Regulators’ update on Congestion Management and Balancing CRE - OFGEM SG FUI, Paris, 4 th November
Balancing update of 16 th of October meeting (1/3) • Review of the 6 first months of BALIT. • • Positive feedback from both sides on the interim solution. Some transparency requirements are still not fully satisfactory: • • • A detailed and clearer methodology for pricing bids and offers (including a concrete example) than TSOs’ proposal paper published in 2007. A clear and detailed methodology for calculating the fee. “The value of the fee was agreed 7 -8 years ago between NG and RTE. However, there is no clear methodology explaining how this price was calculated. ” A clear and detailed charging methodology and financial treatment methodology for the fee. SG FUI, Paris, 4 th November 2
Balancing update of 16 th of October meeting (2/3) • Due to delays in IT development, a new target date (from Nov. 2009 to Nov. 2010) for implementing the enduring solution. • On NGET’s request, a feasibility study for the introduction of a 2 h product will be conducted by TSOs, with particular focus on: • The compatibility with the arrangements on the other French and UK borders. • The additional requirements in terms of IT developments and the consequences in terms of implementation target. • The conclusions of the feasibility study are expected by February 2010. SG FUI, Paris, 4 th November 3
Balancing update of 16 th of October meeting (3/3) • Fee for the use of interconnection assets Revised ERGEG Guidelines of Good Practice for electricity Balancing Markets Integration published in September 2009 states : « When setting up cross-border exchanges of balancing energy after interconnection gate closure, any charge on access to interconnection capacity for balancing energy shall be prohibited » In order to be compliant with ERGEG guidelines on balancing markets integration, CRE will support taking the fee out of BALIT SG FUI, Paris, 4 th November 4
Congestion Management : New IFA rules (1/2) • The new IFA rules entered into force the 1 st of October 2009 as well as a new platform CMS for the allocation and the nomination. • The objectives followed with the implementation of the new rules were the compliance with the European legislation and potential harmonisation with European borders. • Main improvements of the new rules: • Separation of LT, DA and intraday nominations • Application of UIOSI for LT nominations and UIOLI for daily nominations allowing netting to be applied • Switch to pay-as-bid auctions • Introduction of an intraday allocation mechanism SG FUI, Paris, 4 th November 5
Congestion Management : New IFA rules (2/2) • In its formal approval, CRE highlighted that the 3 following topics are still pending and will have to be improved in the future: • The lack of firmness and more exactly the impossibility for NGIL to buy energy to ensure firmness of nominated capacities. This raises two problems: • Non application of ERGEG position • Not compliant with article 6. 2 of regulation 1228/2003: “Transaction curtailment procedures shall only be used in emergency situations where the transmission system operator must act in an expeditious manner and redispatching or countertrading is not possible » . • The curtailment procedure, with a priority given to long-term nominations, could be considered as an entry barrier for small participants and a potential discrimination • Article 6. 2 of regulation 1228/2003 states that «Any such procedure shall be applied in a non-discriminatory manner”. • The reimbursement of capacities in case of curtailment is not a compensation • Article 6. 2 of regulation 1228/2003 states that « Except in case of Force Majeure, markets participant who have been allocated capacity shall be compensated for any curtailment » . SG FUI, Paris, 4 th November 6
Congestion Management : Next steps • IFA rules: the firmness issue to be adressed • Harmonisation of the capacity allocation at regional level towards an integration of MOYLE? • Towards the PCG target models: market coupling, FTRs, intraday continuous trading SG FUI, Paris, 4 th November 7
Thank you for your attention! www. energy-regulators. eu SG FUI, Paris, 4 th November 8
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