Carlo SABELLI

TSO-DSO RELATIONS IN THE FUTURE EUROPEAN POWER SYSTEM

GO 15 San Francisco April 13 2016

42 TSOs in ENTSO-E the European Network for Transmission System Operators for Electricity

42 TSOs from 35 countries

600 million citizens served

900 GW generation managed

310 Thousand Km of transmission lines

Ten-Year Network

Development Plans (TYNDP)

Adequacy forecasts

R&D plans Tools for Market

Integration Network Codes

Grid Development Operational

Planning Innovation Market Regulation

https://www.entsoe.eu/

The Third Internal Energy Market Package

Third Internal Energy Market

Package

Third IEM Package

Directive 2009/72/EC on common rules for the internal market in

electricity

Electricity Directive)

Regulation (EC) No. 714/2009 on conditions for access to the network

for cross-border exchanges in electricity

ENTSO-E

Regulation (EC) No. 713/2009 establishing an Agency for the

Cooperation of Energy Regulators

ACER

Directive 2009/73/EC on common rules for the internal market in

natural gas

Gas Directive

Regulation (EC) No. 715/2009 on conditions for access to the natural

gas transmission networks

ENTSOG

ENTSOE-E: TSO Association with Institutional duties

Loa

d 5

30

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d f

rom

53

0 t

o 5

74

GW

Forecast 2015-2030 (the global system view)

Page 4 Source: ENTSO-E

TYNDP 2016 vision 4

The GENRATION MIX and the FLEXIBILITY Power flows fluctuation

across EUROPE

Renewable energy and more active consumers

Page 5

Thousands of small

(embedded) units

(embedded)

System stability, Resource variability, power flow control, Integrating

demand side resources, Managing data, Empowering consumers,

Unlocking flexibility, optimize storage.

Challenges TSO and

DSO in common

Active consumers

Resources are in the Distribution Systems

The participation to the Market is key

Source of data Active Distribution

Systems

Changing our power system needs enhanced TSO-DSO coordination

Page 6

4 DSO Associations (more than 2500 DSOs) and ENTSO-E launched a TSO-DSO platform in 2015

DSO 2525

DSO >100k Clients 223

DSO < 100k Clients 2302 •Joint workshops to tackle the

key issues

•Joint project team on data

management

•Cooperation in innovation

initiatives

•Associations have taken

turns in hosting

(Observer)

Different Grids

Different Models

Initiative completed by internal ENTSO-E

internal project “TSO-DSO Wholesale –

Retail interface”

Cooperation Agreement

Enhancing TSO/DSO cooperation

Page 7

Market Operation

Planning Data

• Defining data needs to

fulfil regulated tasks

• Using existing standard

developed at European

level (CIM format)

• Defining IT architecture

for data management

• Defining solutions for

observability &

controllability

• Active power management

actions impacting balancing

and congestion in

transmission should be

overseen by TSOs

• Redefine roles of TSOs and

DSOs

• Enhancing the information

exchange for planning

• Coordinating the

assessment of connection

capacity

• Ensuring consistency

between wholesale and

retail market

• Unlocking DSR potential

• One single market

Key issues for the TSO-DSO platform and cooperative approach

Page 8

Active and

reactive power

management

Roles and

responsibilities

Balancing

Flexibility

Congestion

management Data handling

Empowering

consumers

Voltage control

Planning

• Project team was launched on data management

• Deliverable : recommendations to EC by Q2 2016

Data management

• Workshop held on 14 January

Network planning

• Workshop held on 20 January

Reactive power

management

• Workshops in 2015 resulted in joint paper:

• General Guidelines for Reinforcing the cooperation between TSOs And DSOs

Roles and responsibilities

Example of TSO/DSO cooperation : Balancing

Page 9

• TSOs might increasingly need to make use of flexibility on the distribution grid to reduce imbalances.

• Flexibility activation can cause congestions (active power and voltage) within the distribution grid.

• In order to prevent these congestions, close coordination between TSO/DSO is required:

Long-Medium term

•Assess network capacity regarding flexibility pools

•Inform the Balancing Service Providers of possible limitations due to network constraints

Day-ahead/Intraday

• Assess network capacity regarding balancing offers

• Close coordination on activating offers that might cause congestions

Close to real time

• Close coordination in handling offers that might cause congestions

• Several options are possible for implementing this step

Balancing markets: Market Design Initiative should complement, not overlap with, the Balancing Guidelines (*)

Page 10 (*) one of the EU Grid Codes

The EB GL defines elements and processes to be

harmonised for integrated European balancing

markets:

•Two-step approach to European Balancing market via Coordinated Balancing Areas

•Four processes (IN, aFRR, mFRR, RR)

•Standard Products

•Reservation of cross zonal capacity

•TSO-TSO model for procurement of balancing services

•Single Common Merit Order List

•Settlement

• Prices should reflect power system scarcities and cost-relevant factors such as adequacy, resilience and location.

• Member States to avoid legal price caps to and to promote acceptance of scarcity pricing in all markets

• EC to introduce balance responsibility for RES and remove mandatory priority dispatch

• ENTSO-E and ACER to propose new AS and system services markets (e.g. reactive power, transient and dynamic stability, inertia, etc.) to keep the power system stable and reliable at all times

• Enable RES participation to provide balancing and ancillary services compatibly with system needs, product specifications

Mark

et

Desig

n In

itia

tive

Bala

ncin

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uid

eli

ne

Integrated

Balancing

Markets

Effective Price

Signals

System

Resilience

IN, = Inbalance Netting; aFRR,= Automatic Frequency RestorationReserve mFRR= Manual Frequency Restoration Reserve , RR= Reserve Replacement

Effective day-ahead and intraday markets for RES integration

Page 11

Full and timely implementation of the Capacity Allocation and Congestion Management guidelines (CACM)

Ensure customers are free to access all relevant markets and enable aggregators’ participation

ACER and the National regulatory agencies should put full financial balance responsibility on all market participants to expose market parties to system adequacy price signals

ID Gate Cloure Time should allow market participants’ to adjust their schedules as closely as possible to real time while respecting the time required for guaranteeing system security

To improve the investment signal while mitigating the risks for market participants, new risk hedging products should be introduced