Ancillary Services Procedures - nosbih.ba...price cap in case that there were no bids accepted in a monthly tender 3.1.6.1 – coefficient for the penalty price for undelivered reserve

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Ancillary Services Procedures

December, 2016

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History

Version/

Date

Application Author Changes

1

16.12.2014

NOSBiH Initial Draft

1.2

4.6.2015

NOSBiH Removing obstacles observed in the testing period

and adapting to new Market Rules

1.3

15.10.2015

NOSBiH 3.1.2 - calculation of required secondary reserve in

November

3.1.3.1 – the scope of procurement, price caps and

the right to participate in the process

3.1.3.2 – invitation to deliver bids as instructed by

NOSBiH

3.1.4.1 – ''Methodology for determination...'' the

BSP's share is taken into account before the

invitation to deliver bids

3.3.2.1 – method of calculating secondary regulation

energy

4.1.3.1 – the scope of procurement, price caps

4.1.3.2 – bids' delivery as instructed by NOSBiH

5.2 – Tender for losses in October

1.4

7.12.2015

1.1.2016-

31.12.2016

NOSBiH

Downward tertiary regulation included

1.5

18.11.2016

5.12.2016

1.1.2017 -

NOSBiH 3.1.1 – liability to register secondary regulation

structures

3.1.4.1 – Methodology for determination of

necessary (required) secondary reserve for the BSP

– equal allocation

3.1.4.2 – the missing quantities shall be paid by the

price cap in case that there were no bids accepted in

a monthly tender

3.1.6.1 – coefficient for the penalty price for

undelivered reserve

3.3.1 – Payment of actual instead of contracted

secondary reserve – it is considered that cheapest

agreements are firstly realized

3.3.3 – penalty in case of unfulfillment

3.3.3.1 – included an additional analysis of the work

of secondary regulation

4.1.1 – liability to register tertiary regulation

structures

4.1.3.2 – non-publishing the tender results on web

page

4.2 – activation of tertiary regulation service

(software balancing system)

4.3.1 – included penalties in case of non-provided

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tertiary regulation

6 – preliminary compensations, not final ones, shall

be delivered two days before the energy delivery

8.1.2 - corrections of monthly reports included

These Procedures shall define the activities and the sequence of activities as well as the rights

and obligations of the parties involved in the process of procurement, activation and

settlement of ancillary services for the balancing of the electric power system in Bosnia and

Herzegovina, for covering losses in the transmission system, for elimination of unintentional

deviations of BiH Control Area and reactive-voltage support.

Ancillary services for balancing the energy sector in BiH consist of primary, secondary and

tertiary regulation having characteristics of some services described in the Grid Code.

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Contents

1. Definitions, marks and abbreviations......................................................................5

1.1 Definitions.............................................................................................................5

1.2 Marks and abrreviations.......................................................................................6

2. Primary Regulation..................................................................................................8

3. Secondary Regulation..............................................................................................8

3.1 Procurement of Secondary Regulation..................................................................8

3.1.1 Registration of Structures providing Secondary Regulation ...............8

3.1.2 Determination of Required Secondary Reserve.............9

3.1.3 Procurement of Secondary Reserve..........................................12

3.1.4 Allocation of Missing Reserves per BSPs................................................14

3.1.5 Procurement of Secondary Reserve through a Direct Settlement16

3.1.6 Penalties in case of Unfulfilled Obligations........................................16

3.2 Activation of Secondary Regulation ..........................................................17

3.3 Settlement of Secondary Regulation ............................................................18

3.3.1 The Cost of Secondary Reserve.................................................18

3.3.2 The Cost of Secondary Regulation

Energy...................................................18

3.3.3 Penalties in Case of Unfulfilled Obligations...............................................19

4. Tertiary Regulation................................................................................................21

4.1 Procurement of Tertiary Regulation....................................................................21

4.1.1 Registration of Reserve Providing Units providing Tertiary Regulation

................21

4.1.2 Determination of Required Tertiary Reserve...............23

4.1.3 Procurement of Tertiary reserve............................................23

4.2 Activation of Tertiary Regulation .............................................................25

4.2.1 An Activation of Tertiary Regulation..........................................27

4.3 Settlement of Tertiary Regulation Service

...............................................................27

4.3.1 The Cost of Reserve...............................................................................27

4.3.2 The Cost of Tertiary Regulation

Energy.......................................................29

5. Covering Losses in BiH Transmission System......................................................29

5.1 Estimation of Losses in BiH Transmission System.............................................29

5.2 Procurement of Energy for Covering Transmission

Losses.........................................................30

6. Elimination of Unintentional Deviations of BiH Control Area.............................30

7. Q-V Support.........................................................................................................31

8. Reports on Ancillary Services...............................................................................31

8.1.1 Daily Reports on Ancillary Services........................................................31

8.1.2 Monthly Reports on Ancillary Services...................................................32

8.1.3 Publishing Reports on Ancillary Services................................................34

8.2 Invoicing and Payment.......................................................................................34

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1 Definitions, marks and abbreviations

1.1 Definitions

The following definitions shall be used in these Procedures:

Balance Responsible Party means a Market Participant who, in accordance with the Law on

Balance responsibility, accepted balance responsibility for the Balance Group and is

registered at NOSBiH as a Balance Responsible Party

Imbalance means the difference between the measured amount of injected and withdrawn

electricity and a programme of Balance Responsible Party or Market Participant taking into

consideration engaged balancing energy

Daily Schedule means a schedule covering scheduled generation, consumption, trade and sale

of electricity of a Balance Responsible Party or a Market Participant

Grid Code means rules and procedures which, among other issues, regulate technical issues

in regard of connection to the transmission system, ancillary services, measurement and daily

schedules delivery

Unintentional Deviation means the difference between actual and scheduled power exchange

of a Regulation Area

Period of Compensation of Unintentional Deviations means the period in which

accumulated unintentional deviations are settled in line with ENTSO-E Operation Handbook

by using the Compensation Programe. The Compensation Period usually lasts from Thursday

00:00 until Wednesday 24:00.

Off-peak Load Period means the period from 24:00 until 06.00 during the day, a working

day, weekend days or a holiday.

Settelement Period means the basic time unit for which the imbalance settlement of a

Balance Resposible Party is done. NOSBiH will, in accordance with the technical and

organizational abilities of involved electric power entities, adopt as its settlement period one

hour or fifteen minutes.

Period of Registration of Unintetional Deviations means the period in which unintentional

deviations are registered in line with ENTSO-E Operation Handbook. The Registration

Period usually lasts from Monday 00:00 until Sunday 24:00.

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Trading Period means the basic time unit for which nominations are delivered within a daily

schedule

Peak Load Period means the period from 06:00 until 24:00 during the day, a working day,

weekend days or a holiday.

Ancillary Services mean all services which NOSBiH procures from the service providers for

purpose of ensuring system services i.e with purpose of maintaining safe and reliable

operations of the power grid in BiH and continuous and qualitative supply of consumers

Compensation Programe means an hourly programe which serves for settlement of

accumulated unintentional deviation of a regulation area during a compensation period

Programe means balance of scheduled electricity generation and consumption that is

electricity sale and purchase on an hourly base for a Balance Responsible Party or a Market

Participant

Producer means a role of a Market Participant, a company which possesses a license for

generation of electric power

Balancing Services Provider/Ancillary Service Provider means a Market Participant

whose resources are registered at NOSBiH as those providing ancillary services

Reserve Providing Unit – resource available to provide ancillary service

Control Block means one or more control areas which operate jointly in the function of

secondary regulation, in relation to other control blocks of the synchronized zone to which it

belongs. BiH Control Area is a part of the Control Block of Slovenia-Croatia-Bosnia and

Herzegovina.

