Transmission, system management & ancillary services Hubert
Lemmens Slide 2 Agenda Elia Group Electricity market Role of the
different players Elia products and services Ancillary services
Balancing Ancillary services AS markets Challenges &
opportunities Slide 3 Agenda Elia Group Electricity market Role of
the different players Elia products and services Ancillary services
Balancing Ancillary services AS markets Challenges &
opportunities Slide 4 4 Ownership Elia 100% of 380-150kV network
94% of high voltage network (70-30kV) 50Hertz 100% of 380-220kV
network 34% of the German 380kV network 19% owner of the German
220kV network Age of networks Elia Less than 15 years for 50% of
underground cables Less than 25 years for 50% of lines &
substations 50Hertz Around 10 years for 90% of the network
(refurbished after German reunification in 1989) Elia Group -
reliable and resilient networks Slide 5 5 Elia + 50Hertz
Transmission = Top 5 in Europe Elia Group 110-380 kV lines and
cables13,431 km 30 tot70 kV lines and cables4,800 km Substations872
Served territory (km2)~ 143,000 Direct consumers~ 130
Inhabitants> 30m Staff (FTE)~ 1,900 Regulated Asset Base (RAB)
5,843m 5 Slide 6 Elia Transmission 380 to 30 kV Belgian producers
Electricity Generation Distribution from 15 kV to 230 V Domestic
Customers Exports France Netherlands Luxembourg U.K.? Germany?
Imports Small Industry France Netherlands Luxembourg U.K.? Germany?
Large & Medium Industry Elia operates, maintains and develops a
network consisting of lines, underground cables, transformers and
substations linking producers and consumers of electricity Elias
Role 6 Slide 7 7 The transmission grid: key in energy policy The
European transmission system: 34 interconnected countries 532
million consumers 880 GW installed generation 3.200 TWh/year
consumption 380 TWh/year international exchanges The European
transmission grid: 305.000 km interconnections A remarkable
technological accomplishment of the 20th century ! Slide 8 Agenda
Elia Group Electricity market Role of the different players Elia
products and services Ancillary services Balancing Ancillary
services AS markets Challenges & opportunities Slide 9 9
Regulatory framework Europe Liberalisation is an European
initiative: Creation of one European market Free market Producers
Supply System operator -Natural monopoly -Independent system
operator -Strong regulation With social and environment corrections
Slide 10 Power market design Asset management Power system
operation Power exchanges 10Elia Group ISO model TSO model Brasil,
US, Korea, Australia, Europe Critical interface 3 rd pty Slide 11
11 EU Market Model Forward Manage forward price and vol. Risk
Arbitrage Maintenance planning Investment planning Day Ahead Manage
STprice and vol. Risk Close forward positions Generation
optimization (Make or buy) Intraday Volume adjustment/fine tuning
(T, wind,) Outage management Balancing System security Slide 12
Power Markets: general framework ForwardDay
aheadIntradayBalancingReserves Energy only marketsCapacity market
Multilateral market TSO is single buyer 12 Slide 13 13 Different
electricity markets Balancing Market Wholesale Market OTC and
Exchange Retail Market Retailers Traders Slide 14 14 European power
exchanges Products Bilateral, brokered or exchange-based Physical
or financial delivery Forwards, futures, options and other
derivatives Years, quarters, months, weeks, days, hours Price per
delivery zone (~ country) Slide 15 Agenda Elia Group Electricity
market Role of the different players Elia products and services
Ancillary services Balancing Ancillary services AS markets
Challenges & opportunities Slide 16 16 Market actors Producers
Produce electricity Have a licence for production Suppliers Sell
the energy to the consumers Have a supplier licence Traders Buy and
sell the energy, but dont supply Grid Users Are connected to the
Grid (Transmission or Distribution) Take energy off or inject
energy in the Grid Grid operators (Transmission / Distribution)
Build and maintain Grid Guarantee security and quality of supply
Control and manage balance, voltage, frequency and congestions
Promote the opening of the market 16 Slide 17 Roles and
responsibilities Resource Adequacy Energy Balancing Ancillary
service Responsibility: government/market Tools: Measurement/
forecasts Capacity remuneration schemes Strategic Reserves
Responsibility: energy market actors/ TSO (residual) Tools: Direct
control (dispatchable load) Response to price signals
(non-dispatchable load) Responsibility: TSO as buyer -
generation&load as provider Tools: Direct control (dispatchable
load) options (pre-contracted) DSOs involved, especially when
Distribution grid congestion issues 17 Slide 18 Elias tasks
Operation of the transmission network, including the management of
the energy flows and the organisation of ancillary services.
