Public TERRE Industry Day Introducing the TERRE product to the GB market 16 January 2018 ELEXON & National Grid
Health & Safety 2
Agenda & event outcomes ■ To gain a high level Agenda item Time Presenter 09:30 understanding of the Registration and coffee 1. Introduction and housekeeping 10:00 Elliott Harper (ELEXON) TERRE balancing product to 2. Welcome 10:05 Mark Bygraves (ELEXON) be implemented in the GB Sophie Tilley (National Grid), Elliott 3. Introduction to Project TERRE 10:10 market arrangements Harper (ELEXON) Bernie Dolan (National Grid), Matt 4. The detail of the GB solution 10:40 Roper (ELEXON) 11:25 Break ■ To have the opportunity to 11:40 Bernie Dolan (National Grid), Matt 5. The detail of the GB solution Roper (ELEXON) ask questions about TERRE 12:45 Lunch to the GB TERRE project 13:30 Bernie Dolan (National Grid), Matt 6. The detail of the GB solution Roper (ELEXON) teams from ELEXON and Sophie Tilley (National Grid), Elliott 7. The P344 and GC0097 Industry Consultations 13:45 National Grid Harper (ELEXON) Elliott Harper (ELEXON), Sophie Tilley 8. Implementation timescales 14:00 (National Grid) Break 14:20 9. Question and Answer session with the GB Project TERRE 14:30 All teams 16:00 Close
CEO Welcome Mark Bygraves
Introduction to Project TERRE Sophie Tilley – National Grid Elliott Harper - ELEXON
Project TERRE industry day: Project TERRE Background - Electricity Balancing Guideline Pan-EU Balancing Harmonisation of Cross Zonal Energy Market Market Design & Capacity • Development of pan-EU platforms Settlement Reservation (CZC) for the exchange of standard balancing energy products • Harmonised Gate Closure Time for • Opens the possibility for TSOs to • 6 year implementation period standard products reserve XB capacity for the • Replacement Reserves (RR) • Harmonisation of ISP at Synchronous Area exchange of balancing energy • Manual Frequency Restoration • Co optimisation with market level Reserves (mFRR) • Harmonisation of imbalance arrangements timeframes • Specific products retained nationally • TSOs to develop detailed (preference for single imbalance pricing) • Harmonisation of reserve procurement methodologies arrangements European Balancing Platforms 6
Project TERRE industry day: Project TERRE European Implementation Projects Design • TSO-TSO Model • Marginal Pricing • RR Product • Schedule Activation • 30min Full Activation Time • 15min Blocks • One auction per hour • HVDC losses taken into account • Congestion rents generated Current Status • 10 full members (GB, France, Italy, Portugal, Spain, Switzerland, Czech Republic, Romania, Poland, Hungary) • More observers in process of joining • RFP underway • 1 st NRA approval Sept 16 • 2 nd Consultation held summer 2017 • NRA currently assessing 2 nd design submission • Go-live Q3 2019 7
What does TERRE mean for GB? Operationally Commercially • New post gate-closure time balancing auction (similar to • New international market for GB existing day ahead arrangements) market participants to compete in. • Additional process for submitting • Introduction of new pay-as-clear offers to TERRE in line with pricing approach (in parallel with Balancing Mechanism processes. existing arrangements) • SO will have an additional tool to • Removal of barriers to entry for conduct coarse energy balancing “non - BM participants” and an actions etc using 15 min blocks of increase in price formation energy • Estimated reduction in balancing • Access to additional flexibility such costs of € 13 million for GB as “non - BM” units and across • Currency exchange required: borders for energy balancing. 8
Project TERRE industry day: Project TERRE How big is TERRE and how will it fit into our strategy? National Grid conducted some analysis to understand the below questions: How much could we use TERRE? Use to stand down STOR earlier – 164MWh per day (7MW average) Coarse energy balancing – 1.4GWh per day (60MW average) Controlling I/C flows – 1.4GWh per day (60MW average) Total yearly volume 1.10TWh out of 4.42TWh total actions – 25% of needs What sort of volumes could be offered into TERRE by the GB market? Initial analysis has suggested that we could see up to 3.8GW of volume offered into TERRE from GB market participants 9
Who is ELEXON and what do we do? ■ Administer the Balancing and Settlement Code (BSC) ■ Manage imbalance Settlement arrangements and payments ■ Settle payments for actions under the Balancing Mechanism (BM) What else does ELEXON do? ■ Training and support for BSC Parties ■ Ensures compliance to the BSC through auditing and a party performance framework ■ Manages review and implementation of changes to existing GB BSC regulation
