Transcript DG TREN - Europa

Electricity Balancing Framework
Guidelines
ACER Workshop
Ljubljana, 24 October 2011
 ACER
.
Regulation (EC) No 713/2009 establishes an Agency for
the Cooperation of Energy Regulators (ACER)
»
A community body with legal personality
»
Purpose: “[…] to assist the regulatory authorities […] in
exercising at Community level the regulatory tasks [...]
and to coordinate their actions”
»
Fully operational since March 2011
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 ENTSO-E
.
Regulation (EC) No 714/2009 establishes the European
Network of Transmission System Operators for Electricity
(ENTSO-E)
»
“All transmission system operators shall cooperate at
Community level through the ENTSO for Electricity, in
order to promote the completion and functioning of the
internal market in electricity and cross-border trade and to
ensure the optimal management, coordinated operation
and sound technical evolution of the European electricity
transmission network.” (Article 4)
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 Framework Guideline
.
.
.
.
The Commission shall request ACER to develop a non-binding
framework guideline
Framework guideline to set out clear and objective principles
for the development of network codes
Each framework guideline shall contribute to
» non-discrimination
» effective competition
» efficient functioning of the market
After the Commission’s request, ACER has 6 months to prepare
the framework guideline. The EC may extend that period upon a
reasoned request from ACER.
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 Network codes
.
.
.
The Commission shall request the ENTSO-E to submit a network
code (which is in line with the relevant framework guideline) to
ACER within12 months
The network codes shall be developed for cross-border
network issues and market integration issues, and shall be
without prejudice to the Member States’ right to establish national
network codes which do not affect cross-border trade
The network codes are made legally binding through the
comitology process
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 Basic timeline
Agency prepares
Framework
Guidelines
EC
requests
Agency to
submit
framework
guidelines
EC defines
priorities
for
network
codes
12 Months
ENTSO prepares
network codes
EC requests
ENTSO to
submit
network code
ENTSO
submits
network code
to Agency
3 Months
Agency
reviews
network
codes
COMITOLOGY
6 Months
Agency
submits
network code
to EC when
satisfied,
recommending
approval via
Comitology
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 Process description
..
..
..
..
Framework Guidelines (FG) − ACER
Invitation from the Commission to draft FG
Public consultation
Adoption of the FG / Submission to the Commission (6 months)
Network Codes (NC) − ENTSO-E
Commission request
ENTSO-E prepare the NC in line with the FG (12 months)
ACER reasoned opinion on NC (3 months)
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 State of play
..
ACER deliverables on FG (2011 Work Programme)
..
.
Electricity Grid Connection (finished)
Capacity Allocation and Congestion Management (finished)
System Operation (on-going)
Balancing (to be delivered in mid 2012)
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 Areas for network codes
Network security
and reliability rules
Network connection
Grid connection
rules
Third-party access
rules
Data exchange and
settlement rules
Interoperability
rules
Operational
procedures in
emergency
Capacity allocation
and congestion
management rules
Rules for trading
Balancing rules
Rules regarding
harmonised
transmission tariff
structures, ITC
Energy efficiency
regarding electricity
networks
Transparency rules
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 Project timeline
.
.
.
.
.
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April 2011: launch of the balancing framework guideline project –
setting up ACER drafting team (NRAs)
July / August 2011: publication of an open letter and creation of the
expert group
24 October 2011: public workshop to get feedback from
stakeholders
December / January 2012: finalisation of the draft IIA and FG and
approval procedures within ACER
February – March 2012: public consultation on draft IIA and FG
June 2012: final IA and FG and approval procedures within ACER
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 Process
Identification
of problems
Identification
of objectives
Identification /
assessment of
policy options
Selection of
options
Expert Group
Sept 2011 January 2012
Workshop to
get a first
feedback from
stakeholders
Draft
Framework
Guideline
Public
consultation
Finalisation of
the FG
February 2012
- June 2012
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 Role of the Ad-Hoc Expert Group
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.
.
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The Impact Assessment procedure envisages the possibility to
use ad hoc expert groups
The goal of the group is to provide expert support to ACER on
developing input for Framework Guidelines
Experts are invited ad personam, not representing companies,
but providing their expertise
The expert group operates in accordance with the Chatham
House rules, but also takes into account the need for a high level
of transparency (minutes in a summary form to be publicly
available)
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 Ad-Hoc Expert Group
Industry
• Javier Alonso
Perez
• Christopher
Proudfoot
• Nigel T.Hawkins
• Susane Dornick
• William Chan
(consumer side)
Academics /
consultants
TSOs
• José Ignacio de
la Fuente
• Yves Harmand
• Emeline Spire
• Lasse Sundahl
•
•
•
•
Goran Strbac
Gerard Doorman
Rudi Hakvoort
Christian
Hewicker
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
..
..
..
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Rationale for the drafting of the FG
Very few XB exchanges currently in place
A significant amount of remaining capacities
Highly concentrated markets
More potential to exercise market power
Increased and increasing share of intermittent RES (wind)
Increasing integration of DA and ID markets
Low participation of demand response
Aim of the FG
Provide an adequate framework to foster an effective
balancing markets’ integration
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
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Policy objectives
Guarantee / enhance short-term operational security
» Does the proposed option make short-term operational
security lower, equal or higher than it currently is?
» Does the proposed option improve market signals for
investments and security of supply?
