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Trends in the Power industry in the European context

Spindleruv Mlyn

April 11th 2017

Peter HermansCTO Stedin

peter.hermans@stedin.net

TSO – DSO relations

Exploration of the changes in the TSO DSO relations

in Europe

Stedin

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Consumers & small and medium business customers

Industry & high-volume business customers

Electricity 2.0 million 20,000Gas 1.9 million 2,100

PEOPLE2 million customers3880 employees

FACTS23,659 km – gas pipes

44,875 km – electricity cablesTelecom: 6000 km copper cable

1453 km optical fiber

FINANCIALS (2016)€ 1173 million – net revenue€ 105 million – net profit

Dutch “Urban” DSO

Serving: The Hague, Utrecht, Rotterdam

& Port of Rotterdam

DSO & TSO interactions with the Market todayRelatively independent

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Characteristics

• Limited DSO-TSO interaction (distr. grid is a “copper plate”)

• No European “one size fits all” model:

• With or without central data hubs• Regulated or commercial role• Run by TSO, DSO or jointly

• Balancing reserves mainly on TSO grid

• Supplier switching• Providing metering data• A&R services

• Nomination (E-programs)

• Balancing• Settlement

DSO TSO

market actors (BRPs, suppliers,metering companies)

Demand Response & FlexibilityBringing DSOs &TSOs together

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• Demand side flexibility required for:

• BRP for portfolio optimization• TSO for balancing & congestion mitigation on

transp. grid• DSO for congestion mitigation on distr. grid & PQ

• DNO -> DSO active system management

• Need to align processes between TSO & DSOs

• To avoid unwanted interference between congestion management and balancing

-> DSO & TSO: 2 actors on one system

RED = Acuterisk to the gridDSO intervenesdirectly in production andconsumption.

NEW! YELLOW = Potential risk to the gridDSO interacts with market and uses flexibility.

GREEN = Market phasewithout criticalgrid status.

Today TomorrowTraffic light concept

DSO & TSO interactions with the market tomorrowSignificantly increasing…

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Characteristics

• Significant more market actors then traditional suppliers & BRPs

• Blurring boundaries between retail / wholesale markets

• Interaction between DSOs and TSO in more near real-time

• Significant more data

• Need for collaboration

• Nomination (E-programs)

• Requesting flexibility for balancing, incl. use of decentralized resources

• Settlement• Open data distribution• Data privacy protection

• Supplier switching• Providing metering data• A&R services,

based on smart meters• Requesting & using

flexibility• Open data distribution• Data privacy protection

DSO TSO

One system

existing & many new market actors

European context: defining the TSO-DSO data exchangeThe first steps…..

Objectives of the European TSO-DSO data management working group

• To agree on a common terminology and principles

• Common understanding of the concepts discussed (e.g. role models)

• To reach a common understanding on TSO-DSO data exchange

• Provide recommendations to the European Commission on TSO-DSO data exchange

Approach followedWriting a book starts with chapter 1

Information Exchange

Interaction

Business Processes

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Process

1. Identify roles & responsibilities

2. Define interaction between roles: market mechanismsfor constraints/congestion management, balancing and market facilitation

3. Define processes between TSO & DSO supportingthese interactions

4. Define data exchange in these processes

Use case Template

1. Scope

2. Market relevance

7. Principles & recommendations for the EU

3. Process description (high-level)

4. Roles5. Common

definitions6. Information

exchange needs

• Congestion management • Balancing• Use of flexibility • Real-time control and supervision• Network planning

Elaborated in subgroups with TSO and DSO members (co-creation)

Using the Use Case approach

Reframing the challengeThe cultural issue

-> From DSOs against TSOs and vice versa to…

-> How to come to solutions where both parties cancontinue their legal tasks and respect roles and responsibilities of the other party?

-> Building trust, respect and collaboration

3 important questions in this reframing exercise:

1. What is the ambition of the TSOs, resp. DSOs?2. What is the fear of the TSOs, resp. DSOs?3. What can a TSO do to reduce the fear of the DSO and

vice versa?

