Network Code on Electricity Balancing · 1. Regional integration model 2. European integration...

Network Code on

Electricity Balancing

Ebadge Workshop

Trieste, 17 September 2014

Contents

• Development and Overview of Network Codes

• Key concepts of the NC EB

• Background and Status Quo of the NC EB

• European Pilot Projects on Cross Border Balancing

• Timing

Contents

Development and Overview of Network Codes

Na

tio

nal R

egula

tory

Au

tho

rities / A

CE

R

Ma

rke

t P

art

icip

ants

an

d o

the

r S

take

ho

lders

Legislation

„How should

it be done?“

„What needs to

be done?“ Framework

Guidelines

Network

Codes

Comitology

Identification

of main code

principles

Specification

of detailed rules

Legally binding

for Market

Participants

Development of Network Codes

(legal background 3rd Package)

Overview Network Codes

• Requirements for Generators (RfG)

• Demand Connection Code (DCC)

• HVDC Connection Code (HVDC)

• Connection Procedures (CP)

Connection Related Codes

• Operational Security Network (OS)

• Operational Planning & Scheduling (OPS)

• Load Frequency Control & Reserves (LFCR)

• Operational Procedures in an Emergency (EP)

• Staff Training (ST)

System Operation

Related Codes

• Capacity Allocation & Congestion Management (CACM)

• Forward Capacity Allocation (FCA)

• Balancing Network Code (BAL)

Market Related Codes

An example from today: Diversity across Europe

Source: 2013 Survey on Ancillary Services

Procurement and Electricity Balancing Market Design

Contents

Key concepts of the NC EB

Goals of the Network Code on Electricity Balancing

The Electricity Balancing Network Code establishes common rules for Electricity Balancing including the establishment of common principles for procurement and settlement of Frequency Containment Reserves, Frequency Restoration Reserves and Replacement Reserves and common methodology for the activation of Frequency Restoration Reserves and Replacement Reserves.

t

Power /

Frequency

Frequency Containment Process Frequency Restoration Process

Reserve Replacement Process

RRFRRFCR manual FRR

Time to Restore Frequency

reserve activation

frequency

occurrence of the

disturbance

Joint Action within

Synchronous AreaLFC Area

Regional & European targets:

Implementation of harmonized

processes

Goals:

• Maintain the system balance

(Compliant with NC LFC&R

requirements)

• Promote Competition

Non discriminatory, flexible

Open to conventional, RES,

demand sources

What is the harmonization scope?

RR process mFRR

process aFRR

process

Imbalance netting process

Imbalance settlement

Typically for

units with

activation

time up to

hours

Typically for

units with

activation

time up to

15minutes

with manual

activation

Typically for

units with

activation

time up to

minutes with

automatic

activation

For real-time

avoidance of

counter-

activation of

units by

different TSOs

Legislation and

financial

incentivisation

to market

participants for

a „good

behavior“

EU

Balancing

market

Entry into

force of the

NC EB

Implementation of

the regional

integration model

Implementation of

the European

integration model

Principal steps on the way to implement the target model

Implementation

framework for the

regional integration

model

Implementation

framework for the

European

integration model

Implementation framework:

• List of TSOs

(CoBA configuration)

• Implementation timeline

• Principles for algorithm

and methodologies

2. European integration model 1. Regional integration model

Modification of the

European integration

model (via CBA based

on the gained

experience)

CBA … Cost-Benefit analysis

• Stepwise approach to develop the Common European Balancing

Market by using the Regional and European Integration Model

• Allow for additional Balancing Energy Bids, next to those based on

Balancing Reserve Contracts

• Limit the number of standard products as much as possible to allow

exchange

• Use a common merit order list (CMOL) for activation of Balancing

Energy

• TSO-TSO model to ease processes (e.g. procurement, activation,

settlement)

Activation of Balancing Energy

Coordinated Balancing Areas

Concept of a

Coordinated

Balancing Area

• Each TSO shall form at least one Coordinated

Balancing Area (CoBA) with two or more TSOs

operating in different Member States

• Each CoBA includes the Exchange of Balancing

Energy from at least one Standard Product or the

Imbalance Netting Process

• Flexibility on the way to reach the FWGL targets is

ensured by not detailing which cooperation is to be

done with which TSO

• Functions are performing central tasks

• All TSOs of a CoBa shall establish a common

proposal, detailing Terms & Conditions, etc.