Competition and economic efficiency
» Does the proposed option improve competition?
» Are the overall balancing costs reduced? To take into
account potential side-effects on the market, the overall
social welfare should be considered.
Integration of variable generation
» Does the proposed option facilitate integration of variable
generation and encourage renewable BRPs to be in
balance?
» Does the proposed option limit or increase entry barriers for
variable generation?
Your opinion on these objectives?
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
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Evaluation criteria
Key criteria:
»
»
Effectiveness (achieve the
objectives)
Time of implementation
(pragmatically feasible,
when?)
»
Efficiency (least cost and
highest benefit)
»
Coherency (trade-offs
across the economic, social
and environmental domain)
»
Criteria
Option 1
Option 2
Security of
supply
Effectiveness
Competition
and
economic
Renewables
Time of implementation
Efficiency
Coherency
Sustainability (adaptability
in case of major external
changes)
Sustainability
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
Scope: topics and options
1. No EU action
2. No exchanges of reserves
Balancing reserves
3. Intermediate step
4. Full integration
No requirement to enable cross-border exchanges between control areas
No transmission capacity reservation and no exchange of reserves
Harmonisation of minimum-required balancing variables allowing X-border
exchanges of balancing energy (GCT, technical characteristics, etc.)
Common provision of automatic reserves
1. No EU action
2. TSO-BSP model
Balancing energy
3. TSO-TSO without CMO model
4. TSO-TSO with CMO
Balancing
responsibility &
imbalance
settlement
1. No requirements
2. Minimum harmonisation
3. High harmonisation
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 Input to the discussion
.
It is widely considered that one of the main challenges of introducing
an EU-wide cross border balancing mechanism is the wide variety of
existing arrangements adopted at national level.
» Shall the Balancing FG define a common target model, as it is
done for CACM? Are interim solutions acceptable, allowing for a
step-by-step approach?
» Should the Balancing FG describe the roles and responsibilities
of BRPs?
» What level of harmonization is required to allow for an efficient
exchange of balancing resources to be introduced?
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 Input to the discussion
.
.
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Existing balancing rules often assume that only
generation sources can provide balancing energy and
capacity.
Demand response is essential to achieve higher energy
efficiency.
How to achieve higher participation of demand response
in electricity balancing?
» The target model should enable participation of demand in the
balancing market on equal grounds.
» The minimum standards for participating in the balancing market
should not hamper participation of demand response.
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 Balancing energy – Target model
..
Should the FG define the EU target model?
What should be the final target model?
1. TSO-TSO model without Common Merit Order list
» Implementation deadline?
2. TSO-TSO model with Common Merit Order list
» Implementation deadline?
» Transitional arrangements (TSO-TSO w/o CMO)?
» How to ensure cross-regional harmonization?
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
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Market & Settlement
Should the FG define the EU target model for how the
TSO “sell” balancing energy?
How should the final target model look like:
» No requirements?
» Minimum harmonisation?
» High / full harmonisation?
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 Balancing energy – harmonization issues
Transitional
Target Model
Final
Target Model
Gate-closure times
Essential vs
desired?
Essential vs
desired?
Market time-unit (1h vs. 15min)
Essential vs
desired?
Essential vs
desired?
Imbalance pricing and settlement
Essential vs
desired?
Essential vs
desired?
Balance responsibility
Essential vs
desired?
Essential vs
desired?
Merging balancing and redispatching
markets
Essential vs
desired?
Essential vs
desired?
Mandatory participation
Essential vs
desired?
Essential vs
desired?
Netting of Area Control Error (ACE)
Essential vs
desired?
Essential vs
desired?
Harmonization
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 Input to the discussion
.
In the case of cross border exchange of reserves, transmission
capacity may need to be reserved. Recent ENTSO-E’s position paper
advises to leave the possibility to reserve interconnection capacity
open in case an increase of social welfare is demonstrated.
» Should the FG foresee the possibility to reserve interconnection
capacity (subtracting it from day ahead or intraday allocations)?
» Is it feasible to produce reliable cost/benefit analysis to
demonstrate the gain of social welfare?
» With balancing being linked to system security, how will TSOs
guarantee that these reserved transmission capacities will be
fully firm?
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 Input to the discussion
.
There are currently different products are used to balance the system,
some systems rely mainly on secondary regulation (automatically
activated reserve), while others mainly on tertiary (manually activated
reserves).
» Should the scope of this FG cover exchanges of balancing
energy only or reserves (e.g. primary, secondary, tertiary) as
well?
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 Balancing reserve – harmonization issues
Transitional
Target Model
Final
Target Model
Possibility for reservation of XB capacities
Essential vs
desired?
Essential vs
desired?
Reserve products (within FG SO)
Essential vs
desired?
Essential vs
desired?
Common reserve dimensioning and
requirements
Essential vs
desired?
Essential vs
desired?
Common procurement
Essential vs
desired?
Essential vs
desired?
Procurement time-frames
Essential vs
desired?
Essential vs
desired?
Harmonization
Others?
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 Input to the discussion
.
Reserve capacity is procured by European TSOs in many
different ways: on the basis of long term contracts (up to 3
years) or a few hours before real time on the basis of bids
and offers submitted by the BSPs.
»
Are the different procurement timeframes constituting an
obstacle for the integration process? Can they distort the
market operation once the resources are exchanged cross
border?
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
Thank you for
your attention
www.acer.europa.eu
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