The Nordic Capacity Calculation Methodology (CCM) project. CCM Stakeholder Forum Stockholm 8 February

The Nordic Capacity Calculation Methodology (CCM) project CCM Stakeholder Forum Stockholm 8 February - 2017

Agenda 1. Coffee (9.00 9.30) 2. Welcome, objective and agenda (9.30-9.45), Trond Jensen (Statnett) 3. NordREG presentation (9.45-10.15), Johan Roupe (EI) 4. Nordic CCM project and timeline (10.15-10.30), Trond Jensen (Statnett) 5. Coffee (10.30-10.50) 6. Nordic FB and CNTC methodologies (10.50-11.30), Nils Flaten Ræder (Statnett) and Heini Ruohosenmaa (Fingrid) 7. Market results (11.30-12.00), Mårten Bergman (Svk) 8. First round of questions and answers (12.00-12.30) 9. Lunch (12.30-13.30) 10. Market information platform and market information tool (13.30-14.00), Mårten Bergman (Svk) 11. CCM proposal process (14.00-14.30), Ulrik Møller (Edk) 12. Coffee break (14.30-15.00) 13. Second round of questions and answers (15.00-16.30)

Main deliveries of the Nordic CCM project A CCM for the Day Ahead (DA) and Intraday (ID) ID market in accordance to Guideline on Capacity Allocation and Congestion Management (CACM) The methodology is to be used by the industrialized Capacity Calculation (CC) tool to be developed by the Regional Security Centre (RSC) Either a Flow Based or a Coordinated Net Transfer Capacity (CNTC) methodology Prototype Capacity Calculation tool(s) to test the methodology on real market data Market simulations and parallel runs Management of the National Regulatory Agencies (NRA) CCM proposal process Consultation document (Supporting document) Stakeholder consultation NRA proposal for CCM (Legal document) Support the RSC with "Domain expertise" in the tooling phase Capacity Calculation (CC) experts Specify domain requirements for the RSCs CC tool

Organizational structure Regional Group Nordic (RGN) Steering committee One member from each TSO Convener: Søren Dupond Kristensen Market Steering Group (MSG) Convener team Project Manager: Trond Jensen Operational Reference Group Convener: Jan Hystad IT-Support Convener: Martin Julander Work Group 1 CCM Methodology FB & CNTC Convener: Nils Ræder Work Group 2 CCM Methodology CNTC Convener: Heini Ruohosenmaa Work Group 3 Welfare Economics Convener: Mårten Bergman Work Group 4 CCM Proposal Convener: Ulrik Møller

A brief history of the Nordic CCM project Today 18 Sept. CCM proposal 2010/2011 2012 2013 2014 2015 2016 2017 Internal TSO phase External communication Stakeholder Forums Stakeholder Group News letters Info platform FB experiments FB Capacity Calculation and market simulations CNTC Calculation and simulations SN Flow Based Project Nordic Flow Based Project Nordic CCM Project Asses the FB concept Asses literature & practice Develop ideas Prefeasibility study Project development Model studies Market assessments Work shops Feasibility study Methodology and technical requirements for a Nordic FB Prototype development FB capacity calculation and market simulation experiments Stakeholder communication Pre-implementation phase Capacity calculation and market simulations Welfare analyses Infrastructure development (IT platforms) Stakeholder processes CCM proposal process CNTC development DA DA and ID

High Level Status WP Convener Status Project Management team Trond Jensen Stakeholder and NRA communication (Stakeholder Group, Forums and information platform, News Letters) IT infrastructure (Secure FTP, CCM server) Link to other projects (Common Grid Model Project, Regional Security Centre project) Work Group 1 Nils Ræder FB and CNTC methodologies are developed FB and CNTC prototype tools are developed (CNTC not fully adjusted yet) Intraday CNTC Methodology is being developed FB capacity calculation and market simulation is ongoing CNTC capacity calculation and market simulation is ongoing Work Group 2 Work Group 3 Work Group 4 Heini Ruohosenmaa Mårten Bergman Ulrik Møller Alternative CNTC methodology and prototype tools is in development DA market welfare analyses FB vs NTC is ongoing DA market welfare analyses FB vs CNTC is ongoing CCM proposal Currently working on a supporting document Planning for the internal TSO consultation Preparing for the market consultation Legal proposal document to be done later in the process

