The Balancing Mechanism (BM) is a real-time process operated by NESO to maintain system balance:
It operates from Gate Closure (1 hour before delivery) through real time and is the final stage of physical system balancing.
The BM is best understood as a real-time constrained optimisation process under uncertainty, implemented through the acceptance of bids and offers.
Role
Forward and day-ahead markets cannot fully resolve:
- Forecast errors (demand, wind, solar)
- Plant outages
- Network constraints
- Intra-day trading changes
The BM enables NESO to correct these imbalances in real time.
Key Properties
- No forward commitment required
- Availability declared dynamically
- Actions are based on submitted bids and offers
Interpretation
- The power system is continuously out of balance
- The BM is the mechanism used to correct this in real time