The approach which leads to successReflection on collaboration

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Stop sending, start collaborating

Select a team, built trust, agree on process

and set an example

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Explore the issues behind the issues

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Ambition Fear Ambition Fear

Finalization, going for consenus

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• Engaged in a co-creation process leading to 8 recommendations and 5 use cases

• Respecting each others roles:• TSO: balancing & transp. grid congestion

mitigation• DSO: using flexibility for distr. grid congestion

mitigation• DSO & TSO both facilitating the market

• Approach to avoid unwanted interference between congestion management & balancing

• Options defined for allowing TSO to have access to data of users, connected to DSO grids

• Equal access to flexibility in all markets: BRPs to enhance their products in nomination and bidding with additional information (e.g. locational and ramp up information); one integrated bid ladder

The first results: Co-creation and relevant topics addressed

1. Data exchange has to support efficient market functioning

2. Focus on services rather than on platforms

3. Establish third- party acces to data4. Parties for data management must be

neutral5. Standardization of data is needed6. Use flexibility according to market rules

while singling out system risks7. Avoid harmful interference between

congestion management and balancing8. Ensure data acces for TSO related to grid

users connected to distribution grid

Recommendation 2: Publishing a service catalogueDescribing services provides full transparancy on data exchange

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Value

• Market models in Member States may differ on existence and governance on datahubs / platforms

• This however is irrelevant for EU-wide market functioning, as TSO & DSO interactions with the market (-> services) are the basis for EU-widemarket functioning

• So EU orientation on services enable EU-widemarket functioning with different underlying modelson data hubs

• Independently of service delivery, TSOs and DSOscan cooperate and consolidate on platforms

Platform

PlatformPlatform

DSO

ser

vice

s

TSO

ser

vice

s

TSO

ser

vice

s

DSO

ser

vice

s

DSO TSO

CDH/GWA

Federated TSO- DSO platform

TSO/DSOInterface

Customers MarketParties

Services to Customers & Markets

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Identified way to do this

• Offered flexibility can be activated only once in any timeframe

• TSOs continue balancing based on market principles whileallowing DSOs to asses impact and communicate limitsbefore activation

• DSOs (and TSOs) can perform congestion management bycontracting flexibility, not disturbing system balance (e.g. in day-ahead, or activation of “balance neutral” flexibility bids)

• Enhancing forecasts and bids of BRPs with additionalinformation (e.g. including locational information / ramp up speed etc.)

• Qualification, certification and validation of the execution of contracted flexibility services, by TSOs and DSOs

Recommendation 7:Avoiding harmful interference between congestion management and balancing

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Agreed in more detail:

• TSO should be able to perform its legal task on balancing, which requires data of specific level of detail and timeframe

• DSO is responsible to provide this data to TSO (TSO access to this data is mandatory)

• For TSOs 3 options exists:

1. Access to this data via a market party (e.g. aggegrator/ BSP)

2. Access to this data via DSO (e.g. via their SCADA systems)

3. Direct access to this data from the grid connected user (after agreement with DSOs), without transferring DSO metering responsibility

Recommendation 8:Ensure data access for TSO related to grid users connected to distribution grid

Flexibility & congestion management in the NetherlandsStatus update

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• Good collaboration between TSO and DSOs

• Dialogue between TSO, DSO, Market Parties, Policy Maker & Regulator

• Debate on aggregator market models

• Draft principles for use of flexibility in congestion management established

• Key questions for the policy maker formulated

6. Applicability to all grid layers HV, MV & LV?

3. Complete “freedom of dispatch” versus

(some) market restrictions

2. What is the right DSO grid investment

level?

1. Future affordability of the copper plate

principle

5. Usage of flexibility: temporary or structural?

4. Using flexibility versus expanding the grid

Key questions for the policymaker

Preparing a pilot in NL on the use of flexibilityfor mitigating congestion

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BRPTradingplatforms

BRP/AggregatorTSO

Balancing

DSO/TSO

Congestion management

Publishing of Congestion

Points & MarketRestrictions

RSS feed RSS feed

Reserve pool

Regulated domainCommercial domain

• Taking TSO/DSO data management report as starting point

• Market platform for intradaytrading with integrated bid ladder (for balancing & congestionmanagement)

• Collaboration between TenneT, Stedin & ETPA

• Defining the use case on congestion management for pilot implementation

• Planning: demo april 2017, pilot September 2017

A win-win scenario for TSO & DSOCharacteristics

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• DSO procures flexibility intraday(included in BRP nomination & portfolio optimization)

• Bids contain enhanced information (location, ramp up etc.)

• TSO & DSO have common view on bidsin the market

• Warning capability: DSO informs TSO on load limits in distribution grid

• Congestion spread: DSO activatesflexibility for congestion management in a balance neutral way

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peter.hermans@stedin.net

Thank you,