Control Area means a part of ENTSO-E interconnected system managed by single system

operator and having the function of secondary regulation. BiH is one control area.

Supplier means a role of a Market Participant, an entity licensed to supply final consumers

with electricity

Trader means a role of a Market Participant, an entity licensed for electricity trading.

1.2 Marks and Abbreviations

In this Document the following abbreviations shall be used:

BRP Balance Responsible Party

NRA National Regulatory Authority

𝐵𝑅𝐸𝐴𝐿 Realized of Balance Responsible Party

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𝐵𝑃𝐿𝐴𝑁 Planned Balance of Balance Responsible Party

𝐶𝑅𝐸𝐴𝐿 Realized Consumption of BRP

𝐶𝑆𝑒𝑐𝐸𝑛𝐷𝑂𝑊𝑁𝑊𝐴𝑅𝐷 The lowest bid price of energy for downward secondary regulation

𝐶𝑆𝑒𝑐𝐸𝑛𝑈𝑃𝑊𝐴𝑅𝐷 The highest bid price of energy for upward secondary regulation

𝐶𝑇𝑒𝑟𝑐𝐸𝑛𝐷𝑂𝑊𝑁𝑊𝐴𝑅𝐷 The lowest price of energy for activated downward tertiary regulation

𝐶𝑇𝑒𝑟𝑐𝐸𝑛𝑈𝑃𝑊𝐴𝑅𝐷 The highest price of energy for activated upward tertiary regulation

∆𝐵𝑅𝑃 Imbalance of Balance Responsible Party

NRA National Regulatory Agency

ENTSO-E European Network of Transmission System Operators for Electricity

𝑘𝑃𝑒𝑛𝑆𝑒𝑐𝐶𝑎𝑝 Coefficient of charges for non-provided secondary regulation

𝑘𝑃𝑒𝑛𝑇𝑒𝑟𝑐𝐶𝑎𝑝 Coefficient of charges for non-provided tertiary regulation

𝐿 Average System Load

𝐿𝑀𝑎𝑥 Maximum System Load

NOSBiH Independent System Operator in Bosnia and Herzegovina

𝐺𝐿 The lowest generation limit of BSP

𝐺𝐻 The highest generation level of BSP

𝑝𝑀𝑎𝑥𝑆𝑒𝑐𝐶𝑎𝑝 The price cap for secondary reserve

𝑝𝑀𝑎𝑥𝑆𝑒𝑐𝐶𝑎𝑝𝑀𝑜𝑛𝑡 The price cap for secondary reserve for each month

𝑝𝑀𝑎𝑥𝑆𝑒𝑐𝐶𝑎𝑝𝑌𝑒𝑎𝑟 The price cap for secondary reserve for a year

𝑝𝑀𝑎𝑥𝑇𝑒𝑟𝐶𝑎𝑝 The price cap for tertiary reserve

𝑝𝑀𝑎𝑥𝑇𝑒𝑟𝐸𝑛𝑈𝑝 The price cap for upward tertiary regulation energy

BSP /ASP Balancing Service Provider /Ancillary Service Provider

𝑃𝑟𝑒𝑔𝐷𝑂𝑊𝑁𝑊𝐴𝑅𝐷Delivered balancing power of downward secondary and tertiary regulation

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𝑃𝑟𝑒𝑔𝑈𝑃𝑊𝐴𝑅𝐷 Delivered balancing power of upward secondary and tertiary regulation

R Required secondary regulation reserve

𝑅 𝑁 Required (planned) secondary regulation reserve for BSP

S Difference in prices of energy for upward and downward secondary regulation

𝑊 𝑆𝑒𝑐𝑅𝑒𝑔 Secondary regulation power for BSP

2 Primary Regulation

BSPs whose Reserve Providing Units are obliged, according to the Grid Code, to provide

ancillary service of primary regulation shall do that at their own expense and without any

compensations.

3 Secondary Regulation

3.1 Procurement of Secondary Regulation

The ancillary service of Secondary Regulation is procured through the public purchase

procedure. In the first phase of the purchase procedure there shall be elected the qualified

Ancillary Service Providers (hereinafter BSPs) whose Reserve Providing Units are able to

provide the ancillary service of secondary regulation, and in the second phase there shall be

elected those qualified BSPs which shall provide secondary regulation in a specific time

period.

3.1.1 Registration of Reserve providing Units

The right to participate in the market procedure to purchase secondary reserves, which shall

be organized by Independent System Operator in Bosnia and Herzegovina (hereinafter

NOSBiH), belongs to BSPs whose Reserve providing units satisfy the technical preconditions

for providing secondary reserve and that are registered at the Registry of secondary reserve

providers.

Any BSP which wants to registrate its Reserve providing units to provide secondary

regulation shall be obliged to submit to NOSBiH the filled Request for registration of the

Reserve providing unit to provide ancillary service and a copy of its valid generation license if

it is a generation unit.

BSPs are obliged to register in the Registry of ancillary service providers any Reserve

providing unit which is, according to the generation license or to the Grid Code, obliged to

ensure technical preconditions for providing secondary reserve.

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A form of the Request for registration of Reserve providing unit to provide ancillary services

is available on NOSBiH web page.

NOSBiH shall consider the submitted requests as needed. In the process of considering the

requests, NOSBiH may ask BSP to:

● submit additional documents as to confirm the Reserve providing units 's ability to provide

concrete ancillary services,

● practically test the Reserve providing unit which is to provide ancillary services in

accordance with the procedures described in 3.1.1.1.

When the Reserve providing unit is determined as adequate to provide ancillary service, it is

entered in the Registry of ancillary service providers for a period of next five years and the

BSP with that unit may participate in the purchase procedure of a specific ancillary service.

Otherwise, BSP's Request for registration of Reserve providing unit to provide ancillary

services shall be denied.

3.1.1.1 Technical inspection of the Reserve providing Units

NOSBiH shall conduct technical inspection of the Reserve providing unit that may provide

secondary reserve during the initial registration of the Structure for providing secondary

reserve or during the exploatation, if NOSBiH finds it necessary.

NOSBiH may enter into the Register those Reserve providing unit which previously provided

secondary reserve, without conducting the procedure of technical inspection.

Technical inspection of the reserve providing Units shall involve the testing of:

● Operational telecommunication and managing infrastructure which enables efficient and

correct transmission of the managing signal and response,

● Real time measurements of active output power of the generation structures which provide

automatic secondary regulation ,

● The ability for remote meter reading,

● Speed of response to the managing signal.

Through the process of preparation and conducting the mentioned activities the BSP shall be

obliged to fully cooperate with NOSBiH.

Each party shall itself bear the testing costs. Technical validity verified upon the technical

inspection shall last for 5 (five) years and may be extended with no further testing if the Units

succesfully provided the secondary reserve within the previous period, which is to be finally

decided by NOSBiH.

In case that any of the BSP's Units does not meet the standards given in the Register, or in

case that the BSP itself submits a statement that its unit may not provide the secondary

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reserve, the respective unit shall lose its active status in the Registry and may not be used as

the secondary reserve provider.

In case that the BSP unit only temporarily fails to comply with the standards entered in the

Registry, NOSBiH may suspend the respective unit by the time the obstacles are removed.

During the time of suspension from the Registry, the respective unit may not be used as a

secondary reserve provider.

3.1.2 Determination of Required Secondary Reserve

Required secondary reserve in the electric power sector in BiH shall be determined on a

monthly basis for peak load period and off-peak load period separately.

The period of peak load shall be from 06:00 until 24:00 during each day, a working day,


The period of off-peak load shall be from 00:00 until 06:00 during each day, a working day,


When determining required secondary reserve for BiH Control Area it is necessary to take

into consideration the obligations arising from ENTSO-E Operation Handbook, actual needs

of BiH Control Area (integration of renewable energy sources, intermittent consumption and

similar) and plans for share and exchange of secondary reserve with other Control Areas

(ENTSO-E Grid Codes).

