Status of the CWE Flow Based Market Coupling Project

Transcription

1 Commissie voor de Regulering van de Elektriciteit en het Gas Commission pour la Régulation de l Electricité et du Gaz Status of the CWE Flow Based Market Coupling Project Joint NordREG / Nordic TSO workshop on Flow-Based capacity calculation 11 December 2014 Patrick Luickx Advisor CREG Technical Operation of the Markets

2 Overview History and future outlook Welfare & other indicators Regulatory Issues FBMC parameters Regulatory Issues Flow Competition Stakeholder issues Zones impact Technical Aspects 2

3 History and future outlook Welfare & other indicators Regulatory Issues FBMC parameters Regulatory Issues Flow Competition Stakeholder issues Zones impact Technical Aspects HISTORY AND FUTURE OUTLOOK

4 History 7 June 2007: CWE Memorandum of Understanding implementation of a flow-based market coupling between the five countries June 2008: Decision to start with ATC MC in CWE End of 2010: Start of CWE FBMC market impact analysis First CWE FBMC technical meeting Go-live was foreseen end of March 2011: First Enhanced Flow-based MC feasibility report 4

5 History Early 2013: start of weekly // runs 7 March 2013: Market Forum 15 April 2013: NRA workshop on FBMC 2 May 2013: Project-led Public consultation February 2014: Start of daily publication of // run results June 2014: NRA-led Public consultation 23 June 2014: Market Forum Summer-Autumn 2014: submission of approval packages to NRAs 30 September 2014: FB User Group 5

6 Future outlook Between now and launch of FBMC List of NRA conditions Testing Flow competition - adequacy discussion (market consultation +) approval FBMC 2.0 after FBMC 1.0 6

7 History and future outlook Welfare & other indicators Regulatory Issues FBMC parameters Regulatory Issues Flow Competition Stakeholder issues Zones impact Technical Aspects WELFARE & OTHER INDICATORS

8 Weekly day ahead welfare Development of welfare (XX - ATC) - daily average Daily average welfare ( ) Thousands 1000 ATC higher FB higher FB FBI start daily parallel run Week 8

9 ΔWelfare ( ) Millions Change in average welfare ΔCR Δmarket surplus start daily parallel run week 9

10 10 Price convergence 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Price convergence Week ATC FB FBI start daily parallel run

11 Jan 13 Feb 13 Mar 13 Apr 13 May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 35% Intuitiveness non-intuitive hours (as percentage of congested hours) 30% 25% 20% 15% 14.4% 10% 5% 0% *experimental cycles reported 14.4% non-intuitive of congested hours Post NWE 11

12 Import Export potential 12

13 Import Export potential 13

14 Import Export potential 14

15 Import Export potential 15

16 History and future outlook Welfare & other indicators Regulatory Issues FBMC parameters Regulatory Issues Flow Competition Stakeholder issues Zones impact Technical Aspects REGULATORY ISSUES FBMC PARAMETERS

17 Critical Branches (CB) FB allocation = Optimisation under constraints corresponding to thermal line capacities of CB Capacity on the CB, given to the FBMC : RAM = F max - F ref - FRM FAV RAM = remaining available margin capacity for market coupling F max = maximum allowable flow F ref = physical flow resulting from base case needs to be adjusted for LT nominations FRM = flow reliability margin FAV = Final adjustment value 17

18 Critical Branches (CB) General rule: threshold value to include as CB Maximum zone-to-line PTDF-factor is larger than a certain threshold include line as CB: Regional crossborder trade (between two zones) with largest impact on a certain existing line needs to have impact larger than 5% for the line to be considered a CB However, individual TSO has final say in inclusion of CB 19

19 Critical Branches (CB) Exchange A C Active constraint Security Domain Market clearing point Exchange A B Binding Critical Branches Physical constraints Critical Branches (chosen by TSOs) 20

20 Critical Branches (CB) CB determines constraints in the Market Coupling algorithm Constraints impact welfare and prices Choice of CB influences the prices 21

21 Capacity Calculation Power Transfer Distribution Factor (PTDF) matrix: PTDF node-to-line Transactions Line L12 0-0,75-0,5-0,25 L23 0 0,25-0,5-0,25 L34 0 0,25 0,5-0,25 L41 0 0,25 0,5 0,75 Interpretation: a 1 MW transaction from node 2 to 1 results in a 0,25 MW additional flow on line L34 Calculation: PTDF 2 3 = PTDF 2 1 PTDF(3 1) 23

