the role of power networks for the future of cross-border ... networks for futur… · 1 the role...

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The role of power networks for the future of cross-border

energy markets

Stela Nenova, Policy Senior Specialist, ENTSO-E

3rd Dundee Energy Forum, 10-11 June 2019

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EU law gives ENTSO-E & TSOs responsibilities

Rules, tools and players of the EU Internal Energy MarketThe link between EU institutions & power networks

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Rules, tools and players of the Internal Energy MarketENTSO-E: Implementing the 3rd Energy Package

Smart, data-centric system

One-way power flows

Predictability

PAST FUTURE?PRESENTVariability &

decentralisation

Bidirectional flows & smart technologies

Engaged prosumersElectrification of transport

A paradigm shift in the power system

The clean energy transition: Transmission makes it happen 27% renewables by 2030 = +/- 45% for the power system

CHALLENGES

• System stability• Resource variability• New connections• Changed power flows • Integrating demand-side resources • Empowering consumers & managing

data• Unlocking flexibility

Wind

Solar

Hydro

FlowNorth-south

FlowNorth-EastSouth-West

SETTING THE SCENE

Keep global warming well below 2o C

Clean Energy Package - 2030 Targets

• 45% reduction of CO2 emissions

• 32,5% improvement in energy efficiency

• 32% of energy from renewables

2050 Energy Strategy

80 – 90% reduction of CO2 emissions and decarbonisation of the energy system by:

• Energy efficiency• Nuclear energy• Renewable energy• Carbon capture and storage

MARKETSInternal Energy Marketdeveloped voluntary & regionally

EU guideline on capacity allocation &

congestion management

OPERATIONSRegional security coordinators created on a voluntary basis

Registered in the EU system operation

guideline

PLANNINGRegional planning used in the EU 10-year network development process

TYNDP used as basis for the EU

Projects of Common Interests

TSOs in ENTSO-E – a success story for regional cooperation

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Market integration

for all timeframes

Including links inside countries

Regional security

coordination

Enabling more RES &

demand response

Rules, tools and players of the Internal Energy MarketTackling the increasing complexity

Implementation of the EU Network Codes

Strengthening the European grid

Enhancing existing cooperation at all levels

COOPERATION

EU

National

Regulators & ACER

TSOs & ENTSO-E

Distribution

Stakeholders

11/2006: TLC

02/2015: MRC+ CSE

02/2014: NWE

05/2014: MRC

05/2015: MRCCWE Flow-Based

CapacityCalculation

‘REGIONALISM’ IN THE POWER MARKET: A SUCCESS STORY

11/2011: CWE

1990sNord Pool


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Reaping the benefits of market integration

• 1400 TWh representing 50% of consumption in European market coupling

• 1 billion Euros in social welfare created by allowing cheapest electricity to flow to main consumption centres

DAY-AHEAD MARKETS INTRADAY MARKETS

• 140 TWh traded intraday on main power exchanges in 2017

0200400600800

1000120014001600

2009 2010 2011 2012 2013 2014 2015 2016 2017

Regional Coordination Centers (RCCs): the new faces of TSO regional cooperation

Enhanced regional cooperationframework through the Regional Coordination Centers (RCCs) building upon existing regional initiatives and the EU Network Codes

New tasks and responsibilities

To be set up and running by 1 July 2022

• 260 GW of RES connected• 25 GW in 2016• >10 GW of EU demand

side response

• NO multi-state interruptions recent years• Up to 300 coordinated regional tasks/day • Hundreds of trained employees in the

Regional Security Coordinators

• 23 states and 85% of European consumption market coupled

• 10 million data files made available yearly for 2500 daily users of ENTSO-E transparency platform

Security of supply

Competitiveness & Social WelfareSustainability

Network codes

Rules, tools and players of the EU Internal Energy MarketNetwork Codes – key enablers for EU energy integration

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From asset… …to smart optimization of generation and load

September 2016 in Denmark, one week (source Energinet.dk)

The flexibility challenge

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@ENTSO-E All rights reserved 15

