What is the energy balancing guideline?

October 30, 2025 •

3 min read

Introduced in 2017, the European Union's Electricity Balancing Guideline (EB GL) was designed to establish a framework for harmonizing electricity balancing markets across the EU. This framework provides a clear set of rules for the crucial task of maintaining grid stability across the continent.

Quick Summary

The Energy Balancing Guideline standardizes the procurement and exchange of balancing energy across EU countries. It promotes market-based solutions, integrates new technologies, and enhances grid stability.

Key Points

Harmonization of Markets: The EB GL standardizes electricity balancing markets across Europe, moving from fragmented national systems to a single, integrated framework.
Enhanced Grid Stability: By mandating cross-border cooperation and defining standard reserve products, the guideline ensures that electricity supply and demand are always balanced to maintain grid frequency.
New Market Access: The regulation allows new players, such as demand response providers and renewable energy generators, to participate in balancing markets, increasing competition and innovation.
Market-based Procurement: It promotes efficiency and cost-effectiveness by requiring that balancing services are procured via transparent, market-based mechanisms rather than national, non-market arrangements.
Platform Integration: The EB GL has led to the creation of pan-European platforms (PICASSO, MARI, TERRE) for exchanging balancing energy, creating a single market for these services.
Financial Responsibility: The guideline implements robust settlement and imbalance pricing rules, ensuring that market participants are financially incentivized to maintain their commercial balance.

The Purpose of the Energy Balancing Guideline

The Electricity Balancing Guideline (EB GL), formally known as EU Regulation 2017/2195, was established to integrate and harmonize the internal electricity market across the EU. Its main goal is to ensure the European electricity grid remains stable and secure, especially with the growth of variable renewable energy. Before the EB GL, each country had its own balancing market rules, leading to fragmentation and inefficient cross-border resource sharing.

Addressing National Disparities

National Transmission System Operators (TSOs) previously managed their grids independently with varied rules for procuring and settling balancing services. The EB GL addresses this by creating binding pan-European rules, shifting balancing from a national to a continent-wide concern and supporting the EU's goal of an integrated energy market.

Key Components of the EB GL

The EB GL framework includes several key elements to achieve its objectives.

Market-based Procurement: Balancing capacity and energy must be procured via transparent, market-based mechanisms to boost competition and efficiency.
Standard Product Definitions: Standardized products for Frequency Containment Reserve (FCR), Frequency Restoration Reserve (FRR), and Replacement Reserve (RR) enable seamless cross-border trading.
Settlement and Imbalance Pricing: Clear rules for settling balancing energy and calculating imbalance prices incentivize market participants to maintain balance and hold them accountable for deviations.
TSO Cooperation: TSOs are required to cooperate and exchange balancing energy across borders for more efficient resource use and improved security of supply.
Inclusion of New Players: The guideline supports the participation of new entities like demand response aggregators and renewable energy generators in balancing markets.

How Energy Balancing Works in Practice

Balancing involves matching electricity generation with consumption to maintain the grid frequency at 50 Hertz. Instant reactions are needed to counteract fluctuations from sources like variable wind power or changes in demand. The EB GL establishes a hierarchy of reserves to manage these events:

Primary Balancing Energy (FCR): Activated automatically within 30 seconds for small frequency deviations.
Secondary Balancing Energy (FRR): Activated within 5 minutes to stabilize frequency and relieve the primary reserve.
Replacement Reserve (RR): Manually activated within 15 minutes for larger, longer imbalances, replacing the FRR.

TSOs manage the activation of these reserves, which are provided by Balancing Service Providers (BSPs) who receive payment for their capacity and activated energy. More technical information can be found at the official ENTSO-E resource(https://www.entsoe.eu/major-projects/network-code-implementation/cross-border-electricity-balancing-pilot-projects/Pages/default.aspx).

Standardized Platforms and Market Integration

Pan-European platforms were created under the EB GL to facilitate cross-border balancing energy exchange. These platforms standardize exchange and settlement, ensuring a level playing field. Key platforms include:

PICASSO: For automatically activated Frequency Restoration Reserves (aFRR).
MARI: For manually activated Frequency Restoration Reserves (mFRR).
TERRE: For Replacement Reserves (RR).

Comparison: Pre-EB GL vs. Post-EB GL Market


Feature	Pre-EB GL Market	Post-EB GL Market (Harmonized)
Market Scope	Primarily national markets with limited cross-border cooperation.	Pan-European market with standardized cross-border exchanges.
Market Access	Limited access for new and innovative players, like demand response providers.	Non-discriminatory market access for all participants, including demand response and renewables.
Reserve Products	Differing national products and technical specifications.	Standardized reserve products (FCR, FRR, RR) across the EU.
Cost Efficiency	Lower efficiency due to market fragmentation and national-level procurement.	Higher efficiency through greater competition and pooled resources across borders.
Grid Stability	Dependent on national measures and limited resource sharing.	Enhanced stability and security through coordinated regional and European actions.

The Future of the Energy Balancing Guideline

Implementing the EB GL is an ongoing process with rules and methodologies continuously developing. As the energy landscape evolves with more renewables and demand-side participation, the guideline offers a framework to address future challenges. Its success relies on collaboration between TSOs, regulators, and market participants to fully realize the benefits of a harmonized balancing market, ensuring a reliable and efficient grid during the energy transition.

Conclusion: The Path to a Harmonized Grid

The energy balancing guideline is a critical part of EU energy policy, aiming for a more integrated, secure, and efficient electricity market. By standardizing rules and promoting market mechanisms, the EB GL has fostered cross-border cooperation and opened doors for new technologies. This enhances grid stability and ultimately benefits consumers with lower costs and a more resilient power supply. The EB GL will remain crucial in managing grid stability as the European energy system moves towards sustainability.

Frequently Asked Questions

The core purpose of the EB GL is to harmonize and integrate the electricity balancing markets across the European Union to ensure the stability and security of the electricity grid.

The EB GL improves grid stability by requiring Transmission System Operators (TSOs) to cooperate and exchange balancing energy across borders. It also standardizes the types of reserves available to quickly counteract any imbalance.

The EB GL affects Transmission System Operators (TSOs), Balancing Service Providers (BSPs), and Balance Responsible Parties (BRPs), which include generators, suppliers, and large consumers.

The EB GL standardizes three main types of reserves: Primary (FCR), Secondary (FRR), and Replacement Reserve (RR). They are activated at different speeds to maintain grid frequency.

Market-based procurement ensures that balancing services are acquired efficiently through open competition, which helps to lower costs for consumers compared to pre-harmonized national systems.

The EB GL enables and facilitates the participation of new players, such as aggregators of renewable generators and demand response services, in the balancing markets, creating new revenue streams.

PICASSO and MARI are pan-European platforms for exchanging balancing energy. PICASSO is for automatically activated Frequency Restoration Reserves (aFRR), while MARI is for manually activated FRR (mFRR).