Deelname aan Elia’s balancingmarktFlexibele energieproductie op biogasinstallaties

Vlaams Vergistingsforum – 14 december 2017

Patrik Buijs – Elia

1. Changing electricity landscape, a grid operator challenge creating opportunities for

flexible resources

2. The Elia BidLadder: a new market segment – State of play

3. Transfer of Energy: an enabler for participation of energy

Overview

Vlaams Vergistingsforum - 14 dec'17 - P. Buijs 2

Changing electricity landscape…

A grid operator challenge creating opportunnities for flexible

resources

Major trends impacting the power system

4

Consequences

→ More & long distance transmission

& interconnection

→ More flexibility needs to balancing

system with high amounts of

variable RES

→ More flexibility available at end-user

level & appearance of new business

model

→ Intensified coordination

local (DSO-TSO) & supranational

(ENTSO-E, CORESO, etc.)

The development of

intermittent generation

Decentralisation, digitalisation

& new playersThe regionalisation

of the electricity sector

Integrating more renewables challenges the way we

balance the system

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Example of wind generation in Belgium during some days in March [MW]Installed renewable generation capacity in Belgium – “Base” scenario

The variability of renewables need to be managed at different time-frames: not only daily but also weekly and seasonal.

Need for (more) flexibility in the system is a consequence of the integration of (more) renewables.

Balance Management: central role of the market participant

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Needs• Flexible set up of production units

• Flexible demand (demand response)

• Interconnections

• Storage

Sources

50 Hz

▪ Elia regulates the residual

global imbalance of the system:

✓with reserves (FCR, aFRR &

mFRR) & with “free bids”

• Elia’s regalulation actions

determines the Imbalance

Tariff that shall incentivice

BRPs to stay in balance

▪ Incentivation via Elia’s

balancing tariff to keep the

portfolio balanced =

REACTIVE BALANCING

▪ Additional deviations (outages,

wind …) can still be settled

bilateral between market

parties or by proper means

▪ Adjustment of the portfolio

based on the new prognoses:

✓via Intra Day Market (until

1 to 2 hours before Real

Time)

✓with own flexibility means

▪ Each Balancing Responsible

Party (BRP) nominates hour

per hour its portfolio in balance

based on predictions

▪ To reach for a balanced

portfolio every hour of the day,

diverse flexibility needs are

deployed, via contracts or own

flexibility means

RT Balancing Market

Elia

ID to Real Time

(RT)

Intra Day (ID)

MarketDay-Ahead Market

Market Parties/ Balancing Responsible Party

Uncertainty

RT Balancing MarketID to Real Time (RT)Intra Day (ID) MarketDay-Ahead Market

• Variability of the consumption

• Variability of the production, especially

renewable sources

• Production incidents

Imbalance Tariff

“Free Bids”Not pre-contracted; availibitliy only

guaranteed during bid validity

• Free mFRR Bids

• NA

• NA

Pre-Contracted Volumes (=Reserves)

availability guaranteed by contract –

tendered weekly or monthly

• mFRR “R3 Standard”

• mFRR “R3 Flex”

• aFRR Up

• aFRR Down

• FCR symmetric 100 or 200MHz

• FCR asymmetric up or down

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2 Product Types

Balance Management: Balancing Products

FCR

aFRR

mFRRFrequency Containment

Reserve (FCR)

Stabilizes frequency of the

synchronous area.

(automatic activation ;

response time < 30’)

Automatic Frequency Restoration Reserve

(aFRR)

Restores the balance of the control block (and hence

restores frequency to 50Hz) within 15’ (automatic

activation; response time <7,5min).

Manual Frequency

Restoration reserve (mFRR)

Manual activated reserve in

addition to aFRR (in the event of

large imbalances) to restore the

balance of the control block.

(response time <15min).