Settlement of required secondary reserve at the level of BiH for next year shall be made on a

monthly basis, for peak load period and off-peak load period separately, on the basis of these

data:

● Official data of NOSBiH on hourly gross electricity consumption (consumption + losses) in

BiH transmission system for last 12 months,

● Coefficient of expected load change which is determined on the basis of planned change of

consumption.

Secondary reserve shall be settled on a monthly level, for peak load periods and off-peak load

periods separately. Settlement of monthly reserves shall be done at the begining of November

of current year for next 12 months. According to NOSBiH official data on annual

consumption in BiH within last 12 months, the required reserve shall be calculated for each

month of next calendar year.

The following algorithm shall be used to settle required secondary reserves for the electro-

power sector in BiH:

● By multiplication the data on hourly electricity consumption in the transmission system

with appropriate coefficients of expected load change we shall have the forecasted data on

hourly consumption for the following year.

● For each month of the following calendar year these shall be determined:

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▪ Standardized maximum consumption values for peak load periods (according to item

3.1.2.1),

▪ Average consumption values for off-peak load periods (according to item 3.1.2.2).

● Reached consumption values from previous step on a monthly level for peak load and off-

peak load periods shall be used in the process of determination of monthly reserve for

secondary regulation R at BiH level, for peak and off-peak loads separately, by applying the

formula from ENTSO-E Operation Handbook:

𝑅 = √𝑎 ∗ 𝐿𝑚𝑎𝑥 + 𝑏2 − 𝑏 [𝑀𝑊]

Where

the parameters a and b are empirically determined constants, with values a = 10 MW and b =

150 MW,

Lmax is defined as the maximum forecasted load of BiH Control Area including the losses as

well. The method for the determination of Lmax is given in chapters 3.1.2.1 and 3.1.2.2.

Following the general rounding rules, the rounding is done to a round number.

3.1.2.1 Determination of Standardized Maximum Consumption Values for Peak Load

Periods in BiH

Peak load period is from 06:00 to 24:00 in each day, a working day, weekend days or a

holiday. For determination of required secondary reserve there shall be used the standardized

maximum consumption value which is determined on a monthly basis by applying the

following algorithm:

● select all the values of planned hourly consumption for the peak load period;

● rank the values of hourly consumption in descending order from highest to lowest values;

● starting from the highest hourly consumption to the lowest, the following procedure shall be

conducted:

▪ observing the difference r between current (n) value and the value which is for k places

distant from current (n+k) value: r=Ln-Ln+k;

▪ if the observed difference r is lower or equal than/to pre-defined value rmax, the current value

presents standardized maximum value and the procedure is completed Lmax=Ln;

▪ if the observed difference r is higher than pre-defined value rmax, the calculation shall be

repeated for the next consumption value in order.

Parametres k and rmax have these sizes:

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k = 5 – the distance between numbers (consumption values) for which the difference is being

determined

rmax = 10 MW – pre-defined value of the difference according to which the standardized

maximum value is determined.

3.1.2.2 Determination of Average Consumption Values for Off-peak Load Periods

Off-peak load period is from 00:00 to 06:00 in each day, a working day, weekend days or a

holiday.

For determination of required secondary reserve in off-peak load periods there shall be used

the average value of off-peak load which is determined on a monthly basis by applying the

following algorithm:

● select all the values of planned hourly consumption for the off-peak load period in a

calendar month.

● find average monthly value for the off-peak period by addition of all values and the division

by the number of the addends.

𝐿 =1

𝑛∗ ∑ 𝐿𝑖

𝑛

𝑖=1

L – average monthly value of hourly load in off-peak load period,

L – individual hourly load in off-peak load period,

n – number of hours in off-peak load period in a calendar month.

3.1.3 Procurement of Secondary Reserve

NOSBiH shall carry out the procedure to purchase secondary reserve in June of current year

for next year.

Contracting of secondary reserve shall be done on a monthly basis, for peak load periods and

off-peak load periods separately.

If the required scope of secondary reserve has not been purchased for a certain month, the

missing quantities shall be provided through a monthly procedure for that month.

Ancillary Service Providers (BSP) shall deliver their bids in accordance with the regulations

of the Invitation for participating in the procedure to procure secondary reserve. The bids shall

imply a symmetrical scope of secondary reserve.

3.1.3.1 Framework Agreement

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In accordance with Article 32 of the Public Procurement Law of BiH, NOSBiH shall carry out

an open procedure with the purpose of signing a framework agreement with the (BSP).

The Procedures for procurement and allocation of secondary reserve on an annual basis shall

be carried out at the beginning of June of current year for next year, and it shall, among other

issues, define:

● The scope of the procurement procedure,

● The deadline specified for the bids delivery,

● The method of delivering bids and the bids' format,

● The time period for the publishing of the procurement's results

● The criteria for selection the most suitable bid,

● The instruction on appeal procedure.

The right to participate in the market procedure to procure secondary reserves belongs to

those bidders whose Reserve providing units have active status in the Registry of

ancillaryservice providers for the period for which the service is procured.

NOSBiH shall sign a framework agreement with any BSP which fulfills the tender

qualifications.

Dynamics of an annual procurement procedure for a year Y shall be as follows:

1. Procurement publishing by 15th

of June in Y-1 year,

2. Receiving bids by 30th

July in Y-1 year,

3. The bids' evaluation by 6th

August in Y-1 year,

4. Publishing the tender results by 8th

August in Y-1 year,

5. The deadline for complaints and appeals by 18th

August in Y-1 year,

6. Discussing possible complaints and appeals and creating a final list by 20th

August in

Y-1 year,

7. Concluding framework agreements by 10th

September in Y-1 year.

3.1.3.2. Invitation for bid submission

NOSBiH shall carry out the procedure proscribed by the Public Procurement Law of BiH and

accordingly shall ensure receipt, validity check, confirmation of receipt and storing of the

submitted bids. NOSBiH shall rank the submitted bids according to the price offered for

secondary reserve. The price cap for secondary reserve 𝑝𝑀𝑎𝑥𝑆𝑒𝑐𝐶𝑎𝑝 shall be determined by the

National Regulatory Agency (hereinafter NRA) by its Decision in an annual 𝑝𝑀𝑎𝑥𝑆𝑒𝑐𝐶𝑎𝑝𝑌𝑒𝑎𝑟

and a monthly 𝑝𝑀𝑎𝑥𝑆𝑒𝑐𝐶𝑎𝑝𝑀𝑜𝑛𝑡 procurement procedure separately. A bid with the price

exceeding the price cap shall be rejected.

From the created list NOSBiH shall make selection of the most favourable bids to the level of

the required quantity of secondary reserve. Invitation for annual bids submission shall be

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organized in November of current year for next year. The procurement procedure shall be

organized for 12 months, for peak load periods and off-peak load periods separately.

If the required scope of reserve has not been purchased in an annual procurement procedure,

the invitation for providing ancillary service of secondary regulation on a monthly basis shall

be announced in month M-1 for calendar month M.

The invitation for bid, among other issues, shall define:

● The scope of the procurement procedure (required scope of secondary regulation for peak

load periods and off-peak periods separately),




● The price cap of secondary reserve,



The invitation for the bids submission shall be published on NOSBiH web page and shall be

sent electronically to those BSPs with which the framework agreement for providing

secondary regulation service has been concluded.

The bids for reserve procurement shall contain the following information:

● Date and time of the bid's preparation,

● Period (month) of delivery of reserve,

● Time periods (peak load/off-peak load) of the delivery period and the related pairs of

quantity-price,

● Pairs: quantity - unit price per the delivery time periods

▪ Quantities are integer power values expressed in MW

▪ Prices are unit values of 1 MW reserve expressed in KM/MW/h with two decimals.

