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© OECD/IEA 2013
Practical experience of power trade in Europe
Workshop on Energy Connectivity and Transboundary Power Trade Suzhou, China
November 8, 2015
© OECD/IEA 2013
Founded in 1974
• Formed in wake of 1973 oil embargo with mission to promote member country energy security --autonomous agency of the Organisation for Economic Cooperation and Development (OECD)
29 member countries
• Asia Pacific: Australia, Japan, Republic of Korea and New Zealand• North America: United States, Canada• Europe: Austria, Belgium, Czech Rep, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Luxembourg, Netherlands, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey and United Kingdom
• European Commission also participates in the work of the IEA• Chile is in the process of accession to become members of the IEA
Headquarters: Paris
Decision-making body: Governing Board
• Consists of member country representatives• Under the Governing Board, several committees are focusing on each area
Secretariat: • Staff of around 240, mainly energy experts and statisticians from its member countries
The IEA
© OECD/IEA 2013
Network Investment
IEA’s Electricity Security Action Plan
Generation Investment
Demand Response
RegionalMarket
Integration
EmergencyPreparedness
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Relevant IEA work
Seamless Power Markets (2014)
Development Prospects of the ASEAN Power Sector (2015)
Re-powering Electricity Markets (forthcoming 2016)
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Market integration: consolidation vs co-ordination
Consolidation Co-ordination
Initial situation:Separated and independent system operators
Separate operations withoptimized interconnections- Harmonized or standardized
network codes- Trade of power across borders
Integrated operations :- Standardized market design- Centralized system planning
and operations
EU: National, liberalisedmarkets co-ordinatingat a regional level
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Five models for regional co-ordination
1. Unidirectional trades based on electricity cost differences.2. Bilateral, bi-directional power trades between national utilities.3. Imports from IPPs in neighbouring countries.4. Trade with one or more intermediary countries.
a) Purchase and resell of electricityb) Third-party wheeling charges
5. Multi-buyer, multi-seller market.
Power System A
• 10 USD
Power System B
• Wheeling Charges
Power System C
• 20 USD
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EU: increasing trade between countries
Driven by increased market integration and growing share of renewables, among other factors
Source: ERIA, European Commission
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A few countries dominate trade flows
Source: European Commission
Trade flows have not always been rational from a market perspective
At times, power flows have gone from high price to low price regions
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Co-ordination: market coupling
Source: European Commission
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Co-ordination: Ten-Year Network Development Plan
Developed by ENTSO-E (41 TSOs representing 34 countries in 6 regions)
Regional plans are coordinated to identify Projects of Common Interest
Gap between plan and implementation Source: European Commission 2014
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Co-ordination: Fragmented capacity market implementation General preference for domestic resources over
imports
GermanyStrategic Reserve
SwitzerlandNo capacity mechanism
NetherlandsNo capacity mechanism
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Moving to real-time: Western US Energy Imbalance Market
Increased penetration of renewables is driving greater real-time market integration
May lead to development of multi-state RTO (consolidation)
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Thank you!
Download Development Prospects of the ASEAN Power Market for free at:
http://www.iea.org/publications/freepublications/publication/Partnercountry_DevelopmentProspectsoftheASEANPowerSector.pdf