Management of the balance between injection and off-take of the
network around the clock (7 days/7, 24 hours/ day) Maintenance of
the transmission network and the implementation of the necessary
investements to develop and improve the network. Grant access to
the network on an objective and transparant basis. Development of
instruments and systems that should enhance the good functioning of
the market: hub, nominations, auction of transmission capacity at
the borders, energy exchange, market coupling. Electrical system
management Market facilitator High voltage infra- structure
management 18 Slide 19 Elia is a market facilitator Nominations
Transmission programme for every ARP and balance responsible party
Validation by Elia Day ahead: normal procedure Intraday: in the
event of an imbalance, restore balance through exchanges on the hub
HUB IT platform for bilateral exchanges between ARPs to safeguard
the balance Day ahead & intraday (intraday = in the event of
unexpected imbalances) Balancing: offset imbalances Allocation of
border capacities Energy exchanges: purchase and sell electricity
anonymously Belpex: Belgian energy exchange with trilateral market
coupling (Belgium the Netherlands France); APX: energy exchange
between Belgium, the Netherlands and the UK Participation in
Powernext, Frances energy exchange (via HGRT) CWE and CWE-Nordic
ITVC market coupling: launched 9 November 2010 19 Slide 20 Agenda
Elia Group Electricity market Role of the different players Elia
products and services Ancillary services Balancing Ancillary
services AS markets Challenges & opportunities Slide 21 21
Product overview In its interactions with the market, we
distinguish following categories of products: Services supplied to
Grid Users Connection to the Grid Access to the Grid Use of the
Grid Supply of ancillary services Management of balance Allocation
of interconnection capacity Services contracted with third parties
Supply of energy for ancillary services Coordination of Injection
of Production (CIPU) Slide 22 22 Product overview For each of them
specific contracts are signed: Slide 23 Principle BRP balanced
day-ahead 23 (ARP = BRP) Slide 24 24 Goal : BRP must be in balance
All Injections = All Off-takes (Sum IN = Sum OUT) Injections :
Import from NL/FR Purchase on HUB Generation/ injection Off-takes :
Export to NL/FR Sale on HUB Offtakes for direct clients or DGO
Losses Slide 25 Imbalance tariffs: objectives Incentive to avoid
imbalances By good forecasting By participation on the intraday
markets By use of own flexibility Incentive not to source on real
time market => Ideal situation no regulating power need to be
activated by the TSO Avoid excessive charges deterring market entry
ARP whose imbalances are zero on average and are not correlated to
system imbalance will pay small imbalance charges on average.
Incentives to execute requested regulating power Transparency; real
time publicationTransparency; real time publication XB
harmonizationXB harmonization Slide 26 Agenda Elia Group
Electricity market Role of the different players Elia products and
services Ancillary services Balancing Ancillary services AS markets
Challenges & opportunities Slide 27 Electricity consumption =
generation on interconnected network otherwise: BLACK OUT! Balance
between electricity consumption and generation: coordination
between TSOs TSO ensures balance in its control area Every BRP is
responsible for maintaining h balance between total injections and
total off-takes in his portfolio General principles balance
management Slide 28 Balancing - Elia Means of maintaining balance
Primary reserve Secondary control (LFC) Incremental or decremental
bids (non-contractual R3) Contractual tertiary reserves (production
and interruptible customers) Inter-TSO emergency reserves All the
other small production units (MW Action) Defence Plan: U-5% Defence
Plan: interruption of load Curtailing (in theory) ControlTime unit
R1Power stations: automatic VFRms R2Elia: automatic SCADAsec - min
R3Elia: manual15 min Slide 29 Agenda Elia Group Electricity market
Role of the different players Elia products and services Ancillary
services Balancing Ancillary services AS markets Challenges &
opportunities Slide 30 30 System Services organised by Elia
Essential for quality and reliability of power supply: #products
R1, R2, R3: different kinds of reserve capacities to be activated
by TSO Interruptible customers ICH Inter TSO support Voltage
regulation Black start Congestion relieve Compensation for grid
losses TSO responsibilities -> market design/architecture ->
contracting/tools -> settlement/monitoring Pass trough in
tariffs but good housekeeper principle (Regulatory scrutiny) Slide