Final bids ( pairs reserve - price) within an annual cycle through the months, on the basis of

signed framework agreements, shall be delivered in line with NOSBiH's invitation and

instruction.

Final bids ( pairs reserve - price) within a monthly cycle, on the basis of signed framework

agreements, shall be delivered as apropriate in month M – 1 for M month in line with

NOSBiH's invitation and instruction.

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NOSBiH shall deliver NRA a detailed report on any public procurement procedure conducted

for purchase of secondary reserve.

3.1.4 Allocation of Missing Reserves per BSPs

In case that the market procedures described in Article 3.1.1 do not provide required

secondary reserve, NOSBiH shall determine the missing reserves to be liability of the BSP.

3.1.4.1 Methodology for Determination of Required (planned) Secondary Reserve of

BSPs

The Required (planned) reserve amount of an individual BSP in secondary reserve on a

monthly basis shall be calculated before the invitation to submit the bids for secondary

reserve. These information shall serve as guidelines for the BSP when offering its secondary

reserves in the procurement process.

For the calculation of the required reserve of BSP there shall be used the formula for peak

load and off-peak load periods separately:

𝑅𝑁 =𝑅

𝑁

R – total required secondary reserve of BiH for peak load and off-peak load periods

separately.

𝑅𝑁 - required (planned) secondary reserve of an individual BSP for peak load and off-peak

load periods separately.

N – the number of registered secondary regulation service providers.


In case that the described method does not provide the entire amount of required secondary

reserve R, that is if the value R is not divisible by N, NOSBiH shall re-allocate the additional

obligations per BSPs thereby satisfying the principle of equal allocation on an annual basis.

3.1.4.2 The Procedure of Allocation Missing Quantities of Secondary Reserve per BSPs

If the required scope of secondary reserve has not been purchased through an annual or

monthly procedure for a certain month, NOSBiH shall allocate the missing quantities per

certain BSPs taking into consideration the scope of reserves purchased in the public

procurement and the BSPs from which those quantities were procured. The allocation

procedure shall be done immediately after the completion of a monthly procurement of

secondary reserve. BSPs shall be obliged to provide missing quantities of secondary reserve.

The price of thus allocated secondary reserve shall be regulated and equal to the weighted

average price of accepted bids in a monthly procurement procedure, that is equal to the price

cap for secondary reserve 𝑝𝑀𝑎𝑥𝑆𝑒𝑐𝐶𝑎𝑝𝑀𝑜𝑛𝑡 if there were no bids accepted in a monthy

procurement procedure.

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Input data in the procedure of allocation missing reserves of secondary reserve per BSPs shall

be:

● Procured quantities of secondary reserve through (annual and monthly) a public

procurement.

● Required share of individual BSPs in the total amount of required secondary reserve, for

peak load and off-peak load periods separately.

● The total quantity of required secondary reserve R on the level of Electric Power system of

BiH, for peak load and off-peak load periods separately.

In the procedure of allocation missing of secondary reserves there shall be included those

BSPs which through the procurement procedure of secondary reserve had been allocated with

reserve amount less than the required (planned) secondary reserve. For these BSPs, the

missing quantities of secondary reserve shall be allocated proportionally to the difference

between required (planned) secondary reserve and secondary reserve allocated through public

procurement procedures.


3.1.5 Procurement of Secondary Reserve through a Direct Settlement

If an BSP is not able to provide the contracted secondary reserve for next calendar month, it

shall be obliged to inform NOSBiH on that by submitting a statement by the 25th

day of a

current month at the latest. The Statement shall contain information on the period of time and

on quantities of secondary reserve which the BSP has failed to provide.

In this case, NOSBiH shall procure missing quantities of secondary reserve through a direct

settlement in a transparent and non-discriminatory way. The highest price that NOSBiH shall

pay this procurement shall be the penalty amount being paid in case of a failure to provide

reserve which is defined in 3.1.6.1 of these Procedures.

3.1.6 Penalties in Case of Unfulfilled Obligations

If an BSP has failed to provide or nominate the contracted of secondary reserve in the

activities for next day, it shall be obliged to pay penalties to NOSBiH for missing quanitites

for each hour of not providing reserve. The penalty amount is defined in 3.1.6.1 of these

Procedures.

The contracted secondary reserve for BSP from previous paragraph shall present the total

amount of contracted reserve through an annual and monthly market procedure, through

regulated allocation of obligations for missing reserve and through a direct settlement.

3.1.6.1 Penalty Price for Non-provided Reserve

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Amount of penalty for each non-provided MW of secondary reserve shall be equal to the

higher price of the price caps for secondary reserve, which is determined in an annual and

monthly procurement for a specific month increased by coefficient 𝑘𝑃𝑒𝑛𝑆𝑒𝑐𝐶𝑎𝑝 − 1.

NRA shall in its decision determine coefficient 𝑘𝑃𝑒𝑛𝑆𝑒𝑐𝐶𝑎𝑝 and it shall be between 1,1 up to

1,25.

3.1.6.2 Determination of Secondary Reserve Price

The contracted secondary reserve shall be paid by offered price (Pay-As-Bid). The reserve

contracted due to re-allocation of missing quantities of secondary reserve shall be paid by

weighted average price of the bids accepted for secondary reserve in a specific month.

3.2 Activation of Secondary Regulation

Automatic secondary regulation must be continually active in a scope contracted in the

procurement procedure of secondary reserve. The scope of automatic secondary regulation

shall be equal to double value of secondary reserve.

Contracted secondary reserve shall be provided by the BSP and automatically delivered to

SCADA/EMS system of NOSBiH in real time in terms of upper and lower generation limits

of the BSP. Regulation impulses from SCADA/EMS system of NOSBiH shall be sent to the

BSP's managing centres or to generation units along with a request for activation of

contracted secondary regulation power.

The regulation request shall be shared and sent to the BSP's managing centres or generation

units proportionally to the contracted power of each BSP, that is in line with algorithm

implemented in SCADA system in NOSBiH.

Each day the BSP shall be obliged for a next day (in day D-1) to deliver to NOSBiH bids for

the contracted secondary reserve. Bids shall be delivered in each hour, one price of energy for

upward secondary regulation and one price of energy for downward secondary regulation.

The difference in prices of energy for upward and downward secondary regulation in an hour

must be lower or equal to the maximum value S which shall be determined by NRA in its

Decision on ancillary services. Format for bids delivery of secondary regulation power shall

be determined by NOSBiH.

At NOSBiH's request an BSP shall be obliged to deliver a list of generation units providing

the service of automatic secondary regulation.

Ancillary service of secondary regulation shall be performed automatically on the basis of the

managing signals formed by AGC function of SCADA/EMS system at NOSBiH. An BSP

shall be obliged to enable connecting to the system of automatic secondary regulation.

Secondary Regulation Provider shall also be obliged to:

● provide a possibility to receive a regulation signal from NOSBiH Centre and allocate and

forward the signal towards the generation units within the BSP,

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● provide correct and reliable real-time measurements necessary for secondary regulation

activation (active power, upper and lower generation limits, gradient response etc) and the

status of the switch necessary for BSP's connection to the system of automatic secondary

regulation.

● provide the contracted scope of secondary regulation in positive and negative directions,

● provide the defined (contracted) speed of response of secondary regulation,

● enable activation of secondary regulation in its centre and premises continually during the

term of the agreement.

Secondary regulation providers shall be obliged to automatically deliver real-time information

to SCADA/EMS system at NOSBiH in terms of upper and lower generation limit within its

premises. The difference between upper and lower generation limit shall present double value

of available scope of secondary regulation (positive and negative secondary regulation scope).

