Post on 01-Apr-2015
transcript
Introduction to the Capacity Allocation & Congestion
Management Network Code
1st Stakeholder Group Meeting
Mark Copley
ENTSO-E Market Advisor
Background & Context
1) ENTSO-E’s legal role
2) The importance of codes
3) Overview of the network code development process.
Article 4: ENTSO
•Charged with working to complete the internal market.
Article 6: Creating network codes
•In line with ERGEG framework guidelines.•Which become binding.•And involve extensive consultation.
Article 7: The scope of network codes
•Cross border & market integration issues.•Without prejudice to Member States’ right to establish codes.
Article 8: ENTSO-E’s activities
•Network Codes•Ten Year Network Development Plans.•Generation adequacy.•Winter and summer outlooks.•Work programs and annual reports.
1) ENTSO-E’s role according to Regulation (EC) 714/2009
2) Why are network codes important?
• They are legally binding.
Every TSO, generator and load will have to comply.
While they will not duplicate national regulation, national regulation has to be
consistent.
• Hence, creating fit-for-purpose network codes is in everyone’s interest.
• A mayor challenge for drafting teams lies in ensuring that codes are
accessible to all and represent a range of views.
3) The Network Code Development Process
Comitology Process (where appropriate)
EC In consultation with all stakeholders resulting in legally binding NC
Assessment of NC
ACER Recommendation of NC to EC
Period in which ENTSO-E can develop a NC (12 month period)
ENTSO-E In consultation with stakeholders according to FWGL
Request for ENTSO-E to draft a network code
EC According to FWGL submitted by ACER
Development of the FWGL (6 month period)
ACER (ERGEG) In consultation with ENTSO-E, stakeholders, with input from Ad-Hoc Expert Group
Request to draft a FWGL
EC On a topic identified in art.8 (6) of Regulation EC 714/2009
Development of FWGL
Development of NC
The Capacity Allocation & Congestion Management Network Code
1) The suite of network codes
2) The scope of the CACM code
3) High-level overview of issues covered
4) Interactions with other areas
1) The network codes required to facilitate the IEM
Markets
Capacity Allocation & Congestion
Management code
Network Code on balancing
System Operations
Network code on generator
connection
Network code on DSO & industrial load connection
System Development
Network code on operational security
Network code on operational planning
& scheduling
Network code on load frequency
control & reserves
2) Scope of the CACM code
Forward markets
• To be tackled at a later stage.
Capacity Calculation
• Within the CACM code
Day Ahead Markets
• Within the CACM code
Intra-day Markets
• Within the CACM code
Balancing
• Subject of a separate code
The CACM code will be a single document
3) High-level overview of the CACM code
Introduction, applicability, entry into force, glossary etc
Capacity calculation
Day Ahead Capacity Allocation
Intra-Day Capacity Allocation
Firmness & cost recovery
The exact scope, structure & content will be defined by the Final Framework Guideline
4) Interactions with other areas
CACM code
Draft governance guideline
Other Network Codes
Ongoing implementation
projects
Vallidation of PCR algorithm
There are several ongoing issues relevant
to CACM.
They need to be managed, monitored,
considered and reflected.
Without delaying timings or overcomplicating the
code.
Lessons learned in the CACM code also need to
be communicated
Proposed process to develop the CACM code
1st Stakeholder Group Meeting
Mark Copley
ENTSO-E Market Advisor
Agenda
• The draft FG
• ENTSO-E internal working structure
• Sign-off processes
• Project plan
• Stakeholder involvement
• Formal consultation
The draft FG and code timescales
• The exact timescales for developing the CACM code will depend on
when we receive an invitation letter from the Commission.
• We understand ACER will submit a final FG for approval shortly.
• We tentatively expect a formal invitation and “the clock to start
ticking” in September 2011.
• That will then give us 12 months to develop and consult on the
CACM network code.
ENTSO-E Internal Working Structure
• The 12 month timescale will be challenging.
