Konsultrapport Balansansvarigas förutsättningar Merlin Metis (2026)

Merlin & Metis, 10 February 2026 — Balansansvarigas förutsättningar (Conditions for Balance Responsible Parties). Submitted to Energimarknadsinspektionen (Ei). Authors: Christian Holtz, Jakob Helbrink, Bethel Zaya, Victor Renefalk. Study ran December 2025; delivered February 2026. Methodology: desk research, price data analysis, and 12 semi-structured stakeholder interviews (6 BRPs, 4 end customers, 2 academia/independent experts).

Summary

A knowledge base for Ei on how BRP (Balansansvarig part) market conditions have changed following three major market reforms in 2024–2025, and what the implications are for different market participant segments. The report documents rising balancing costs and risk, structural changes in BRP market composition, and emerging bilateral risk management practices.

The BRP/BSP role split (1 May 2024)

On 1 May 2024, the previous combined “Balansansvarig” role was formally split into two:

• BRP (Balance Responsible Party, Balansansvarig part): economically responsible for balancing inmatning and uttag per elområde and per settlement period (now 15 minutes). Governed by BRP-avtal with Svk
• BSP (Balance Service Provider, Leverantör av balanstjänster): provides prequalified resources for ancillary services (FCR, aFRR, mFRR) to Svk. Governed by BSP-avtal. Requires an existing BRP agreement for the delivery point — a fristående BSP (independent aggregator) role is not yet available

Timeline for fristående BSP: Svk estimates full implementation (allowing a BSP to operate without holding a BRP agreement) by 2028. This is the key enabling mechanism for third-party aggregators to participate without needing to manage BRP responsibilities.

Three market reforms and their cost impact

Three structural changes were introduced in 2024–2025, collectively causing a marked increase in balancing costs and risk:

1. Flödesbaserad kapacitetsallokering (flow-based market coupling) on the Nordic day-ahead market — introduced October 2024. Reduces available transmission capacity (ATC) allocated to intraday, limiting BRPs’ ability to correct imbalances before delivery
2. 15-minutersavräkning (15-minute settlement, MTU/ISP) — introduced March 2025. Quarter-hours that previously netted out within an hour are now individually settled; cannot net opposing imbalances across quarters
3. mFRR EAM (Energy Activation Market, automatiserad mFRR-aktivering) — introduced 4 March 2025. Continuous algorithmic activation of mFRR bids; has caused higher price differentials (the raw’s only figure is the >1,000 EUR/MWh differential hours in its Figure 3; total mFRR activated volume rose 41% and imbalance cost rose by over 100 M EUR in 2025 vs 2024) and near-elimination of unregulated periods

Combined effect: hours with spot–balanskraftspris differentials above 1,000 EUR/MWh, which did not exist before 2023, increased sharply (“ökat kraftigt”) in 2025. The raw says the rise in the spot–balanskraft differential has been largest in SE3/SE4, not that the count of >1,000 hours is highest there.

Imbalance pricing rules (current)

• Enpris system (since November 2021): BRP always buys/sells imbalance at balanskraftspriset, regardless of direction. A BRP can earn on imbalances in the opposite direction to the market’s regulation need
• Obalansavgift: 1.15 EUR/MWh on all imbalance volume, direction-independent (2025–2026). Additional: grundavgift 1.6 EUR/MWh; veckoavgift 30 EUR
• Tolerance band: Svk added a ±10 MW tolerance in the AOF (automatic optimization function) algorithm for mFRR EAM in 2025 — allows minor deviations from exact mFRR requirement if cost-efficient; tied to direct activation and indivisible bids; the raw’s aim is a lower marginal price (raw: autumn 2025)

BRP market structure

• BRP count: grew from 20–30 before 2022 to 70 as of early 2026. Growth mainly from small trading and flex-focused entrants
• Volume concentration: approximately 11 BRPs hold >90% of energy volume
• Supply structure change: the number of BRPs willing to offer risk-bearing BRP services to large electricity users and producers has decreased — smaller BRPs without physical assets assess that the balancing risk is too large to carry at a fixed price for large customers
• Result: large electricity users and wind/solar producers increasingly find it difficult or impossible to get a fixed-price BRP service; competition for BRP services for this segment has weakened

BRP market segments (7 types identified)

Emerging bilateral risk contracts

• Buyers of balancing power (BRPs managing imbalances) and sellers of mFRR (BESS operators) are increasingly entering bilateral risk-sharing contracts outside spot/ancillary markets
• BESS operators seek fixed revenues to finance investments (tolling agreements)
• BRPs seek to cap balancing cost exposure
• MnM assesses this is a complex transaction requiring high transparency and information sharing between parties to function well
• Current flex revenue transparency between BRPs and resource owners is assessed as “relativt oreglerad” (relatively unregulated; translated) with respect to transparency and settlement between BRPs/retailers and flex-resource owners, compared to financial markets

Regulatory and design issues identified

Pending reforms

• Intradag + flödesbaserat: Lack of flow-based allocation on the intraday market reduces its effectiveness post-October 2024; intraday ATC is severely constrained. Per Svk’s timeline, flow-based capacity calculation for the intraday auctions comes at the end of 2027 (no date for continuous intraday or balancing); 30-minute gate closure also in 2027
• Trilateral mFRR capacity market (Sweden, Finland, Denmark since November 2024): Norway stands outside; inclusion is a respondent wish with no date communicated (an earlier version wrongly named Norway as a trilateral partner)
• ATC optimization method on intraday: current approach maximizes MW sum without weighting by expected trading value; a value-weighted approach is suggested

Nordic harmonization

• Finland (Fingrid) publishes imbalance prices in real time; Sweden (Svk) does not — asymmetry hinders self-regulation by BRPs
• Finland allows trading right up to delivery period; Sweden closes earlier
• MnM recommends harmonizing toward Energinet and Fingrid practice

SO GL Article 182 / BSP-avtal

• Updated BSP agreement 2026 will address Art. 182 mechanism allowing DSOs to restrict BSP deliveries that threaten local grid security. Limits apply only to new prequalifications and are not retroactive; revenue effect for BSPs is mixed (potentially negative, potentially positive if it enables more flexible connections)

Free-standing BSP / independent aggregator

• Target: 2028 for Svk to complete implementation
• Purpose: allow aggregators to participate in ancillary service markets without needing BRP agreements per delivery point — expected to increase demand-side flexibility participation

Measures raised (MnM recommendations vs interview respondents’ suggestions)

An earlier version listed five numbered “Recommendations to Ei”; the raw contains none. Its explicit MnM recommendations are: (1) harmonise Nordic rules toward Energinet/Fingrid practice (real-time imbalance pricing, late trading), and (2) that Ei review transparency of intraday market data. Other items — advocating intraday flow-based allocation, transparency toward flex owners — are measures raised by interview respondents. Two earlier items (“monitor for market failure”, “NordREG coordination on fristående BSP”) do not appear in the raw at all.

Relevance to other wiki pages

• Balancing Markets — three market reforms, BRP/BSP split, mFRR cost development, enpris rules, obalansavgift, tolerance band, bilateral contracts
• Demand Response — fristående BSP enabling third-party aggregators; BRP as gatekeeper for flex resource access to markets
• Energy Storage — BESS tolling agreements; BESS as balancing risk buyer/seller; mFRR EAM impact on BESS arbitrage economics

Data gaps

• Actual aggregate increase in mFRR costs (EUR/year) following March 2025 reforms — the raw text does state the headline magnitude (mFRR activated volume +41%; imbalance cost up by over 100 M EUR in 2025 vs 2024) — remaining gap is a per-year EUR series