CO2 CO2

- 80% emissions by 2040

POWER NETWORKS CUTTING DOWN EMISSIONS


2018

Renewables Other

30%

2040

Renewables Other

60%with grids

POWER NETWORKS DOUBLING SHARE OF RENEWABLES


POWER NETWORKS EFFICIENT USE OF CLEAN ENERGY

156 TWh of clean

energy saved each year= 1/3 of France’s power consumption


COST OF ‘NO GRID’

7.5 billion euros per year to invest until 2040

With power links Without power links

43billion

euros extra to payeach year for electricity

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POWER NETWORKS EFFICIENT MARKET INTEGRATION

Enhancement of wholesale price signals

RES integration

DSR, retail markets, role of DSOs & aggregators

European resource adequacy

Risk preparedness framework and security of

supply

Regional Cooperation

TSO-DSO cooperation and coordination

Governance

The Clean Energy Package: the right framework to address future challenges

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One system approach: new TSO-DSO cooperation creating value for the customer

TSO-DSO Cooperation

Extended data exchange, enhanced observability and controllability, right level of

transparency

Enable efficient use of flexibilities for congestion management on the grids and for balancing of the

power system

Facilitating markets and designing products for flexibility together with

customers, aggregators, suppliers, traders, DSOs, TSOs

ENTSO-E welcomes theEU DSO Entity and

looks forward to the futurecooperation.

CEP: joint ENTSO-E & EU DSO tasks on future Network Codes drafting, system operation and planning, demand response, interoperability

Policy regions

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Decision-making triangle 1

Regional TSO cooperation2

Regional Energy Forums underpinning cooperation in the electricity sector

Member states

Regulators

Other parties

System Operators

Regional Security

Coordinators

Picture from Pixabay

Power generation & trading

Power transmission

Power distribution

Energy services (retail)

Electric devices

End-use customer

Distributed resources (generation, storage, electric vehicles)

Power generation & trading

Power transmission

Power distribution

Energy services (retail)

Electric devices

End-use customer

Data hubs

Information & services platform owner

Information services

Information devices &

appliances

Information flowPower flow

TRADITIONAL ELECTRICITY

VALUE CHAIN

EMERGING ELECTRICITY

VALUE CHAIN

Source: IBM Institute for Business Value

New market Orchestration

role

Looking forward: new challenges and opportunitiesNew multi-sided orchestration platforms

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2. Who are the key players for TSOs?Looking forward: new challenges and opportunitiesDo not forget potential disruptive changes…

Electricity: European, Regional, national, local at once…

Thank you for your [email protected]

Transformative changes

Clean Energy Package

Picture by Nil Castellvi

Digitisation

Paris agreement

Regions

Innovation


Develop partnership with DSOsDigitisation &

Innovation

Develop a solid

governance for ENTSO-E

including long term financial

planning

ENTSO-E Bridge to

2022Develop Transparency & trust

ENTSO-E STRATEGYCOVERING KEY DIMENSIONS OF THE ENERGY TRANSITION

Customer empowerment

Integration of systems horizontally

Markets & sector

coupling

Integration of systems vertically


BACK UP SLIDES


Develop partnership with DSOsDigitisation &

Innovation

Develop a solid

governance for ENTSO-E

including long term financial

planning

ENTSO-E Bridge to

2022Develop Transparency & trust

ENTSO-E ROADMAPACTING ON THE ENERGY TRANSITION

Customer empowerment,

Transparency & Trust

Integration of power systems horizontally

Infrastructurre, Markets &

sector coupling

Integration of power systems vertically


Regional cooperation


POWER MAPS POWER PLATFORMS POWER APPS

POWER NETWORKSCOMMITTED TO TRANSPARENCY


TSOs will invest 114 billion euros in next 20 years to

build power bridges in Europe

Rescheduled

Investment on time

Delayed

Ahead

of time1

60 63

148

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New investment

POWER NETWORKS ACCELERATING THE ENERGY TRANSITION

Sustainability

Market integration

Security

of supply Customer

Infrastructure

development

Digital grid

ENTSO-E POWER FACTS EUROPE

...withCombining...

UPDATING THE ENERGY POLICY TRIANGLE

THE ‘TRILEMMA’ DIMENSIONS NEW ONES

Sustainability

Market integration

Security

of supplyCustomer

Infrastructure

development

Digital grid

ENTSO-E POWER FACTS EUROPE Empower citizens with facts on Europe and the

energy transition

The energy transition is multi-stakeholder, multifactor, multidimensional. It

requires involvement of all, and especially of citizens.

