EuroPEXAssociation of European
Power Exchanges
EuroPEXAssociation of European
Power Exchanges
Development and Implementation of a Coordinated Development and Implementation of a Coordinated Model for Regional and Inter-Regional Congestion Model for Regional and Inter-Regional Congestion
ManagementManagement
María Luisa Huidobro
Member of the EuroPEX Steering Committee
EuroPEXAssociation of European
Power Exchanges
EuroPEXAssociation of European
Power Exchanges
BackgroundBackground to joint work on: to joint work on:
”Development and Implementation of a Coordinated Model for ”Development and Implementation of a Coordinated Model for Regional and Inter-Regional Congestion Management”Regional and Inter-Regional Congestion Management”
EuroPEXAssociation of European
Power Exchanges
EuroPEXAssociation of European
Power Exchanges
Challenge from Florence Forum
‘The Forum requested ETSO and EuroPEX to write a common discussion paper before March 2008 to address the implementation of regional and interregional capacity allocation methods, in particular the governance of the bodies running the system and to address the technical, legal and commercial challenges implied by the Consentec target model. Other stakeholders were invited to contribute to the discussion and ETSO and EuroPEX were invited to take particular account of the work so far done by EFET.’
◆ Joint Action on ETSO and EuroPEX from the Florence Forum
EuroPEXAssociation of European
Power Exchanges
EuroPEXAssociation of European
Power Exchanges
Terms of Reference
◆ A working group from ETSO & EuroPEX established in November 07
◆ Terms of Reference identified 5 broad areas of work1. Flow based capacity calculation methods
2. Long Term & Secondary Market Timeframe
3. Day Ahead Timeframe
4. Intraday Timeframe
5. Legal and Regulatory Issues
◆ Original schedule was to deliver the result in April 2008
◆ Timescale not realistic – Therefore a two stage approach adopted with Interim in April and Final in November 2008
EuroPEXAssociation of European
Power Exchanges
EuroPEXAssociation of European
Power Exchanges
Glidepath Approach
EuroPEXAssociation of European
Power Exchanges
EuroPEXAssociation of European
Power Exchanges
Market Perspectives – Criteria for success
EuroPEXAssociation of European
Power Exchanges
EuroPEXAssociation of European
Power Exchanges
Implementation approaches
LOW
MED to LOW
HIGH to MED
HIGH
Developments initiated by TSOs and PXs at regional level with the appropriate cooperation and support from regulators and market parties;
Developments facilitated by TSOs and PXs at regional and inter-regional level, but with a clear mandate provided regulatory authorities and the EC.
Formal and coordinated (European) approach via the establishment of market codes and rules (potentially binding) such as envisaged in the EC’s 3rd package proposals;
Imposed by new EU legislation
’BOTTOM UP
’TOPDOWN’
Need for centrally driven EU-initiative
Implementation Approaches High-level strategy
EuroPEXAssociation of European
Power Exchanges
EuroPEXAssociation of European
Power Exchanges
Congestion Management Model Options
EuroPEXAssociation of European
Power Exchanges
EuroPEXAssociation of European
Power Exchanges
DOME COUPLING
EuroPEXAssociation of European
Power Exchanges
EuroPEXAssociation of European
Power Exchanges
Industry consultation done in June Individual responses (10+) and summary are
published on EuroPEX & ETSO homepages
Survey within EuroPEX & TSO about regional/inter-regional development plans & prospects
Roadmap alternatives Describe paths and issues from
bilateral to regional, to inter-regional and European scale for:• Day Ahead• Intra Day• Forwards (Long Term)
Deliver Report and presentation at 15th Florence Forum late Nov. ‘08
Key work towards Final Report
EuroPEXAssociation of European
Power Exchanges
EuroPEXAssociation of European
Power Exchanges
Challenge for next phase of project
◆ Elaborate on the choices for the way forward (Day Ahead, Forwards, Intraday)What the different approaches can deliver: speed of
implementation and geographic extent, European harmonisation, quality of solution, etc
What they require: implementation organisation and direction, enduring governance and regulation, etc
Feasible glidepath
EuroPEXAssociation of European
Power Exchanges
EuroPEXAssociation of European
Power Exchanges
Implementation Issues
Relatively few parties involved
Common interests, clear regional benefits
Bottom-up / evolutionary processes
SUCCESSFUL REGIONAL PROGRESS TO DATE:
Many more stakeholders involved
More divergent interests, wider benefit distribution
A consensual approach more difficult
CHALLENGES AHEAD FOR INTER-REGIONAL DEVELOPMENTS:
Increasing need for more ‘Top Down’ initiatives?
EuroPEXAssociation of European
Power Exchanges
EuroPEXAssociation of European
Power Exchanges
Day Ahead Market (DAM)
1. Unified Pan-European solution2. Horizontal Integration3. Dome coupling
Key features to assess:• Efficiency• Complexity• Implementation challenges• Degrees of centralisation• Governance issues
OPTIONS CONSIDERED:
METHODS• Explicit auctions of physical
transmission rights (PTRs)
• Implicit auctions
CAPACITY ASSESSMENT• Flow based ATC• Bilateral ATC
ALLOCATION :
EuroPEXAssociation of European
Power Exchanges
EuroPEXAssociation of European
Power Exchanges
Forward Cross Border Market
Transmission Rights (TR):
• PTR with UIoLI• PTR with UIoSI• Financial Transmission Right (FTR)
Energy derivatives:
• Contract for Difference (CfD)
OPTIONS CONSIDERED:
More implicit auctions in DAM
PTRs with UIoSI
PTRs may evolve towards FTRs
Market players want liquidityin a secondary market
Development of CfD-markets areindependent of TR-solution
DEVELOPMENT PATHS:
EuroPEXAssociation of European
Power Exchanges
EuroPEXAssociation of European
Power Exchanges
Intraday Market
Explicit capacity auctions
Implicit auctions
First-come-first-served access to capacity obligations
Continuous trading
OPTIONS CONSIDERED:
Ensure liquidity and market depth
Ensure competition
DEVELOPMENT PATH:
Regional solutions appear to be more important than inter-regional solutions at current stage