Ord

er

of

ac

tiva

tio

n

68MW

144MW

780MW

monthly

weekly

weekly

Increased flexibility needs for balancing [MW]

Intra Day (ID)

MarketDay-Ahead Market

Year FRR+ aFRR+ mFRR+ FRR- aFRR- mFRR-

2017 924 144 780 144 144 -

↓

2021 1240 175 1065 1000 175 825

2023 1240 175 1065 1000 175 825

2027 1240 175 1065 1000 175 825

NEEDS VOLUMES

FCR R1

aFRR R2

mFRR R3

Source: Adequacy study and assessment of the need for flexibility in the Belgian electricity system - April 2016, available on www.elia.be

Disclaimer: indicative volumes – non binding – based on the 2016 applicable volume determination methodology – excluding any additional measures/volumes that would be

require to deal with exceptional situation (e.g. storm risk) ; these volumes have as sole purpose to give an idea of the future trend wrt volume needs and do by no means

substitute for the legally/regulatory determined volume assessment process in place between Elia and the CREG

TREND

NEW

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The Elia BidLadder: a new market segment

State of play

9

BidLadder: opening up non-reserved mFRR to all market players

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Yearly profile

Daily profile

• Non-Reserved mFFR used to be offered only by large

generation units (i.e. CIPU, typically >25 MW)

• As from July’17, this market is also open to non-CIPU

connected to the Elia Grid, i.e. industrial load,

decentralised generation, both individually and via

agrgegators

• This product will the first applying Transfer of Energy

• The product can be combined with R3 Non-CIPU on the

same delivery point

• It is less demanding than the reserve products in terms of

requirements (such as availability).

The BidLadder pilot project: introduction of a new product

Non-reserved tertiary control power:

A low-barrier product for all kinds of flexibility available on a 15min basis.

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Requirements for a non-reserved tertiary control power for non-CIPU

(“Non-CIPU Free bid”)

Minimum volume 1 MW, upwards or downwards

(at pool-level, not at delivery point level)

Activation period Only the periods as offered to Elia, on 15min basis

Activation duration Maximum four 15min periods, but subject to “prolongation”

information included in the offer (ranging from 1 QH to max 4 QH)

Pricing Free in €/MWh, paid-as-bid

Award criteria Based on techno-economic merit order (cf. balancing rules)

Availability Only for the 15min periods for which a volume was offered at Gate

Closure Time

Gate Closure Time Real-time minus 45 minutes

Vlaams Vergistingsforum - 14 dec'17 - P. Buijs

Imbalance tariffs also provide a clear incentive to keep your balance as BRP...

... and are a good indication of the reward when participating as free bids

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Positive Imbalance Price Negative Imbalance Price

2014 2015 2016 2017 2014 2015 2016 2017

Jan 47,55 45,14 29,48 72,70 48,40 45,88 30,33 73,67

Feb 36,68 50,88 21,80 32,81 37,73 51,56 22,87 33,81

Mar 37,34 45,76 25,11 26,07 38,63 46,81 26,46 27,33

Apr 38,12 41,30 32,02 28,39 38,87 42,02 33,12 29,08

May 41,52 33,71 25,21 38,64 42,25 34,48 25,86 39,32

Jun 39,94 43,67 37,44 32,44 40,59 44,35 38,43 33,11

Jul 41,35 43,85 30,15 32,19 42,08 44,53 30,69 32,85

Aug 35,51 47,26 26,96 36,89 35,92 48,00 27,45 37,35

Sep 44,34 39,51 33,13 35,45 44,84 40,10 33,46 35,96

Oct 37,41 61,04 52,88 46,89 37,99 61,79 53,72 47,54

Nov 39,76 36,57 55,20 n/a 40,53 37,10 56,03 n/a

Dec 44,09 33,31 49,17 n/a 44,72 33,82 50,01 n/a

Average 40,30 43,50 34,88 38,25 41,05 44,20 35,70 39,00

Whereas the average prices may seem moderate, also price spikes occur regularly, e.g.

• high prices in case of the system being short

• negative prices when the system behaves incompressibly

Vlaams Vergistingsforum - 14 dec'17 - P. Buijs

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High prices for negative imbalance

(historically about 3-4% of time > 100 €/MWh)

Negative prices - incompressibility

(historically about 3 % of time < 0 €/MWh)

• Launched by Elia 1 July 2017, so far no offers yet, but ....

