D15: Data Exchange Study and Market Demonstrator · 2014. 11. 17. · “Time line data exchange”, where sequences for three of the most probable scenarios for electricity exchange

Project no.: TST5-CT-2006-031477_ Power Generation during Loading & Unloading

Project acronym and title: PLUG

D15: Data Exchange Study and Market Demonstrator

Deliverable D15

Due date of deliverable: 15 months after Project starting date Actual submission date: 15 months after Project starting date Start date of the project: October 15, 2006 Duration: 2 years Organisation name of lead contractor for this deliverable: SINTEF Energiforskning AS Revision: Version 3.0

D15: Data Exchange Study and Market Demonstrator; TST5-CT-2006-031477

PLUG - Power Generation during Loading and Unloading

The project group consists of:

Snecma Project Coordinator France

Converteam S.A.S Project Partner France

SINTEF Energiforskning AS Project Partner Norway

Leduc Project Partner France

WAVESPEC Limited Project Partner UK

Stäubli SCA Project Partner France

Authors of the document:

• Sigrun Kavli Mindeberg, SINTEF Energiforskning AS

• Andrei Z. Morch, SINTEF Energiforskning AS

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Control Versions:

Version Date Author Description of Changes

1.0 2007-09-13 Sigrun Kavli Mindeberg

Creation of the document

2.0 2007-11-09 Andrei Z. Morch Description of the markets added.

2.7 2007-12-05 Andrei Z. Morch Revised description of the demonstrator.



Acronyms and Abbreviations

CC Container Carrier

CET Central European Time

DSO Distribution System Operator

EDF Électricité de France

ICE Intercontinental Exchange

LNG Liquefied Natural Gas

MCP Market Clearing Price

OMEL Compañia Operadora del Mercado Español

PLUG Power Generation during Loading & Unloading

RECS Retail Electricity Supply Company

REE Red Eléctrica de España

RP Regulating Power

RPOM Regulating Power Option Market

STREP Specific Targeted Research Project

TSO Transmission System Operator

UML Unified Modelling Language™

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TABLE OF CONTENTS

1 INTRODUCTION....................................................................................................................................... 7

1.1 PLUG IN A NUTSHELL.............................................................................................................................. 7 1.2 SCOPE OF THE STUDY ............................................................................................................................. 7 1.3 DATA...................................................................................................................................................... 7 1.4 THE READING GUIDE................................................................................................................................ 8

2 POWER MARKETS.................................................................................................................................. 9

2.1 NORWAY ................................................................................................................................................ 9 2.1.1 Roles and responsibilities.......................................................................................... 9 2.1.2 Organisation of the trading ...................................................................................... 10 2.1.3 Elspot ...................................................................................................................... 11 2.1.4 Regulating Power Market - RPM............................................................................. 13 2.1.5 Regulating Power Option Market (RPOM) .............................................................. 15 2.1.6 Bilateral contracts.................................................................................................... 15 2.1.7 OTC (Over the counter) contract ............................................................................. 15 2.1.8 Network Tariffs in Norway ....................................................................................... 15

2.2 FRANCE................................................................................................................................................ 16 2.3 SPAIN................................................................................................................................................... 16

2.3.1 Daily market ............................................................................................................ 16 2.3.2 Intraday market ....................................................................................................... 16 2.3.3 Special regime generation....................................................................................... 17

2.4 UNITED KINGDOM ................................................................................................................................. 17 2.4.1 Spot Market ............................................................................................................. 17

2.5 MARYLAND (US) ................................................................................................................................... 18 3 IDENTIFICATION OF ACTORS............................................................................................................. 18

3.1 VESSEL ................................................................................................................................................ 18 3.2 SHIPPING COMPANY .............................................................................................................................. 20 3.3 TERMINAL............................................................................................................................................. 20 3.4 DISTRIBUTION SYSTEM OPERATOR (DSO).............................................................................................. 20 3.5 RETAIL ELECTRICITY SUPPLY COMPANY (RESC) OR ELECTRICITY TRADER ............................................. 20 3.6 TRANSMISSION SYSTEM OPERATOR (TSO)............................................................................................ 20 3.7 MARKET OPERATOR (MO) ..................................................................................................................... 20

4 TIME LINE DATA EXCHANGE.............................................................................................................. 21

4.1 ELECTRICITY EXCHANGE WITH ELECTRICITY SPOT MARKET ...................................................................... 21 4.2 ACTIVATION FOR REGULATING POWER MARKET ..................................................................................... 21 4.3 TRADING VIA BILATERAL CONTRACTS...................................................................................................... 22

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5 THE “SHIP-TO-SHORE-TO-MARKET” DEMONSTRATOR................................................................. 22

5.1 INPUT DATA TO THE SIMULATION............................................................................................................. 22 5.1.1 Generator data ........................................................................................................ 23 5.1.2 Electrical load data .................................................................................................. 24 5.1.3 Contract data........................................................................................................... 25 5.1.4 Tariff data ................................................................................................................ 26 5.1.5 Emission data.......................................................................................................... 27 5.1.6 Summary of input data ............................................................................................ 28

5.2 SIMULATION.......................................................................................................................................... 29 5.3 SIMULATION EXAMPLES ......................................................................................................................... 31

5.3.1 High price variation.................................................................................................. 32 5.3.2 Average price variation............................................................................................ 33 5.3.3 Low electricity prices ............................................................................................... 34 5.3.4 Discussion of the simulation examples.................................................................... 34

6 FURTHER WORK .................................................................................................................................. 36

7 REFERENCES........................................................................................................................................ 37



1 Introduction

1.1 PLUG in a nutshell

Power Generation During Loading and Unloading (PLUG) is a Specific Targeted Research Project (STREP) in the European Sixth Framework Program. The main objective of the project is to develop and put on the market a standard power interface between cargo vessels and harbour terminals allowing power exchange between the vessel and the electricity distribution network ashore.

The project focuses specifically on large tankers carrying Liquefied Natural Gas (LNG) and Container Carriers (CC). The power interface can be connected and disconnected in few minutes, meaning that an LNG carrier may be able to exchange power with the local grid during at least 17 hours during each call, while a CC may be able to stay connected as long as the vessel remains in quay, basically 24 hours.

