Nordic Stakeholder reference group meeting Arlanda Airport May 21 th 2019
Agenda # Topic Time 1 Opening the meeting, role and tasks of the reference group, introductions and expectations 09:30 (80min) 2 Competition Act 10:50 (10min) 3 What is Nordic Balancing Model and what are the dependencies between NBM and Higher 11:00 Time Resolution (HTR) (45min) 4 Lunch 11.45 (45min) Results from the reference group members’ pre -assignment 5 12.30 (45min) 6 NBM and HTR Roadmap 13.15 (30min) 7 Coffee break 13.45 (30min) 8 Roadmap for stakeholder cooperation 14.15 (30min) 9 Next meeting and assignment for participants 14.45 (15min) 10 AOB 15:00 2
# 1 Opening the meeting, role and tasks of the reference group, introductions and expectations 3
• Implementation of NBM Programme will apear as variety of tasks and changes in TSOs' and market participants' systems • Need for a dialogue and knowledge – both ways from TSO's to market participants and the other way around • Combining national projects 4
Role and task of the Nordic stakeholder reference group • contribute to the planning of the common Nordic NBM Roadmap • follow the implementation phase • identify risks and propose ways to mitigate them • increase stakeholder awareness of the NBM project especially Higher Time Resolution (HTR) • contribute to ensure a wide and good flow of information to all stakeholders 5
What are your expectations? 6
# 2 Competition Act Rules to be taken into account in Nordic cooperation 7
Prohibited restrictive measures The following is prohibited Examples of prohibited arrangements • all agreements between • directly or indirectly fix purchase undertakings, decisions by or selling prices or any other associations of undertakings and trading conditions concerted practices which may • limit or control production, affect trade, and markets, technical development, • which have as their object or or investment effect the prevention, restriction • share markets or sources of or distortion of competition supply ... 8
Meeting practices for ensuring the compliance • Must have: an agenda & minutes. • Materials of the meetings are published. • Sharing business sensitive information must be avoided. − topical information which is not available from public sources − information that may affect other parties market behavior, e.g. information on future prices or quantities • If concerns regarding the compliance arises, the handling of the matter must be stopped. 9
# 3 What is Nordic Balancing Model and what are the dependencies between NBM and Higher Time Resolution (HTR) 10
The common Nordic Balancing Market is very efficient • For more than 15 years the Nordic TSO’s has operated a cross border balancing energy market. • Nordic consumer benefits have several times been calculated to be in the range of +200 mEUR per year • This welfare should be maintained also in the new world with 15 min ISP, smaller bid size etc.... • Hence the transition towards the new world should be carefully planned • Next step for the Nordic Balancing Market is to harvest welfare from common capacity markets 11
15 minutes imbalance settlement period (ISP) Same Phasing out of coal power plants main drivers Increasing share of wind and other intermittent energy resources as NBM Phasing out of Swedish nuclear power plants More interconnectors out of the Nordic synchronous area • EB GL 53.1: By three years after the entry into force of this Regulation, all TSOs shall apply the imbalance settlement period of 15 minutes (...) 15 minutes 15 minutes imbalanse 15 minutes Intraday markets settlement period balaning markets 12
Development for balancing philosophy ACE in each country Frequency control mACE ~0 ~0 ~0 ~0 ~0 ~0 ~0 ~0 ~0 ~0 ~0 ~0 ~0 ~0 ~0 Nordic ~0 AOF More efficient use of resources Digitalization of balancing Netting of imbalances Better control with flows Merit order bid list Clearer responsibilities 13
Automatic optimization function (AOF) efficient trade and netting Imbalances and available reserves in each bid-area are optimized in a central algorithm. This secures: • optimized use of grid capacity • efficient exchange of balancing products • fair settlement between buyers and sellers 14
Now: Integrated into one comprehensive program From manual processes based on operator knowledge and experience to automated processes. Necessary due to increase in complexity, and requires: • Extensive change of control room processes • Formalization of knowledge and routines • Considerable IT-investments • Significant improvement in data quality Transition to control based balancing within each bidding-area • Smaller building blocks a prerequisite for automated processes • Provides consistency between authority and responsibility between TSOs • Basis for correct settlement and proper incentives • Depending on regulatory approvals From an ambitious roadmap in parallel with other major development in system operation – to an ambitious and realistic plan for implementation. 2.Generation 1.Generation 15 min Time NBM Resolution NBM 15