• Contracts between Elia and suppliers are being signed and testing with suppliers ongoing

• Participation likely to speed up as from 2018, due to:

• B2B access as from January 2018

• DSO participation as from January 2018

• Transfer of Energy as from April 2018

BidLadder – State of Play

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Transfer of Energy framework

An enabler for participation of flexibility

1

5

A supplier has sourced (via his BRP) an amount of energy in the day ahead market that is equal to the forecast of its customers’

demand. Hence, the BRP perimeter is balanced.

When a demand response dispatch occurs in real-time that is not initiated by the supplier, it changes the actual consumption of

its customer base. This creates two distinct impacts:

1. The BRP cannot charge or receive payment for part of the electricity it sourced on the market (this electricity is consumed by

clients of other suppliers).

2. While the BRP is required to balance its portfolio, it is put in imbalance due to the third party aggregator action.

the customer has, through the aggregation contract, sold the value of its demand side flexibility to be used into the market

directly, and the customer should have the right to the market value of that flexibility.

Transfer of Energy - principles

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Neutralization of BRPsource

imbalance risk

Financial compensation to

BRP

Source: SGTF-EG3 Report: Regulatory Recommendations for the Deployment of Flexibility (January 2015)

Vlaams Vergistingsforum - 14 dec'17 - P. Buijs

In Belgium, the Electricity Act foresees a ToE-regime as from July’17, which is currently being

implemented Up and running as from April 2018

Transfer of Energy

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Energy Market

Flexible End consumer

Balance Responsible Party

(BRPsource)

Energy Supplier

Elia

Flexibility Service Provider

(FSP)

BRP of the FSP

Without a ToE-mechansism, the

supplier would make a loss as he

bought (and pays to the market)

the energy, but can only invoice a

smaller consumed amount to the

end consumer who reduced its

load as requested by the FSP

Also the BRP(source) needs to be

corrected, otherwise he suffers an

imbalance for the activated volume

beyond its control.

Transfer of Energy boils down to 2 things:

- Correction of the perimeter of the BRP(source)

- Financial compensation between FSP and Supplier

Vlaams Vergistingsforum - 14 dec'17 - P. Buijs

(4)

Transfer of Energy: organisational setup

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(6)

GU

Elia

DSO

BRPSOURCEFSP BRPFSP

(1)

(2)

(3)

Supplier

(5)

(7)

1. Elia-FSP Contract (GFA Bidladder)

2. ARP contract (between Elia and BRPFSP)

3. Collaboration Agreement between Elia and DSO

4. ARP contract (between Elia and BRPSOURCE)

5. Elia-Supplier Convention for data exchange

6. Grid User-DSO contract (Network Flex study between GU (or FSP) and

DSO)

7. DSO-FSP Contract: Contract which describes the rights and

responsibilities w.r.t. data transfers between the DSO and the FSP and the

update of the list of delivery points

8. ToE- arrangement FSP - Supplier

(8)

Note:

• Elia/DSO will ensure data handling in a way that ensures confidentiality between all necessary parties.

Specific arrangements can apply in case of Passthrough-contracts

• ToE only applicable on “vraagflexibiliteit”, i.e. on delivery points with a sufficient net offtake

Vlaams Vergistingsforum - 14 dec'17 - P. Buijs

More information?

• Patrik.Buijs@elia.be

• Contracting_as@elia.be

• Overview of products (incl. BidLadder/R3-non-Reserved):

http://www.elia.be/en/suppliers/purchasing-categories/energy-

purchases/Ancillary-services

• Product description: http://www.elia.be/en/suppliers/purchasing-

categories/energy-purchases/Ancillary-services/Product-Description

• Bidladder Contract: http://www.elia.be/en/suppliers/purchasing-

categories/energy-purchases/Ancillary-services/Practical-Info/Contractual-

documents

Vlaams Vergistingsforum - 14 dec'17 - P. Buijs 19