Using the signals in its Centre NOSBiH shall set the amount of generation of BSP's units

providing secondary regulation to the desired value within the available scope.

The secondary regulation provider shall be obliged to secure its units from NOSBiH signal

which might possibly set the generation amount beyond the contracted scope, and shall be

obliged to ensure the most qualitative performance of automatic secondary regulation.

3.3 Settlement of Secondary Regulation Service

The cost of provided service of secondary regulation shall consist of the payment for reserves

and of the payment for activated balancing energy of secondary regulation. If an BSP has

failed to meet the contractual obligations, NOSBiH shall apply a penalty. Compensations and

penalties shall be settled and paid on a monthly basis.

3.3.1 The Cost of Secondary Reserve

The cost of secondary reserve of the BSP in one hour shall equal to total amount of costs in

that hour per individual agreements of secondary regulation of the BSP. In this process it shall

be taken into account that at a daily market firstly the agreements with lower prices of reserve

are nominated and operationally delivered.

Total cost of reserve of BSP shall be settled on a monthly basis as the sum of all hourly costs

in that month.

3.3.2 The Cost of Secondary Regulation Energy

Those BSPs whose units will deliver energy in the process of providing secondary regulation

shall have the right to get payment for the delivered energy. The amount of penalty shall be

equal to the product of the delivered energy of secondary regulation and of the price of energy

for upward regulation which has been offered by the BSP in activities of the balancing market

for a next day (day ahead).

19

Those BSPs whose units have taken energy in the regime of providing secondary regulation

i.e. have reduced their power supply, shall be obliged to pay to NOSBiH undertaken energy.

The amount of penalty shall be equal to the product of undertaken secondary regulation

power and of the price of energy for downward regulation offered by the BSP in activities of

the balancing market for a next day (day ahead). Especially, if the offered price of energy for

downward secondary regulation is negative, the BSP shall have the right to get payment

equal to the product of activated energy for secondary regulation and of the offered negative

price.

3.3.2.1 Secondary Regulation Energy

Engaged secondary regulation energy for the BSP in one hour shall be calculated as an

integral of requests at SCADA/EMS system at NOSBiH (SETPOINT) towards the BSP in

that hour.

Secondary regulation power for the BSP in one hour shall be calculated as follows:

𝑊𝑆𝑒𝑘𝑅𝑒𝑔 = 𝑊𝑎𝑐𝑡 −𝑃𝐺 + 𝑃𝐷

2

Where:

Wact shall be actual generation of the BSP (MEGAUNIT) at SCADA system at NOSBiH

in a specific hour

PG shall be the integral of upper generation limit for the BSP from SCADA system at

NOSBiH

PD shall be the integral of lower generation limit for the BSP from SCADA system at

NOSBiH

If the engaged energy in an hour is positive, the BSP enters the regime of providing the

service of secondary regulation and it delivered energy into the system. If the engaged energy

in an hour is negative, the BSP enters the regime of providing the service of secondary

regulation and it has taken energy out of the system.

Engaged secondary regulation energy may not be larger than the reserve nominated in day

ahead activities that is than the delivered scope of regulation.

3.3.2.2 The Price of Secondary Regulation Energy

The price of energy for upward and downward secondary regulation shall equal to the offered

price for upward and downward secondary regulation, respectively.

3.3.3 Penalties in Case of Unfulfilled Obligations

NOSBiH shall impose penalties on the BSP if it fails to fulfill the contracted obligations and

shall do so for each MW of non-provided secondary regulation by the price determined as

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defined in 3.1.6.1. The amount of the penalty for unfulfilled obligatory shall be determined

depending on the type of unfulfillment:

1. If the BSP within an hour has failed to provide qualitative supply of secondary

regulation , the penalty shall be calculated in relation to the nominated reserve. The

quality of provided secondary regulation service of the BSP within an hour shall be

calculated by the rules under 3.3.3.1.

2. If the BSP has failed to nominate the contracted reserve in activities for next day, the

penalty amount shall be determined in relation to non-nominated reserve.

3. If the BSP, by submitting a statement, has informed NOSBiH on inability to provide

the contracted secondary reserve, the penalty amount shall be calculated for the

reserve indicated in the statement.

4. In the BSP has failed to provide the nominated reserve in real-time, the penalty shall

be calculated for the difference between the nominated and actually delivered

secondary reserve.

Contracted reserve for a specific hour is the reserve contracted with the BSP through an

annual and monthly market procedure, through the process of allocation the missing quanities

of secondary regulation per BSPs and through the mechanism of direct settlement between

NOSBiH and the BSP.

Nominated reserve is the reserve nominated by the BSP in a daily market for providing

secondary regulation service through IT platform at NOSBiH.

Actually delivered secondary reserve shall be calculated as the half of the difference between

upper and lower generation limit of a specific BSP delivered at SCADA system at NOSBiH.

𝑃𝑆𝑒𝑘𝐶𝑎𝑝𝐼𝑠𝑝 =𝑃𝐺 − 𝑃𝐷

2

Where:

𝑃𝐺 means integral of upper generation limit for BSP from SCADA system at NOSBiH

𝑃𝐷 means integral of lower generation limit for BSP from SCADA system at NOSBiH

3.3.3.1 Quality of Secondary Regulation Work

It is considered that secondary regulation of an BSP within an hour would have satisfying

quality if the following conditions are met:

● If the regulation has not been disconnected on BSP side longer than 5 minutes cumulative

within a specific hour (AGC signal at SCADA/EMS system at NOSBiH: ''Unit blocked'' or

''Unit off remote control'') and

● If AGC signal ''Unit Not Following'' has not be active longer than 15 minutes cumulative

within a specific hour.

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If at least one of these criteria has not been met, it is considered that the secondary regulation

was not of satisfying quality in a specific hour.

NOSBiH shall make a detailed analysis of work of secondary regulation as required. In that

process NOSBiH shall analyse generation limits of an BSP such as the limits of regulation,

generation request from SCADA system at NOSBiH, response of generation units of an BSP,

other signals and measured values. These analyses NOSBiH shall use in reaching a final

decision on the quality of work of secondary regulation.

The BSP shall be entitled to compensation for secondary reserve for hours in which the

secondary regulation has not been working properly due to the reasons which are out of the

BSP's regulation, which shall, for each particular case, be determined by NOSBiH and the

BSP staff.

4. Tertiary Regulation

4.1 Procurement of Tertiary Regulation

The ancillary service of tertiary regulation is procured through the public purchase procedure.

In the first phase of the purchase procedure there shall be elected the qualified Ancillary

Service Providers whose Reserve providing units are able to provide the ancillary service of

tertiary regulation, and in the second phase there shall be elected qualified BSPs which shall

provide tertiary regulation in a specific time period.

The public purchase procedure shall be carried out for upward tertiary regulation reserve and

for downward tertiary regulation reserve separately.

4.1.1 Registration Reserve providing unit for providing Tertiary Regulation

The right to participate in the market procedure to purchase tertiary reserves, which shall be

organized by NOSBiH, belongs to BSPs whose Reserve providing units satisfy the technical

preconditions for providing tertiary regulation and that are registered at the Registry of

upward and downward tertiary regulation service providers.

BSPs, owners of the generation units that satisfy the technical preconditions for providing

tertiary regulation service, shall be obliged, in accordance to the Grid Code and the license

issued by the NRA or other document, to register that Reserve providing unit for providing

tertiary regulation . The registration shall be done by submitting at NOSBiH a properly filled

Request for registration of Reserve providing unit for ancillary service providing. If it is a

generation unit, it shall be necessary to deliver a copy of valid generation license.

The Request for registration Reserve providing unit for providing tertiary regulation may be

submitted at NOSBiH by other entities (producers and consumers) which want to register

their units as those providing tertiary regulation .

