“R3 Dynamic Profile”: product description

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“R3 DYNAMIC PROFILE”
beleidsplatform VREG
24 juni 2013
Agenda
1.Challenges ahead & how to mitigate ?




Overview ELIA reserves
Role Balancing Responsible Party (BRP)
Support balancing by BRPs
Facilitate diversification & steps taken
2.“R3 Dynamic Profile”




Stakeholder consultation via Expert Working Group
Development of R3 Dynamic Profile product
Product features
Timing of tendering
8/04/2015
2
Many challenges ahead…how to mitigate ?
Installed capacity wind and PV Belgium [MW]
5000
4500
4000
3500
3000
2500
Wind [MW] Total
2000
Solar [MW] Total
1500
1000
500
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
The significant increase in
installed
solar
and
wind
generation capacity will have
an impact on the system
management as well as on
the size and nature of the
residual system imbalances,
used
as
input
for
the
dimensioning of the reserves,
due to:
- forecast errors
- ramping
3
5
Overview of ELIA contracted reserves
2013
description
Primary Control
(R1) or
91 MW
Frequency
Containment
Contain the system frequency after the
occurrence of an incident or imbalance
within the Synchronous Area.
Reserves (FCR)
Secondary Control
140 MW
(R2) or
automatically
Frequency
Restoration Reserves
Automatically activated reserves with
an activation time less than 15
minutes which are used to restore the
ACE of the control block to zero in case
of an imbalance in the block.
(FRRa)
Tertiairy Control (R3)
or
manually Frequency
Restoration Reserves
(FRRm)
8/04/2015
-
661 MW :
400MW R3
production
261MW
interruptible
load
Manually activated reserves with an
activation time less than 15 minutes
which are used to desaturate the FRRa
in case of large imbalances.
Role of Balancing Responsible Party (BRP)
•
•
•
•
•
•
Balancing responsible parties (BRPs) are responsible for balancing their
perimeter on a 15-minute time interval in the Belgian system.
BRPs have to nominate a balanced perimeter in day-ahead and have to
perform intraday adjustments according to more accurate intraday
forecasts and actual measurements of production and off-take, as the
uncertainty on the final balancing position of the perimeter decreases
towards real-time.
Any residual system imbalance is in last instance resolved by Elia by
deploying the reserves at its disposition.
As a result, any assessment of the required reserve volumes crucially
depends on the behaviour of BRPs
Once all metering is known, ELIA calculates imbalances per Qh per BRP
Imbalances are invoiced at imbalance tariffs:
MDP= Marginal Decremental
Price = Lowest downwards
activation price
MIP = Marginal Incremental
Price = Highest Upwards
activation price
55
Mitigation 1: support balancing by BRPs
Residual balancing needs, to be solved in
real-time by TSO, should be minimised.
TSO responsibility
•
•
•
Design appropriate incentives
(imbalance)
Develop liquid short-term
markets in cooperation with
PXs (NWE ID project)
Provide publicly available
forecasting and balancing data
BRP responsibilities
•
•
•
Invest in & use forecasting
Be pro-active on markets
(trade their imbalance, offer
flexibility in DA & ID)
Develop flexibility in their
generation portfolios
6
5
Mitigation 1: support balancing by BRPs
8/04/2015
Mitigation 1: support balancing by BRPs
8/04/2015
Mitigation 2: facilitate diversification
Purpose: opening the Balancing Energy & Reserves Market to a new kind of flexibility.
Today :
Majority of Balancing Energy & Reserves provided exclusively:
- By injection ARPs (who have signed a CIPU contract)
- On Centralized Production Units
- Exceptions: Interruptible Load and R1 Load from ELIA-Grid Users
Goal:
Extend participation of Balancing Energy & Reserves to new resources (load and
decentralized production units) and new players.
As is
Contractual
framework
•
CIPU contract
Flexibility
resources used
for Ancillary
Services
•
Centralized Production
Units covered by a CIPU
contract
Mainly TSO grid
connected
Flexibility
Supplier
•
•
•
BRP producer
Exception: GU for ICH
To Be
•
TBD
•
•
Centralized Production Units
Decentralized Production
Units & Load
TSO & DSO grid
•
•
•
Any BRP with physical
flexibility
BSP not BRP
9
Steps taken towards diversification…
What
Innovation
R1:
Production

load
“R1 Load”
R2:
Diversification
survey
R3:
ICH 2013
10
Survey launched in October 2012 on Elia’s website in
order to assess potential for R2 flexibility in Belgium,
esp. from CHPs
- CHP participating in 2013 to R2
Grid Users

Aggregators
- Possibility to offer from a pool of load access-points
connected to the Elia grid
- 15MW provided by BSP from a pool of 5 access points
TSO-connected
load distributed
load
March 4th 2013
- Task Force organized with 3 GUs in 2011/2012
- 30MW R1 UP provided by industrial load connected
to Elia grid in 2013
Centralized