Digital support needed with 15 minute markets – Operational planning period changes from 1 hour to 15 minute T T+1 T+2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 hour operational planning period For T+1 For T+2 For T+1 For T+0 For T+2 For T0 For T+1 For T+2 For T+1 Q1 For T0 Q3 For T+1 Q1 For T0 Q4 For T+1 Q2 For T+1 Q1 For T+1 Q2 15 min operational For T+1 Q3 planning period For T+1 Q2 For T+1 Q3 For T+1 Q4 For T+1 Q4 For T+2 Q1 For T+2 Q1 For T Q3 For T Q4 For T+1 Q1 For T+1 Q2 For T+1 Q3 For T+1 Q4 Proactive congestion handling and balancing Monitoring and continues balancing and congestion handling Periode shift planning – Smooth production changes Determine price 16 Label: "T+1 Q1" is operational planning for hour t+1 and quarter 1 16
1 MW bid size and more standardized bids • In the proposals for the implementation of the European platforms for an aFRR and mFRR market, the minimum bid size is 1 MW − Lower entry barriers, more bids (mFRR: 10 MW => 1 MW, aFRR: 5 MW => 1 MW) − Standard activation time and ramping vs more flexible Nordic approach 17
Not possible to implement 15 minutes settlement without changes to the Nordic balancing • Today's balancing of the Nordic system is already at its limit. If we add more complexity, the operational risk is unacceptable without new solutions and automation • As long as 15 minutes imbalances are visible to market actors, we risk moving into a 15 minutes world – any implementation of 15 minutes settlement requires new solutions and automation 18
The regulations require that 15 minutes settlement, 15 minutes ID market and 15 minutes balancing markets are implemented simultanously • EBGL and the Clean Energy Package (CEP) put the following requirements on compliance concerning 15 minutes ISP: − The ISP within a bidding zone shall be 15 minutes − The market time unit within a bidding zone shall be equal to the ISP. − The cross border market time unit shall be equal the highest market time unit of the adjacent bidding zones. − The TSOs shall calculate an imbalance price for each ISP − The Clean Energy Package puts an obligation on the NEMOs to offer products at least as short as the ISP in both the day-ahead and intraday markets. A comprehensive program covering the new balancing model and markets, 15 minutes ISP, and 15 minutes market time unit in the intraday and possibly day ahead markets 19
15 minutes ISP and the new imbalance settlement model • The NRAs are currently assessing the all TSO proposal to proposal to specify and harmonize the imbalance settlement in Europe • When approved TSO must implement • Not full harmonization, but the main change is from dual imbalance position to single imbalance position One position? New 15 min NRA assessment Amendment Implementration 18 months imbalance ISP 6 months 4 months? price 2020 2021 2022 2019 20
What will the delay of 15 minutes settlement imply for the datahubs? • For elhub in Norway the delay means more time to implement • Originally 15 minutes ISP was expected to go live before the datahubs in Finland and Sweden • What is the impact of the delay? Are there new dependencies? 2019 2022 2020 2021 21
The Clean Energy Package gives the NEMOs an obligation to offer 15 minutes trading in day-ahead and intraday • Energy regulation article 8.2: NEMOs shall provide market participants with the opportunity to trade in energy in time intervals which are at least as short as the imbalance settlement period for both day-ahead and intraday markets. • With the delay it is more likely that 15 minutes intraday and day ahead trading will go live will be closer in time • How to handle different market time units in an auction? 22
# 4 Lunch (45 min) 23
# 5 Results from the reference group members’ pre - assignment 24
Background • The pre-questionnaire was sent to the Nordic stakeholder reference group members − Both multiple choice and open questions included • Altogether 13 participants answered • The results help the Nordic TSOs to create an overall picture about the prepardness and will of the Nordic stakeholders regarding NBM − This guides and supports the decision-making 25
RESULTS 26
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