RAE, the Regulatory Authority for Energy, is seriously considering an alternative restrictive measure for the prevention of price-level extremities in the new balancing market, which has been volatile since the launch of target model markets in November.

The formula being considered by RAE, proposed by power grid operator through public consultation staged by the authority, would offer an adjustable price ceiling, not fixed, determined as a percentage of the wholesale electricity price in the day-ahead market.

RAE’s public consultation on the issue attracted an array of opinions, many of these conflicting.

The authority has requested further details from IPTO on its proposal in order to assess the measure’s feasibility, both at technical and regulatory levels. The power grid operator is confident its proposal can be implemented.

According to sources, RAE is also examining other balancing market rule revisions, the intention being to normalize offers submitted by producers operating gas-fueled power stations. These offers are weighing in heavily on balancing market prices, which rose sharply in the first few weeks of the target model’s early-November launch.

The European Commission appears to have quietly given RAE the green light to impose restrictive measures as a transitional measure at the authority’s responsibility.