The planned interface will provide a connection between the vessel electric system and the local network would allow either:

• Use vessel’s generators to provide power to the local grid

• Use local grid to supply the vessel’s electricity demand during loading/unloading (so-called “cold ironing)

1.2 Scope of the study

The present report presents results the Project’s Task 3.3 Data Exchange. The study identifies the relevant segments of deregulated power market, maps the relevant actors involved in the power trade and finally presents a data exchange Demonstrator, developed by SINTEF Energiforskning AS. The Demonstrator is based on the “Ship to shore to market” link, and will be used to identify, exemplify and study potential benefits and challenges related to implementation of power exchange between LNG carriers and the local electricity grid during loading an unloading of the carrier.

The growing price volatility and scarce generation capacity are probably the most known features of deregulated electricity markets. An efficient operation in the spot market environment requires a frequent decision making and regular developing of generation schedules based on day-ahead electricity spot prices. The Demonstrator therefore is primarily intended to be used as decision-support tool on a local level and can be adapted to technical characteristics of a particular vessel in a particular port of call. Therefore the Demonstrator is not meant to be a bidding tool nor a portfolio-optimisation tool, since these activities are normally performed by Electricity Traders (see Section 3.5).

More general economic study, including development of business models and profitability assessments for power exchange between vessels and harbour will be presented in the next deliverable of the present project D16: Power Interface Combination Analysis Report.

1.3 Data

The project studies possibilities for electricity exchange between LNG tankers and harbour. In order to make the study more specific, the study uses Snøhvit project in Northern Norway, which is Europe's first export facility for liquefied natural gas (LNG), as an example and reference point. The Snøhvit project will use natural gas from the Snøhvit, Albatross and Askeladd fields in the Barents Sea for production of LNG at processing facility on Melkøya Island outside Hammerfest in Northern Norway.

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Figure 1.1 LNG processing facility at Melkøya. Source: Statoil ASA

The regular operation of the facility was initially planned to start in October-November 2007 and will result in approximately 50-60 LNG shipments by special carriers to markets in Europe and the USA per year.

1.4 The reading guide

After introduction of the project, the study describes briefly organisation of the Norwegian electricity market in Section 2 “Power markets”. The Norwegian Power market is used as a reference point in development and testing of the demonstrator. Additionally the study mentions several other electricity markets, which may become relevant due to export/import of LNG or other vessels’ traffic. The study discusses and identifies products, which are most relevant for electricity exchange between vessels and ports of call.

Further, the study identifies the most relevant market actors, which are expected to be involved into the scenario in Section 3 “Identification of actors”. This is continued in the next Section 4 “Time line data exchange”, where sequences for three of the most probable scenarios for electricity exchange are modelled, using Unified Modelling Language (UML).

The next Section 5 “The “Ship-to-shore-to-market” Demonstrator” presents the structure of the Demonstrator, including the input data forms, simulation and the output. The Section exemplifies use of the Demonstrator with three different simulation examples, based on real spot prices in Norway in 2006. In the final Section 6 the study outlines the further work.

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2 Power markets

As it has been pointed out earlier, the demonstrator will be used to exemplify power exchange with the local grid during loading of carriers carrying LNG from Snøhvit LNG export terminal in Northern Norway. Hence the most relevant power market is the Nordic power market with NordPool as Market Operator (MO) and the Norwegian balancing market operated by the Norwegian TSO (Statnett). In this chapter it will be given a short introduction to the Norwegian and Nordic power market with identification of the most relevant potential trading schemes for the power exchange.

In addition, power systems in several other relevant countries, where LNG will be exported, will be described in brief. Here differences between them, which have to be taken into account introducing a “ship to shore to market” link, will be emphasized.

2.1 Norway

With the Energy Act of June 1990, a restructuring of the Norwegian power system started. It took some time to establish the necessary organizational structure, but from May 1992 it has been an open electricity market in Norway [4].

The electricity system in Norway is deregulated - the liberalisation of the market implied a separation of tasks related to the trade and transport of electric energy. The production and trade in electric energy have been liberalized while the transmission and distribution are maintained as a monopoly. According to the Energy Law, the electricity sales and the electricity transport of integrated utilities must be completely unbundled with separate accounting for production, trading and transmission.

2.1.1 Roles and responsibilities

After the first few years with a liberalized power market, former integrated roles in the electricity industry have become separated and identifiable. There are many ways in which the value chain activities on electricity markets can be defined. For this report, we use the following definitions, which are derived from the Norwegian power market and shown in Figure 2.1.

Electricity retail and billing

El. distribution

Meter reading and billing

Market Operation

Trading

System Operation

Transmission

Generation

Figure 2.1 Roles and responsibilities in a deregulated electricity market

Electricity Generation: Commercial operation and ownership of generation facilities. This activity is done by Electricity Generators Electricity Trading: Bulk purchase and sale of power Market Operation: Brokering of power trades. In Norway operated by Nord Pool ASA System Operation: Operation of imbalance market, management of ancillary services and system reserves. In Norway operated by Statnett SF, national Transmission System Operator (TSO)

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Transmission: Design, construction, operation and maintenance of high voltage network. In Norway operated also by Statnett SF Electricity Distribution: Design, construction, operation and maintenance of low voltage network, connect new customers, install and maintain meters. Operated by Distribution System Operators (DSO) Meter reading and billing: In Norway DSOs are responsible for metering and billing of the distribution network services. Electricity Retail: marketing and sale of electricity to Final customers. Electricity retail is usually done by Retail Electricity Supply Companies (RECS). RECS bill customers for the consumed electricity, based on the metered data.

2.1.2 Organisation of the trading

This chapter gives a description of the trading in the Norwegian market. The description is divided in two: the market phases and the control phases as it is shown in Figure 2.2.

Control Phases

Market Phases

Regulating Power MarketPrice and volume of power reserves for specific

hours. Bidding concerning the next day.

