wg eu market design & system · spaic process creates transparency about the potential impact....

WG EU market design & system

operations

European Market Design

• Intraday market design on Nemo Link (BE-GB)

• Introduction of explicit ID auctions (4 auctions, each covering 6 hours)

• Expected go-live before the end of the year – subject to uncertainties

• Decoupling incident on 7/06 (by EPEX spot)

• Belgian approach for the CEP 70% requirement => see next slides

• No action plan

• Derogation for loop flows and long duration outages – under consideration for a parallel run

• Long-term capacity calculation and splitting rules methodology: summary of the approach in Core to support consultation

process

• In the meantime: Core TSOs fail to agree on the methodology – EC should now facilitate the processµ

System Operations

• Emergency & restoration: list of SGU, Defense Plan and Restoration Plan.

2

• Elia, CREG and BE ministry concluded before the summer that there is no need for an action plan

since BE is not facing structural congestions

• Elia does see a need for a derogation for 2 reasons:

• High loopflows that cannot be contained due to methodological limitations (no Core

CCM, no coordinated RD&CT with cost sharing) and likely action plans elsewhere

(confirmed for Germany) externalities

• Long duration outages (in particular for replacing conductors) where 70% may not be

achievable despite internal redispatching, due to temporarily weakened grid. The

SPAIC process creates transparency about the potential impact.

• The cornerstones of this approach have been presented to Belgian market parties in June

• While the underlying drivers are expected to remain present in the foreseeable future (until all

Core methodologies are in place and the action plan of other countries are implemented), the

derogation will be for 1 year only in order to enable a “learning-by-doing” approach.

3

CEP 70% - Belgian approach

• The derogation will be in the form of a methodology (including both principles and formulas).

This methodology will be applied on a daily basis, fully integretated in the capacity calculation,

in order to set the appropriate level of ambition in terms of minRAM inclusion.

• As opposed to a “value-based” derogation where the minRAM values would be (roughly) set ex-

ante in the derogation, the methodological approach allows taking assumptions as late as

possible (remaining assumptions in D-2 are of much better quality than year ahead), therefore

avoiding over-shooting (more efficient) the extent of the derogation.

• This methodological approach also allows being robust with respect to the approach chosen by

other countries. No specific coordination with other countries is required

• E.g.: if the loopflows are below the acceptable threshold on one particular day and/or

one particular branch, the effect of the derogation will be void

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• Other points relevant to CEP implementation:

• Elia intends to consider all non-CCR flows (including third country flows) with a

forecast approach to compute the resulting minRAM to be offered within CWE, in line

with current practices and ACER recommendation.

• A minimum capacity of 20% for CWE exchanges will be offered anyhow, in line with

current approved methodology and practices.

• Short term outages (typically maintenance) and other situations where the level of

ambition of the CEP could not be reached despite usage of internal redispatching will

be justified towards CREG as input for their annual compliancy assessment.

• Next steps:

• Intention to submit derogation beginning of October together with other CORE TSOs

• ECBC Sep 30 with intention to create transparency on EU level on countries’ approaches

• Ongoing implementation in operational processes (challenging)

5


• Under consideration: having an external parallel run for e.g. 6 months at the beginning of 2020

• This would be part of Elia derogation.

• Justification would be be grounded on operational security (in line with Electricity

Regulation Art. 16.9) due to the usage of many new tools and processes (non-

industrialised) which would not have been fully tested due to limited time.

• The methodological derogation approach applied by Elia entails a higher complexity,

hence a risk that can be higher than for other TSOs.

• Aiming at 70% except in specific situations is by nature more challenging for system

operations than relying on an action plan.

• Besides the legal justification in accordance with Electricity Regulation, Elia is of the opinion that

a parallel run can provide some foresight to the market participants about the expected market

evolutions. This was valued in the past by market participants, e.g. for CWE flow-based go-live.

• Even though CWE is not formally a CCR, our legal interpretation is that we are also bound by

CACM Art. 20(8) on top of the CEP regulation requirements.