• So we have tried to put effective structures in place, start preparing
early and use the “scoping” phase to make progress.
• 3 drafting teams have been created and have started work.
• Hence we are beginning to identify and tackle important issues.
Drafting Teams
CACM network code
Capacity Calculation Team
Clotilde Levillain - RTE
Day Ahead Team
Oliver John - Amprion
Intra-Day team
Frank Vandenberghe -
Elia
ENTSO-E Secretariat
Drafting Team Composition
A convenorConsistent
membership from across TSOs
Legal supportA member of the
ENTSO-E Secretariat staff
Working structures & sign-off processes
• Approves policy positions• Approves versions for publication
ENTSO-E Assembly
• Develops policy positions• Advice & feedback
ENTSO-E Market Committee
• Advises on issues• Critiques outputs
ENTSO-E Market Integration Working Group
Exact timescales will be determined by when we receive the FG.
We have tried to make progress in anticipation of this.
We are likely to spend the remainder of 2011 developing drafts and
engaging to understand views.
Then to finesse documents and get internal approval during Q1
2012.
Before formal consultation in late spring.
Expected Timescales
Stakeholder engagement
ENTSO-E
Stakeholder Group
Workshops
Bilateral Discussions (as
required)Updates
Formal consultation
Formal consultation
• ENTSO-E will formally consult on the CACM network code.
• The code will be accompanied by a consultation document providing more
detail & explanation in a less formal manner.
• Two months will be provided for comments.
• ENTSO-E is developing an IT tool to help facilitate consultation.
Other forms of consultation
• Each code involves different issues, which need tackling in different ways.
• Hence each team will decide on the forms of consultation that are needed.
• This may include bilateral meetings, workshops (such as the one
tomorrow)with a wider or more technical audience.
• This group will be kept abreast of discussions and regular updates will
appear via the website,
• We are conscious of the need for openness, inclusivity and transparency.
• We welcome ideas on how to achieve this.
Challenges & issues to be tackled in developing the CACM
network code
1st Stakeholder Group Meeting
Mark Copley
ENTSO-E Market Advisor
Purpose of this presentation
• To briefly outline some challenges we have encountered to date.
• To provide an opportunity to discuss these (and other) issues – and to
suggest approaches and/or solutions.
• To raise other questions and challenges.
It should be noted that work is at a very early stage and things we present
are initial thoughts/ work in progress which are not approved positions.
Issue 1 – What is a cross border issue?
• A fairly fundamental question but not clearly defined in the draft FG.
• Is a consistent definition across all network codes required?
• The decision affects the extent to which codes and national legislation
overlap and impacts on the scope and complexity of the code.
• Vitally important but highly contentious!
Issue 2 – How should the code be written?
• Network codes need to be accessible and understandable to all market
participants (who they bind).
• What is the right trade-off between accessibility and detail? I.e. should the
code aim at setting principles or be very prescriptive?
• And how is this question influenced by the fact it is a European regulation?
Issue 3 – How can codes adapt when the market changes/
• The energy market is dynamic.
• Codes have to reflect what happens in practice.
• We have to avoid a scenario where a code constrains or prevents a beneficial
development.
• But there is no change management process and all changes (irrespective of
size) have to go via Comitology.
• What are the implications for resources, for the future and for the way the
code is initially written?
Issue 4 – How much can feasibly go in a code?
• The CACM code covers issues including the Common Grid Model, the SOBF,
the CMM and the price coupling algorithm. Is it feasible to put these inside a
code?
• The detail needs to be available in an accessible form to interested market
participants, but is the body of a European regulation the right place?
• What other structures could be considered?
Issue 5 – How do we manage interactions with other areas of work?
• PXs and TSOs both have important roles in the market coupling process and
have to work together.
• The EC governance guideline will define an appropriate division of roles and
responsibilities.
• But it remains under development. What are the right working assumptions
to allow code drafting?
• How do we interface with issues which will be in network codes in due
course but haven’t been written yet?