Related Activities CCM Project High-Level CCM Project Roadmap Sept 18: Submission of CCM proposal to NRAs March 18: NRA Decision Q3: Nordic DA CCM operationalized Q1-Q2: Go-live DA CCM Q4: Go-live ID CCM Today 2016 2017 2018 2019 2020 Oct 16 Sept 17 CCM proposal Develop operational procedures Q1/18 Q3/19 Jan 16 Dec 17 Cap calc & Market sim. Public parallel runs Q1/18 Q4/19 Q3/18 Q3/20 Develop operational tools and go-live Intraday 2016 Dec 17 CGM D-2 Q1/17 Q4/17 Each TSO develops CNE process 2017 2019 RSC develops industrialized DA tool Q1 18 Q4 18 CGM ID Q1 19 Q4 20 RSC develops industrialized ID tool

Why capacity restrictions? The electrical grid has a limited capacity for transporting power Try transferring too much power, and the system is at risk of collapse Capacity restrictions are necessary to ensure stable electricity supply with high quality Capacity restrictions are only one of the tools employed by the TSOs to ensure operational security

Capacity calculation? Only essential information is preserved, the amount and complexity of information is greatly reduced A detailed model of the electricity system, with forecasted system state and information on transmission constraints Capacity calculation process Simplified transmission constraints that can be used by the electricity market

Scope of the Capacity Calculation Methodology Scope of CCM The CCM covers capacities for both the dayahead and intraday market The market capacities can be formulated as either flow-based parameters (FB) or coordinated net transmission capacities (CNTC) Simplification of grid model Calculation of available capacity Reliability margins Generator shift keys FB CNTC OR To power exchanges for price calculations Both FB and CNTC must respect the same underlying grid constraints, much of the calculation can be common to both approaches The calculation process will consider updated forecasts until the last possible moment Common grid model (CGM) of the electricity system with forecasted system state Grid constraints Available remedial actions Input from the TSOs

The Common Grid Model Defined in CACM: common grid model means a Union-wide data set agreed between various TSOs describing the main characteristic of the power system (generation, loads and grid topology) and rules for changing these characteristics during the capacity calculation process The CGM is built up of the TSOs' Individual Grid Models: 'individual grid model means a data set describing power system characteristics (generation, load and grid topology) and related rules to change these characteristics during capacity calculation, prepared by the responsible TSOs, to be merged with other individual grid model components in order to create the common grid model

Simplifications made in the capacity calculation Nodes aggregated into bidding zones Almost all load and generation have a unique impact on the flows in the transmission system The difference in impact is not considered by the market coupling All market parties in the same area are considered to have equal impacts Each node have weigh according to the generation shift keys (GSK) Linearization of interdependencies in the modelled electricity system There are complex relationships between the net position of the bidding zones, and the loading of a transmission constraint A more simplified approximation is found This linearization is required by the price calculation algorithms Loading of a transmission constraint A B C The bidding zone contain numerous nodes Export position of a bidding zone

Flow-based or Coordinated net transmission capacity The TSOs will provide either FB or CNTC to each of the dayahead and intraday markets Both FB and CNTC are sets of linear transmission constraints provided by the TSOs to the day-ahead and intraday markets Both FB and CNTC are based on the same input data The requirements that all relevant transmission constraints shall be respected is the same Both require the model of the electricity system to be simplified Mathematically speaking the difference between the approaches is small FB considers all bidding zones to be interconnected, and provides the market with information on transit flows CNTC treats all bidding zone borders as independent conduits for commercial exchange

