ČEPS pursues the following objectives when purchasing AnS (in this order):
- Ensuring high quality and reliability of supply at the TS level in compliance with standards defined in the Grid Code;
- Minimising the cost of AnS procurement and
- Optimising the costs of market participants relating to balancing services.
Two trading tools are used by the Company in order to purchase AnS:
Long-term contracts concluded with the winners of tenders for individual AnS categories. The respective AnS is then paid for at the offer price, i.e. the price specified in the relevant agreement between ČEPS and the AnS provider. Roughly 90% of AnS are purchased this way. Invitations to tender are published either in paper form or electronically via the Electronic Tender module of the Damas Energy system.
The remaining portion of AnS, i.e. roughly 5%, is purchased in the day-ahead market for ancillary services (AnS DAM). The so-called marginal price is applied in relation to AnS purchase in the AnS DAM. The marginal price is defined as the highest bid price offered and duly accepted during a given trading hour. This price is subsequently used to pay for all AnS bids accepted by ČEPS and actually provided by the respective providers.
AnS DAM trading rules are set out in the Agreement on Accepting ČEPS’s Commercial Conditions for AnS Provision, Damas Energy Operational Rules and the Grid Code. AnS DAM forms part of the Damas Energy system. Any AnS DAM participant must meet the required technical conditions with regard to its generating units, i.e. so-called certification.
ČEPS observes the following principles when selecting AnS Providers:
non-discriminatory approach to AnS providers and their tenders in compliance with the relevant tendering procedure rules;
specification of the criteria employed for selecting AnS providers;
verifiability of procedures - important historical data concerning each and every trading procedure is stored for future reference and
security of data transmission.