Operational PhaseBalance between generation and consumption,

trough activating of power reserves

Pre operationalPhase

OperationalPhase

Price hedging PhaseBilateral contracting and

financial trading

Regulating PowerOption Market

Objective: To secure asufficient amount of power

reserves to the RPMContracts with volume and

price/MW for specific periods.

Spot PhaseDaily trading of contracts for physical

delivery the next 24 hours(day-ahead market)

Tim

elin

e

Figure 2.2 Market and control phases

The Market phases start with the Price Hedging phase consisting of bilateral contracting and financial trading and end with the Spot Phase, where the market settlement is reached every day at noon. The Regulating Power Option Market (RPOM) (see Section 2.1.5) is included in the market phases, since this market operates only on an economical basis and does not include the direct activation of acquired power reserves.

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The Control phases start with the pre-operational phase where the Regulating Power Market (RPM) bidding for the next day is performed. The next step is the operational phase, when the production and consumption in the power system need to be in balance. The national Transmission System Operator (TSO) is responsible for maintaining this balance and this is performed through activation of bids in the Regulating Power Market.

The Elspot (Spot phase) and the RPM (Pre-operational phase) are often referred to as the Physical Markets.

2.1.3 Elspot

The spot market (Elspot) is operated by the Nordic Power Exchange1 (NordPool). This is a contractual market where contracts are traded daily for physical delivery during the next 24 hours; hence the market is referred to as a day-ahead market. Trading is based on an auction trade system and the prices are calculated based on the balance between the bids and offers from all the market participants. There are several types of products on the Elspot market. The power contracts are the most relevant products in the scope of the present study, which function as one-hour long physical obligation for delivery or consumption of the electricity. The minimum tradable electricity volume (block) is 0,1 MWh pr. hour.

As soon as the noon deadline for participants to submit bids has passed, the Nordic Power Exchange’s spot market gathers all buy and sell orders into two curves for each power delivery hour: an aggregate demand curve and an aggregate supply curve. The spot price for each hour is determined by the intersection of the aggregated supply and demand curves (See Figure 2.3). The spot price is also called the market clearing price (MCP) or System Price.

In the figure below the volume for sale and purchase of power is presented on the horizontal axis and the bid price for sale and purchase is presented on the vertical axis.

Fixed-pricedemand

Fixed-pricesupply

System price

Turnover MW

Price

Maximumbid price

Supply(sale)

Demand(purchase)

Figure 2.3 Determination of the spot price (System price)

1 www.nordpool.com

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http://www.nordpool.com/



The electricity spot market is characterised by a high volatility of electricity prices, which can differ significantly both on seasonal and even hourly basis. Figure 2.4 shows variation of the system price for 2007. The registered difference between the lowest (8,8 Euro/MWh) and the highest (49,67 Euro/MWh) price during the given period was more than 5 times.

System price at Nord Pool Spot (01.01-15.11.2007)

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25.0

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Date

EUR

/MW

h

Figure 2.4 Electricity System Price for 2007. Source: NordPool ASA

The price variation on hourly basis is illustrated by Figure 2.5 showing price variation during a seven days period.

System price at Nord Pool Spot (08-15.11.2007)

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15.11.07

Figure 2.5 Comparison of electricity System prices during a 7-days period. Source: NordPool ASA

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The system price is set for the whole region and does not consider any possible constraints in transmission of electricity within the region. In order to manage these constraints or so-called “bottlenecks”, NordPool estimates prices in areas on each side of the bottleneck. These are referred as so-called area prices as it is shown in Figure 2.6. When it comes to Norway, the number of area prices depends on supply/demand situation from year to year and normally varies from two to four areas. In the recent year, NordPool has operated with three price areas in Norway (Norway 1 – Norway 3). The Melkøya installation is situated in Northern Norway, which belongs to Norway 3 price area.

Figure 2.6 Spot prices in NordPool: the system price and eight area prices. Source: NordPool ASA

In Figure 2.6 the area price of 19.62 Euro in the Southern Norway is evidently lower than price in the both neighbouring areas. When there are no capacity constraints in the transmission system, the system price will equal the area price in all areas in the Nordic market

Conclusion: the spot market is probably the most relevant target product for electricity exchange since it is based on a time frame (day-ahead) and the minimum tradable volume (0.1 MWh/h), which are acceptable for electricity exchange between a vessel and harbour.

2.1.4 Regulating Power Market - RPM

In the pre-operational phase production scheduling is carried out by each producer and the market players submit bids for physical power regulation into the Regulation Power Market (RPM), which is a real time market operated by the Transmission System Operator (TSO).

During the operational phase there will always be a large or small deviation in relation to the planned balance due to forecast deviations or transmission limitations in the grid, as well as operational interruptions that can upset the balance. The physical RPM is used for load balancing (secondary control) during the operating phase to compensate for any deviations that arise.

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The RPM is in principle open for both production and consumption and the number of participating actors and applied volume [MW] differs from hour to hour.

Bids in the RPM are submitted to the TSO after the spot market has closed. Figure 2.7 shows an example of prices on RPM for Northern Norway.

RPM prices in Northern Norway (Tromsø)

150,00

200,00

250,00

300,00

350,00

400,00

1 3 5 7 9 11 13 15 17 19 21 23

Hour

[NO

K/M

Wh]

14.10.0715.10.0716.10.0717.10.0718.10.0719.10.0720.10.07

Figure 2.7 Example of RPM prices during period 14-20.10.07. (7,8 NOK = 1€) Source: Statnett SF

Statnett SF, which operates the RPM, identifies a set of terms and requirements for participation in RPM [5]. In the scope of the present project the following requirements for placing bids on RPM are relevant:

• The offer should be received by the TSO not later than at 19.30, with 2 hours correction deadline. The offer should contain information about price and volume of power reserve per power station or place of consumption.

• The lowest price for upward regulation in the offer is the nearest whole 5 NOK/MWh (0,625 euro/MWh) over area price in Elspot.

• The highest price for downward regulation in the offer is the nearest whole 5 NOK/MWh (0,625 euro/MWh) under area price in Elspot.

• The minimum volume for a bid is 25 MW, but if necessary Statnett SF can consider lower bids.

