Integration challenges and solutions – planning a

regional system with RES

1

Dr. Susanne NiesCorporate Affairs Manager, ENTSO-E

EU-GCC Workshop: Electricity Interconnections and Trading for Growth and Efficiency

22 May, 2017

Where we were in the past Where we might go in the future

Large, steerable, & centralised generation

One-way flow to consumers with predictable pattern

Where we are now

CHANGE IN POWER MARKET = EVOLUTION IN SYSTEM OPERATION

Mixed generation portfolio of distributed, CCGTs & low carbon technologies

Suite of new technology assets & services

Engaged, active, prosumers

Further electrification of transport

Smart, data-centric system

Increasing proportion of small, intermittent & decentralised generation

bidirectional flows at all voltage levels

Reduced thermal generation

Increasing smart technologies7

HOW TO TACKLE THIS NEW COMPLEXITY?Enhance

existing

cooperation at

all levels

COOPERATION

EU

National

Regulators & ACER

TSOs & ENTSO-E

Distribution

Stakeholders

8

Implement the

EU codes

Capacity calculation:

Implement flow based

Review bidding zones

configurations (ongoing

study)

Regional security

coordinators

Strengthen the

grid

Including links inside

countries

Support TSOs’ effort to explain

to the public that energy

transition & grids go together

4

Enhance existing cooperation

5

MARKET COUPLING OFTEN A VOLUNTARY

TSO REGIONAL COOPERATION

1990s 2006 2011

Feb 2014May 2015 Feb 2015

6

FLOW BASED PROJECT

Central-West Europe (CWE) project to introduce

flow-based (FB) capacity calculation

• Into the highly meshed region

• Went live on 20 May 2015

• 9 parties involved, include TSOs from France, Belgium,

Luxembourg, Germany and the Netherlands, and two

power exchanges

The sixteen TSOs of the CWE and CEE capacity

calculation regions (CCRs)

• Signed a memorandum of understanding (MoU)

• On 3 March 2016

• To develop a common day-ahead flow-based

capacity calculation methodology (DA FB)

• Aim: merge the two CCRs into one

CWE CEE Region Merge Project

7

INTRADAY MARKETS

A continuous intraday market lets positions be fine tuned close to real

time. This is vital to managing the variability of RES;

The target model pools all liquidity to maximize economic benefits.

The relationship between the Shared Order Book function and Capacity

Management Module will be one-to-one;

Cross-zonal intraday capacity allocation and energy

trading based on implicit continuous allocation

EUROPEAN TARGET MODEL

8

THE XBID SOLUTION

Cross border Intraday (XBID) Market Project

• Launched by TSOs from 12 countries, along with

power exchanges (PXs)

• Aim: to enable the creation of a joint integrated

intraday cross-zonal market

• Overarching objective: to create one integrated

European intraday market.

State-of-play in pan-European Single

Intraday Coupling as of August 2016

Countries involved the XBID Project

Accession countries

Source: ENTSO-E’s report on the progress and potential problems with the

implementation of Single Day- Ahead and Intraday Coupling

9

INTRADAY MARKET COUPLING

1 The list is based on the present status of PXs active in the concerned

countries; it does not prevent any other PX joining as soon as they are

selected as NEMO in one of the countries.

