Government Adopts Decree on Balance Responsibility of Guaranteed Suppliers and Preferred Electricity Producers – Who Pays the Fee When Fewer Kilowatts Are Produced

The Government of Serbia has adopted the Decree on taking on balance responsibility, which determines the rights and the obligations of a guaranteed supplier and a preferred producer in the market premium system.

The decree also regulates the criteria for determining a good prognosis of the production of electrical energy, the fee that is paid in case the producer does not project its electricity production well, the duration and the termination of the agreement on the taking on of balance responsibility, as well as the conditions and the procedure for signing agreements and other important elements.

The producer, as said, has the right to transfer the balance responsibility to the guaranteed supplier until the expiration of the deadline of six months from the date of the market merging or the expiration of the deadline of 30 months from the date of the establishment of an organized intraday market. The producer which transfers the balance responsibility to another responsible party is free to set the mutual rights and obligations.

The producer is obliged to make reasonable projections of the production of electrical energy in line with the good projection practice. The good projection practice is the projection of the production of electrical energy in the accounting interval with the skill and attention justifiably expected from a reasonable and competent producer of electrical energy.

The good projection practice is determined by an independent expert through an independent analysis of the projection of the production of the producer’s power plant. The criteria for determining a good projection of the production of electrical energy are:

– the absolute difference between the independent analysis of the projection by an independent expert and the reported production of the producer to the guaranteed supplier for each accounting interval within the period covered by the independent analysis (absolute deviation) is equal to or lower than 5% of the installed production power of the producer’s power plant multiplied by the length of the accounting interval and

– the absolute difference between the reported production and the realized production of the producer is lower than the absolute difference between the independent analysis of the projection by an independent expert and the realized production of the producer.

If the independent analysis of the projection shows that the producer has not met any criterion of a good projection, it is obliged to pay to the guaranteed supplier an additional compensation for each accounting interval which is calculated by multiplying the 100% price of electrical energy in the day-ahead market with the absolute deviation of the projection expressed in MWh.

Negative and positive balance deviation

In the case of a negative balance deviation, that is, in the case when the producer generates less electrical energy than the amount it reports to the guaranteed supplier, the producer is obliged to pay to the guaranteed supplier the difference between the reported production price of electrical energy and the realized production expressed in MWh at the price on the day-ahead market for that interval of the balance deviation.

In the case of a positive balance deviation, that is, in the case when the producer generates more electrical energy, the guaranteed supplier is obliged to pay to the producer the difference between the realized production and the reported production of electrical energy expressed in MWh at the price on the day-ahead market for that interval of the balance deviation.

If the price on the day-ahead market cannot be determined, the difference between the reported and the realized production expressed in MWh is paid, at the average price for the day-ahead market for the same interval of the balance deviation in the past ten consecutive days, when the price on the day-ahead market could be determined.

The producer is obliged to submit to the guaranteed supplier the request for the signing of the agreement on the taking on of balance responsibility within 30 days of the date of the expiration of the status of a temporary preferred producer, and the supplier is obliged to prepare the agreement on the taking on of balance responsibility within 30 days of the reception of the request.

Vlada Republike Srbije

Government of Serbia

Decree on taking on of balance responsibility

criteria for determining the good production projection

good projection practice

production of electrical energy

balance responsibility

production of electricity