Transit flows Contract paths vs physical paths 0.1 % Power exchange between two bidding zones will follow all available paths in the grid 20 % 12 % 0.1 % Much of the power will pass through other bidding zones these are transit flows 8 % 12 % The presence of transit flows means that a trade between two bidding zones will impact all transmission constraints in the region 0 % 0.7 % 0.7 % 0.7 % 24 % 56 % 24 % 24 % The maximum commercial exchange that can be allowed between two bidding zones is therefore dependent on all other commercial exchanges in the region

Example market capacities Coordinated net transmission capacities Generation A Simple system with three bidding zones B Border A -> B B -> C A -> C Max exchange 750 MW 750 MW 750 MW These are the power transfer distribution factors (PTDF) 67 % 33 % C Flow-based Transmission constraint Available margin Impact from A Impact from B Impact from C A -> B 1000 MW 33 % - 33 % 0 Load B -> C 1000 MW 33 % 67 % 0 A -> C 1000 MW 67 % 33 % 0

impact on scheduled flow DK1-DE DK1-SE3 DK1-NO2 DK1-DK2 DK2-DE DK2-SE4 FIN-EE FIN-SE3 FIN-NO4 FIN-SE1 NO1-NO2 NO1-NO3 NO1-NO5 NO1-SE3 NO2-NL NO2-NO5 NO3-NO4 NO3-NO5 NO3-SE2 NO4-SE1 NO4-SE2 SE1-SE2 SE2-SE3 SE3-SE4 SE4-DE SE4-LT SE4-PL The PTDF describe the interdependency between border flows Commercial exchange between areas DK1-DE 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 DK1-SE3 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 DK1-NO2 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 DK1-DK2 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 DK2-DE 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 DK2-SE4 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 FIN-EE 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 FIN-SE3 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 FIN-NO4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 FIN-SE1 0 0 0 0 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 NO1-NO2 0 0 0 0 0 0 0 0 0 0 0.9 0 0.2 0 0 0.7 0 0.2 0 0 0 0 0 0 0 0 0 NO1-NO3 0 0 0 0 0 0 0 0 0.1 0 0 0.4 0.1 0.2 0 0 0.2 0.4 0.2 0.1 0.1 0 0 0 0 0 0 NO1-NO5 0 0 0 0 0 0 0 0 0 0 0.1 0 0.8 0 0 0.6 0 0.7 0 0 0 0 0 0 0 0 0 NO1-SE3 0 0 0 0 0 0 0 0 0.1 0 0 0.6 0 0.8 0 0 0.2 0.6 0.2 0.1 0.1 0 0 0 0 0 0 NO2-NL 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 NO2-NO5 0 0 0 0 0 0 0 0 0 0 0.1 0 0.2 0 0 0.3 0 0.2 0 0 0 0 0 0 0 0 0 NO3-NO4 0 0 0 0 0 0 0 0 0.2 0 0 0.1 0 0 0 0 0.5 0.1 0.2 0.2 0.3 0.1 0 0 0 0 0 NO3-NO5 0 0 0 0 0 0 0 0 0 0 0 0 0.1 0 0 0.1 0 0.1 0 0 0 0 0 0 0 0 0 NO3-SE2 0 0 0 0 0 0 0 0 0.2 0 0 0.4 0 0.1 0 0 0.4 0.4 0.6 0.2 0.2 0.1 0 0 0 0 0 NO4-SE1 0 0 0 0 0 0 0 0 0.6 0 0 0.1 0 0 0 0 0.4 0.1 0.1 0.6 0.5 0.1 0 0 0 0 0 NO4-SE2 0 0 0 0 0 0 0 0 0.1 0 0 0.1 0 0 0 0 0.1 0.1 0.1 0.1 0.2 0 0 0 0 0 0 SE1-SE2 0 0 0 0 0 0 0 0 0.4 0 0 0.1 0 0 0 0 0.5 0.1 0.1 0.3 0.6 0.9 0 0 0 0 0 SE2-SE3 0 0 0 0 0 0 0 0 0.1 0 0 0.6 0 0.2 0 0 0.2 0.6 0.2 0.1 0.1 0 1 0 0 0 0 SE3-SE4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 SE4-DE 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 SE4-LT 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 SE4-PL 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 The table show how a commercial exchange between two areas production in one and consumption in the other create flows on the bidding zone borders The checkered area shows that the Norwegian and Swedish grids are highly interconnected Any trades that would change the net positions in these areas create transit flows on multiple borders There is not a one-to-one relationship between commercial exchange and power flow

