A balancing group is an association of electricity market participants, which is created on the basis of an agreement on the creation of a balancing group in accordance with the Law of Ukraine "On the principles of functioning of the electricity market of Ukraine".
Such an association assumes that each party included in the group is responsible for the imbalance of electrical energy of all other participating parties. Participating in a balancing group allows participants to significantly save on variances during forecasting.
In practice, the activity of the Balancing Group consists of the purchase and sale of electric energy (in the number of imbalances) between the members of the Balancing Group and the Party responsible for the balance (SVB). In turn, SVB carries out the purchase and sale of the final (balanced) amounts of imbalances from NEC "Ukrenergo".
(arising under the influence of random causes) in a significant number of consumers, to whom electricity is supplied by members of the same Balancing Group.
With the introduction of two separate prices for the settlement of positive and negative imbalances in Ukraine from March 1, 2020, supplier losses from imbalances are increasing significantly.
Suppliers with a small number of consumers with difficulty to predict operating conditions will suffer losses, because, in the conditions of fierce competition, they will not be able to pass on the increased losses from imbalances to consumers, increasing the price of electricity. In turn, suppliers who are part of balancing groups (for example, ETG, United Energy, D.Trading, and others) with a significant number of consumers will have corresponding advantages in the market and higher profitability.
Participation in a balancing group is usually beneficial for all its members because thanks to this they will be able to minimize losses on imbalances due to compensation within the group. In fact, within the framework of the Balancing Group, electricity is bought/sold by participants at prices set on the "day-ahead market" without any increase/decrease in price. The balancing group allows you to reduce losses by 20 to 80% in the regulation of imbalances.
This is done by only one group member who is part of this association.