CWE Flow-Based Market Coupling: on the Eve of Implementation Pieter Schavemaker and Philippe Noury European Market Coupling & Integration: Day-ahead and Intraday Energy Markets 24-04-2012
Pieter Schavemaker Pieter H. Schavemaker was born in Velsen, the Netherlands on November 30, 1970. He obtained his M.Sc. in Electrical Engineering from the Delft University of Technology in 1994 and he obtained his Ph.D. in Electrical Engineering from the Delft University of Technology in 2002. He worked for ABB, in the field of substation control systems and as an assistant professor in the Electrical Power Systems group of the Delft University of Technology. The past five years Pieter worked for Tennet TSO B.V., the Dutch Transmission System Operator, where he was actively involved in international capacity calculation and allocation projects amongst others as convenor of the CWE inter-tso working group that is responsible for the design of the CWE coordinated ATC and CWE flow-based methodologies, as convenor of the flow-based Validation task force in the CWE joint project of the TSOs and PXs, and as convenor of the multi-stakeholder Working Group Capacity Calculation in the Market Integration Design Project. Currently, Pieter works as senior manager Energy for Eurogroup Consulting. He is author of the book Electrical Power System Essentials, published by Wiley. 2
Philippe Noury Philippe Noury was born in Poitiers, France, on the 10th of December 1979. He obtained his Diplôme d Ingénieur (French equivalent of a Master of Engineering) at Ecole Centrale de Lyon end of 2002. Philippe Joined RTE in the beginning of 2003 as a Shift Engineer in the South-East regional Control Center in Marseille. After 3 years in the control room, Philippe joined the South-East commercial team of RTE, where he lead a team in charge of metering data analysis, customer invoicing and electricity quality improvement. Since the beginning of 2010, Philippe is project manager within the European Market Integration Department in RTE s headquarters, located at La Défense. Philippe s current main activities are linked to the implementation of market coupling, and especially within the CWE initiative to lead the Flow Based Working Group, a TSO group of experts in charge of designing and implementing the Flow based methodology. 3
Contents CWE FB: status update, where are we now? CWE FB: a short summary CWE FB: FB in CWE and ATCs outside; how? CWE FB: FB for Day Ahead; what about ID? 4
Contents CWE FB: status update, where are we now? CWE FB: a short summary CWE FB: FB in CWE and ATCs outside; how? CWE FB: FB for Day Ahead; what about ID? 5
CWE (Central Western Europe)
CWE (Central Western Europe) where are we now? 2007 2008 2009 2010 2011 2012 2013 June 2007, MoU signed targeting FB MC for CWE region June 2008, Decision to start with ATC MC and further study of FB MC Nov 9, 2010 CWE ATC MC go live ITVC CWE Nordic Sept 2012: Start of the FB external parallel run End 2012: Go-live of the NWE MC Mid 2013: Go-live of the CWE FB MC! 2008 FBMC simulations based on nonoperational FB data issues detected were that seemed to be linked to the data quality
CWE (Central Western Europe) where are we now? Public consultation Internal parallel run 2012 External parallel run September Interaction with market participants: CWE FB User Group Public consultation External //run Operational ATCMC; FBMC, FBIMC simulated based on operational ATC order books and operational FB parameters Market participants to get acquainted to FB parameters and market impact To allow FB to establish a reference on its own
Contents CWE FB: status update, where are we now? CWE FB: a short summary CWE FB: FB in CWE and ATCs outside; how? CWE FB: FB for Day Ahead; what about ID? 9
What is congestion?
What is congestion? commercial: more capacity requested by the market than is available physical: overloaded transmission lines leading to outages
congestion management in the broadest sense determination of available transmission capacity capacity allocation congestion forecast if needed: congestion relief Bids / reservations Generation schedules Timeline
Assessment of the security of supply domain determination of available transmission capacity capacity allocation NTC/ATC or FB constraints respecting the Security of Supply domain Bids / reservations 13
How to approximate the security of supply domain - example with 3 countries - Country B Country A Monitored lines Outage scenario Margin left (MW) Influence of exchange on lines (PTDF) A B A C B C Outage1 Line 1 Line 2 No outage Outage 1 20% 150 10% 120 +100 MW Country C Line 3 line 1-100 MW 14
The security of supply domain Monitored Lines Line 1 Line 2 Line 3! Numbers are for illustration only Outage scenario No outage Margin left (MW) Influence of exchange on lines (PTDF) A B A C B C 150 1% 10% 3% Outage 1 120 5% 20% 1% Outage 2 100 6% 25% 1% No outage 150-2% 0 5% Outage 3 100-12% 0 10% No outage Outage 4 Constraints Security of supply domain Exchange(A>C) 400 300 200 100-100 - 200-300 - 400 0 Exchange(A>B) - 400-300 - 200-100 0 100 200 300 400 April 20, 2012 15
Assessment of the security domain Determination of available transmission capacity capacity allocation step 1 step 2 output Bids / reservations Exchange(A>C) 400 300 200 100 0-400 - 300-200 - 100 0 100 200 300 400-100 - 200-300 Security of Supply domain Exchange(A>B) Capacity split Between borders NTC/ATC constraints FB constraints - 400 16
ATC & FB constraints theory Security domain is obtained by taking into account all the relevant physical constraints of the grid Given the security domain, NTC/ATC constraints and the corresponding NTC/ATC domain are a choice made by the TSO Exchange(A>C) 400 300 200 100-100 - 200-300 0 Exchange(A>B) - 400-300 - 200-100 0 100 200 300 400 The FB domain is the security domain itself - 400 constraints polyhedron NTC/ATC security domain Flow-based 17
