| 1 NEW workshop 9.12.2011 Vision for the internal electricity market Matti Supponen Unit B2...

| 1NEW workshop 9.12.2011

Vision for the internal electricity marketMatti SupponenUnit B2“Internal Market II: Wholesale markets; Electricity & Gas”

European day-ahead and intra-day pilot projects1st NWE Stakeholder Workshop 9 December 2011


Contents

.Drivers of the European electricity market.European electricity market target model.Infrastructure package.Issues


Drivers in energy policy regarding electricity

.Decarbonisation.Renewables targets.Security of supply.Competitiveness


The 20-20-20 EU policy by 2020

Greenhousegas levels

Energyconsumption

Renewables inenergy mix

-20% -20%100%

+20%

8,5%

Roadmap 2050


Surplus and deficit areas (2008)

Wind

Surplus

Deficit15

25

Storage Hydro

80

30 3025 35

1010

2525

25 25

40

50

20

25

20

30 45 50

20

10

10 10

10 25

20

TWh

20 TWh

TWh

TWh

25

40

15

5 15

10


Wind Energy Production - Effects on the Market | 2010 | © Amprion7

Correlation Wind Energy Production ↔ Control Program DE

h-Values, 2010

Sou

rce:

Am

prio

n G

mbH

Trendline

7

+ E

xpor

t-

Impo

rt


Infrastructure


~~~ ~~~ ~~~ ~~~

Overlay network?

Transmission

380/220kV

Distribution

110kV

Distribution

Virtuelle Erzeugung

Virtuelle Last

~~~~~~~ ~

~

)*

Overlay network

Source: Klaus Kleinekorte in VDE DACH 2010 conference


European infrastructures priorities by 2020 for electricity

Baltic energy market inter-connection plan

Interconnections in South West Europe

Interconnectionsin Central-South East Europe

Offshore grid in the Northern Seas and connection to Northern and Central Europe

Smart grids in the EU

Electricityhighways


ACER opinion

National / regional TYNDP with PCIs

By 30 July 2013

TYNDP and CBA (electricity: 2014, gas: 2015)

EU infrastructure priorities

Commission decision on Union-wide PCI list

Regional Groups to propose regional PCI lists

Approval by concerned Member States

Energy & Climate Objectives

Overview of the process of identification of projects of common interest


Measures to facilitate the implementation of projects of common interest

» A new method to identify and select concrete projects of common interest (PCIs) necessary to implement the priority corridors

» Shortening and streamlining permit granting procedures and improving public involvement

» Removing regulatory obstacles for investments in infrastructures of European relevance

» Providing appropriate direct support and financial support for projects of common interest


Market design

.Forward markets based on spot markets.Cross-border trade optimisation based on day ahead market coupling.Long term cross border trade with financial products.Further cross-border trade optimisation through allowing intra-day trade with the remaining capacity.Final optimisation through a pan European balancing system


Congestion management 1998

Nord Pool

Implicit auctions

Only explicit auctions

Other methods



Nord Pool

Arnhem auction office

Implicit auctions


Other methods



Nord Pool

APX

CASC CAO

EMCC

Implicit auctions


Other methods


Congestion management 2014?

Euro Pool

Implicit auctions


Other methods


TLC 650TWh

NE

BS

FUI

SWE

CEE

CSE

SEE

Volume coupling

Price coupling No decision on the coupling yet

Possible sequence of European market coupling

GB400TWh SEM

25TWh

Hungary40TWh Romania

55TWh

Poland150TWh

Estonia, Latvia, Lithuania 25TWh

Other SEE countries

DE and AT600TWh

CWE, NE, BS and UK

~2100TWh

CWE, NE, BS,SWE, CEE, CSE-,

UK and RO~3100TWh

MIBEL 300TWh

CZ and SK 100TWh

SE, NODK and FIN

400TWh

CWE CWE, NE, BS,SWE, CEE, CSE-

and UK~3050TWh

2010 2011 2012 2013 2014 2015

IT and SLO 350TWh

BS, SE, NODK and FIN

All regionscoupled!

~3500TWh

~350MW~1000MW

~2800MW~1500MW

~1000MW

~2500MW

~6000MW

~1000MW

~1000MW

~1000TWh = approximative yearly

consumption

~3000MW = approximative interconnection capacity

between areas to be coupled

CWE, NE, BS,SWE, CEE, FUI,

CSE- and RO~3100TWh

~600MW

>5000MW

NWE CouplingEuropean Coupling


European electricity day ahead spot market

EPEX(DE/AT 23%FR 11%CH 13%)

Liquid (>30% spot trade/consumption)

Little liquidity (5%<<15%

No liquidity (<5%)

Some liquidity (15%< <30%)

Nord Pool (74%)

APX (NL 21% UK 4%)

OMEL (83%)

EXAA (4%)

OPCOM (9%)

IPEX (69%)

South Pool (0%)

BELPEX (12%)

OTE (~5%)

LITPX

HUPX

POLPX

Hellenic Pool (~100%)Volumes from 2008 data


Matti’s price zones for Europe


Northern Electricity Price IndexNEPI

Central Electricity Price IndexČEPI

Wind Electricity Price IndexWEPI

Iberian Electricity Price Index IEPI Southern Electricity Price Index

SEPI

Matti’s price references for Europe


Issues

.Heretic local market designs.Governance of market coupling.Relations between power exchanges.Calculation of cross-border capacity» Price zones» Loop flows» Sharing of congestion rents» Flow based methods.Who will build and pay new infrastructure?


Loop flows

---Deficit

1000 MW

+++Surplus

Physical flow

Commercial flow


DE+ 98 M€

NL- 0 M€

BE- 5 M€

CH- 35 M€

FR+ 235 M€

IT+ 20 M€

SI- 15 M€

AT- 35 M€

CZ- 97 M€

SK- 39 M€

PL- 40 M€

+ 4 TWh (- 20 M€)

- 7 TWh (+ 120 M€)

HR

+ 6 TWh(- 150 M€)

+ 4 TWh (- 20 M€)

- 3 TWh (+ 10 M€)

+ 4 TWh (- 20 M€)

+ 1 TWh (0 M€)

- 1 TWh (+ 10 M€)

+ 6 TWh (- 50 M€)

+ 2 TWh (- 40 M€)

- 13 TWh (+130 M€)

- 6 TWh (+ 120 M€)

+ 4 TWh (- 40 M€)

+ 3 TWh (- 20 M€)

HU- 4 M€

+ 1 TWh (- 7 M€)

+ 1 TWh (- 4 M€)

+ 11 TWh (- 110 M€) + 2 TWh

(- 0 M€)

+ 2 TWh (- 50 M€)

UA

CountryX M€

X = Net benefit for the country in 2008 on the difference between commercial and physical flows M€ Green = positive values Red = negative values

Y = Difference between the average physical and commercial flow in 2008 [TWh]

Z = Estimated monetary value of the difference in 2008 [M€]

Legend:

+ 0 TWh (- 0 M€)

0 TWh (0 M€)

0 TWh (0 M€)

DK SE SE

+ 1 TWh (0 M€)

- 3 TWh (0 M€)

+ 1 TWh (0 M€)

- 3 TWh (0 M€)

0 TWh (0 M€)

NO

- 21 TWh (+ 210 M€)

Y TWh (Z M€)

Loop flows


Looking forward to the discussion

| 1 NEW workshop 9.12.2011 Vision for the internal electricity market Matti Supponen Unit B2...

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