22 Generation Shift Key (GSK) From node-to-line to zone-to-line PTDF Example for trades between zones A, B and C Under different GSK assumptions PTDF zone-to-line constructed Different impacts on lines analysed Lines are CBs GSK: x% GSK: (100-x) % 24

23 Generation Shift Key (GSK) Interpretation of highlighted PTDF: A 1 MW commercial exchange from zone B to zone A with uniform repartition of GSKs leads to 0,625 MW additional physical flow on line L12 (in direction node 2 to node 1) PTDF zone to line Line B A B C C A L12-0,625-0,375-0,25 L23-0,125 0,125-0,25 L34 0,375 0,625-0,25 L41 0,375-0,375 0,75 GSK: 50% GSK: 50% 25

24 Generation Shift Key (GSK) PTDF zone to line Line B A B C C A L12-0,5-0,25-0,25 L23-0,5-0,25-0,25 L34 0,5 0,75-0,25 L41 0,5-0,25 0,75 GSK: 0% GSK: 100% Notice important difference in PTDF due to GSK choice of TSO in zone B PTDF zone to line Line B A B C C A L12-0,75-0,5-0,25 L23 0,25 0,5-0,25 L34 0,25 0,5-0,25 L41 0,25-0,5 0,75 GSK: 100% GSK: 0% 26

25 Generation Shift Key (GSK) The selection of GSKs made by TSO B has a large impact on the profitability of A to C exchanges TSO GSK choice greatly impacts PTDF zone-to-line which in turn impacts CB, prices and congestion rents 27

26 Generation Shift Key (GSK) PTDF zone-to-line is GSK-dependent (see above) Electricity prices are PTDF zone-to-line -dependent P( C) PTDF P( B) P( C) PTDF P( A) B C on L34 A C on L34 Shadow price With a given P(C) and P(B), P(A) will depend on PTDF B C on L34 Electricity prices are GSK-dependent 29

27 Generation Shift Key (GSK) Two issues for GSK determination in CWE 1. Which power plants participate? Market driven & flexible plants Gas/oil, hydro, pumped-storage & hard coal Exception: nuclear units if not enough flexible generation 2. How to estimate output level of these plants? Which % of output attributed to power plant Plain method for FR & DE Uniform for Amprion, TenneT GE According to base case % for RTE Linear interpolation method for BE & NL (see next slide) 30

28 Margins on the CB RAM = F max - F ref - FRM FAV Margins: Flow Reliability Margin (FRM) Final Adjustment Value (FAV) Special critical branches Explicit additional constraints in the algorithm Reflect uncertainty 31

29 Margins on the CB Special critical branches External constraints Additional constraints that are not normal CBs E.g.: import / export limitation for entire zone To guarantee secure grid operation Avoid market results with stability problems Voltage stability Avoid market results too far away from reference flows 34

30 Intuitiveness NL MW DE MW Intuitive example 761 MW 213 MW BE MW FR MW 2791 MW * Source: CWE TSOs, Intuitiveness pedagogical presentation, 22 November 2011 (Results of simulation of FBMC on December 2 st, 2010 at 20:00) 37

31 Intuitiveness 666 MW r NL MW 1792 MW DE MW Non-intuitive example BE MW ² 3091 MW * Source: CWE TSOs, Intuitiveness pedagogical presentation, 22 November 2011 FR MW (Results of simulation of FBMC on December 1 st, 2010 at 07:00) 38

32 Intuitiveness FBMC is welfare optimising Price minimization Frequency and importance of non-intuitive results seems higher for smaller zones when there is a mix of large and small zones. CWE FBMC will start with FB intuitive Following the results of the Market Consultation, 39

33 Monitoring Monitoring: completion of the template of periodic data for regulators Type & frequency of monitoring reports Important monitoring work of NRAs TSOs have direct impact on prices / market operation Data collection and analysis 40

34 History and future outlook Welfare & other indicators Regulatory Issues FBMC parameters Regulatory Issues Flow Competition Stakeholder issues Zones impact Technical Aspects REGULATORY ISSUES FLOW COMPETITION