• The minimum duration of an offer is 1 hour. The duration can be limited to a specific number of hours, and a resting time between each activation can be specified in the offer.

• The offer should be on an hourly basis, with constant volume during each hour.

• The power reserve should be activated within 15 minutes.

• There are no requirements that the actor has to make bid to the RPM every day. In the Norwegian power system, there is only one RPM price for each hour. The last unit called upon within each hour defines the RPM price for that specific hour. In the event of both upward and downward regulation within the same hour, agreed-to rules define the price within that hour. When there is no regulation within the hour, the RPM price is equal to the spot price.

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Conclusion: The main limitation related to RPM is that it requires minimum quota of 25 MW, which is difficult to meet with a single vessel. This makes this scenario rather difficult to implement. Statnet SF has earlier pointed that in special cases they can reduce the quota, but it is unlikely that it will be reduced 4-5 times in order to match generation capacity from a single vessel. Theoretically in a big harbour it is possible to combine generation capacity from several boats. Melkøya terminal, which is used as a reference case does not have capacity for more than one tanker.

The overall conclusion was to implement a possibility to trade on the RPM, even though it is not possible for the Norwegian case.

2.1.5 Regulating Power Option Market (RPOM)

This arrangement represents a kind of medium term ancillary service market where both producers and consumers are allowed to bid in reserves.

The new element introduced by this product is payment for availability (or so-called “stand-by compensation”). The “option” price is determined as the price of the last offer accepted. Through the RPOM the TSO buys an exclusive right to dispose the power reserves in generation and consumption. TSO pays a market based compensation (an option premium) for this. The RPOM is not a market for physical trading of power reserves – only a tool to secure that the TSO will get enough power reserves included in the bids to the RPM.

Conclusion: Since this market normally does not include physical electricity exchange, it has been decided not to include it in the Demonstrator.

2.1.6 Bilateral contracts

Considerable part of electricity in Norway is still traded via so-called bilateral contacts. There are several price formulas which can be applied for these contracts, varying from constant price to different versions of spot price-based contracts.

Conclusion: Bilateral contracts have been implemented in the Demonstrator.

2.1.7 OTC (Over the counter) contract

In some countries electricity can be traded via so-called Over the Counter (OTC) contracts, which can be both financial and physical.

Conclusion: Possibility to trade on physical OTC market has been implemented in the Demonstrator.

2.1.8 Network Tariffs in Norway

Distribution and transmission of electricity and some other network services are natural monopolies. Therefore on a deregulated electricity market these activities are unbundled and paid via network tariff. Since the present study includes bidirectional electricity exchange with the network, it is necessary to consider two types of tariffs: for electricity distribution (consumption of electricity) and feeding of electricity into network. The structure and pricing of the tariffs is normally differentiated according to the customers’ group. Tariff, which are relevant for the present study will include three different charges:

• Constant charge, paid once a year for a given customer.

• Capacity charge, paid according to the max registered electric capacity [NOK/kW]

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• Energy charge, paid according to electricity volume, which has been consumed or fed into the

network [NOK/kWh]

Specifically the last charge is important for the present study since in areas with electricity deficit, the energy charge for network feeding tariff can be negative.

2.2 France

In 2001 a power exchange, named Powernext® was introduced in France as a direct response to the opening up of the European electricity markets following the 1996 European Directive. Powernext SA offers Day-ahead contracts for the management of volume risk on Powernext® Day-Ahead, and medium term contracts for the management of price risk on Powernext® Futures. Powernext® Day-Ahead combines three different market segments [3].

• Powernext® Day-Ahead Auction

• Powernext® Day-Ahead Continuous

• Powernext® Day-Ahead Intraday The Powernext® Day-Ahead Auction is operated within the framework of market coupling between Belgium, France and the Netherlands. This coupling consists in a simultaneous allocation of energy and interconnection capacity conducted by the organized markets in collaboration with the TSOs. After the gate closure at 11.00 a.m. CET, the sales and purchase orders of the three exchanges are aggregated and matched according to their merit order. This is done independently from the geographical origin of the orders and within the cross-border available capacity.

From 7:30 a.m. to 11:30 a.m., hourly and block contracts for electricity to be delivered the next day can be traded continuously on Powernext® Day-Ahead Continuous. From 7:30 a.m. to 11:00 p.m. hourly and block contracts for electricity to be delivered the same day (until one hour before delivery) and on the following day can be traded continuously on Powernext® Day-Ahead Intraday.

2.3 Spain

2.3.1 Daily market

To furnish bids in the Spanish daily market a production unit must have an installed capacity of more than 1 MW. All available production units over 50 MW that are not bound by physical bilateral contracts are obliged to present bids in daily market. Sale and purchase bids can be made considering between 1 and 25 energy blocks in each hour, with power and prices offered in each block. In the case of sales, the bid price increases with the block number, and in the case of purchases, the bid price decreases with the block number. These are simple bids. In addition, sales bids can incorporate more complex conditions such as ‘minimum income’, ‘indivisibility’, ‘load gradient’, and ‘scheduled shutdown’ [2].

2.3.2 Intraday market

The Spanish intraday market is structured into six sessions with session openings at 16:00, 21:00, 01:00, 04:00, 08:00 and 12:00. Table 2.1shows the hourly distribution of the sessions. All agents that are authorised to participate in the daily market and have either participated in the corresponding daily market session, or have executed a physical bilateral contract, may participate in the intraday market. Agents authorised to present purchase bid in on the daily market can only participate in the intraday market for the hourly periods they have participated in the daily market. The bids can either be simple or include several conditions such as “load gradient”, “minimum

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income”, “maximum income” and “maximum matched power”. There are different conditions applicable to sales and purchase bids. For more information see [2]. Table 2.1 Hourly distribution of intraday market sessions. Source: OMEL 2007

SESSION 1º

SESSION 2ª

SESSION 3ª

SESSION 4ª

SESSION 5ª

SESSION 6ª

Session Opening 16:00 21:00 01:00 04:00 08:00 12:00 Session Closing 17:45 21:45 01:45 04:45 08:45 12:45 Matching Results 18:30 22:30 02:30 05:30 09:30 13:30 Reception of Breakdowns

18:45 22:45 02:45 05:45 09:45 13:45

Constraints Analysis 19:20 23:10 03:10 06:10 10:10 14:10 Adjustments for Constraints Publication PHF

19:35 23:20 03:20 06:20 10:20 14:20

Schedule Horizon (Hourly periods)

28 hours (21-24)

24 hours (1-24)

20 hours (5-24)

17 hours (8-24)

13 hours (12-24)

9 hours (16-24)

2.3.3 Special regime generation

Electricity generation, which is based on renewables and has installed capacity less than 50 MW along with CHP-generation are considered as so-called Special Regime Generators and may sell their generation output directly to the system at:

• The tariff fixed by royal decree, which is indexed to the average or reference tariff of the Spanish system or

• The Spanish pool price, plus certain premiums and incentives.