31 The activation of Primary reserves is based on local frequency
measurment, installed by the supplier. Accurancy of 10mHz Minimum
sample rate every 1-2seconds The minimum activation time for R1 is:
50% of the contracted value after 15seconds 100% of the contracted
value after 30seconds. Primary Reserves 31 Objective: to maintain a
balance between GENERATION and consumption (DEMAND) within the
SYNCHRONOUS AREA, using primary controllers Slide 32 Suppliers can
exchange their contractual obligation via the secondary market for
R1 symm & R1 down. Primary Reserves Contracted capacity
transfer of obligations via sec. market 32 Slide 33 Remuneration
for the reservation (capacity fee): Paid on monthly basis KB 2013:
45/MW/h for the symmetrical part Attention, in case of increased
liquidity on the market, these prices are not representative. No
remuneration for the Activation: Energy up and energy down are the
same in the time. Primary Reserves R1 remunerations 33 Slide 34
Objective: SECONDARY CONTROL maintains a balance between GENERATION
and consumption (DEMAND) within each CONTROL AREA SECONDARY CONTROL
makes use of a centralized AUTOMATIC GENERATION CONTROL, Via a
setpoint, Elia ask to modify the active power of GENERATION SETS in
the time-frame of seconds to typically 15 minutes. There are two
types of regulation: Upwards regulation: Elia can ask to produce
more electricity than scheduled Downwards regulation: Elia can ask
to produce less electricity than scheduled In case of multiple
supplier, all suppliers are activated simultaneously and pro rata
based on the total volume secondary that can be activated Secondary
Reserves Principles 34 Slide 35 Contracted capacity: Elia Contracts
140MW of Secondary reserves on a yearly basis from different
suppliers. Upwards/downwards regulation Peak / off-peak The
contracted capacity must be available 100% of the time. Possibility
to exchange via a secondary market Free Bids: Every Supplier with
an R2 contract can offer, day-ahead on quarterhour basis secondary
reserves to Elia @ an activation price. Secondary Reserves
Contracted capacity / selection 35 Slide 36 Selection of Seconday
reserves Day ahead, Elia selects 150MW The selection is done
separately for upwards and downwards volumes The selection is done
every quarter hour Economial ranking: Lowest prices for upwards
regulation (Elia buys energy and pays money to supplier) Highest
prices for downwards regulation (Elia sells energy and receives
money from the supplier) Secondary Reserves Contracted capacity /
selection 36 Slide 37 Suppliers can exchange their contractual
obligation via the secondary market. Secondary Reserves Secondary
Market 37 Slide 38 Elia transmits a dynamic and continuous
setpoint. The dynamic setpoint, represents the volume with which
the supplier must increase/decrease its production. The supplier is
required to keep the activated reserves equal to this signal.
Maximum deviation of 15% The slope of the setpoint is defined by
the total selected volume in a direction devided by 7,5 minutes.
The dynamic setpoint is updated every 5 seconds. Secondary Reserves
Activation 38 Slide 39 Remuneration for the reservation (capacity
fee): Paid on monthly basis KB 2013: 22,5/MW/h in one direction
Attention, in case of increased liquidity on the market, these
prices are not representative. Remuneration for the Activation:
Remuneration for the energy (separate for upwards and downwards for
each QH) Day-ahead the supplier communicates the volume of reserves
+ the price of activated energy. These prices are subject to price
caps Price for upwards energy < the fuelcost of a standard CCGT
+40 Price for downwards energy > 0 These prices are used for the
selection of R2 Secondary Reserves Remuneration 39 Slide 40
Objective: Reserve power with which ELIA can restore the balance
between the supply of and demand for active power within the
Control Area. Specifically: A third line of reserve to resolve
major imbalances Cope with a major or systematic imbalance in ELIA
control zone Offset a significant frequency variation Resolve major
congestion problems Only upwards Activated manually To be activated
within 15 minutes 400MW from Production units Tertiary Reserves
Principles 40 Slide 41 Contracted capacity: Elia Contracts 400MW of
Tertiary reserves on a yearly basis from different suppliers.
Upwards regulation Peak / off-peak The contracted capacity must be
available 100% of the time. Free bids: Free bids are managed via
the CIPU contract (coordination for injection of production units)
Principle: all production units that are minimum stand-by (not in
revision) offer their capacity to Elia on a quarter-hour basis.