ATC and FB domain Determination of available transmission capacity capacity allocation step 1 step 2 output Exchange(A>C) 400 300 200 100 Security of Supply domain Exchange(A>B) 0-400 - 300-200 - 100 0 100 200 300 400-100 Capacity split Between borders ATC FB Bids / reservations - 200-300 - 400 18
ATC vs FB constraints theory FB offers more trading opportunities with the same level of security of supply Exchange(A>C) 400 300 200 In FB capacity split is not a choice of the TSO, but is market driven (at the time of allocation) 100-100 - 200 0 Exchange(A>B) - 400-300 - 200-100 0 100 200 300 400-300 - 400 constraints polyhedron NTC/ATC security domain Flow-based 19
FB experimental results CWE reported in Oct 2011 on their experimental findings with FBMC, based on 9 weeks of data ( CWE Enhanced Flow-Based MC feasibility report ) FB offers more trading opportunities with the same level of SoS as the current coordinated ATC As such, FB market coupling results in higher welfare and better price convergence compared to the current ATC MC ones Results included in the report are based on basic assumptions which have to be fine-tuned
FB domain: experimental results FB offers more trading opportunities with the same level of SoS as the current coordinated ATC
social welfare increase relative to ATC (in Million Euro for 9 weeks) Full price convergence (9 weeks data) FB market impact: experimental results FB market coupling results in higher welfare and better price convergence compared to the current ATC MC ones 12 100% 10 80% 8 6 4 60% 40% 2 20% 0 Intuit FB FB Infinite 0% ATC Intuit FB FB Infinite
Contents CWE FB: status update, where are we now? CWE FB: a short summary CWE FB: FB in CWE and ATCs outside; how? CWE FB: FB for Day Ahead; what about ID? 23
FB in CWE and ATCs outside; how? Hybrid coupling, two variants 1. Standard: realized ATC transactions are not taken into account in the margin of the CBs TSOs need to reserve margins (worst-case) on their CBs for the possible usage by the ATC area Just like today No competition for the use of the scarce capacity in the allocation mechanism due to the ex-ante split Not optimal: scarce capacity not always fully used FB area Total margin on the CB Price coupling ATC ATC area Margin reserved for the ATC Margin left for the FB 24
FB in CWE and ATCs outside; how? Hybrid coupling, two variants 1. Standard 2. Advanced: realized ATC transactions are taken into account in the margin of the CBs TSOs do not need to reserve margins on their CBs use of margin is market driven Competition for the use of the scarce capacity in the allocation mechanism Optimal use of scarce capacity Maximum social welfare ATC area is subject to FB price properties FB area Total margin on the CB Price coupling ATC ATC area Margin available for the FB and ATC trades 25
Contents CWE FB: status update, where are we now? CWE FB: a short summary CWE FB: FB in CWE and ATCs outside; how? CWE FB: FB for Day Ahead; what about ID? 26
FB for Day-Ahead; what about ID? After the implementation of FB DA, the logical next step will be the development of FB ID FB domain before the DA FBMC Exchange(A>C) 400 300 200 100 Till then, the same basic principle like today: capacity left after the DA stage ID stage - 100-200 - 300 0 Exchange(A>B) - 400-300 - 200-100 0 100 200 300 400-400 27
FB for Day-Ahead; what about ID? After the implementation of FB DA, the logical next step will be the development of FB ID FB domain after the DA FBMC Exchange(A>C) 400 300 200 100 Till then, the same basic principle like today: capacity left after the DA stage ID stage - 100-200 - 300 0 Exchange(A>B) - 400-300 - 200-100 0 100 200 300 400-400 28
FB for Day-Ahead; what about ID? After the implementation of FB DA, the logical next step will be the development of FB ID ID ATC taken from the FB domain Exchange(A>C) 400 300 200 100 Till then, the same basic principle like today: capacity left after the DA stage ID stage - 100-200 - 300 0 Exchange(A>B) - 400-300 - 200-100 0 100 200 300 400-400 29
Questions
Thank you for your attention! In case of questions, do not hesitate to contact us: Philippe Noury philippe.noury@rte-france.com Pieter Schavemaker p.schavemaker@eurogroupconsulting.nl 31
Back-up slides
FB domain how to get a grip? (1/2) From the constraints itself Figures obtained from the search space as defined by the constraints: Maximum bilateral exchanges ( ) feasible, given the FB domain The vertices of the FB domain (all the corner points at the boundary of the domain) Maximum net positions feasible, given the FB domain Exchange(A>C) 400 300 200 100-100 - 200-300 0 Exchange(A>B) - 300-200 - 100 0 100 200 300 400-400 constraints polyhedron security domain Flow-based 33
FB domain how to get a grip? (2/2) NTC/ATC and FB can/will show different values for the maximum bilateral exchanges that are feasible FB Maximum bilateral exchanges feasible in the FB domain are non-simultaneous values NTC/ATC NTCs/ATCs are by definition simultaneous values that limit the bilateral exchanges Exchange(A>C) 400 300 200 100-100 - 200-300 - 400 0 Exchange(A>B) - 300-200 - 100 0 100 200 300 400 constraints polyhedron NTC/ATC security domain Flow-based 34
External parallel run Utility Tool snapshots Interactive part Values entered by the user are checked on the FB constraints of all 24 hours (non-simultaneous) indicators for the hour selected
External parallel run Utility Tool snapshots CWE map showing the (non-simultaneous) indicators for the selected hour
External parallel run Utility Tool snapshots 24 hour overview graphs of the (non-simultaneous) indicators
External parallel run Utility Tool snapshots 24 hour overview graphs of the (non-simultaneous) indicators