35 Flow competition in FB FBMC improves market outcome when no congestion FBMC induces flow competition between large and small countries / zones in case of congestion Competition issue under normal circumstances Security of Supply / adequacy issue under scarcity circumstances 42

36 Security of supply with FB FBMC worsens security of supply issues in small countries when competing with large countries in congested situations Link to PTDF advantage for larger countries 43

37 Security of supply with FB PTDFs Nl-B/Nl-F ratios for a congestion on the Nl-B border vary between 1,18 to 2,14 Ratio weighted average = 1,58 (data 1/1/ /9/2014) BE market players bid 3000 (= price cap) If FR market player bids above a threshold of 1900 independently of their location in France Requests for imports for France will have full priority on imports for Belgium Scarcity No congestion in Be & Fr & congestion If ask >

38 Security of supply with FB In scarcity conditions: if Belgium competes with France for imports from the Netherlands and Germany risk that import volume in Belgium goes to zero even when bidding 3000 All or nothing behaviour above a given threshold observed in the current design Current design lets countries that do not bid max price get all capacity mitigation measures 45

39 History and future outlook Welfare & other indicators Regulatory Issues FBMC parameters Regulatory Issues Flow Competition Stakeholder issues Zones impact Technical Aspects STAKEHOLDER ISSUES

40 Market forums and consultation 7 March 2013: Market Forum 2 May 2013: Project-led Public consultation June 2014: NRA-led Public consultation 23 June 2014: Market Forum 30 September 2014: 1 st FB User Group 47

41 Market forums and consultation Recognition of improvements with FBMC welfare Market has intermediate understanding of FBMC Improvements before go-live or in FBMC 2.0 Concerns of losing welfare gains from Day ahead FBMC in intraday afterwards Impact on ID market unclear 48

42 Market forums and consultation Market wants much transparency To reap all benefits from FBMC Robustness FB intuitive More studies before go-live to better understand 49

43 Conditions after consultation Conditions from NRAs towards TSOs on: Intuitiveness / Euphemia Fallback mechanism Typical winter days and impact of long-term evolutions LTA inclusion Impact on Intraday Welfare analysis generation/demand adequacy 50

44 Transparency Level of transparency towards market players needs to be sufficient for market to understand the process and implications of FBMC Importance of market consultation 51

45 History and future outlook Welfare & other indicators Regulatory Issues FBMC parameters Regulatory Issues Flow Competition Stakeholder issues Zones impact Technical Aspects ZONES IMPACT

46 Zone impact Better understand the impact of a mix of small and larges zones on FBMC results A. Marien, P. Luickx, A. Tirez, and D. Woitrin, Importance of design parameters on flow-based market coupling implementation, in th International Conference on the European Energy Market (EEM), 2013, pp. 1 8 Synthetic example with 12 lines, 16 nodes & 4 countries represented here 53

47 Zones impact FRM (in MW) for several zones delimitations FRM should be taken into account in zones delimitation studies FRMs decrease with the number of zones Uncertainty decreases with increasing number of zones 54

48 Zones impact Impact of mix of small and large zones A. Marien, P. Luickx, A. Tirez, and D. Woitrin, Importance of design parameters on flowbased market coupling implementation, in th International Conference on the European Energy Market (EEM), 2013, pp

49 Zones impact Impact of a mix of small and large zones Averaging mechanism On average, cross-border exchanges between large zones have the smallest PTDF and make the smallest use of the transmission lines (rows at the bottom of the table) Cf. zones B & C in example Compensation mechanism On average, PTDF corresponding to internal lines are lower than PTDF corresponding to cross-zonal lines Important characteristic when two trades compete on a same congested CB since trade with lowest PTDF gets the deal Grey area in example 56

50 History and future outlook Welfare & other indicators Regulatory Issues FBMC parameters Regulatory Issues Flow Competition Stakeholder issues Zones impact Technical Aspects TECHNICAL ASPECTS

51 Robustness «Missing days» Parallel runs without results via the regular FBMC process Published on CASC website Based-MC/Parallel-Run-Results Reasons for missing days: (IT) tools learning curves (of operators) improvement of method 58