Upwards and downwards volumes. Tertiary Reserves Contracted
capacity 41 Slide 42 Activations of tertiary reserves are based on
a technical-economic merrit order: First activation of free bids,
merrit-order When all free bids are used, activation of R3, merrit
order Manual activation by the system operation via a communication
platform Probid Tertiary Reserves Activation 42 Slide 43
Remuneration for the reservation (capacity fee): Paid on monthly
basis Cost-based + margin Remuneration for the Activation: Energy
delivered ~ incremental in procedure nomination of daily bids (D-1
for day D) in CIPU Art.13.2.5 Startup-costs ~ as specified in CIPU
(depending on fueltype & cost) If and only if Pnom Pmin before
and after activation quarter (calculated as average on 4 qtrs)
Startup-time Lack of liquidity Pressure on reserves (and downward
balancing energy) in Belgium Underlying facts: Penetration RES,
increasing need of reserves but not delivering System Services, and
decreasing availability of flexible plants (CCGTs less & less
in operation, out of merit order) Market perceives price for System
Services as too low and products/ sourcing process as inflexible
(1Y cycle) Regulatory framework acts as a disincentive. > 50% of
R3 (Tert. Reserve) could close in next 5 years More frequent and
severe incompressibility situations Slide 55 Possible solutions:
working on different axis 55 Improve System Imbalances at the
source (ARP): Single marginal imbalance tariff since 01/01/2012
Enhance balancing publications: e.g. wind and solar forecastings
Continued market integration (NWE intraday, etc.) Etc. Diversify
assets providing balancing services: In 2013 - R1/R2 contracts
revised to allow a variety of assets Load participating in supply
of primary control (2013) Participation of aggregators in the
supply of interruptible load (2013) RES, Storage Realise
XB-synergies: Participation of BE to iGCC (imbalance netting with 6
countries incl. DE) Intensive participation in the Network code
drafting team Study into potential BE-NL XB synergies (with Tennet
NL) Further investigations for iGCC evolutions Etc. Slide 56 Agenda
Elia Group Electricity market Role of the different players Elia
products and services Ancillary services Balancing Ancillary
services AS markets Challenges & opportunities Slide 57
Physical reality Max-min generation : 23 GW Forecast actual: 5 GW
Forecast actual : 2 GW Delta peak in 1 week: 9 GW In Belgium: Wind
~1400 MW PV ~2200 MW 57 Slide 58 Low wind conditions (Germany) 58
Slide 59 Flexibility will be needed and Valued! Examples: important
differences between minimal and maximal generation from
intermittent sources TSOs need flexibility to keep the balance
between supply and demand, by mobilizing all potential sources of
flexibility within the grid, generation and the demand side! In the
real-time balancing market In the Intraday market Outside the
balancing market, but in timeframes between DAY AHEAD and REALTIME:
Potential for strategic reserves 1 week wind generation in Germany
1 week solar generation in Belgium 59 Slide 60 60 Courtesy to
Boston Consulting Group Slide 61 Baseload Prices in Be and
neighbours 61 Continuing general downwards trend of prices Slide 62
62 Courtesy to Boston Consulting Group Slide 63 Daniel Dobbeni |
28-30.10.2013 | Page 63.. System Adequacy & EU Market model x
1,4 while shale gas in the US pushes gas out of the market in the
EU and support mechanisms drives RES investments 2013: EON to close
11 GW, Gdf to close, etc EU States moving quickly towards capacity
markets, strategic reserves, Slide 64 Daniel Dobbeni |
28-30.10.2013 | Page 64.. System Adequacy & EU Market model
Source: ENTSO-E Concern: How to ensure reliability when decisions
are taken in an uncoordinated way? How to avoid TSOs being blamed
for this lack of coordination? Slide 65 Storage Storage often
considered as the silver bullet Able to provide short term
fexibility Weak business case for arbitrage on power market
Requires high investments 65 Slide 66 Technical performances from a
grid perspective Storage brings flexibility: Easy start and stop
Fast ramping rates Source of Ancillary services Optimizing grid use
investment deferral Constraints: Limited energy content Mechanical
based storage needs minimum generation or load Developments: Multi
purpose optimizing tools Cost decrease 66 Slide 67 Belgian
electricity system Cases of interest 67 Energy Island (Offshore
Belgian Coast) Potential services: Reserves (e.g. R2)? Arbitrage?
Bulk storage for integration of off-shore wind?
http://gtms1303.wordpress.com/2013/01/28/an-artificial-energy-atoll-at-the-belgian-coast/
2,5 km diameter 10 m above sea level 300 MW Slide 68 Storage in
Europe Elia current position Storage offers resources for:
Balancing (Balance resp. party) Ancillary services (TSO use) In
competition with other resources: Flexible generation DSM Prefered
path: Technology neutral markets for Ancillary services Multi
purpose storage has best perspectives Last resort: if market doesnt
deliver, regulated investment not excluded. 68 Slide 69 Thank you !
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