Coordinated

Balancing Area

TSO 1

TSO 4

TSO 2

TSO 3

wid

en

coopera

tion

Chapter 2: CoBAs - Promoting Integration & Flexibility

Concept allows for early

cooperation due to its flexibility Integration of CoBAs allows for

reaching the FWGL targets

Obligation for cooperation in

CoBAs fosters integration

t

Coordinated

Balancing Area

TSO y

TSO x

Coordinated

Balancing Area

TSO z

cooperate

Coordinated

Balancing Area

merg

e

Coordinated

Balancing Area

merg

e

Coordinated Balancing

Area = Target

e.g. FWGL target of a

single pan-European

CMO for the activation of

RR energy form

fo

rm

form

TSOs may cooperate with

different TSOs in CoBAs for

different products

CoBAs serve as intermediary

steps and vehicles to reach

the FWGL targets

Ensuring available CZC for Exchange of Balancing Capacity

and Sharing of Reserves

Probabilistic Approach

Reservation Chapter 4, section 1

Exchange and Sharing of Balancing Services requires available

Cross Zonal Capacity

Co-optimisation process

Market based reservation process

Economic efficiency analyses

Available CZC for exchange

of Balancing Energy or Imbalance Netting Process

(Chapter 4, section 2)

Available after intra day GCT

Reserved Available after intra day GCT Released

Settlement

TSO-BSP Settlement TSO-TSO Settlement TSO-BRP Settlement

• Frequency

Containment Process

(optional)

• Frequency

Restoration Process

• Reserve Replacement

Process

• Intended exchange

• Unintended exchange

• Imbalance Settlement

Period

• Imbalance Calculation

• Imbalance Price

Target Outcome of Settlement

• Financial neutrality for the TSO

• Fair and equal distribution of energy settlement cost/benefit

• No perverse incentives, e.g. BSP non-delivery, BRP gaming, TSO free

riding

Contents

Background and Status Quo of the NC EB

Background and Status Quo of NC EB

Sep 2012

ACER publishes Framework

Guideline on Electricity

Balancing

Dec 2012

EC asks ENTSO-E to develop

NC EB Dec 2013

ENTSO-E sends NC EB to

ACER

Mar 2014

ACER gives Feedback to

ENTSO-E

Sep 2014

ENTSO-E sends NC EB

back to ACER

End 2014

ACER sends NC to EC

2014/2015

EC comitology

process;

with entry into force in

Sep 2015

European Pilot Projects on Cross Border Balancing

How do the Pilot Projects represent the Balancing Processes across Europe?

A. Imbalance Netting (IN)

B. Replacement Reserve (RR)

C. Manual Frequency

Restoration (mFRR)

D. Automatic Frequency

Restoration (aFRR)

E. Frequency Containment

Reserve (FCR)

A B C

D E

The Cross Border Pilot Projects on Electricity Balancing

1

2 3

3

4

4

5

7

8

9

9

4 4

8

8

9

5

5 5

5 5

1 CMOs for mFRR and aFRR with real Time Flow Based

congestion management

9 IGCC Imbalance Netting, aFRR-Assistance and Flow-

Based Congestion Management.

2 Cross-border market for FCR based on TSO-TSO model

3 E-GCC

4 TERRE: Trans-European Replacement Reserves

Exchange

5 Development of the Nordic RPM

7

Design and evaluation of a harmonised reactive

balancing market with XB optimisation of Frequency

Restoration while keeping control areas, bid zones, and

Regulatory oversight

8 BritNed / TenneT / National Grid Balancing Services

TSOs involved

TSO possible future involvement

2

9

New developments: Project 2: German TSOs and TTB join APG and swissgrid in Project 2; APG joins

IGCC in Project 9.