Decentralized
production
R3 (R&D)
Pilot Project
R3 from
distributed
load
Description
- 10 MW of interruptible load on the distribution grid
- Concrete case study that allows to:
-test the technical performance of interruptible load in
distribution grid
-gain experience on control modalities and contractual
prerequisites
- Based on above pilot project, ELIA developed for 2014
a new product “R3 Dynamic Profile” to contract
flexibility, principally situated at distribution grids, to
complement its existing R3 portfolio.
Continuous stakeholder consultation
 Against this fast-changing context, ELIA established the Balancing Taskforce
(as ad hoc group under Users’ Group) as the platform via which Elia consults
the market when proposing evolutions to balancing and ancillary service
mechanisms.
 During such Taskforce of Jan 11th 2013, dedicated to the contractual models for
diversification, it became clear that there are quite some complex issues to be
tackled in this respect. Those issues are emphasized for resources located in
distribution grid as Elia does not own any metering in those grids. It’s for this
specific purpose that an “Expert Working Group” (as subgroup of TF Balancing)
has been created, consisting of BSPs, BRPs, DSOs, FORBEG and ELIA.

Main questions to be discussed within the working group:
- How to manage the impact on the BRP of the activations by a BSP non-BRP:
- How the manage the control and remuneration of ancillary services provided
from resources that are not directly metered by Elia.
- Balancing services provided by resources located on distribution grid, should not
cause congestion problems on distribution grids  importance of
establishing a prequalification process with DSOs to assess and qualify eligible
access points.
8/04/2015
11
The development of R3 Dynamic Profile
 Conclusions of this working group will directly be reported to the Task Force
Balancing. Elia will finalize its proposals taking into account the input of the
Taskforce and will then require appropriate approval from CREG.
 Experts has met 4 times now with focus on establishing the R3 Dynamic Profile
product for 2014 using flexibility residing at distribution access points (short
term) and providing recommendations for the long term.
 In order to achieve this first step, Elia introduced on April 17th, according to
article 233 of the Federal Grid Code, a proposal to the CREG for the applicable
reserve volumes for 2014 with a specific part related to the procurement of
reserves through a ”R3 Dynamic Profile” product.
 Having no experience with the performance of such a product, Elia decided to
limit the volume of ”R3 Dynamic Profile” to be procured at 50 MW maximum
for 2014.
 After technical qualification performed by DSOs and Elia, Elia will apply a
market based approach to contract between 0 to 50 MW with the “R3 Dynamic
Profile” product.
8/04/2015
12
“R3
Dynamic Profile”: product description
1. No correction of ARP-perimeter
• Amendment of ARP-contract, introducing notion of “Dynamic Profile Provider”, incl. information to ARP
when activating
2. Capacity only product
(no activation price nor payment to BSP)
3. Needs
•
To open R3 to Distributed Energy Resources (load and prod with AMR Meter) through BSP
participation; resources at TSO level could also be eligible to be part of the BSP pool for this product;
4. Volume and selection
•
Limited volume in comparison with R3 production due to the model characteristics (i.e. end of the merit
order, tariffs impact) and to gain experience. Start with max 50 MW
5. Number and duration of activations
 Around 40 activations; Maximum duration of 2 hours;
6. Availability control
 Requirement of 100% availability (cf R3 Production); Controlled per quarter-hour;
 Based on real metering (15’ metering) provided by DSO (and not on nominations);
7. Activation control




