Agenda 1. Approval of the minutes of the meeting of 6 May 2020 6. Miscellaneous 6.1. Next WG Belgian Grid: 22 September 2020 2. Note on capacity reservation in the context of a CRM 2.1. Adaptation FTR: state of play 2.2. Bank guarantee in the context of the connection contract: principles 3. Implementation Federal Grid Code 3.1. Substantial modernization: results public consultation 3.2. Drop-off procedure: launch public consultation 4. Tariff for the additional purchase or injection of reactive energy 5. Grid losses 1
Agenda 1. Approval of the minutes of the meeting of 6 May 2020 6. Miscellaneous 6.1. Next WG Belgian Grid: 22 September 2020 2. Note on capacity reservation in the context of a CRM 2.1. Adaptation FTR: state of play 2.2. Bank guarantee in the context of the connection contract: principles 3. Implementation Federal Grid Code 3.1. Substantial modernization: results public consultation 3.2. Drop-off procedure: launch public consultation 4. Tariff for the additional purchase or injection of reactive energy 5. Grid losses 2
Working Group Belgian Grid Note on capacity reservation in the framework of a CRM Meeting 24 juni 2020
Remaining design issues
Remaining design issues identified in FOD‘s received feedback The kind of production unit(s) referred to in the current proposal needs to be clarified 2 possible solutions are identified and being analyzed by ELIA: 1) Refer to existing types (A – B – C – D); 2) Determine a MW threshold (e.g: above 10 MW installed capacity) Wording – Art. 168bis. § 1. “Het aansluitingscontract kan penaliteiten (…) bevatten” – brings confusion. Proposal to remove the “kan” to clarify the sentence Missing definitions of “allocated capacity” and “reserved capacity” (confusion coming from the current FTR proposal, unclear on that matter) ELIA will propose definitions in the updated FTR text proposal Title of presentation 5
Remaining design issues identified in FOD‘s received feedback “Art 168 ter § 3. Op verzoek van de aanvrager en na goedkeuring van de Commissie (…)” Request for alignment of CREG’s role in the proposed process with other already established (e.g balancing) and/or proposed mechanisms (CRM Functioning rules) Proposal to remove the CREG’s role in the application of the mechanism Title of presentation 6
Financial guarantee in the Connection Contract
Interaction Connection Contract and CRM Main principles: 1. No double financial penalties should be claimed under both the Connection Contract and CRM process 2. As such no double Financial Security requirement under both contracts. 3. The bank guarantee under the CRM should have priority Title of presentation 8
When to deliver a Financial security under the Connection Contract? Connection contract is signed before the ‘moment of choice ’ to participate in the CRM Provide financial security under the Connection Contract • Grid User/CDS Operator signs a Connection Contract → No bank guarantee is provided at this stage. • Every 1stof June, Elia will ask the Grid User/CDS Operator if the allocated capacity will participate in the CRM. CRM participation: no financial security under Connection Contract. No CRM participation: financial security to be provided under Connection Contract after the 1 st of June Partial CRM participation: part of financial security under CRM, other part under Connection Contract. Title of presentation 9
Permissible types of Financial Security Three different types of Financial Security can be provided : 1. Bank guarantee 2. Parent company guarantee • A parent company guarantee can be accepted, subject to the condition that the same conditions as a bank guarantee are met. 3. Cash account (only as fallback solution) • Cash to be put on an Elia account when decided not to participate in the CRM • Cash account to be replaced by a bank guarantee/parent company guarantee within 6 months • The cash account will not accrue interests for the grid user Title of presentation 10
Requirements for the bank guarantee/parent company guarantee 1. Common requirements for bank guarantee and parent company guarantee • The bank or parent company guarantee should satisfy the following requirements: Unconditional / at first demand Irrevocable • Guarantor should have a minimum rating of BBB (S&P or Fitch) or Baa2 (Moody’s). → This rating requirement is aligned with other Elia contracts (BRP/Access/Connection) • The guarantor (bank or corporate) should be permanently established in a member state of the European Economic Area. • The guarantee should be provided based on a standard template included in the Connection Contract 2. Additional requirement for parent company guarantee • Legal opinion from an acceptable law firm, confirming that the parent company guarantee is legal, valid, binding and enforceable under the relevant legislation. Title of presentation 11