impact on scheduled flow impact on scheduled flow DK1-DE DK1-SE3 DK1-NO2 DK1-DK2 DK2-DE DK2-SE4 FIN-EE FIN-SE3 FIN-NO4 FIN-SE1 NO1-NO2 NO1-NO3 NO1-NO5 NO1-SE3 NO2-NL NO2-NO5 NO3-NO4 NO3-NO5 NO3-SE2 NO4-SE1 NO4-SE2 SE1-SE2 SE2-SE3 SE3-SE4 SE4-DE SE4-LT SE4-PL DK1-DE DK1-SE3 DK1-NO2 DK1-DK2 DK2-DE DK2-SE4 FIN-EE FIN-SE3 FIN-NO4 FIN-SE1 NO1-NO2 NO1-NO3 NO1-NO5 NO1-SE3 NO2-NL NO2-NO5 NO3-NO4 NO3-NO5 NO3-SE2 NO4-SE1 NO4-SE2 SE1-SE2 SE2-SE3 SE3-SE4 SE4-DE SE4-LT SE4-PL The interdependencies between the bidding zone borders are not considered in CNTC Commercial exchange between areas Commercial exchange between areas DK1-DE 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 DK1-SE3 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 DK1-NO2 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Flow-based DK1-DK2 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 DK2-DE 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 DK2-SE4 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 FIN-EE 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 FIN-SE3 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 FIN-NO4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 FIN-SE1 0 0 0 0 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 NO1-NO2 0 0 0 0 0 0 0 0 0 0 0.9 0 0.2 0 0 0.7 0 0.2 0 0 0 0 0 0 0 0 0 NO1-NO3 0 0 0 0 0 0 0 0 0.1 0 0 0.4 0.1 0.2 0 0 0.2 0.4 0.2 0.1 0.1 0 0 0 0 0 0 NO1-NO5 0 0 0 0 0 0 0 0 0 0 0.1 0 0.8 0 0 0.6 0 0.7 0 0 0 0 0 0 0 0 0 NO1-SE3 0 0 0 0 0 0 0 0 0.1 0 0 0.6 0 0.8 0 0 0.2 0.6 0.2 0.1 0.1 0 0 0 0 0 0 NO2-NL 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 NO2-NO5 0 0 0 0 0 0 0 0 0 0 0.1 0 0.2 0 0 0.3 0 0.2 0 0 0 0 0 0 0 0 0 NO3-NO4 0 0 0 0 0 0 0 0 0.2 0 0 0.1 0 0 0 0 0.5 0.1 0.2 0.2 0.3 0.1 0 0 0 0 0 NO3-NO5 0 0 0 0 0 0 0 0 0 0 0 0 0.1 0 0 0.1 0 0.1 0 0 0 0 0 0 0 0 0 NO3-SE2 0 0 0 0 0 0 0 0 0.2 0 0 0.4 0 0.1 0 0 0.4 0.4 0.6 0.2 0.2 0.1 0 0 0 0 0 NO4-SE1 0 0 0 0 0 0 0 0 0.6 0 0 0.1 0 0 0 0 0.4 0.1 0.1 0.6 0.5 0.1 0 0 0 0 0 NO4-SE2 0 0 0 0 0 0 0 0 0.1 0 0 0.1 0 0 0 0 0.1 0.1 0.1 0.1 0.2 0 0 0 0 0 0 SE1-SE2 0 0 0 0 0 0 0 0 0.4 0 0 0.1 0 0 0 0 0.5 0.1 0.1 0.3 0.6 0.9 0 0 0 0 0 SE2-SE3 0 0 0 0 0 0 0 0 0.1 0 0 0.6 0 0.2 0 0 0.2 0.6 0.2 0.1 0.1 0 1 0 0 0 0 SE3-SE4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 SE4-DE 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 SE4-LT 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 SE4-PL 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 DK1-DE 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 DK1-SE3 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 DK1-NO2 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 CNTC DK1-DK2 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 DK2-DE 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 DK2-SE4 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 FIN-EE 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 FIN-SE3 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 FIN-NO4 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 FIN-SE1 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 NO1-NO2 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 NO1-NO3 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 NO1-NO5 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 NO1-SE3 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 NO2-NL 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 NO2-NO5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 NO3-NO4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 NO3-NO5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 NO3-SE2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 NO4-SE1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 NO4-SE2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 SE1-SE2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 SE2-SE3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 SE3-SE4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 SE4-DE 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 SE4-LT 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 SE4-PL 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1