GB implementation of the TERRE product overview (1/2) National Grid and ELEXON working together to deliver TERRE ■ – National Grid: the Grid Code – ELEXON: the Balancing and Settlement Code Changes required to both Codes in order to implement the necessary arrangements to ■ facilitate the TERRE balancing product BSC: P344 ‘Project TERRE implementation into GB market arrangements’ ■ Grid Code: GC0097 ‘Grid Code Processes Supporting TERRE’ ■ Due to interdependencies between the Codes for TERRE, ELEXON and National Grid have ■ facilitated cross-Code working – Working together utilising internal and industry resource to deliver an aligned, efficient TERRE balancing product to the market
GB implementation of the TERRE product overview (2/2) ■ Both Codes have a similar structure of change process to implement TERRE: Proposal to amend Development of solution Industry Consultation on current Code by Industry Workgroup solution arrangements Industry Consultation on Panel final Initial Panel initial Panel recommendations recommendations recommendations Development and testing Authority (Ofgem) Implementation (go-live) of systems to deliver the decision on changes TERRE product
Joint European Stakeholder Group (JESG) ■ An information source for EU legislation impacting the GB market – JESG weekly newsletter ■ Discussion forum for EU impacts, much wider than TERRE – JESG monthly meeting ■ For more information, please contact europeancodes.electricity@nationalgrid.com
The detail of the GB solution Matt Roper – ELEXON Bernie Dolan – National Grid
TERRE Industry Day Overall End to End Process End to End Process Replacement Reserves E2E Process Registration Data Dispatch/ Product Imbalance Pre- Reporting Submission Delivery Settlement Settlement qualification BSC Mod - P344 Grid Code Mod - GC0097 • Proposed by National Grid • Proposed by National Grid • Work Group has been meeting • Work Group has been meeting since summer 2016 since Jan 2017 • Initial consultation held Feb 17 • Joint working since July 2017 • Joint working since July 2017 15
Introduction Registration Data Dispatch/ Product Imbalance Pre- Reporting Submission Delivery Settlement Settlement qualification Who can participate in TERRE? What is an Independent Aggregator? New BSC Party Comparison What is a Secondary BM Unit? Market Entry Process 16
Who Can Participate in TERRE? Supplier M M 2__ANAME001 Additional ∑ M M M BM Unit Generator T_NAME-1 M CVA BM Unit Trading Party E_NAME-1 M Embedded BM Unit
Who Can Participate in TERRE? Supplier M M 2__ANAME001 Additional ∑ M M M BM Unit Generator T_NAME-1 M CVA BM Unit Trading Party E_NAME-1 M Embedded BM Unit However, the European Electricity Balancing Guidelines (EB GL) requires that TSO’s facilitate demand response participation in TERRE, including independent aggregation facilities and energy storage
Who Can Participate in TERRE? Supplier M M 2__ANAME001 Additional ∑ M M M BM Unit Generator T_NAME-1 M CVA BM Unit Trading Party E_NAME-1 M Embedded BM Unit Ofgem defines Independent Aggregators as parties who bundle changes in consumer’s loads or distributed generation output for sale in organised markets and who do not simultaneously supply the customer with energy
What is an Independent Aggregator? £ Supplier M M M M M M M M M £ Generator 20
What is an Independent Aggregator? £ Supplier M M M M M M M M M Balancing £ Services Generator 21
What is an Independent Aggregator? £ [ ] Supplier M M M M M M M M M M M M Balancing £ Services Generator 22
What is an Independent Aggregator? £ £ Independent Aggregator [ ] [ ] Supplier M M M M M M M M M M M M M M Flexibility Balancing M M M Services Balancing £ Services Generator 23
Virtual Lead Party Comparison Existing BSC Virtual Lead Party Party Trading party Non-Trading Party Energy Accounts (P/C) Virtual Balancing Account Secondary BM Units Primary BM Units No ECVN or MVRN ECVN or MRVN VLP Base Monthly Charge Base Monthly Charge No Funding Share Calculated Funding Share Calculated Full Credit Requirements Reduced Credit Requirements 24
Who Can Participate in TERRE? Supplier M M 2__ANAME001 Additional ∑ M M M BM Unit Generator T_NAME-1 M CVA BM Unit Trading Party E_NAME-1 M Embedded BM Unit Virtual Lead Party M M V_NAME-1 Secondary ∑ M M M BM Unit
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