Impact of EU Target Model on GB Electricity Trading Arrangements Place your chosen image here. The four corners must just cover the arrow tips. For covers, the three pictures should be the same size and in a straight line. FTA Forum, 2 nd July 2013 Ian Pashley
Agenda � Overview of EU Target Model � Market Coupling � Harmonisation of Balancing Regimes � Issues the FTA Forum could consider 2
Overview of EU Target model � Relates to making efficient use of cross-border capacity � Creates pan-European electricity market by removing barriers for cross border trading subject to network constraints � Targeted to become law 2014; detailed implementation thereafter Balancing Intraday Forwards Day ahead (implicit continuous (explicit allocation) (implicit allocation) allocation) Physical market 3
Market Coupling Market TSOs provide: Power Coupling Capacities Exchanges between provide: Algorithm market areas Energy Orders Interconnector flows & PX prices Pan-European market – prices likely to converge [dependent on capacity] GB New ‘Bidding Zone optimisation process’ notes: Interconnector capacity sold implicitly IS developments required 4
Harmonisation of Balancing regimes Co-ordinated TSOs provide: Parties in CoBA Balancing Capacities provide: bids to between connecting TSO Area market areas Common Merit Orders; Co-ordinated activation; Harmonised imbalance settlement ‘Standard’ products promoted; however specifics permitted GB ‘Pay-as-cleared’ pricing required in FGs for standard products notes: Automatic netting of market lengths where I/C capacity allows IS developments required 5
Issues the FTA Forum could consider � Target Model should deliver benefits on a pan- European basis – a progressive approach to delivery is being taken, using regional initiatives and pilots � What might the FTA Forum want to consider? � To what extent do our arrangements need to change? � What will be the implications of a bidding zone review? � Investments; transmission charges, etc � How to promote liquidity through the timescales? � How to ensure consistency between ongoing GB and European developments (e.g. imbalance settlement)? 6
Appendix: Network Code Timelines Place your chosen image here. The four corners must just cover the arrow tips. For covers, the three pictures should be the same size and in a straight line. FTA Forum, 2 nd July 2013 Ian Pashley
European Network Code Development Status: Key 1 July 2013 Awaiting Commission Mandate ENTSO-E drafting ACER Review Third Energy Package: Areas for Network Codes specified in Article 8(6) of Regulation 714/2009 Revisions following ACER Review Pre-Comitology / Comitology Grid System Market Codes Connection Published in OJEU Operation Codes Operation Codes Codes Reg (EU) No 543/2013 13 Transparency Reg. Requirements for Operational CACM* Generators Security Demand Connection Demand Connection Forward Capacity Operational Planning Operational Planning Code Allocation and Scheduling Load-Frequency HVDC Balancing * Governance Guidelines Control and Reserves Control and Reserves have been merged with CACM during pre- Comitology Connection Staff Training Procedures and Certification Emergency and Restoration Expected in the second phase of Code development
European Network Code Development Status: 1 July 2013 To fit work 6 months programme 12 months 3 months 1 year (?) 2014 ACER recommends EC invites Network Code to EC ENTSO-E ACER Network ACER ENTSO-E develops reviews Code develops to develop Comitology Network Network becomes FWGL Network Revisions to ACER Code Code Law Code Code after revises Opinion opinion Grid Connection Op Sch & Plan Transparency Regulations CACM Op Sec LFC&R System Operation Balancing Developed by EC* CACM Balancing HVDC DCC RFG FCA † Gov. Guide. Member State Council & Parliament 1 2 3 4 5 6 7 8 9 10 11 12 Preparation Approval Approval Drafting Approval Public Revise Approval Consultation Code * Areas developed by EC follow a different development process and there are no Framework Guidelines. † Governance Guidelines prepared by Commission are being merged with CACM NC.
Status of Development of European Electricity Network Codes KEY Activities undertaken by ACER Activities undertaken by ENTSO-E Activities undertaken by European Commission Future dates are subject to change Comitology process - led by Commission Dates shown in italics are best approximations based on current understanding. Entry into Force / Applicability of Requirements TODAY It has been necessary to 'round' some dates for the benefits of the diagram. 2012 2013 2014 2015 Network Code Framework Guidelines Next Step Aug Dec Mar Apr May Jun Aug Nov Dec May Aug Nov Dec Jan May Jul Sep Oct Nov Jan Feb Sep Oct Jan Feb Mar Apr Jun Sep Oct Feb Mar Apr Jun Jul Jul In Force Drafting of Regulation Comitology 18 month implementation period as specified in Regulation Applies Regulation published in OJEU on 15 Transparency (started as an ERGEG N/A June 2013. 18 month implementation Parliamentary Approval Public Member Regulations document, later become a Finalise ACER Consultation Refinement of MOP period has commenced State MOP Review Commission document) Approval Drafts Manual of Procedures on MOP ENTSO-E revision Agree Comitology Capacity Allocation and ACER recommended Network Code to Review Capacity Allocation Drafting ACER Review s Congestion Management Commission on 14 March. Code is now Finalise and Congestion Merge CACM and Gov. Guide Political Comitology in Comitology. Code to be merged with Management IA, text review and translations (duration estimated) Governance Guidelines Commission drafting of Governance Guidelines Governance Guidelines E Comitology ACER Review ACER recommended Network Code N Requirements for Revision of Code based Fi Grid Connections ACER Review to Commission on 25 March. Code is Impact Assessment, text review Political Comitology Generators on ACER Opinion n now in Comitology and translations (duration estimated) al ENTSO-E Drafting Comitology Following their ACER opinions, OS and OP&S are now ACER recommended Network Code Demand Grid Connections to Commission on 25 March. Code is ACER Review subject to revision by ENTSO-E. Consultati Impact Assessment, text review Political Comitology Connection Code Finalise drafting now in Comitology on and translations (duration estimated) Timescales are not yet known for this process. ENTSO-E Drafting Comitology ACER Review ACER opinion received which Operational ENTSO-E System Operation requests ENTSO-E redrafting in a ACER Review Impact Assessment, Initial Consultati Political Comitology Security Revisions Finalise drafting number of areas of the Network Code text review and drafting on (duration estimated) translations ENTSO-E Drafting Comitology Operational ENTSO-E Revisions Review ACER opinion received which ACER Impact Planning & System Operation requests ENTSO-E redrafting in a ACER Review Consultati Political Comitology Initial drafting Finalise drafting Assessment, text Scheduling number of areas of the Network Code on (duration estimated) review and ENTSO-E Drafting Comitology Load Frequency Code due to be submitted to ACER by ACER Review System Operation Consultati IA, text review & Political Comitology Control & Reserves 30 June 2013. Initial drafting Finalise drafting on translations (duration estimated) ENTSO-E Drafting Comitology Forward Capacity Capacity Allocation and ENTSO-E revising Network Code ACER Review IA, text Consultati Political Comitology Allocation Congestion Management following public consultation Initial drafting Finalise drafting review & on (duration estimated) translations ENTSO-E Drafting Comitology Framework Electricity Network Code is in Public Balancing Guidelines on ACER Review IA, text Consultati Political Comitology Consultation until mid-August Balancing Initial Drafting Finalise drafting review & Balancing on (duration estimated) translations 10 ENTSO-E Drafting Comitology Commission mandate received. Code HVDC Grid Connections ACER Review Call for Consultati due to be completed by 1 May 2014. IA, text review & Political Comitology Stakehol Initial Drafting Finalise drafting der on translations (duration estimated) evidence
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