More or less capacity with FB compared to CNTC? The aim of the capacity calculation is to provide capacities that create the best possible dispatch All loads covered Minimizing production costs Avoiding risks to operational security Forecasted system state Export position of area A 400 300 200 100 0 Export position of area B FB is a more flexible approach compared to CNTC The "solution space" for FB can form almost any shape The "solution space" for CNTC is limited by the requirement that all bidding zone borders are considered independently - 400-300 - 200-100 0 100 200 300 400-100 - 200-300 - 400 Black line: real limit of system security

More or less capacity with FB compared to CNTC? The aim of the capacity calculation is to provide capacities that create the best possible dispatch All loads covered Minimizing production costs Avoiding risks to operational security Forecasted system state Export position of area A 400 300 200 100 0 FB Export position of area B FB is a more flexible approach compared to CNTC The "solution space" for FB can form almost any shape The "solution space" for CNTC is limited by the requirement that all bidding zone borders are considered independently - 400-300 - 200-100 0 100 200 300 400-100 - 200-300 - 400 Black line: real limit of system security

More or less capacity with FB compared to CNTC? The aim of the capacity calculation is to provide capacities that create the best possible dispatch All loads covered Minimizing production costs Avoiding risks to operational security Forecasted system state Export position of area A 400 300 200 100 0 FB CNTC Export position of area B FB is a more flexible approach compared to CNTC The "solution space" for FB can form almost any shape The "solution space" for CNTC is limited by the requirement that all bidding zone borders are considered independently - 400-300 - 200-100 0 100 200 300 400-100 - 200-300 - 400 Black line: real limit of system security

Are internal grid constraints limiting cross-border trade? Few grid constraints are at the geographic border The location of grid constraints determined by the total system state: grid topology, loads and generation We don't want to change the bidding zone configuration hour-by-hour Constraints inside bidding areas mainly affected by cross-border trade FB doesn't "move" the congestions at all, the PTDFs provide accurate information on how each area impact the constraints CNTC makes a choice on which cross-border trades can be allocated the capacity of the constraint, constraint still mainly affected by cross border trade Grid constraints not highly affected by cross border trade not included in capacity calculation Constraints instead handled by costly remedial actions (Non-costly remedial actions already included in the capacity calculation)

Can we have FB day-ahead and CNTC intraday? The planned continuous intraday market cannot use FB initially There will be a new capacity calculation for the intraday market Based on an updated common grid model Not only the "remainder" from the day-ahead market as today Result of the day-ahead market Export position of area A 400 300 FB The concern is that there will be limited capacity available for intraday FB is a more flexible approach The FB net positions from day-ahead may put the system in a "corner" where it's there's limited options to create secure CNTCs This is due to more capacity being made available for the day-ahead market Reasons/options that mitigate this risk: Reduced uncertainty at the intraday stage TSOs can expand the CNTC space where it's unlikely to be used will free up initial capacity without significant impact on operational security CNTC can be continuously recalculated 200 100-100 - 200-300 - 400 0 CNTC - 400-300 - 200-100 0 100 200 300 400 Export position of area B