Which volume (MW) should be covered by the financial security? Secured Amount = Financial penalty (EUR/MW) * Financial Security Volume (MW) 1. Financial penalty (in line with the amounts set within the CRM) • For existing installations/capacity + signed connection contract = no bank guarantee • For additional installations/capacity (reinforcement or substantial modernization) + signed connection contract = 20.000 EUR/MW • For new installation/capacity = 20.000 EUR/MW 2. Financial security Volume (MW) • For new installations/capacity = installed capacity as stipulated in the Connection Contract • For existing installations in case of a reinforcement or substantial modernization = not the total installed capacity in the Connection Contract needs to be secured but only the additional installed capacity reserved for the reinforcement Title of presentation 12
Required level (EUR/MW) of the financial security? Principles : • The amount is defined in function of the perceived risk and the level of anticipated penalties → in line with CRM • During the process, the financial security can to be lowered once certain milestones have been met by the Grid User/CDSO: Existing installations/capacity Additional installation/capacity New installation/capacity Financial guarantee NO YES YES Required level N.A. 20.000 EUR/MW 20.000 EUR/MW Milestones for partial N.A. 1. Milestone 1: all major permits and 1. Milestone 1: all major permits and release licenses licenses 2. Milestone 2: installation is built and 2. Milestone 2: installation is built and in use (= existing) in use (= existing) Title of presentation 13
Thank you.
Agenda 1. Approval of the minutes of the meeting of 6 May 2020 6. Miscellaneous 6.1. Next WG Belgian Grid: 22 September 2020 2. Note on capacity reservation in the context of a CRM 2.1. Adaptation FTR: state of play 2.2. Bank guarantee in the context of the connection contract: principles 3. Implementation Federal Grid Code 3.1. Substantial modernization: results public consultation 3.2. Drop-off procedure: launch public consultation 4. Tariff for the additional purchase or injection of reactive energy 5. Grid losses 15
Working Group Belgian Grid Substantial modernisation Meeting 24 June 2020
Feedback on the public consultation
Modernisation – Consultation feedback The public consultation ran from the 13 th of May to the 15 th of June The consulted documents refer to the concept of modernisation as described in the Federal Grid Code (no application for regional levels) The consulted document were: Modernisation substantielle : lignes directrices définissant le concept de modernisation substantielle dans le cadre du nouveau Règlement Technique Fédéral en vigueur depuis le 22 avril 2019. Version du 12/05/2020 Substantiële modernisering: richtlijnen voor het definiëren van ‘substantiële modernisering’ in het kader van het nieuw Federaal Technisch Reglement van 22 april 2019. Versie 12/05/2020 The documents are available here: https://www.elia.be/en/public-consultation/20200513_public-consultation-on-elia-proposal- of-guidelines-for-defining During the first consultation, Elia received 2 non-confidential responses from: • Febeliec • FEBEG Conslultation feed-back modernisation 18
Modernisation – Consultation feedback The feedback received mainly concerns (Febeliec): – Type B units : • Inclusion of Type B units in the scope of modernisation while EU network code RfG only considers Type B and C units Answer Elia : to be discussed during UG (see next slides) – Existing units: • In case of no modernisation or partial modernisation, grid users have to comply with existing prescriptions on the date of their entry into force Answer Elia : indeed, the existing units which are not subject to modernisation have to comply with relevant version of the Grid Code – Process : • Support of the simplified process without to many parties (especially for demand ant Type B units) Answer Elia : the simplified process has to be discussed with the regulator and within UG (see next slides) • Better understanding of the timeline, especially the starting point Answer Elia : any existing unit is concerned by the modernisation in case of type switch, increase of power or renewing of an element that has an impact on the performances of the units regarding the prescriptions of the new grid code. Consultation feed-back modernisation 19
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