2.4 United Kingdom

The reform of electricity sector in England and UK was the first one and has attracted most attention, creating a reference point for the whole industry after the Electricity Act of 1989. The British reforms remain the most radical and extensive in their scope, including both deregulation and privatisation of the sector. Additionally, restructuring of the power sector was closely integrated with similar reforms of the gas industry.

Established in 2000 as Britain’s first independent power exchange, APX Power UK2 (formerly named UKPX) offers an anonymous market place for integrated trading, clearing and notification for spot and prompt power contracts and a trading platform for cleared forwards contracts. APX Power UK is the cornerstone of the UK spot market and is used by members on a 24 x 7 basis for the majority of their within day balancing requirements [9].

2.4.1 Spot Market

APX Power UK offers physical electricity products for trading on its 24 x 7 electronic platform, EuroLight. The spot market is used for balancing and trading purposes and consists of half hourly products of electricity as well as discrete standardised blocks made up of the individual half hours.

2 http://www.apxgroup.com/

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All Spot products traded on the EuroLight platform are automatically cleared and notified providing a fully integrated and efficient solution for members. The following products are traded:

• Half-hour: Rolling two days

• Two-hour block: Rolling two days

• Four-hour block: Rolling seven days

2.5 Maryland (US)

In the US there are 10 different regional electricity markets. In Maryland PJM (Pennsylvania-New Jersey-Maryland) Interconnection (PJM) operates the regions power grid and wholesale electric markets. The energy market is a two-settlement spot market, day ahead and real-time, with locational marginal pricing (LMP). Energy and capacity in the region are also traded bilaterally through brokers and the Intercontinental Exchange (ICE) [1].

3 Identification of actors

Roles and responsibilities in a “Ship to shore to market” link can be pictured in different ways. Some of the roles and responsibilities can vary from country to country depending on if and how the electricity supply industry is deregulated. Based on the electricity industry in Norway seven main actors in this “Ship to shore to market” link have been identified. In the following these actors and their part in the link will be described.

The modern deregulated power market is very flexible and provides a multitude of opportunities for development of new services. The present study attempts to narrow the scope of the study by focusing on scenarios which are the most relevant, and especially the most probable within the existing market organisation, based on the available input data and limitations as for example limitations of the available generation capacity onboard, the terminal’s capacity etc.) In order to make the scenarios more realistic and doable, it is also assumed that implementation of these scenarios will require: • None or minimum modifications, to the existing rules, regulations and information exchanging

routines • Creation of none or minimum new market actors • That the existing actors will continue to carry out their core functions

3.1 Vessel

The vessel itself has electricity demand both at sea and when the it is connected to the harbour terminal. This electricity demand includes “hotel” load (e.g. electricity to run lights, heating, air conditioning and hot water for the crew) and required load from the de-ballast pumps when loading or required load from the cargo and ballast pumps when unloading.

The present analysis uses technical data similar m/t “Arctic Princess” as an example, see Figure 3.1. The vessel is operated by Höegh LNG shipping company and is planned for regular LNG transport operation from Statoil’s LNG installation at Melkøya in Northern Norway. According to Statoil [8] it is planned to approximately 70 calls of LNG ships to Melkøya per year, with 5-6 days duration per call.

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Figure 3.1 m/t ”Arctic Princess”. Source: Högh LNG

The vessel uses a steam turbine (Kawasaki Heavy Industries Ltd) with reduction gear for propulsion and three auxiliary diesel engines (MAN B&W). It means in practice that the propulsion engine cannot be utilised for power generation and the total available electricity generation capacity onboard is approximately 10 MW.

During a call the tanker has an electricity demand covering own electricity consumption (cargo pumps, air conditioning etc.). Normally the demand will depend upon several internal and external factors as, for example, weather conditions in the port and vary accordingly. For the sake of simplicity the study uses a typical load curve for “Arctic Princess” vessel, which is shown in Figure 3.2.

Electricity demand

1000

2000

3000

4000

5000

6000

7000

1 3 5 7 9 11 13 15 17 19Hours

Dem

and

[MW

]

Cargo Loading [MW]

Cargo Unloading [MW]

Figure 3.2 The vessel’s own electricity demand during a call. Source: Wavespec Ltd

Duration of a call is normally about 19 hours, where the vessel stands idle two hours before and after loading, and the own demand is respectively reduced.

In periods of high electricity market price the vessel will generate electricity. In this case the generation covers own consumption, while the residual capacity is sold to the power market. On the other hand, with low electricity market price, the electrical load will be supplied by the grid.

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3.2 Shipping company

One possible way of picturing the division of responsibilities is that the shipping company manages the trade of electricity on behalf of all its ships. This solution can be advantageous if the company has many ships frequenting one terminal. The same time Shipping Companies may function merely as operators, while vessels can be jointly owned by third companies. It is also necessary to consider that Shiping Companies normally do not have the necessary skills and experience in this field.

3.3 Terminal

To make the power exchange possible, the Terminal must have the technical solution, the plug, available. As an owner of the “Plug”, another possible way of picturing the division of responsibility is to let the terminal handle the trade of electricity. By using this solution one will get a one-to-one connection between the one handling the trade and different power systems/countries, as opposed to if the shipping company handles the trade where you will have a one-to-many connection, meaning that one shipping company will have to deal with all the different power systems in the countries their carriers frequent. A drawback with this is that the terminal has less control than a shipping company over when a specific ship will be in port.