Reduced uncertainty in the intraday time-frame Reduced uncertainty means there may be more capacity available initially TSOs can expand the CNTC space where it's likely to be used, free up initial capacity CNTC can be continuously recalculated, making new capacity available in the desired direction Export position of area A 400 300 200 100 0 FB CNTC - 400-300 - 200-100 0 100 200 300 400 Export position of area B - 100-200 - 300-400

Discard grid constraints unlikely to be binding in the market outcome Reduced uncertainty means there may be more capacity available initially TSOs can expand the CNTC space where it's likely to be used, free up initial capacity CNTC can be continuously recalculated, making new capacity available in the desired direction Export position of area A 400 300 200 100 0 FB CNTC - 400-300 - 200-100 0 100 200 300 400 Export position of area B - 100-200 - 300-400

Continuous recalculation of CNTC Reduced uncertainty means there may be more capacity available initially TSOs can expand the CNTC space where it's likely to be used, free up initial capacity CNTC can be continuously recalculated, making new capacity available in the desired direction Export position of area A 400 300 200 100 0 FB CNTC - 400-300 - 200-100 0 100 200 300 400 Export position of area B - 100-200 - 300-400

Impact on price forecasts and bids No impact on bid format Bids still specified by volume and price per area in all markets More hour-to-hour variation in available capacity Both FB and CNTC will better reflect the constantly varying state of the power system compared to current NTC FB will provide information on available capacity in a new format PTDF and RAM contain much more information than NTC/CNTC May impact the tools and methods used for predicting future prices FB will provide more, but smaller price differences Prices not caused by congested borders, instead caused by congested grid constraints All areas receive a price relative to the area's specific impact on the grid constraints Coordinated net transmission capacity A -> B B -> C A -> C Flow-based Max exchange 750 MW 750 MW 750 MW Available margin Area A Area B Area C A -> B 1000 33 % - 33 % 0 B -> C 1000 33 % 67 % 0 A -> C 1000 67 % 33 % 0

Prototype capacity calculation and market simulations The Nordic CCM project have developed a set of prototype tools for coordinated capacity calculation We are currently calculating flow-based parameters, and doing market simulations CNTC market simulations just starting, but the CNTC method needs refinements on the rules for efficiently sharing capacity on the borders Data quality remains an issue Mostly related to the prototype common grid model which is created specifically for this use Quality will improve as soon as the real common grid model is in place Market simulations are conducted using the same algorithm and bid lists used for the day-ahead market

Calculation of maximum exchanges on bidding zone borders Aim to automate TTC calculations Calculations based on basic AC load flow and dynamic simulations Method and tool to calculate maximum exchanges has been developed and tested using SE1-FI border as an example Tool calculates maximum technical capacities for import and export directions individually bidding zone border by border taking into account following items GSKs Contingencies Operational security limits The same calculation approach can be used to calculate F max values in the FB approach, and cross-zonal capacities in the CNTC

Capacity calculation tool Input data CGM GSKs Contingencies and other rules Operational security limits (thermal limits, voltage limits, frequency and damping limits) Load flow analysis Dynamic stability analysis Maximum cross-zonal capacity

Other steps in CNTC calculation process adjusting maximum power exchange using remedial actions applying rules for avoiding undue discrimination between internal and cross-zonal exchanges applying rules for efficiently sharing power flow capabilities of different CNEs among different bidding zone borders taking into account reliability margin and previously allocated crosszonal capacity cross-zonal capacities to be given to the market