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A form of the Request for registration Reserve providing unit for providing ancillary services

shall be available on NOSBiH web page.

NOSBiH shall consider the submitted requests as needed. When considering the requests

NOSBiH may require from the BSP:

● to submit additional documents confirming the unit's ability to provide a specific ancillary

service,

● to test the unit to practically provide ancillary service in accordance with the procedures

given in 4.1.1.1.

If a unit is identified as adequate provider of ancillary service, that unit shall be entered in the

Registry of providing ancillary service for a period of next 5 years and the BSP with that

structure may participate in the procurement procedure of a specific ancillary service.

Otherwise, an BSP's Request for registration Reserve providing units for providing ancillary

services shall be denied.

4.1.1.1 Technical Inspection Reserve providing units for providing Tertiary Regulation

NOSBiH shall conduct technical inspection of the unit that may provide upward and

downward tertiary regulation during the initial registration of the unit for providing tertiary

regulation or during the exploatation, if NOSBiH finds it necessary.

NOSBiH may enter into the Register those units which provided tertiary regulation in

previous period without conducting the procedure of technical inspection.

Technical inspection of the units providing Tertiary Regulation shall involve the testing of:

● Real time measurements of active output power of the generation units which provide

tertiary regulation ,

● The ability for remote meter reading,

● Speed of response i.e. ability to activate upward power regulation or downward power

regulation within 15 minutes following an order's issuance.

Through the process of preparation and conducting the mentioned activities the BSP is

obliged to fully cooperate with NOSBiH.

Each party shall itself bear the testing costs. Technical validity verified upon the technical

inspection shall last for 5 (five) years and may be extended with no further testing if the unit

succesfully provided the service of tertiary regulation within the previous period, which is to

be finally decided by NOSBiH.

In case that any of the BSP's units does not meet the standards given in the Register, or in case

that the BSP itself submits a statement that its unit may not provide the service of tertiary

regulation, the respective unit shall lose its active status in the Registry and may not be used

as the tertiary regulation provider.

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In case that the BSP's unit only temporarily fails to comply with the standards entered in the

Registry, NOSBiH may suspend the respective unit by the time the obstacles are removed.

During the time of suspension from the Registry, the respective unit may not be used as a

tertiary regulation provider.

In case of a complaint about or an appeal against NOSBiH decisions on their technical

validity, Ancillary Service Providers may use the procedures for dispute resolution set by the

Grid Code.

4.1.2. Determination of Required Tertiary Reserve

Required tertiary reserve in the electric power sector in BiH shall be determined by taking

into consideration power of generation units in BiH, power of the largest consumers and

regional agreements on tertiary regulation allocation and exchange with other system

operators.

4.1.3 Procurement of Tertiary Reserve

NOSBiH shall carry out an annual procedure to purchase upward and downward tertiary

reserve separately in June of current year for next 12 months. Contracting of upward and

downward tertiary reserve shall be done on a monthly basis.

If the required scope of tertiary reserve has not been purchased for a certain month, the

missing quantities shall be provided through a monthly procedure for that month.

If the required scope of tertiary reserve has not been purchased through a monthly procedure

for a certain month, and if it is expected that there will not be enough bids for tertiary

regulation power in a daily market, NOSBiH shall propose that NRA adopt a Decision on

providing tertiary regulation in a regulated manner, with the proposal of reserve and the

appropriate prices.

BSPs shall deliver their bids in accordance with provisions of the invitation to participate in

the procedure of public procurement of upward and downward tertiary reserve.

NRA shall in its decision determine the price cap of upward and downward tertiary reserve.

The bid with the price exceeding the price cap shall be rejected.

4.1.3.1. Framework Agreement

In accordance with Article 32 of the Public Procurement Law of BiH, NOSBiH shall carry out

an open procedure with the purpose of signing a framework agreement with the Ancillary

Services Providers on providing upward and downward tertiary regulation .

The Procedure for providing upward and downward tertiary regulation shall be carried out at

the beginning of June of current year for next year, and it shall define:

● The scope of the procurement procedure,

24


● The method of delivering bids and the bid's format,




The right to participate in the public procurement procedure belongs to those bidders whose

structures have active status in the Registry of upward and downward tertiary regulation

service providers for the period for which the service is procured.

NOSBiH shall sign framework agreement with any BSP which fulfills the tender

qualifications.

Dynamics of an annual procurement procedure for a year Y is as follows:

1. Procurement publishing by 15th

of June in Y-1 year,

2. Receiving bids by 30th

July in Y-1 year,

3. The bids' evaluation by 6th

August in Y-1 year,

4. Publishing the tender results by 8th

August in Y-1 year,

5. The deadline for complaints and appeals by 18th

August in Y-1 year,

6. Discussing possible complaints and appeals and creating a final list by 20th

August in

Y-1 year,

7. Concluding framework agreements by 15th

September in Y-1 year.

4.1.3.2. Invitation for Bids Submission

In accordance with signed framework agreements NOSBiH shall organize an annual cycle

and monthly cycles for submission of bids for providing upward and downward tertiary

reserve.

Bids for upward and downward tertiary reserve shall be submitted in pairs power (MW) –

price (KM/MW/h) in a format defined by NOSBiH. Power shall be expressed as the integer

value higher than or equal to 10 MW. The price shall be expressed with two decimals. In

reserve bids, the BSP shall not be obliged to specify the units that will provide tertiary

regulation .

An annual cycle of collecting bids shall be organized as instructed by NOSBiH in the end of

current year for next 12 months. If the required scope of tertiary reserve has not been

purchased for a certain month in the annual cycle, the missing quantities for that month shall

be provided through a monthly procedure in month M – 1 for month M.

NOSBiH shall carry out the procedure prescribed by the Public Procurement Law of BiH and

accordingly shall ensure receipt, validity check, confirmation on receipt and storing of the

submitted bids. NOSBiH shall rank the submitted bids according to the price offered for

25

upward and downward tertiary reserve. From the created list NOSBiH shall make selection of

the most favourable bids to the level of the required quantity of tertiary reserve.

Invitation for submission of bids for providing tertiary regulation service shall contain:

● The scope of the procurement procedure (required scope of upward and downward tertiary

regulation per months),




● The price cap of upward and downward tertiary reserve,



The invitation for the bids submission shall be published on NOSBiH web site and shall be

sent electronically to those BSPs with which the framework agreement for providing upward

and downward tertiary regulation service has been concluded.

Participants in the procurement procedure shall be obliged to submit their bids in a format

defined by NOSBiH. Each participant has the right to send one or more bids in the reserve

procurement procedure for a defined delivery period (month and/or year).

The bids for reserves procurement shall contain the following information:

● Date and time of the bid's preparation,

● Period (month) of delivery of reserves,

● Pairs quantity – price per delivery time intervals,

▪ Quantities are integer power values expressed in MW

▪ Prices are unit values expressed in KM/MW/h with two decimals.

NOSBiH shall electronically send the procurement's results to the participants of the

procurement procedure in accordance with the confidentiality clauses.

NOSBiH shall deliver NRA a detailed report on any conducted market procedure.

4.1.3.3 The Price of Tertiary Reserve

26

The contracted upward and downward tertiary reserve shall be paid by offered price (Pay-As-

Bid).

4.2. Activation of Tertiary Regulation Service

Tertiary regulation shall be engaged for the needs of electric power system of BiH according

to the balancing reserve merit order list made by NOSBiH for upward and downward tertiary

regulation separately in line with the bids submitted for energy at Daily Balancing Energy

Market in accordance with the Balancing Market Operation Rules.

NOSBiH shall decide on activation of tertiary regulation service.

Any deviation from the merit order list shall be registered in the dispatchers' book and in the

balancing system software with an appropriate explanation.