12

9

11

5

10

1

4

8

23

6

7

TSOs and PXs participating for developing

and implementing the XBID Solution

PXs participating; TSOs observers

PXs participating, adherence to joint

project ongoing

PX observer status

Draft LIPs Tentative Participants1

Nordic Fingrid, EnDK, SvK, Statnett, NPS

DK2/DE (Kontek) EnDK, 50Hz, NPS, EPEX

DK1/DE, DE/NLEnDK, TenneT NL&DE, Amprion,

EPEX, APX/Belpex, NPS

NorNedStatnett, TenneT NL. APX/Belpex,

NPS

FR/DE, CH/DE,

CH/FR, DE/AT

Amprion, TransnetBW, APG, RTE,

Swissgrid, EPEX, NPS

NL/BE Elia, TenneT NL, APX/Belpex

BritNedTenneT BV, National Grid, Chosen

PX

FR/BE RTE, Elia, APX/Belpex, EPEX

FR/ES RTE, REE, EPEX, OMIE

IFARTE and National Grid

Interconnectors

AT/CH APG, Swissgrid, EPEX

ES.PT REE, REN, OMIE

OVERVIEW OF LIPs

12

11

10

9

8

7

6

5

4

3

2

1

10

BALANCING SERVICES

1

Common Merit Order (CMO) for mFRR and

aFRR with real time flow based congestion

management

2Cross-border market for FCR based on TSO-

DSO model

3 E-GCC (project on hold)

4TERRE: Trans-European Replacement

Reserves Exchange

5 Development of the Nordic RPM

6

Design and evaluation of a harmonised

reactive balancing market with XB

optimisation of Frequency Restoration

7BritNed/TenneT/National Grid Balancing

Services (project on hold)

8IGCC Imbalance Netting, aFRR-Assistance

and Flow-Based Congestion Management

OVERVIEW OF PILOT PROJECTS

4 44

44

4

4

4

8

8

5

5

5

5

5

5

9

2

2

3

3

91

TSOs involved

TSOs possible future

involvement

8

9

7

MARKETS DELIVER SECURITY OF SUPPLYBUT WHEN MARKETS END…

Common adequacy

methodology to be

used for pan-

European, regional

and national

assessments

Common adequacy

standards on which

national security of

supply standards can

be based

Member states to

agree on coordinated

management of

simultaneous

scarcity situations in

all timeframes

11

12

Implementation of Network Codes

WHAT IS A NETWORK CODE/GUIDELINE?

13

1

2

3

4

A set of rules applying to a cross-border or market

integration issue in the electricity sector

Developed by the European Commission, ACER, ENTSO-E & market

participants under Art. 8 of the Electricity Directive

Going through a EU law-making process called ‘Comitology’

Which at the end make network codes and guidelines binding EU

regulations to be implemented in all member states

STRIVING FOR EUROPEAN HARMONISATION OF

OUR PROCESSES

14

OPERATIONAL CODES

MARKET CODES

CONNECTION CODES

Reinforced security of

supply

Plan, operate & monitor a

grid with new challenges

and new technologies

Greener power, smarter

consumption

Connect new actors to the

grid and enable them to

play an efficient role

Wider market integration

Allow more competition,

new entrants, and enhance

resources optimisation

Network Codes facilitate EU policies

• 260 GW of RES connected

• 25 GW in 2016

• >10 GW of EU demand

side response

• NO multi-state interruptions recent years

• Up to 300 coordinated tasks/day in a RSC

• Hundreds trained employees in RSCs

programs and offices

• 23 states and 85% of European

consumption market coupled

• 10 million data files made available

yearly for 2500 daily users of

ENTSO-E transparency platform

Security of supply

Competitiveness & Social WelfareSustainability

Network codes

Network Codes deliver

Connection

Codes

Operation

Codes

Market

Codes

• More efficient investments and operations

• Better industrial solutions, competition and cost reductions

• Transparency and involvement give further improvements

• Liquidity and competition

• Efficient utilization of grid and generation

• Lower costs to industry and consumers

• More efficient exchange of reserves

• Secure operations in spite of more RES

3

2

3

Case #1: Promote wholesale markets

• 1 B€ in social welfare

• ~100 M€/year of benefits from

flow-based in CWE

• 84% efficient use of capacity

given to the market

• 1500 TWh(~50% of consumption)

traded on exchanges

DAY-AHEAD MARKETS INTRADAY MARKETS DERIVATIVES MARKETS

0

200

400

600

800

1000

2008-2016Spot-volume growth (TWh/yr).

EPEX and NordPool combined0

1000

2000

3000

4000

5000

2008-2016Derivative-volumes picking up (TWh/yr).