Disclaimers Prototype tools/process Prototype tools have been used for the simulations Flow Reliability Margins (FRM) are not included Some known difficulties with the Danish CNE definitions in the first half of 2016 Although operators are consulted in the review stage, they are not personally involved in the FB capacity calculation process yet Some of the hours (~6 %) in the FB results lacks FB parameters these hours are replaced with NTC values Prototype Common grid model The grid models used are not yet the target models. Indeed those are in the process of being implemented. The quality of the grid models is the best we can have at this moment in time; they do not allow for dynamic analysis and detailed voltage/reactive power analysis though. Merging software for creating the CGM from the IGMs evolves over time. Improvements made for the later weeks have not been applied for the earlier ones Market simulations The market simulations are done in the European Power Exchanges Simulation Facility by using historical order books Limited to the Central Northern European market Critical Network Element (CNE) selection (review and possible removal of non-significantly impacted CNEs) has not been implemented at this stage yet

Objective function of the Price coupling Euphemia Same price coupling algorithm in both FB and NTC MAX Welfare = Consumer surplus Producer surplus Congestion revenue Example of an exchange from a low price area to a high price area Subject to constraints

SEW per Stakeholder [MEUR] Total [keur] SEW per Stakeholder [MEUR] Total [keur] Welfare economic results for Weeks 2-5, 7-8, 14-17, 41-46 80 60 40 20 0-20 -40-60 Nordic socio-economic welfare, FB compared to NTC Nordic 7,000 5,000 3,000 1,000-1,000-3,000-5,000 On an annualized basis the welfare in FB is 12 M larger than in NTC -80-7,000 Congestion rent Producer surplus Consumer surplus Total 40 30 20 10 0-10 -20-30 -40 Nordic socio-economic welfare per week, FB compared to NTC 2 3 4 5 7 8 14 15 16 17 41 42 43 44 45 46 1,200 1,000 800 600 400 200 0-200 -400-600 -800-1,000-1,200 Congestion rent Producer surplus Consumer surplus Total

Average prices in all Nordic bidding zones 1,0 0,5 0,0-0,5-1,0-1,5 40 0,8 Difference FB-NTC 0,1 Nordic DK1 DK2 FIN NO1 NO2 NO3 NO4 NO5 SE1 SE2 SE3 SE4-0,4-0,5-0,4-0,4-0,3-0,5-0,7-0,9-0,9-1,2 Average prices in the bidding zones 0,5 35 30 25 20 15 NTC FB 10 5 0 Nordic DK1 DK2 FIN NO1 NO2 NO3 NO4 NO5 SE1 SE2 SE3 SE4

Nordic net position per week 2-5, 7-8, 14-17, 41-46 and average 500 400 300 200 100 0-100 -200-300 Net Position, [GWh/week] 2 3 4 5 7 8 14 15 16 17 41 42 43 44 45 46 NTC FB Average Nordic net position (GWh) 145 144 143 142 141 140 139 138 137 136 NTC FB

Economic gain VS grid overloads The figure shows how the hourly FB results compare to the NTC market outcome The horizontal axis show the impact on expected grid overloads The vertical axis show the socio-economic impact The TSO choice of which CNEs to include in the market coupling will determine the balance between better grid security, and improved economic outcome Results in this quadrant have both worse economic results and larger grid overloads in FB than in NTC Results in this quadrant have both better economic results and lower grid overloads in FB than in NTC

FB vs CNTC vs NTC: single hour from week 42 FB CNTC NTC

FB vs CNTC vs NTC: single hour from week 42 CNTC 17 FB 20 Welfare compared to NTC (k )

Interfaces External Stakeholders Stakeholder Group Group with nominated members from industry and NRAs Detailed discussions and exchanges Stakeholder Forum Open for all stakeholders Broader information forums Stakeholder Newsletter 1 issued in 2016 4 issues/year from 2017 Stakeholder Information Platform Web platform for information exchange Open for all stakeholders Interactive discussion forum

Information Platform Stakeholder Information Platform Web platform for information exchange Open for all stakeholders Interactive discussion forum To gain access: Send mail to: plansupport@energinet.dk Subject: User registration NCCM SH info platform Content: Name, E-mail & Telephone

The Nordic Capacity Calculation Methodology (CCM) project Stakeholder Information Tool CCM Stakeholder Forum Stockholm 8 February 2017

Stakeholder Tool Tool for examining the effect on flows/possible net positions from PTDFs CNEs are fully anonymized randomized numbering This is a first draft comments/suggestions are welcome