52 Robustness Year wk Wed Thu Fri Sat Sun Mon Tue 0 01 Jan 1 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 2 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 15 Jan 3 16 Jan 17 Jan 18 Jan 19 Jan 20 Jan 21 Jan 22 Jan 4 23 Jan 24 Jan 25 Jan 26 Jan 27 Jan 28 Jan 29 Jan 5 30 Jan 31 Jan 01 Feb 02 Feb 03 Feb 04 Feb 05 Feb 6 06 Feb 07 Feb 08 Feb 09 Feb 10 Feb 11 Feb 12 Feb 7 13 Feb 14 Feb 15 Feb 16 Feb 17 Feb 18 Feb 19 Feb 8 20 Feb 21 Feb 22 Feb 23 Feb 24 Feb 25 Feb 26 Feb 9 27 Feb 28 Feb 01 Mar 02 Mar 03 Mar 04 Mar 05 Mar Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar Mar 21 Mar 22 Mar 23 Mar 24 Mar 25 Mar 26 Mar Mar 28 Mar 29 Mar 30 Mar 31 Mar 01 Apr 02 Apr Apr 04 Apr 05 Apr 06 Apr 07 Apr 08 Apr 09 Apr Apr 11 Apr 12 Apr 13 Apr 14 Apr 15 Apr 16 Apr Apr 18 Apr 19 Apr 20 Apr 21 Apr 22 Apr 23 Apr Apr 25 Apr 26 Apr 27 Apr 28 Apr 29 Apr 30 Apr May 02 May 03 May 04 May 05 May 06 May 07 May May 09 May 10 May 11 May 12 May 13 May 14 May May 16 May 17 May 18 May 19 May 20 May 21 May May 23 May 24 May 25 May 26 May 27 May 28 May May 30 May 31 May 01 Jun 02 Jun 03 Jun 04 Jun Jun 06 Jun 07 Jun 08 Jun 09 Jun 10 Jun 11 Jun Jun 13 Jun 14 Jun 15 Jun 16 Jun 17 Jun 18 Jun Jun 20 Jun 21 Jun 22 Jun 23 Jun 24 Jun 25 Jun Jun 27 Jun 28 Jun 29 Jun 30 Jun 01 Jul 02 Jul Jul 04 Jul 05 Jul 06 Jul 07 Jul 08 Jul 09 Jul Jul 11 Jul 12 Jul 13 Jul 14 Jul 15 Jul 16 Jul Jul 18 Jul 19 Jul 20 Jul 21 Jul 22 Jul 23 Jul Jul 25 Jul 26 Jul 27 Jul 28 Jul 29 Jul 30 Jul Jul 01 Aug 02 Aug 03 Aug 04 Aug 05 Aug 06 Aug Aug 08 Aug 09 Aug 10 Aug 11 Aug 12 Aug 13 Aug Aug 15 Aug 16 Aug 17 Aug 18 Aug 19 Aug 20 Aug Aug 22 Aug 23 Aug 24 Aug 25 Aug 26 Aug 27 Aug Aug 29 Aug 30 Aug 31 Aug 01 Sep 02 Sep 03 Sep Sep 05 Sep 06 Sep 07 Sep 08 Sep 09 Sep 10 Sep Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Sep Sep 19 Sep 20 Sep 21 Sep 22 Sep 23 Sep 24 Sep Sep 26 Sep 27 Sep 28 Sep 29 Sep 30 Sep 01 Oct Oct 03 Oct 04 Oct 05 Oct 06 Oct 07 Oct 08 Oct Oct 10 Oct 11 Oct 12 Oct 13 Oct 14 Oct 15 Oct Oct 17 Oct 18 Oct 19 Oct 20 Oct 21 Oct 22 Oct Oct 24 Oct 25 Oct 26 Oct 27 Oct 28 Oct 29 Oct Oct 31 Oct 01 Nov 02 Nov 03 Nov 04 Nov 05 Nov Nov 07 Nov 08 Nov 09 Nov 10 Nov 11 Nov 12 Nov Nov 14 Nov 15 Nov 16 Nov 17 Nov 18 Nov 19 Nov Nov 21 Nov 22 Nov 23 Nov 24 Nov 25 Nov 26 Nov Nov 28 Nov 29 Nov 30 Nov 01 Dec 02 Dec 03 Dec Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec Dec 19 Dec 20 Dec 21 Dec 