This calls for more credible and accessible information and data.

ENTSO-E is uniquely placed to offer sound data concerning the

wide energy system; enriching the discussion on the energy

transition.

ENTSO-E data is complemented by the most credible external data to

provide a complete and authoritative picture.

PowerFacts Europe is based on proprietary ENTSO-E datapoints, grouped

in six meaningful chapters, to facilitate the information and discussion

around Europe’s energy transition.

40%

60%

Ten Year Network Development Plan

Transparency Platform

R&I Roadmaps and Monitoring reports

Mid-term Adequacy Forecast

Network Codes Updates

Annual Reports

Statistical Factsheets

Incident Classification Scale report

Survey on Ancillary Services

Bidding Zone Technical report

Market Coupling and Forward Capacity Allocation monitoring report

External sources

ENTSO-E data reused and augmented ENTSO-E POWER FACTS EUROPE

ENTSO-E data sources

- Eurostat

- ACER Marketing Monitoring Report

Examples

- European Commission

- EU Energy Poverty Observatory


ENTSO-E POWER FACTS EUROPE CUSTOMERS AND THE TRANSITION

Engaging customers means given the means to grid users to put their flexibility at the service of the power system; creating value for society and reducing emissions.

Even if increasing year on year the rise in the volume of demand response used to maintain the security of the electricity system is slowing down.

Between 2015 and 2016, the volume of demand response in balancing markets went up by 313%. Between 2016 and 2017, the increase was of 225%

If technical and market rules are not adapted, some 140 GW of flexibility from the demand side could just be blocked from markets by 2030 -> resulting in 140 GW to be found often by turning on polluting generation plants

Quick investments are possible – with theright incentives

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Keep global warming well below 2 C and target 1.5 C

= Halve the power sector emissions by 2030

COP25 – Implement the Paris Agreement

ENTSO-E POWER FACTS EUROPE


SETTING THE SCENE

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Energy Transition: the flexibility challenge is real

50% Of the generating capacity from variable RES by 2030

20% Higher installed variable RES capacity compared to peak demand

20% Reduction of dispatchable capacity margin over peak load

14 Countries with wind and solar outputs likely higher than 80% demand already in 2025

350 Additional GW of wind and PV to be connected by 2030

Distributed generation impacts the whole grid and power system

Enhancing and valuing the flexibility potential is fundamental

Active consumers are needed for the whole system

TSO-DSO Coordination is key

Cross-border flows take advantage of the variety of generation mix and patterns

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Steerable generation is shrinking

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Net Generation Capacity Evolution in Europe

Generation Capacity Evolution in Germany (GW)*

*Source: ENTSO-E Transparency Platform**Source: ENTSO-E Summer Outlook 2018

Development: Coal Power Plant Capacity

Source: BDEW

The Future – Regional Coordination will evolve

To evolve overtime

Instruments for the implementation of EU network codes/ guidelines

MORE COORDINATION BRINGS: More security

Optimised operation

Economies of scale

Market integration

Maximised transmission capacity to markets

Links between operational security analysis and market support functions

TSOs MAINTAINING OPERATIONAL DECISION MAKING:

• Minimises risk of wide area events

• Minimises risk of cyber and terrorist attacks

• Cost control

Flexibility needs: Year 2025

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Hourly residual loads indicate high flexibility needs Need for flexibility increases to cope with the variability of RES

In MAF we consider the availability of a fixed capacity (marked as reserves) to beout of the market and always available to cover unbalances


3 million DOWNLOADS/ DAYREGISTERED USERS

12,000

ENTSO-E POWER FACTS EUROPE DIGITISATION AND THE TRANSITION

In three years the number of users of the ENTSO-E

Transparency Platform doubled from 6 000 to 12 000 users

More regulation for innovation is needed and digital

should be horizontal in all innovation projects.