To enable market participants to adapt to any change in the capacity calculation approach, the TSOs

concerned shall test the new approach alongside the existing approach and involve market participants for

at least six months before implementing a proposal for changing their capacity calculation approach. 6


Feedback WG Balancing

• Volumes 2020

• Status New aFRR design

• Status offshore storm risk

• Status FCR

• Status mFRR

Topics

8

Regulatory framework Volumes 2020

9

2018

2019

2020

Dossier Volume 2018-> explain methodology for needs

-> determination of needs

-> determination of means

Dossier Volume 2019-> explain methodology for needs



#N/A#

LFC BOA 2019-> explain methodology for needs


#N/A#

LFC BOA 2020-> explain methodology for needs


Means document 2020-> explain methodology for means


#N/A#

#N/A#

Q3 2019 consultation by Elia

Q4 2019: decision CREG

Expectations regarding contracted volumes

10

2019 Applicable volumes

Upwards Downwards

aFRR: 145 MW aFRR: 145 MW

mFRR: 844 MW mFRR: 0 MW

2020 expectations

• No mFRR down will be contracted

• Similar volumes of aFRR and mFRR up will be contracted

Disclaimer: Volumes on this slides are indicative. Final volumes can only be communicated

after decision CREG

aFRR design; open points

11

New proposal capacity tender methodology: Step 1 @ D-2: independent total cost optimization for the 24-hour block for aFRR up and aFRR down

together (e.g. 140MW)

Step 2 @ D-1: a merit order selection for upward and downward reserves separately and pure divisible 4-hour

bids (e.g. 5 MW)

Rules to gradually increase volumes selected via step 2 in case of low prices in step 2 and sufficient available

volumes

New proposal regarding a ‘moving’ price cap (1000 €/MWh) and the application of

‘weighted average imbalance pricing ‘ with respect to aFRR activation prices in

order to mitigate balancing risks

Both proposals were positively received by all members of the WG Balancing

WORKSHOP on aFRR Monday 23/09 to present/discuss final details

Offshore integration - status

• Public consultation of T&C BRP • User manual of the storm tool

Specific workshop to detail results of storm forecast test period, define procedure parameters and present improvements of the model

Q2

Q3

• Publication of Update of the design note based on feedback from 12/06 workshop

• Feedback on WG bal.

12

12th June

End of June

July-August

November

Last improvements of the storm forecast model (calibration with historical data, integration of new technologies of wind parks)Continuation of the retro-analysis of the model accuracy on past winters

End August September

Go-live of the storm procedureQ4

FCR – Planning and next steps

13

Design note integrating the received feedback is available on Elia website

Next step: T&C BSP FCR

FCR evolution planning

Regional Procurement

Weekly Daily

Local Procurement

Weekly

• Feb. 2019 new design

• Daily tendering (6*4h) and merit order selection

• contractual merge, indivisibility energy bid, paid as cleared, ToE (passed through)

• T&C

• September 9th; start informal consultation stakeholders (share document)

• September 23th : Workshop

• September 24th deadline feedback informal consultation

• Public consultation by Elia: October 4th -> November 4th

• End December: decision CREG

Status mFRR

14

Implementation project iCaros–State of Play

Public Consultation - focus on translating current design (focus PGM ≥

25 MW) to new roles and responsabilities specified in SOGL (not in line

with iCAROS design) - submission end Oct 19

16

1. Timing : 16/09 until 16/10/2019

2. Two // public consultations

– A public consultation regarding the Terms and Conditions for Outage Planning Agent

(T&C OPA), Terms and Conditions for Scheduling Agent (T&C SA) and the Rules for

Coordination and Congestion Management.

– A public consultation regarding the general conditions that will apply for the Terms

and Conditions for all ancillary services.

Terms & Conditions OPA / SA

General Terms and Conditions

for Ancillaries and Grid Losses

CIP

U C

on

tra

ct

CIP

U O

ffs

ho

re

Co

ntr

ac

t

Specific Conditions

OPA

General Conditions

Contract OPA

Annexes (incl. Party

specific information)

Non-regulated ContractsRegulated Contracts

T&C OPA

Specific Conditions

SA

General Conditions

Contract SA

Annexes (incl. Party

specific information)

T&C SA

Transposition of current CIPU Contracts rules and obligations to new Contracts OPA andContracts SA in line with the roles and responsabilities set in SOGL

No change of the AS IS procedures, Elia tools or IT connections to the Elia tools

2019 2020

jun jul aug sept oct

Alignment with CREG

Presentation package external stakeholders (direct clients)- 25/09

Presentation package external stakeholders (DSOs)- 23/09

Rewording based on input collected from public consultation

Planning Public Consultation - focus on translating current design (focus PGM ≥ 25 MW) to

new roles and responsabilities specified in SOGL (not in line with iCAROS design) -

submission end Oct 19

Public consultation- period of one month in accordance to article 11 of SOGL

25/10 Submission

V1 Elia -> CREG

6 months after entry into force of Federal Grid Code27/04 Federal

Grid Code entry

into force

CREG decision

may

- Coordination Rules

- Terms & Conditions Outage Planning Agent

- Terms & Conditions Scheduling Agent

Task Force

Capacity Remuneration Mechanism

CRM framework law voted in parliament on April 4th

Since Easter 5 design workshops :