Deviations from the merit order list may be caused by faults in the electric power system of

BiH or in ENTSO-E system such as unexpected power flows, congestions, outage of OHL

(failure to transmit electricity) etc.

In terms of the mandatory bids for tertiary regulation balancing energy, the BSP shall be

obliged every day to inform NOSBiH on the generation units (on the level of a generating

unit) that will provide upward and downward tertiary regulation service in the scope of

mandatory bids for a next day on an hourly basis.

NOSBiH may not activate the bids fully.

NOSBiH shall define the moment when tertiary reserve is to be activated for the reqested

reserve in full or partial amount.

NOSBiH shall give instruction to the BSP at least 15 minutes before the moment of

activation.

The Operational dispatcher at NOSBiH shall give an order for tertiary regulation activation on

the basis of his operational judgement at any moment.

Restrictions in the process of activation of bids with contracted reserve of upward and

downward tertiary regulation are:

● Minimum period of activation of tertiary regulation is 1 hour.

● Total period of daily activation of tertiary regulation of one bid is maximum of 8 hours in

continuity or in few activations.

● The period between activation of one bid is 2 hours.

Tertiary regulation service provider shall be obliged to:

● ensure availability of its staff as to receive requests from NOSBiH (by a phone, by a

telegram and through the balancing system software),

27

● provide the contracted scope of tertiary regulation,

● ensure defined (contracted) speed of response of tertiary regulation.

Nomination, activation and calculation of voluntary bids (bids without contracted reserve) in

the Daily Balancing Market shall be described in the Balancing Market Operation Rules.

4.2.1 An Activation of Tertiary Regulation

An activation of upward and downward tertiary regulation shall be given by the operational

staff from the Dispatch Centre of NOSBiH. The order shall be given to the operational staff of

an BSP. All information related to the staff, contact details and other details necessary for

communication between NOSBiH and the BSP shall be an integral part of the Agreement on

ancillary service providing.

A telephone activation of tertiary regulation shall contain:

1. The order's unique number and the time of its' issuance,

2. BSP to which the order was issued,

3. Unique number of the bid that is being activated,

4. Starting time,

5. Power that is being activated,

6. Name and surname of the order's sender and recipient.

The Recipient of the order shall be obliged to repeat the text of the order and confirm the

activation of tertiary regulation in a form of a dispatch sent from his power book.

If there is already activated bid for tertiary regulation, NOSBiH staff with a new order may:

1. Change the activation power within the scope given by the bid,

2. Cancel the activation by an order given to the BSP at least 15 minutes before the

activation.

In completing the activation NOSBiH shall issue an order to the BSP in a form of a dispatch

containing:

1. The dispatch's unique number and the time of its' issuance,

2. BSP to which the dispatch was sent,

3. Unique number of the dispatch that is being activated,

4. End time of the activation,

5. Name and surname of the dispatch's sender and recipient.

For each following (or selected) bid from the Merit order list it shall be issued a new

activation, a change of engaged power and on the completition of tertiary regulation

activation.

4.3 Settlement of Tertiary Regulation

28

The cost of provided service of upward and downward tertiary regulation shall consist of the

payment for tertiary reserve and of the payment for activated energy of tertiary regulation.

4.3.1 The Cost of Reserve

BSPs shall have the right to be compensated for reserve for all hours when upward and

downward tertiary reserve has been offered in the Daily Balancing Energy Market for the

needs of NOSBiH.

The cost of reserve in one hour shall equal to the product of nominated reserve and contracted

unit price of reserve (KM/MW/h) under individual agreements. If the nominated reserve is

smaller than the contracted amount, it is considered that the BSP has failed to provide the

contracted reserve from the agreement with higher price of reserve.

Total cost of reserve of the BSP shall be settled on a monthly basis as the sum of all hourly

costs in that month.

4.3.1.1 Penalties in Case of Unfulfilled Obligations

If the BSP has failed to provide i.e. to nominate the contracted reserve of tertiary regulation

for next day activities, it shall be obliged to pay NOSBiH the penalty for the missing

quantities for every hour of non-provided reserve. The penalty's amount is defined in 4.3.1.2

of these Procedures.

The penalty for non-provided reserve by the BSP which contracted upward or downward

tertiary reserve shall be summed up on a monthly basis.

If the BSP which contracted upward or downward tertiary reserve, upon NOSBiH request, has

failed to provide tertiary regulation service in line with the quality criteria defined in Chapter

4.3.1.3, it shall be obliged to pay penalty. The penalty amount shall equal to the weekly

compensation value of contracted tertiary reserve.

Penalties on the BSP which contracted upward or downward tertiary reserve and which are

calculated in line with the quality criteria shall be summed up on a monhtly basis.

4.3.1.2 Penalty Price for Non-provided Reserve

Penalty amount for each non-provided MW of upward and downward tertiary reserve shall be

equal to the higher price of the price caps for upward i.e. downward tertiary regulation, which

is determined in an annual and monthly procurement for a specific month increased by

coefficient 𝑘𝑃𝑒𝑛𝑇𝑒𝑟𝑐𝐶𝑎𝑝 − 1.

NRA shall in its decision determine coefficient 𝑘𝑃𝑒𝑛𝑇𝑒𝑟𝑐𝐶𝑎𝑝 . If the coefficient 𝑘𝑃𝑒𝑛𝑇𝑒𝑟𝑐𝐶𝑎𝑝

has not been determined by NRA's decision, its value shall be 1, i.e. there shall be no

penalities for non-provided tertiary reserve.

4.3.1.3 Quality of Work of Tertiary Regulation

29

It is considered that upward i.e. downward tertiary reserve is provided if the reserve is

nominated in the Daily Balancing Energy Market.

Since tertiary balancing energy is not measured or calculated but is considered to be

delivered, all missing/undelivered quantities shall become deviations of the BRP to which the

BSP belongs.

Monitoring the quality of tertiary regulation shall be done by following activation of

contracted tertiary reserve.

NOSBiH shall analyse activation of tertiary regulation by comparing actual and planned

generation of the units which at a given moment were nominated for providing tertiary

regulation service. If this indicates that the BSP has engaged less than 80% of required

tertiary regulation power within any hour in a day, it shall be considered that the service has

not been adequatly provided and the BSP shall pay penalty in line with 4.3.1.1.

4.3.2 The Cost of Tertiary Regulation Energy

Those BSPs whose units are engaged for providing upward tertiary regulation service will

have the right to get compensation for the delivered energy. The payment shall be equal to the

product of the delivered energy of tertiary regulation and of the price of energy for upward

regulation which has been offered by the BSP in activities of the balancing market for a next

day (day ahead).

Those BSPs whose units are engaged for providing downward tertiary regulation service

shall be obliged to pay the for undertaken energy. The payment shall be equal to the product

of undertaken downward tertiary regulation power and of the price of energy for downward

regulation offered by the BSP in activities of the balancing market for a next day (day ahead).

If the BSP has offered negative price of energy for downward tertiary regulation, a direction

of payment shall be changed and the BSP shall have the right to get payment for undertaken

energy by the absolute value of the price offered by the BSP.

4.3.2.1 Tertiary Regulation Energy

Activated energy upward and downward tertiary regulation shall be equal to the requested

(required) energy as integral of the power of upward and downward tertiary regulation which

NOSBiH required from the BSP in one hour.

4.3.2.2 The Price of Tertiary regulation Energy

The price of energy for upward and downward tertiary regulation shall equal to the offered

price for upward and downward tertiary regulation, respectively.

5 Covering Losses in BiH Transmission System

5.1 Estimation of Losses in BiH Transmission System

30

In order to carry out the procedure to purchase energy to cover losses, NOSBiH shall

make estimations of the losses in the transmission system of BiH according to the

Balance data in the end of current year for next 12 months.