3.4 Distribution System operator (DSO)

The DSO is responsible for operation and maintenance of the electric network, hence provides electricity transmission services for the Vessel (or the one responsible for the power exchange). In addition the DSO also provides metering services to the Vessel. The DSO meets its costs for its services trough network tariffs.

3.5 Retail Electricity Supply Company (RESC) or Electricity trader

Both traders and RECS can be a part of the “Ship to shore to market” link. Normally traders do not have own generation and trade on a bulk market, while RECS are more engaged in electricity retail. At the same time the difference between a RECS and a trader is not very clear, since their activities can have an overlap. A trader buys and sells in the electricity market and can be engaged in physical and financial trading. However, physical trade requires balance responsibility [4].

3.6 Transmission System Operator (TSO)

The TSO provides management of ancillary services and system reserves, securing operations of the system (system services). Further the TSO provides to the local DSO an access to the main grid and respectively access to the Market Operator (NordPool). The access is valuable, since it allows the DSO to sell transmission services to its clients, including the Vessel and the Final Customer.

3.7 Market operator (MO)

The Market Operator or Power Exchange is responsible for receiving bid of sale and purchases of electricity, and settle prices and quantities through matching the bids.

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4 Time line data exchange

This Section shows three of the most probable scenarios for electricity exchange, where those sequences are modelled, using Unified Modelling Language3 (UML). This time line is applicable for trading in the Nordic/Norwegian spot-market. For the sake of simplicity it is assumed that the vessel and the shipping company is the same actor (:Vessel). According to the present rules, all generation units with capacity over 1 MW have to submit generation schedule to balance-responsible actor. The following scenarios assume that the Electricity Trader (:ElTrader) has a balancing responsibility.

4.1 Electricity exchange with electricity spot market

Figure 4.1 shows a trading sequence for this scenario. The vessel sends a Status Report, describing the planned arrival to the given harbour, duration of the call, the vessel’s electricity demand during the call and the available generation capacity. The last is particular important with regard to possible generation and transmission constraints, related to maintenance, reparations or similar issues.

Figure 4.1 Electricity exchange with spot market

Based on this information the Electricity Trader prepares and submits a bid for generation or consumption of electricity. After the bidding on NordPool is finished the Electricity Trader receives a response from NordPool. Considered that the Bid Results were positive and after the spot prices become available at NordPool’s FTP-server, the Trader develops a Generation plan and sends it to the Vessel.

4.2 Activation for Regulating Power Market

This scenario is in practice a continuation of the previous one. The main difference is that the bidding results from NordPool are negative. In this case the Trader gives a generation plan for an islanded operation of the vessel. After opening the RPM, the Trader bids continuously the available capacity on it. If this bidding is successful, the Trader receives an activation call from RPM and transfers it to the vessel. Bids are activated in a merit order and the provider of the activated resources receives the marginal price.

3 www.uml.org

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http://www.uml.org/



: Vessel : ElTrader NordPool : MO

1.StatusReport

2.Bid

3.BidResults

5.GenerationPlan

4.SpotPrices

Statnett:RPM : MO

6.BidRPM

7.BidResult8.ActivationCall

Figure 4.2 Bidding on Regulating Power Market

4.3 Trading via bilateral contracts

This scenario has the simplest trading arrangements: the vessel submits the Status Report to the Electricity Trader and receives a generation plan for the call. Figure 4.3 shows the trading sequence.

Figure 4.3 Trading via bilateral contracts

5 The “Ship-to-shore-to-market” Demonstrator

The Demonstrator is a software tool, which was developed at SINTEF Energiforskning AS using Microsoft Visual Basic.

For simulation of the “ship-to-shore-to-market” link, it has been chosen to use data connected to Europe’s first export facility for liquefied natural gas (LNG), which is located on Melkøya Island outside Hammerfest in Northern Norway. This implies that the market operator in question is NordPool, price area for trading is NO3 and the local grid operator is Hammerfest Energi.

5.1 Input data to the simulation

To perform the simulations and calculations, some information from the user/carrier is necessary. This input data is divided into five categories: • generator data • energy demand data

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• contract data • emission data • distribution network tariff data For each category, data is displayed and can be edited in a separate window (user interface). These windows can be reached from the main window where the simulation is displayed. In the following each of these categories of input data will be explained further.

5.1.1 Generator data

One ship can have many generators with different generator efficiencies and thereby also different production costs. Figure 5.1 shows an example of the generator data user interface. Here the user can select for which generator it will have data displayed. The data in question are production capacity [MWh/h] and production cost [€/MWh]. In the current version of the demonstrator three generators are hard coded with default values of production capacities and production costs. The default values can be edited by the user by typing in the text boxes. The user cannot add or delete generators in the interface, but a zero value can be assigned. As an option for future versions this can be implemented.

The interface also includes a check list over available generators and transmission line. This check list is made with colour codes, where green indicates that the component is active, red that it is inactive and yellow indicates limited capacity. The first column indicates the state for the power exchange capacity relative to installed capacity. The colour in this column is linked to the state of the components. In Figure 5.1 generator 1 is set to be inactive in hour 7-10, which gives a reduced quantity of energy that can be exported from the carrier, hence the yellow colour in the first column. Further the connection between the carrier and the power network is inactive in hour 12-16, implying no exchange capacity, and consequently these hours have a red colour in the first column. The user can change the state (active or inactive) of a component for a specific hour by double clicking in the box corresponding to this hour and component.

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Figure 5.1 Window for editing and displaying generator data

5.1.2 Electrical load data

Based on experience data and information from the control systems on the carrier, an hour by hour prediction of the total electrical load (in MWh/h) on the carrier for the following day will be performed. Typically the load will be lower during port idling than during loading/unloading as it is shown in Figure 3.2. Figure 5.2 shows the window where the electrical load data is displayed and can be edited.