Different design proposals presented by Elia, CREG and FPS Economy

Feedback from stakeholders (specific presentations and Q&A) much appreciated

According to the governance foreseen in the law :

Elia’s scope : 2 public consultations organised on 7 design notes

Batch 1: 13.09.2019 – 11.10.2019

Batch 2: 02.10.2019 – 30.10.2019

CREG and FPS Economy will launch consultations on their topics in the near future

Goal: official notification to the European Commission by 19 December 2019

alternative proposals in case of

disagreement are welcomed

Pre-Auction Auction(Y-4 and Y-1)

Between Auction & Delivery

Capacity Payment

Payback Obligation (Reference Price > Strike

Price)

Availability Obligation

Availability Monitoring &

Penalties

Capacity Auction (Y-4 and Y-1) :

Monitoring of Investments

Secondary Market

XB participation

Capacity Contract

Design Note 2:Intermediate price cap

Auction parameters

- Intermediate Price Cap

Design Note 1: De-rating& input for volume determination (Elia’s part)

- De-ratings

- Inputs for Demand Curve

Design Note 3: Prequalification & Monitoring

Design Note 4: Auction Process

Design Note 5: Payback Obligation

Design Note 6: Availability Requirements &

Penalties

Design Note 7 : Secondary Market

- Strike Price

- Reference Price

Pre-qualification

- Pre-qualification Process

- Aggregation

- Opt-Out

- De-ratings

- Minimum Threshold, Investment Threshold, Cumul

Phase I Consultation 13/09 – 11/10

Phase II Consultation 2/10 – 30/10

In the coming weeks, a set of CRM design notes will be made public by Elia for market consultation. Topics not in scope are covered by FPS Economy/CREG.

Delivery year Y (or longer in case of multi-year

contracts)

Capacity Product

2020

Jun Jul Aug Sep Oct Nov Dec

TF CRM

Jun 13

TF CRM

Jul 9

TF CRM

Sep 5

TF CRM

Sep 26

TF CRM

Oct 22

TF CRM

Nov 12

TF CRM

Nov 21

TF CRM

Dec 13

Submission to EC

Dec 19

KB Methodology – Elia (Part I)- Derating- Intermediate Price Cap

KB Methodo – CREG- Demand Curve

M

Market Rules – Part 2- Auction Algorithm- Grid Feasibility- Opt-Out- Secondary Market- Transparency- Prequalification- Monitoring + Settlement

Market Rules – Part 1- Availability Requirements - Availability Penalties

Drafting Design Note + draft KB (Part I)

Public Consultation Design note part 1

AnalysefeedbackDrafting design Note MR part 1

Submission to Elia/FPS for advice

Public Consultation Draft/Final decision ?

Public Consultation Design note part 2

Analysefeedback

Drafting Design Note MR part 2

Final draft

MR

CdSfeedback

Final draft Market Rules

Implementation plan

Consultation Neighbours

KB investmest levels/Cost - CREG

KB Min threshold/cumul support - FPS

KB Controls - FPS

KB Financing - FPS

Drafting

Submission to Elia for adviceDrafting + public Consultation – draft/final decision Final version

Drafting + public Consultation (stakeholders & regions)

Subm to Elia/CREG for advice

Final version

Drafting Subm to Elia/CREG for advice Final version

Redaction Contract/TranslationMR

Dec 20

Read FR/NL translationsJan 20

Start public consult

Jan 31

End public constation

Mar 1

Analysefeedback and Consultation report

Apr 1

Submission to EC + CREG

Apr 1

Oct 15

drafting consultation report

EC notification file Drafting CdS

Final version

20192019

Final version

Public Consultation Design note + draft KB

Analaysefeedback and ConsultationReport

Submission to CREG/FPS for advice

Final version KB methodo

//

Consultation Neighbours

CdS

CdS

KB XB - FPS Drafting + public Consultation

Submission EC

Final version

Drafting

KB Methodology – Elia (Part II)- Strike & Reference Prices

Drafting Design Note + draft KB (Part II)Public Consultation Design Note + draft KB

Analysefeedback

CREG/FPS for advice

wg eu market design & system · spaic process creates transparency about the potential impact....

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