22 Dec 23 Dec 24 Dec Dec 26 Dec 27 Dec 28 Dec 29 Dec 30 Dec 31 Dec Year wk Wed Thu Fri Sat Sun Mon Tue 1 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 2 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Jan 3 15 Jan 16 Jan 17 Jan 18 Jan 19 Jan 20 Jan 21 Jan 4 22 Jan 23 Jan 24 Jan 25 Jan 26 Jan 27 Jan 28 Jan 5 29 Jan 30 Jan 31 Jan 01 Feb 02 Feb 03 Feb 04 Feb 6 05 Feb 06 Feb 07 Feb 08 Feb 09 Feb 10 Feb 11 Feb 7 12 Feb 13 Feb 14 Feb 15 Feb 16 Feb 17 Feb 18 Feb 8 19 Feb 20 Feb 21 Feb 22 Feb 23 Feb 24 Feb 25 Feb 9 26 Feb 27 Feb 28 Feb 01 Mar 02 Mar 03 Mar 04 Mar Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Mar 18 Mar Mar 20 Mar 21 Mar 22 Mar 23 Mar 24 Mar 25 Mar Mar 27 Mar 28 Mar 29 Mar 30 Mar 31 Mar 01 Apr Apr 03 Apr 04 Apr 05 Apr 06 Apr 07 Apr 08 Apr Apr 10 Apr 11 Apr 12 Apr 13 Apr 14 Apr 15 Apr Apr 17 Apr 18 Apr 19 Apr 20 Apr 21 Apr 22 Apr Apr 24 Apr 25 Apr 26 Apr 27 Apr 28 Apr 29 Apr Apr 01 May 02 May 03 May 04 May 05 May 06 May May 08 May 09 May 10 May 11 May 12 May 13 May May 15 May 16 May 17 May 18 May 19 May 20 May May 22 May 23 May 24 May 25 May 26 May 27 May May 29 May 30 May 31 May 01 Jun 02 Jun 03 Jun Jun 05 Jun 06 Jun 07 Jun 08 Jun 09 Jun 10 Jun Jun 12 Jun 13 Jun 14 Jun 15 Jun 16 Jun 17 Jun Jun 19 Jun 20 Jun 21 Jun 22 Jun 23 Jun 24 Jun Jun 26 Jun 27 Jun 28 Jun 29 Jun 30 Jun 01 Jul Jul 03 Jul 04 Jul 05 Jul 06 Jul 07 Jul 08 Jul Jul 10 Jul 11 Jul 12 Jul 13 Jul 14 Jul 15 Jul Jul 17 Jul 18 Jul 19 Jul 20 Jul 21 Jul 22 Jul Jul 24 Jul 25 Jul 26 Jul 27 Jul 28 Jul 29 Jul Jul 31 Jul 01 Aug 02 Aug 03 Aug 04 Aug 05 Aug Aug 07 Aug 08 Aug 09 Aug 10 Aug 11 Aug 12 Aug Aug 14 Aug 15 Aug 16 Aug 17 Aug 18 Aug 19 Aug Aug 21 Aug 22 Aug 23 Aug 24 Aug 25 Aug 26 Aug Aug 28 Aug 29 Aug 30 Aug 31 Aug 01 Sep 02 Sep Sep 04 Sep 05 Sep 06 Sep 07 Sep 08 Sep 09 Sep Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Sep Sep 18 Sep 19 Sep 20 Sep 21 Sep 22 Sep 23 Sep Sep 25 Sep 26 Sep 27 Sep 28 Sep 29 Sep 30 Sep Oct 02 Oct 03 Oct 04 Oct 05 Oct 06 Oct 07 Oct Oct 09 Oct 10 Oct 11 Oct 12 Oct 13 Oct 14 Oct Oct 16 Oct 17 Oct 18 Oct 19 Oct 20 Oct 21 Oct Oct 23 Oct 24 Oct 25 Oct 26 Oct 27 Oct 28 Oct

53 Robustness Final Industrialized Tool With fallback mechanism Being implemented Testing of fallback mechanism When fallback is needed, the quality of the results needs to be high [2 fallback systems: TSO fallback FIT PX fallback Shadow auctions on CASC] 60