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Figure 5.2 Window for editing and displaying electrical load data

5.1.3 Contract data

A contract for buying or selling electricity include price [€/MWh], time of delivery and energy quantity. In the demonstrator four types of contracts are defined; day-ahead marked, Regulating Power (real-time) market, bilateral contract and “over the counter” (OTC) contract.

For Bilateral and OCT contracts, the user specifies the start and stop of the time frame for the transfer, and the total energy quantity transferred during the time frame (negative values indicate import from local grid to the Vessel). An hourly average value of the energy quantity is calculated by dividing the total energy quantity by the time frame.

When trading in the day-ahead marked and the real-time market values of the transferred energy quantity is calculated hour by hour based on market prices, production costs for using the generators at the vessel, the vessel’s electrical load, the production capacity at the vessel and network tariffs for feeding and distribution of electricity.

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Figure 5.3 Window for editing and displaying contract data

5.1.4 Tariff data

Tariffs will only be taken into account when trading in spot market. Network tariffs for feeding and distribution of electricity can have an impact on the optimal production plan in economical terms. Figure 5.4 shows an example of the window for network tariffs. By selecting which tariff you want to use, default values for energy charge for distribution and feeding to the network will appear. These charges can be edited by the user by typing in the text boxes.

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Figure 5.4 Window for editing and displaying tariff data

5.1.5 Emission data

By use of local grid to supply LNG carriers’ power needs while in port, polluting and fuel thirsty engines are able to be shut down, and a reduction of local and global emissions can be obtained. To illustrate this, a possibility of supervising emissions is included in the demonstrator. This implies that emissions from power production on the carrier have to be identified, and emissions on shore have to be defined. For emissions on shore, emissions from the country’s/area’s fuel mix can be used. For most countries this is data that can be retrieved from IEA’s statistics. Another possibility is to use emissions from marginal fuel type.

Figure 5.5 shows an example of the window where emission data can be selected. By selecting fuel type, default emission factors for electricity production on the carrier will appear in the text boxes. Likewise default emission factors for electricity production on shore will appear by selecting country. The emission factors can be edited by the user by typing in the text boxes. In this version of the demonstrator only CO2 and NOx emissions are included. As an option other emission types can be included in later versions. Another improvement that can be done in later versions is to make it possible to have different generators running on different fuels. In the current version it is only possible to select the fuel for the carrier. Meaning that if a carrier has three generators; all have to run on the same fuel.

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Figure 5.5 Emission data window

5.1.6 Summary of input data

Table 5.1 summarizes the mentioned input data in chapter 5.1.1 to 5.1.5. Table 5.1 Summary of input data

Window Input data Denomination/example

Generator Generator capacity MWh/h

Generator Production cost €/MWh

Electrical load Electrical load MWh/h

Contract Price €/MWh

Contract Type Bilateral, OTC, Day-ahead, real-time

Contract Quantity (calculated for intraday and day-ahead)

MWh

Contract Time of delivery

Tariff data Feeding tariff €/MWh

Tariff data Distributing tariff €/MWh

Emission data Fuel type LNG, Diesel

Emission data Emission factor CO2 for fuel kg/MWh

Emission data Emission factor NOx for fuel kg/MWh

Emission data Emission factor CO2 country kg/MWh

Emission data Country Norway, Spain, USA

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5.2 Simulation

Based on mentioned input data, the software calculates power exchange in each hour, accumulated power exchange, average power exchange and accumulated emissions. Accumulated emissions are divided into type of emission (CO2 and NOx) and source (electricity production on shore or on carrier). The power exchange in each hour while trading in the day-ahead or real-time market is found by solving the linear programming (LP) problem below:

[ ]213111 )()((...min λλλδδ ImbEmaPcPcZ nnn ++−+++= Subject to:

LEIPP n =−+++ 121 ... λλ

maksn PP ≤

21 λλ ≠

1,0,, 321 ∈λλλ

Where:

P1,..,Pn production in generator 1-n in MWh/h

c1,..,cn production cost for generator 1-n in €/MWh

a tariff for feeding electricity to grid €/MWh

b tariff for distributing electricity to carrier €/MWh

m Electricity price in market €/MWh

E exported electricity from carrier MWh/h

I Imported electricity to carrier MWh/h

λ1 Boolean indicating if energy is exported from the carrier

λ2 Boolean indicating if energy is imported to the carrier

λ3 Boolean indicating if the connection between carrier and shore is active

δ1,…, δn Boolean indicating if generator n is available

Figure 5.6 shows a flow chart of the simulation. When running the simulation an output file is generated. This file contains net power exchange (negative values indicate import from grid to the carrier), market price and marginal production costs for each hour simulated.

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Start simulation

Hour =1

Hour = Hour +1

Figure 5.6 Flow chart of simulation

Figure 5.7 shows the main window where all the input data windows can be accessed and where the simulation is performed. The chart in bottom of the window illustrates the electricity consumption on the vessel in MWh/h (red bars), net power exchange in MWh/h (beige bars) and

Compute Power exchange during hour

Sales: positive

Compute associated values:

Average power

Sum energy transmitted in time frame

Accumulated time

Emissions

Update screen

Get power production and consumption during hour

No Yes

Finish End simulation

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accumulated power exchange hour by hour. On the right, an animation illustrates in which direction the exchange goes in the simulated hour.

Figure 5.7 The main window with simulation

5.3 Simulation examples

The study exemplifies functionality of the Demonstrator in several simulation examples. In order to show different possibilities for electricity exchange, the examples use electricity price inputs as variables, while the rest of parameters are constant.

For the sake of simplicity the study uses fictional data for the generation costs and distribution network tariffs. The costs of electricity distribution are assumed to be 1 Euro/MWh and costs for feeding 0,35 Euro/MWh. The generation costs are set differently for all three generators in order to test how it will influence the power exchange patterns as it shown in Table 5.2. Table 5.2 Production costs input for the simulation example

Generator 1 2 3

Max capacity [MW] 5,0 3,0 2,0

Production costs [€ pr. MWh] 40,0 45,0 50,0

Duration of the call is 19 hours, starting 03:00 and finishing at 21:00. The vessels own consumption is identical to the one, earlier presented in Figure 3.2.