8/04/2015
1 activation = number of quarters between start and stop of Elia-bid
Based on real 15’ metering and not on 10” T.M.
Reference curve: based on the last 15’ metering
Settlement in balancing prices : as R3 Dynamic Profile is only activated in merit order after R3
Production is activated, the MIP will reflect the most expensive R3 free Bid price
13
Timing Tendering
Communication DSO
prequalification
decision
20/9/2013
Communication
selection BSP
Design Freeze
17/4/2013
11/10/2013
Contract notice R3 DP
Tendering R3 DP first
Results
7/6/2013 (might be earlier)
R3 DP ready to start
1/12/2013
23/9/2013
Official start R3 DP
R3 DP tendering starts
1/1/2014
1/7/2013
2013
apr
mei
jun
jul
aug
sep
okt
nov
•
•
Today
Drafting of contracts
17/4/2013
Finalization contract
17/5/2013
Tendering procedure
Prequalification by DSO
•
30/5/2013
•
30/6/2013
1/7/2013
7/6/2013
Selection of BSP
Signing of contracts + implementation
dec
jan
2014
2014
Starts at contract notice;
BSP must submit max number of EAN’s to DSO with
required information before Aug 20th at the latest;
From end of May to Aug 20th, BSP can/must ask for
“preliminary advise” from DSO for certain EAN;
DSO communicates the officially validated EAN by Sep
20th
22/9/2013
Submission + preliminary advise
20/9/2013
23/9/2013
11/10/2013
28/10/2013
This is minimum time Elia & BSP need
for adapting IT-tools,
Installation of communication lines, …
30/11/2013
14
Testing period
8/04/2015
1/12/2013
31/12/2013
14
BACKUP SLIDES : R3 Dynamic Profile
Product Description
Elia ENMAN
16/05/2013
“R3 Dynamic Profile”: product description
1. No correction of BRPs perimeter
Example without activation
Example with activation of 40 MW to GU & no
correction
BRP 2
BRP 2
Initial Position: +100 injection – 100 load =
0MW
New Position: +100 injection- 60 load - 0
correction = +40 MW
GU (Load)
Offtake =
100MW
supplier
Prod
Buys
Injection
=100MW
Sells
GU (Load)
Offtake =
100MW
60MW
supplier
Prod
Buys
Injection
=100MW
Sells
Activation settlement: 40MW for BSP GU
Imbalance settlement: + 40 MW @ MIP
•
•
•
•
•
Only upward activation in “all or nothing modus” (complete contracted volume is activated);
BRPs position is raised with the effectively activated energy
 BRP (and through him Supplier) is remunerated by the tariffs;
 BRP is not penalized for the discrepancy;
A specific control of the activation is necessary as there is no incentivizing correction
In principle the final position of the BRP is favourable towards the position of the zone
The effect will be moderate due to characteristics of the product:
 Limited activation duration
 Limited # of activations => after R3 production in merit order
8/04/2015
16
“R3 Dynamic Profile”: product description
2. Capacity Only product
BRP 1
BRP 1
Initial Position:
-100MW
Zone is short:
-100 MW
Elia Activation Request
@ GU: -100 MW (load
convention)
NO correction
BRP 2
BRP 2
Initial Position:
0MW
GU
100MW
New Position:
+100MW
Prod
100MW
GU
100MW
0MW
Result:
•
•
•
BRP 1
-100
invoiced
@ MIP
BRP 2
+100
paid
@ MIP
GU
+100
Paid
@ Bid price
Total
+100
Prod
100MW
Position:
-100MW
Imbalance settlement: -100 MW @MIP
Zone is
balanced
BRP 2
New Position:
+100MW
Activation settlement fur GU
Imbalance settlement: +100 MW for BRP
Bid price
As there is no correction of BRP’s perimeter, activation costs are not covered by tariffs
Activation costs have to be = 0 €/activation & entire remuneration provided on capacity fee
 Number and duration of activations have to be contractually fixed
Such product cannot be price maker
 Volumes to be limited, at least initially
8/04/2015
17
“R3 Dynamic Profile”: product description
3. Needs
•
•
•
•
To open R3 to Distributed Energy Resources (load and prod with AMR Meter) through BSP
participation;
Resources at TSO level could also be eligible to be part of the BSP pool for this product;
To have nearly the same “quality” as R3 prod and at competitive price;
To be able to launch a Tender for this product in 2013, in parallel with ICH;
4. Volume and selection
•
Limited volume in comparison with R3 prod due to the model characteristics (i.e. end of the merit
order, tariffs impact) and to gain experience.
 Start with max 50 MW
 Minimum threshold for participation: 5MW P/OP/BASE offer (for other selection rules, see annexe)
 Candidate BSPs must provide their margin for P/OP/BASE per EAN of their pool
5. Number and duration of activations
•
•
•
•
Both contractually predefined and will influence the reservation price
Number as close possible as number of R3 prod activations but can be less, as activated at the end of
merit order
 Around 40 activations
Trade off between conservative need and price
 12h between 2 consecutive activations
Duration of activation must be limited to avoid a change of NRV sign during activation
On the other hand a duration of activation must fulfil to current R3 prod characteristics and needs of
dispatcher
 Maximum duration of 2 hours;
8/04/2015
18
“R3 Dynamic Profile”: product description
6. Availability control






Requirement of 100% availability;
Based on real metering (15’ metering) and not on nominations;
Controlled per quarter-hour;
No control during the activation
Penalty per quarter-hour based on Capacity Remuneration with penalty factor
With a yearly cap = yearly reservation remuneration
Penalty for 1qh of missing power [€/qh] = 1,3 * Missing power
Remuneration [€/MW/h] * 1/4
Missing power [MW] = R3 [MW] – Pmadeq [MW]*
R3= Contracted MW
that BSP must have
available at any time
Pmad = MW that
BSP really has
available
[MW]
* Capacity
Pmeasured = Meq
Pmad
Agg R3
Pmad
Margin = Power that cannot be curtailed (vital elements of a site)
4/8/2015
19
“R3 Dynamic Profile”: product description
Reminder: No remuneration to BSP
for the activation due to the model
characteristics
Ref = Load equivalent off-take of last 15’min
P(k) = Load equivalent off-take during activation
R3 (k) = contracted volume (fixed amount; which might depend on PEAK/L-OFFPEAK-period)
Qh1 = quarter when the activation starts
4/8/2015
20
“R3 Dynamic Profile”: product description
7. Activation control
 Limitation of 15 min metering data points
Elia Request for
activation
Ref
P(k) = Really
activated energy
Last Qh for activation
serves as reference Qh
(Ref)
stop
start
R3
Qh 0
Qh 1
Qh 2
Qh 3
Energy that should
be activated (incl.
billable Margin)
No availability control during activation
4/8/2015
21
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