EEX and NasdaqOMX combined

Efficient day-

ahead markets

Market

trust

Efficient

planning

Liquid

derivatives

Efficient

hedging

IT IS ALL

CONNECTED

• 120 TWh traded on main power

exchanges in 2016

• 3,6% average annual volume

growth last 5 years

STATES WITH INTRADAYMARKETS

Continuous trading

15 minutes auctions

Case #2: Integrate balancing markets (1)

Replacement reserves in

the Nordics since 2003

Pilot on imbalance netting

within and around Germany

(IGCC)

Pilot on replacement

reserves across the

Continent (TERRE)

~ 220 M€

~ 80 M€

~ 120 M€

Up to 3 Bn€

Theoretical benefits

of full integration of

balancing markets

Annual benefits:

Common reserves, netting

and common merit order

implemented across TSO-

areas in Germany

~ 260 M€

Case #2: Integrate balancing markets (2)

3/2019

• Imbalance netting Continental Europe

2025

• Imbalance settlement

period, 15 minutes

3/2019

• Replacement reserves

3/2021

• aFRR and mFRR

BALANCING

M A R K E T

MILESTONES

Case #3: Secure operations with regional cooperation

CORESO (2008)

TSC (2008)

SEE-Thessaloniki RSC (2016)

SCC (2015)

Nordic RSC(2016)

Baltic RSC (2016)

Regional Security Coordinators:

1. Capacity calculation

2. Security analysis

3. Common grid model

4. Adequacy forecast

5. Outage planning

Discovered 7 times more potentially critical

situations CORESO in 2015 compared to 2014

Mitigate critical grid situations

4000 remedial actions proposed/year in CORESO

130 multilateral remedial actions coordinated by TSCNET

partially operational

in TSCNET and

CORESO

Case # 4: Avoid disturbance – ¨the 2006-case¨

• 15 million households had a load shed

• 17 GW of load shedding

• 300-500 M€ of economic losses due to

load shedding

• > 20 GW of generation tripped or

disconnected

UCTE area split into three areas 4 Nov 2006 22:10

Network codes improve coordination and data

exchange - and streamline emergency procedures

22

Common grid planning

Explores the future

Shows where the infrastructure needs are

Provides data for additional studies

Assesses +/- 200 pan-European projects

1

2

3

4

THE 10-YEAR NETWORK DEVELOPMENT PLAN

INFRASTRUCTURE:

THE BACKBONE

OF EUROPE’S

ENERGY

TRANSITION

24Source: ENTSO-E

POWER BRIDGES

TYNDP 2016 Mid-term

projects

25

THE TYNDP BY THE NUMBERS

26

27

BUILD GRIDS FOR THE FUTURE

Grid investments by 2030 Barriers identified in TYNDP 2016

Exchange of

flexibility

Geo-

political

Loop-flows

Physical

congestions

Market

integration

Connect new entrants

Allow energy transition

150 b€

28

BUILDING GRIDS AND CREATING VALUE (TYNDP 2016)

Consumers Society/Climate

Higher grid cost:

1,5 – 2 €/MWh

Lower wholesaleprices:

1,5 – 5 €/MWh

Emissions down by:

50 – 80%

Reduced spillage of renewable energy by:

30 – 90 TWh

Emissions

reduction

only due

to grid:

8%but…

SCENARIO BUILDING – FRAMING THE UNCERTAINTY

How will 2020 and 2030 look like?

What parameters to consider (demand,

technology, policies)?

How to deal with inherent uncertainties?

The further you look, the more

scenarios we need to ensure a robust

study framework

Today 2020 = one scenario 2030 = four visions

Delayed towards the

2050 RES objectives

On track towards the

2050 RES objectives

Weaker pan-European

framework

Stronger pan-

European framework

2030 VISION CHARACTERISTICS

TYNDP SCENARIOS: A WIDE RANGE OF PLAUSIBLE FUTURES

Vision 1 Vision 2 Vision 3 Vision 4

Exporter Importer

LEGEND

With TYNDP

investments

Without TYNDP 2016

investments

BENEFITS OF TYNDP INVESTMENTS FOR EUROPEAN

MARKET INTEGRATION

Average price spread

at each border in Vision 3

2030 targets for

interconnection

capacities

(TYNDP2016)

V1 V2

V3 V4

12

2030 Transmission adequacy

(TYNDP 2016)

13

THANK YOUFOR YOUR ATTENTION

+32 2 741 09 50info@entsoe.eu

Av. de Cortenbergh 100

1000 Brussels Belgium

For more information:

http://www.entsoe.eu