SG meeting FR/UK/IR region 14 June 2007 Congestion management

SG meeting FR/UK/IR region14 June 2007

Congestion management

Marcel Cailliau (Electrabel)

User comments supported by EFET and Eurelectric on

IFA congestion management proposals from NG and RTE (based on work stream conference 17.04.2007)

Content

• Purpose of this presentation: summary of 17 April workstream meeting– EFET key principles for capacity rights

• UIoSI and intraday for IFA– TSO proposal– View of users

• Firmness of capacity rights IFA– Firmness– ITL

Repartition allocated transmission rights

Current usual practice

100%

66%

33%

1 Y allocation

M + Q allocations

365*24h daily Allocations remaining 33% + seasonal variation

22 % yearly

44% multi year

“Wished” realistic practice

M + Q allocations per year for about 22 %66%

100%

44%

88%

Multi-year and yearly auctions held for proportional shares at different times in year; e.g. 4 auctions of 11% multi-year capacity and 4 auctions of 5.5 % yearly capacity,multi-year products and also Y+1, Y+2, Y+3, .. to be offered separately.

365*24h daily allocations per year 12% + seasonal variations

Seasonal expected commercially available capacity

Source : EFET position paper : Key principles Transmission Rights (June 2006)

Indi

cativ

e %

!

EFET vision linkage LT/secondary market/short term transmission rights

Monthly/Quarterly Intraday market20082010 2009 AnnualC

apac

ity

H-15

Capacity used OTC

Time

Periodic capacity salesharmonised withenergy market

Use or sell (give up) capacity to

PX

Options tradable in secondary market

Obligationstradable in

Intra-day market

H+30

Intradaymarket starts

Daily

“extra”

Use it

Capacity used

implicitly

H

Multi-Annual

Sell it

(get paid for it)

H

D-1 implicit allocation

Capacity allocation at D-1: Market coupling linked to explicit auctions

Source : EFET position paper : Key principles Transmission Rights (June 2006)

Context – CM Guidelines• Congestion Management Guidelines came into force in December

2006

• These Guidelines are annexed to 2003/1228 Regulation and have a compulsory status

• IFA is not fully compliant with these Guidelines. Evolutions are required on:– Reserve Price - done– UIOLI/UIOSI– Intraday allocation mechanism– Firmness of capacity

• The current IFA process is as follows:

D-1 DJD-n

CAR NoticeDeclaration

LT + D-1Nomination

D-1Auction

Periodical(LT) Auction

LT + D-1ICEs

IntraDayRe-nominations

CurrentUIOLI

SecondaryMarket

Current Process

Source : IFA user workshop 28 03 2007 RTE-NG, London

IntradayRedeclarations

Hourly blocs

ICE

D-1 DD-n

Periodical (LT)Auction

24h blocs

MCN

06:45

LT FirmDeclarationHourly blocs

07:45

D-1Auction

24h blocsPAY as CLEARED

Min(ICE)

Max(MCN)

UIOSI

D-1NominationHourly blocs

13:00

D-1 ICEs

Secondary Trading(Reassignment) 05:15

LT ICEs

06:15

Proposed Interim Process


ICE

D-1 DD-n


24h blocs

MCN

06:45


07:45

Min(ICE)

Max(MCN)


LT ICEs

06:15

Proposed Interim Process : comment


Whenever at 1 hour all LT

capacity is used, there isn’t any UIoSI 24h bloc

UIOSI

?

IntradayRedeclarations

Hourly blocs

ICE

D-1 DD-n


24h blocs

MCN

06:45


D-1Auction of24h blocs

PAY AS CLEARED

Min(ICE)

Max(MCN)


+ UIoLI (if intraday pro rata or ELBAS)

OR+ UIoSI

(if intraday auction)13:00

D-1 ICEsNETTING LT!


LT ICEs

06:15

Requested Interim Process (17 04 07)

Could be D-2 16:00 (ph 1)

IntradayAllocation ofHourly blocs

LT ICEs :not necessary if firm rights

UIOSI

07:45

D-1AuctionHourlyOffered

PAY AS CLEARED

Source : EFET position paper : Cross-Border Intraday

IntradayAllocation ofHourly blocs

D-1 DD-n


24h blocs

06:45



+ UIoLIOR

+UIoSI

13:00

D-1 ICEsNETTING LT!


Requested Interim Process (final) (17 04

07)

LT ICEs :not necessary if firm rights

UIOSI

07:45

D-1AuctionHourlyOffered

PAY AS CLEARED

National Grid/RTE proposalIn order to ensure full compliance with CM Guidelines, National Grid

and RTE jointly propose the following action plan:

• September 2007 creation of a LT gate-closure and implementation of a UIOSI on 24hrs bands of capacity

• Mid 2008 implementation of an intraday interim allocation and nomination mechanism (possibly auctions)

• End 2008 improvement of the LT/D-1 mechanism (target mechanism, auction platform, hourly process)

• In 2009 implementation of an advanced intraday continuous allocation and nomination mechanism (intraday capacity platform), if its opportunity and feasibility are confirmed.

Proposal market players• Market players see the following project steps• January 2008 :

– UIoSI on hourly basis– Day ahead auctioning for 24 hours separate products

• For a fast implementation, users give preference to ARIBA platform • CWE (pentalateral forum): common auction office under preparation by 2009

– Concurrently, intraday model based on the current implementation on other French borders (improved pro rata on BE,GE,CH border or explicit auctions on ES border)

– Secondary market model in line with other FR borders, to be further improved in a later phase

• As soon as possible, launch of an “ELBAS” look alike intraday model

• Do not re-invent the wheel! Harmonise! – Consider also ongoing harmonisation work by ETSO (ECAN)

Conclusions 17 April workshop

• TSO menu of options expected within 3 weeks: – Costs, resources needed,..– Benefits– Implementation schedule

• 1 week stakeholder consultation process• Status on 14 June 2007?

Firmness/ITL• EDFT evaluation (2006):

– ITL loss of market value: 17.75M€– Lost market value due to target availability: 14.6M€

• CRE analysis (12.05.2007) FR/SP border : congestion income of 52 M€, curtailments paid at full market spread (PX) = 3 M€.

• User point of view:– Transparency ITL needed– Reimbursement of any curtailment at market spread

• Regulator point of view:– Offering of different products (firm, less-firm (?)) at different prices– Transparency ITL calculation needed (and not compliant CM

guidelines!)

SG meeting FR/UK/IR region 14 June 2007 Congestion management

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