Stakeholder tool

GUI - Test feasible net positions cells that can be editted the white cells indicate the Nordic synchronous area; the grey cells the DK1 synchronous area the orange texts indicate that the cell value is computed from another. Indeed, this is applied for DC cables: the power injected on one side is emitted at the other A check on the power balance in each synchronous area is performed;

GUI - Test feasible net positions If the net positions, that you entered, fit within the FB domain, the message that 'Transmission system not congested' appears. Otherwise, the message 'Transmission system congested' appears in red. The net position, that you entered, appears in the Nordic map in bold. Above this value, the maximum net position (feasible within the FB domain) is shown. Below this value the min net position (feasible within the FB domain) is shown. The border flows (according to the FB model), resulting from the net positions that you entered, are shown in the map.

FB parameters the net positions that you filled in on the 'GUI' the flows induced on the CNEs (PTDF matrix * net positions) the PTDF factors of the CNEs is the CNE congested? Or in other words: is the resulting flow larger than the RAM ( remaining available margin, the flow that is allowed to be used by the market transactions)?

Min/Max Net Positions & Border Flows The tool includes information on Min/Max Net Position per bidding zone Not simultaneously feasible The border flows (according to the FB model), resulting from the net positions that you entered, are computed. Those values are presented in the 'GUI'

Timeline for the NRA proposal Stakeholder Forum Feb 8 Workshop (Stakeholder Forum) Apr 19 Stakeholder Forum Sep 7 Submission of final CCM proposal to NRAs Sep 18 Sep Nov 2017 Mar May Jul Sep 2017 Today Sep 1 - Feb 21 Develop supporting document Feb 22 - Mar 28 Apr 3 - May 15 Apr 3 - Jun 30 Internal TSO consultation and approval of proposed CCM Public consultation Jul 3 - Aug 18 Jul 1 - Aug 15 Develop the legal CCM proposal (legally-binding document) Aug 21 - Sep 18 Internal TSO consultation Holiday period Finalization of the CCM proposal

Content of the supporting document and the CCM proposal Art 21 Legal document: The proposal for a CCM shall (at least) include Supporting document: Proposed methodology and impact assessment Art 21.1.A Methodologies for the calculation of input to the CC Methodologies for: i. Determine Reliability Margins ii. Determine Operational Security Limits ii. Determine Contingencies ii. Determine Allocation Constraints iii. Determine GSK iv. Determine Remedial Actions to be used Art 21.1.B Description of the applied CCM A Mathematical description of the i. Applied CCM with different inputs v. FB: The calculation of PTDFs and RAMs Rules for: ii. Avoiding undue discrimination iii. Previously allocated Cross Zonal capacity iv. Applying Remedial Actions to adjust flow on CNEs vi. CNTC: Calculating Cross Zonal capacity and efficiently sharing CNE cap on Bidding Zone Borders vii. Efficiently sharing CNE cap on different CCRs when relevant 21.1.A Methodologies for the calculation of input to the CC 21.1.B Description of the applied CCM Art 21.1.C Methodology for validation of Cross Zonal capacity Art 21.2 Frequency for updating ID capacity Art 21.3 Fall-back procedure Art 9.9 Proposed timeline for implementation Description of the alternative CCM Comparison FB/CNTC/NTC Impacts on other markets Bidding zone delimitation Non-intuitive flows Art 21.1.C Methodology for validation of Cross Zonal capacity Art 9.9 Description of the expected impact on the objective Congestion Income Distribution (if FB) Art 21.2 Frequency for updating ID capacity Art 21.3 Fall-back procedure Transparency Art 9.9. Proposed timeline for implementation Art 9.9 Description of the expected impact on the objective Long-term investment decisions

FB vs NTC: single hour from week 41 The Nordic welfare is 3k better in FB than in NTC The total market welfare is 7k better in FB than in NTC For the week as a whole Nordic gain is 600k, and the market wide gain is 1M