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The examples are based on the following electricity prices:

• High variation of electricity prices (09.01.2006)

• Average variation of electricity prices (30.08.2006)

• Low electricity prices (26.01.2006)

5.3.1 High price variation

The first simulation example uses electricity spot prices from the 9th of January of 2006, where it was a very high price variation during a day was very high as it is shown on the screen dump from the contract input from on Figure 5.8.

Figure 5.8 Price input for the simulation example. Electricity spot prices for the 19th of December 2006

Figure 5.9 shows results of the simulation example. Connection between the vessel and the local electricity network is established at 03:00. From 03:00 until 05:00 the electricity spot prices ashore are lower then the generation costs, so the vessel imports electricity from the net.

Figure 5.9 Results of the first simulation example

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After hour 6 the spot prices start to raise and access the own generation costs. The vessel starts Generator 1 with the lowest generation costs in order to cover the own consumption. The further raising of the electricity price leads to activation of all three generators. The generators start to supply electricity to the vessel and simultaneously export the residual capacity to the local net.

This lasts until hour 20, when the spot prices start to fall again. The vessel accordingly deactivates Generator 3 with the highest production costs at hour 20 and stops export of electricity at hour 21.

5.3.2 Average price variation

The next example refers to 30th of August 2006, when electricity prices were actually quite high, and their variation remained on an average level for 2006. Figure 5.10 shows the spot prices, which were used in this example.

Figure 5.10 Price input for the second simulation example. Electricity spot prices for the 30th of August 2006

The simulation results are presented in Figure 5.11 and show that due to very high electricity prices ashore, the vessel activates all available generation capacity onboard. The vessels covers the own consumption and uses the residual generation capacity for export to the harbour.

Figure 5.11 Results of the second simulation example

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5.3.3 Low electricity prices

The next example uses prices from the 26th of December 2006, where electricity prices were very low. The prices are presented in Figure 5.12. It is interesting to mention that it is only one week difference between the first and the third examples.

Figure 5.12 Price input for the third simulation example. Electricity spot prices for the 26th of December 2006.

The simulation results are presented in Figure 5.13 and are actually directly opposite to the results in the previous example. The vessel auxiliary engines are not used at all, and the whole electricity consumption is covered by importing the electricity from the harbour.

Figure 5.13 Results of the third simulation example

5.3.4 Discussion of the simulation examples

The spot prices on the Nordic electricity exchange are very volatile. The simulations have shown that an efficient operation in the spot market environment requires a frequent decision making and regular developing of generation schedules based on day-ahead electricity spot prices. It is interesting to mention that it is only one week time between the first and the last examples. At the same time the variation of the spot prices was considerably high and resulted in quite different simulation results. The main conclusion, which can be derived from the simulation examples that the generation schedules are going to be influenced a lot by the price development ashore and likely to have a strong variation even within a fairly short time frame.

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6 Further work

Demonstrator was initially intended to be used as decision-support tool on a local level and can be adapted to technical characteristics of a particular vessel in a particular port of call. The test simulations done in the present study, show examples of day-to-day operation of vessel in a harbour. They have also illustrated how the electricity exchange schedule depends from the existing spot prices. The schedule may require that the electricity flow between the vessel and the harbour will be changed several times during a one single call.

The work will be continued in the next deliverable of the present project D16: Power Interface Combination Analysis Report. Results from the study will be used as an important input in general economic study, including development of business models and profitability assessments for power exchange between vessels and harbour.

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7 References

[1] FERC. (2007, october 4, 2007). "Electric Power Markets: PJM." Retrieved 1. oct, 2007, from http://www.ferc.gov/market-oversight/mkt-electric/pjm.asp

[2] OMEL. (2007). "Mercado de Electricidad." Retrieved 22. oct, 2007, from http://www.omel.es/frames/en/index_eng.jsp.

[3] Powernext. (2007, June 2007). "Products and market organization." Retrieved 14.11, 2007, from http://www.powernext.fr/modules/PwnDl/download/files/fra/Powernext_brochure%20Day-Ahead_2007-06.pdf.

[4] Wangensten, I. (2007). Power system economics - the Nordic electricity market. Trondheim, Tapir academic press.

[5] Terms and Conditions for Regulating Power Market, Statnett SF, 2003 http://www.statnett.no/Files/Open/Vilkår%20RK%20-%20mai%202003.doc

[6] Sætrang I., Statistikk over netlleie i regional- og distribusjonsnettet 2006. Norges vassdrags- og energidirektoratet. April 2006. ISSN 1501-2840

[7] Information about distribution network tariffs. Hammerfest Energy AS

[8] http://www.statoil.com/snohvit

[9] http://www.apxgroup.com/index.php?id=28

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http://www.statnett.no/Files/Open/Vilk�r RK - mai 2003.dochttp://www.statoil.com/snohvithttp://www.apxgroup.com/index.php?id=28

I

IntroductionPLUG in a nutshellScope of the studyDataThe reading guide

Power marketsNorwayRoles and responsibilitiesOrganisation of the tradingElspotRegulating Power Market - RPMRegulating Power Option Market (RPOM)Bilateral contractsOTC (Over the counter) contractNetwork Tariffs in Norway

FranceSpainDaily marketIntraday marketSpecial regime generation

United KingdomSpot Market

Maryland (US)

Identification of actorsVesselShipping companyTerminalDistribution System operator (DSO)Retail Electricity Supply Company (RESC) or Electricity tradTransmission System Operator (TSO)Market operator (MO)

Time line data exchangeElectricity exchange with electricity spot marketActivation for Regulating Power MarketTrading via bilateral contracts

The “Ship-to-shore-to-market” DemonstratorInput data to the simulationGenerator dataElectrical load dataContract dataTariff dataEmission dataSummary of input data

SimulationSimulation examplesHigh price variationAverage price variationLow electricity pricesDiscussion of the simulation examples

Further workReferences

Documents

D15: Data Exchange Study and Market Demonstrator · 2014. 11. 17. · “Time line data exchange”, where sequences for three of the most probable scenarios for electricity exchange