NC EB, Timing

X+6 X+5 X+4 X+3 X+2 X+1 X

A stepwise approach to the implementation of targets: 1 year

TSOs’ proposal for

standard balancing

energy / reserve

products

En

try in

to fo

rce

of N

C E

B

TSOs’ proposal for the pricing method for Balancing Energy (initial marginal pricing)

Time [years]

1. TSOs’ proposal for the pricing method based on

marginal pricing

2. TSOs’ proposal for standard balancing energy /

reserve products

Legend:

BE Balancing Energy

CA Control Area

CMO Common Merit Order (all bids are shared)

CMOm Common Merit Order list with margins (a certain

amount of most expensive balancing energy bids

can be not shared)

FG EB Framework Guideline on Electricity Balancing

a/mFRR automatic/manual Frequency Restoration

Reserve

NC EB Network Code on Electricity Balancing

RR Replacement Reserve

targets manual

targets automatic

targets settlement

X+6 X+5 X+4 X+3 X+2 X+1 X

A stepwise approach to the implementation of targets: 2 years


standard balancing

energy / reserve

products

En

try in

to fo

rce

of N

C E

B


Time [years]

Legend:

BE Balancing Energy

CA Control Area




can be not shared)



Reserve



targets manual

targets automatic

targets settlement

Entry into force of the multilateral TSO-TSO model with CMOm of Balancing Energy from RR

Minim. of counteracting activation of balancing energy between CA (imb. netting)

3. Entry into force of the regional multilateral TSO-TSO

model with CMOm for Balancing Energy from RR

4. Minimisation of counteracting activation of

Balancing Energy between Control Areas (Imbalance

Netting).

X+6 X+5 X+4 X+3 X+2 X+1 X



standard balancing

energy / reserve

products

En

try in

to fo

rce

of N

C E

B


Time [years]

Legend:

BE Balancing Energy

CA Control Area




can be not shared)



Reserve



targets manual

targets automatic

targets settlement

Entry into force of the multilateral TSO-TSO model with CMOm of BE from RR


TSOs’ proposal for target model for the exchanges of balancing energy from aFRR

Harmonisation of the main features of the imbalance settlement

TSOs’ proposal for modification of the FG EB’s multilateral TSO-TSO model with CMO of BE from RR and mFRR

5. TSOs’ proposal for modification of the FG EB’s

multilateral TSO-TSO model with CMO of Balancing

Energy from RR and mFRR

6. TSOs’ proposal for target model for the exchanges

of Balancing Energy from aFRR

7. Harmonisation of the main features of the Imbalance

Settlement

X+6 X+5 X+4 X+3 X+2 X+1 X



standard balancing

energy / reserve

products

En

try in

to fo

rce

of N

C E

B


Time [years]

Legend:

BE Balancing Energy

CA Control Area




can be not shared)



Reserve



targets manual

targets automatic

targets settlement





Entry into force of the multilateral TSO-TSO model with CMOm of balancing energy from RR and mFRR

Coordination between TSOs in activation of balancing energy from aFRR (also includes coordination of aFRR with RR and mFRR)


8. Coordination between TSOs in activation of

Balancing Energy from aFRR (also includes

coordination of aFRR with RR and mFRR)

9. TSOs’ proposal for modification of the FG EB’s

multilateral TSO-TSO model with CMO of Balancing

Energy from RR and mFRR

X+6 X+5 X+4 X+3 X+2 X+1 X



standard balancing

energy / reserve

products

En

try in

to fo

rce

of N

C E

B


Time [years]

Legend:

BE Balancing Energy

CA Control Area




can be not shared)



Reserve



targets manual

targets automatic

targets settlement





Entry into force of the multilateral TSO-TSO model with CMOm of balancing energy from RR and mFRR

Coordination between TSOs in activation of balancing energy from aFRR (also includes coordination of aFRR with RR and mFRR)


Entry into force of the multilateral TSO-TSO model with CMO of balancing energy from RR and mFRR

Implementation of the target model for aFRR

10.Entry into force of the multilateral TSO-TSO model

with CMO of Balancing Energy from RR and mFRR

11. Implementation of the target model for aFRR

Thank you for your attention

Network Code on Electricity Balancing · 1. Regional integration model 2. European integration...

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