Europe, in line with Mission innovation recommends 3% of revenues to be spent on RDI. From data published by the transmission system operators, the average is around 0.5%

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Zooming in: EU Electricity Market IntegrationThe IEM target model

FCAForward Capacity Allocation

CACMCapacity Allocation and Congestion Management

EBElectricity Balancing

Coordination of interconnector

capacities(flow based or

ATC)

TYNDP 2016 Projects: enabling the European Energy Transition

2x more interconnection capacities by 2030

Integrating up to 60% renewable energy sources

Up to 5 €/Megawatt hour reduction on bulk power prices

1% increase in the total consumer bill

€150 billion investment till 2030

Proper return for investors

Gain support from local communities

OPERATIONAL CODES

MARKET CODES

CONNECTION CODES

Reinforced security of supplyPlan, operate & monitor a grid with new challenges and new technologies

Greener power, smarter consumptionConnect new actors to the grid and enable them to play an efficient role

Wider market integration

Allow more competition, new entrants, and enhance resources optimisation

Rules, tools and players of the EU Internal Energy MarketHarmonising the rules of +/-30 countries: Electricity Network Codes and Guidelines

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Wind

Solar

Hydro

FlowNorth-south

FlowNorth-EastSouth-West

The Challenge – Energy Transition

50% Of the generating capacity from variable RES by 2030

20%Higher installed variable RES capacity compared to peak demand

20% Reduction of dispatchablecapacity margin over peak load

14Countries with wind and solar outputs likely higher than 80% demand already in 2025

350 Additional GW of wind and PV to be connected by 2030

Task Responsibility Approval

ENTSO-E ENTSO-E ACER

Pan-European“All TSOs”

EU TSOs All NRAs

Regional“All TSOs”

TSOsof the regions

NRAs of the region

NationalDepending on

national legislation (TSO, DSO, …)

National NRAs

Stakeholders involvement, from European and regional groups, until national bodies

Monitoring by ACER, EC, ENTSO-E

Rules, tools and players of the EU Internal Energy Market: Roles and Responsibilities:Different levels of responsibilities and harmonisation

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Improve price signals

• Complete integration of ID and balancing markets to increase liquidity

• Enable scarcity pricing in all timeframes

• Integrate RES into the market by removing priority dispatch & make them balance responsible

Enhance Demand Response

• Open participation to all markets directly, via supplier or via aggregator

• Dynamic pricing and hedging opportunities

• Easy to switch suppliers• Data management, smart

meters and hubs

Stronger cooperation

• Regional TSO cooperation• Stronger NRAs’ and MSs’

cooperation• Policy regions• DSO-TSO coordinated use

of distributed flexibilities• “EU Framework" for CRM

• Adequacy-based • Cross border

participation

Stronger and more interconnected European grid

How to meet the flexibility challenge?

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Source: ENTSO-E

Zooming in: Electricity Market IntegrationFrom physics to markets

60% increase in interconnector capacity by 2025 between the continent and the

Nordic

Cobra 700 MW

Kriegers Flak 400 MW

Nord Link 1400 MW

North Sea Link 1400 MW

Viking Cable 1400 MW

Hansa Power Bridge 700 MW

Jutland-Germany 1000 MW

Total 7000 MW

INVESTING IN POWER NETWORKS INCREASE CROSS BORDER TRADE

Market integration

Digital gridTSOs have facilitated the integration of 54 GWs of

additional variable RES capacity since 2015.The number of registered users on the Transparency Platform

increased from 6 700 in 2016 to 12 000 in 2017. More open

data facilitates informed and efficient decision-making from

all market participants. Markets are opening to new participants including

balancing markets. The reported volume of demand side

response in balancing markets increased by 260% in

France, 112% in Finland, and 143% in Belgium from

2016 to 2017TSOs will invest 114 bn euros by 2040 in grid

projects. 60% of these projects are either on-

time or ahead of delivery schedule.

In 2018, 1400 TWh representing 50% of consumption in

European market coupling

ENTSO-E POWER FACTS EUROPE AUGMENTED FACTS ON THE ENERGY TRANSITION

Security of supply

Customer

Sustainability

Infrastructure development

In 2017, only 2 minor incidents on the transmission grid led

to the disconnection of more than two hours of grid users.

Both took place in isolated system. Europe enjoys one of the

most reliable power grid notably thanks to interconnections

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