5.2 Procurement of Energy for Covering Transmission Losses

NOSBiH shall provide energy to cover transmission losses by a public procurement procedure

in October of a current year for 12 monthly lots of next year. If through an annual public

procedure the energy for covering losses has not been purchased for a certain month, a

monthly procedure shall be organized for that month.

The right to participate in the public procurement procedure belongs to licensed suppliers in

BiH, i.e. to market participants who own a valid electricity supply licence in BiH.

The criteria for selection of the most favourable bidder in the public procurement procedure

shall be the lowest price for MWh of electricity.

NOSBiH shall conclude an agreement with the selected bidder and it shall be based on

complete covering of electricity losses in BiH transmission system. An hourly deviation

between planned and realized amount of losses shall present the imbalance of the bidder with

whom the agreement for covering losses has been signed in a specific month.

NOSBiH shall deliver to the selected bidder estimated hourly amount of losses (planned

losses) in day D-1 for day D. The planned losses calculated by NOSBiH shall present a

framework of energy needed for covering losses and the bidder may correct these values if he

finds them incorrect.

Transmission losses (realize losses) shall be calculated as the algebraic sum of all injected and

overtaken electricity amount for each metering points defined in the Metering Registry for the

transmission system in BiH.

NOSBiH shall procure energy for covering losses along with energy for compensation of

unintentional deviations of BiH Control Area within the same public procurement procedure.

6 Elimination of Unintentional Deviations of BiH Control Area

Settlement of deviations of BiH Control Area towards external control areas (compensation

programme) shall be done in energy (kind) for each tariff period as provided in ENTSO-E

Operation Handbook. SHB (Slovenia – Croatia – Bosnia and Herzegovina) block coordinator

shall create the compensation programme for BiH control area and NOSBiH shall verify and

confirm it. Compensations are integer quantities of electricity expressed in MWh which are

imported or exported from BiH Control area towards ENTSO-E tariff system.

31

NOSBiH shall procure energy for compensation of unintentional deviations of BiH control

area through the same public procurement procedure which is carried out for procuring energy

for covering losses in BiH transmission system.

Compensations may have positive or negative value and are algebraically added to losses of

electricity in the transmission system of BiH as hourly need for electricity in a specific hour.

NOSBiH shall, upon the calculation, send preliminary data on amount of compensations to

the selected bidder for covering losses at the latest two days before the delivery of electricty.

NOSBiH shall deliver final values of compensations to the selected bidder after the

compensation programmes are harmonized at the interconnection level.

7 Q-V Support

Generator units shall be obliged to provide ancillary service of Q-V support and to maintain

the voltage at generators' conection points within the defined limits and in accordance to the

power chart. They shall do this without any compensation.

8 Reports on Ancillary Services

NOSBiH shall be obliged to create energy and financial report on ancillary services for each

BSP on a daily and monthly level.

8.1.1 Daily Report on Ancillary Services

Daily report on ancillary services shall contain the following energy and financial positions

for the BSP:

● Contracted power and the price for secondary reserve per individual agreements in hour

resolution for a given day,

● Nominated scope and offered price for energy in both directions in hour resolution for a

given day,

● The quality of secondary regulation on an hourly basis in terms of the signals ''Unit off

remote control'' and ''Unit not following'',

● Actually delivered (realized) scope of regulation on an hourly basis,

● Activated secondary regulation energy on an hourly basis which is the ground for

calculation of energy compensations,

● The reserve set out by the BSP in the Statement of inability to provide reserve,

● The price and amount of the compensation for non-provided reserve,

● Total financial value of reserve and secondary regulation energy on a daily basis,

● Contracted upward tertiary regulation power and the price of the reserve per individual

agreements in hour resolution for a specific day,

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● Contracted downward tertiary regulation power and the price of the reserve per individual

agreements in hour resolution for a specific day,

● Nominated energy prices in case of activation,

● Upward tertiary reserve which is the base for calculation of the reserve payment,

● Downward tertiary reserve which is the base for calculation of the reserve compensation,

● Lower compensation amount of upward tertiary reserve for failure to provide a qualitative

service,

● Lower compensation amount of downward tertiary reserve for failure to provide a

qualitative service,

● Engaged energy of upward tertiary regulation on an hourly basis which is the base for

calculation of energy compensation,

● Engaged energy of downward tertiary regulation on an hourly basis which is the base for

calculation of energy compensation,

● Total financial amount for reserve and for upward tertiary regulation energy on a daily

level,

● Total financial amount for reserve and for downward tertiary regulation energy on a daily

level.

8.1.2 Monthly Report on Ancillary Services

● Contracted power and the price for secondary reserve per individual agreements for a given

month,

● Offered price for energy in both directions in hour resolution for a given month,

● The quality of secondary regulation,

● Actually delivered (realized) scope of regulation,

● Activated secondary regulation energy which is the ground for calculation of energy

compensations,

● The reserve set out by the BSP in the Statement of inability to provide reserve,

● The price and amount of the compensation for non-provided reserve,

● Total financial value of reserve and energy which is the basis of invoicing,

● Contracted upward tertiary regulation power and the price of the reserve per individual

agreements,

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● Contracted downward tertiary regulation power and the price of the reserve per individual

agreements,

● Nominated energy prices in case of activation,

● Upward tertiary reserve which is the base for calculation of the reserve compensation,

● Downward tertiary reserve which is the base for calculation of the reserve compensation,

● Activated energy of upward tertiary regulation which is the base for calculation of energy

compensation,

● Activated energy of downward tertiary regulation which is the base for calculation of

energy compensation,

● Lower penalty amount of upward tertiary reserve for failure to provide a qualitative service,

● Lower penalty amount of downward tertiary reserve for failure to provide a qualitative

service,

● Total financial amount for reserve and for energy on a monthly level which is the basis for

invoicing.

NOSBiH shall deliver daily reports on ancillary services to the BSP on a day D+1 for day D,

i.e. on each working day for previous working day and for all previous non working days. If

NOSBiH faces any obstacle in the process of data gathering, it shall send the reports as soon

as the data are available. The purpose of daily reports it so make timely regulation of ancillary

services provided by BSPs. BSPs shall be obliged to inform NOSBiH on any irregularity

observed in daily reports. If NOSBiH accepts a suggestion regarding a daily report on

ancillary services, it shall send a new daily report to the BSP.

NOSBiH shall deliver a preliminary monthly report to the BSP for previous month until the 5

(fifth) day of each month at the latest. The BSP shall verify accuracy of the calculation and of

the data in the report and it shall send to NOSBiH its positive or negative review of the report

until the 7 (seventh) day of each month. If the review is positive, the report shall be the

ground for the invoicing process between NOSBiH and the BSP. If the review is negative,

NOSBiH and the BSP shall harmonize their positions in next two working days. After this

procedure and until the 10 (tenth) day of a month at the latest, NOSBiH shall send a new

report, which is final and binding, for the invoicing process.

If any fault is observed upon the delivery and payment of invoices, NOSBiH shall

periodically, upon the agreement with the BSP, make a correction of the ancillary services

calculation per months according to which NOSBiH and the BSP shall make a financial

settlement. Due date for the corrections shall be the 4 (fourth) month after the specific month.

8.1.3 Publishing the Report on Ancillary Services

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NOSBiH shall be obliged to create a summary daily and monthly report on ancillary services

and publish it on its web page. These reports may not contain confidential financial

information related to the BSP.

8.2. Invoicing and payment

NOSBiH and Providers shall submit invoices for payment by the 10 (tenth) day of a current

month for previous month. The basis for the invoicing between NOSBiH and the BSP shall be

the Report on ancillary services which NOSBiH submits to the BSP.

Ancillary Services Procedures - nosbih.ba...price cap in case that there were no bids accepted in a monthly tender 3.1.6.1 – coefficient for the penalty price for undelivered reserve

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