``Ancillary services and regulation markets'' · EURELECTRIC, \Ancillary services { Unbundling...
Transcript of ``Ancillary services and regulation markets'' · EURELECTRIC, \Ancillary services { Unbundling...
“Ancillary services and regulation markets”
Pierre Pinson
Technical University of Denmark.
DTU Electrical Engineering - Centre for Electric Power and Energymail: [email protected] - webpage: www.pierrepinson.com
26 February 2018
31761 - Renewables in Electricity Markets 1
As part of the overall context...
Here we are on the side of the System Operator, e.g., Energinet.dk in Denmark
31761 - Renewables in Electricity Markets 2
Learning objectives
Through this lecture and additional study material, it is aimed for the students to be ableto:
1 Explain the need for ancillary services
2 Describe the various types of ancillary services
3 Understand differences between capacity, energy and other payments
4 Calculate revenues of ancillary providers
31761 - Renewables in Electricity Markets 3
Outline
1 Definitions and needs for ancillary services
what are “ancillary services”?why would one need ancillary servicesdifferent types of ancillary services
2 Payment and revenues
capacity, energy and other paymentscalculation of revenues
3 Sequence and role of frequency-related ancillary services
from primary to tertiary reservesspecifics in Denmark
4 Future of ancillary services?
31761 - Renewables in Electricity Markets 4
1 Definitions and needs for ancillary services
31761 - Renewables in Electricity Markets 5
What are ancillary services?
“Ancillary services are all services required by the transmission ordistribution system operator to enable them to maintain the integrity andstability of the transmission or distribution system as well as the power
quality.”
EURELECTRIC, “Ancillary services – Unbundling electricity products – An emerging market”, February, 2004 (link).
EURELECTRIC, “Connection Rules for Generation and Management of Ancillary Services”, May, 2000 (link).
31761 - Renewables in Electricity Markets 6
What are ancillary services?
“Ancillary services are all services required by the transmission ordistribution system operator to enable them to maintain the integrity andstability of the transmission or distribution system as well as the power
quality.”
EURELECTRIC, “Ancillary services – Unbundling electricity products – An emerging market”, February, 2004 (link).
EURELECTRIC, “Connection Rules for Generation and Management of Ancillary Services”, May, 2000 (link).
31761 - Renewables in Electricity Markets 7
Various types of ancillary services
We will focus on frequency-related services in the following, as they directly relateto system balance
31761 - Renewables in Electricity Markets 8
Beware of naming conventions
Same issue goes for Denmark, as the country is split between 2 different powersystems with varied operational practice
31761 - Renewables in Electricity Markets 9
Why would the power system be off-balance?
A sample of potential causes:
Electric load is greater or less than foreseen at the time of market-clearing
Renewable energy generation is greater or less than foreseen at the time ofmarket-clearing
Outages (/operational difficulties) of production units
Outages (/operational difficulties) of transmission equipments
Internal congestion (within market/balancing zone)
others?
31761 - Renewables in Electricity Markets 10
Why would the power system be off-balance?
A sample of potential causes:
Electric load is greater or less than foreseen at the time of market-clearing
Renewable energy generation is greater or less than foreseen at the time ofmarket-clearing
Outages (/operational difficulties) of production units
Outages (/operational difficulties) of transmission equipments
Internal congestion (within market/balancing zone)
others?
31761 - Renewables in Electricity Markets 11
A practical example: Load impact (1)
1 April 2014 - Nord Pool & Energinet data:
time of day [h]
pow
er [M
W]
1 6 12 18 24
040
010
0016
0022
0028
0034
00
DK−1: forecastsDK−1: observedDK−2: forecastsDK−2: observed
Comparison of forecasts (at the time of market clearing) and actual electric load,both for DK-1 and DK-2
31761 - Renewables in Electricity Markets 12
A practical example: Load impact (2)
1 April 2014 - Resulting volumes to balance because of load forecasting errors:
time of day [h]
pow
er s
urpl
us/d
efic
it [M
W]
1 6 12 18 24
−20
0−
100
010
020
0
DK−1: surplus(+)/deficit(−)DK−2: surplus(+)/deficit(−)
The resulting balancing needs are fairly low, though there is a clear deficit of powerin DK-1
31761 - Renewables in Electricity Markets 13
A practical example: Wind impact (1)
1 April 2014 - Nord Pool & Energinet data:
time of day [h]
pow
er [M
W]
1 6 12 18 24
020
040
060
080
010
00
DK−1: forecastsDK−1: observedDK−2: forecastsDK−2: observed
Comparison of forecasts (at the time of market clearing) and actual wind powergeneration, both for DK-1 and DK-2
31761 - Renewables in Electricity Markets 14
A practical example: Wind impact (2)
1 April 2014 - Resulting volumes to balance because of wind power forecastingerrors:
time of day [h]
pow
er s
urpl
us/d
efic
it [M
W]
1 6 12 18 24
−20
00
200
400
600
DK−1: surplus(+)/deficit(−)DK−2: surplus(+)/deficit(−)
The resulting balancing needs look high for DK-1 and reasonable for DK-2
31761 - Renewables in Electricity Markets 15
Where to find information about the system balance (and regulation)?
For Scandinavia (and more precisely Denmark):
historical data at Energinet’s page: ’Download of market data’
real-time data at Nord Pool’s page: ’Regulating volumes’ (also lots of other data)
Some other examples:
real-time (and historical) data for France (RTE) at RTE’s page: ’Daily balancingenergy volume’
historical data for the Netherlands (TenneT) at TenneT’s page: ’Export data’
A very nice App for Spain (REE) at REE’s page: ’Electricity demand tracking inreal-time’
etc.
31761 - Renewables in Electricity Markets 16
2 Payments and revenues
31761 - Renewables in Electricity Markets 17
What is the system operator paying for?
Capacity Energy
And possibly:
performance
mileage
etc.
Nota: Capacity is exclusive - one cannot offer capacity for service provision andsimultaneously use it for selling energy through the day-ahead market(!)
31761 - Renewables in Electricity Markets 18
3 Sequence and role of frequency-related ancillary services
31761 - Renewables in Electricity Markets 19
Ancillary services in Denmark
Denmark is originally connected to two different power systems with differentoperational practice
Ancillary services are then different in DK1 and DK2...
Energinet, “Ancillary services to be delivered in Denmark – Tender conditions”, October 2012 (link).
31761 - Renewables in Electricity Markets 20
Ancillary services in DK1 and DK2
(with focus on frequency-related services)
DK1
Primary reserves
Secondary reserves(Load FrequencyControl)
Manual reserves
DK2
Frequency-controlled normaloperation reserves(FNR)
Frequency-controlleddisturbance reserves(FDR)
Manual reserves
31761 - Renewables in Electricity Markets 21
Primary reserves (DK1)
There is an overall need for +/−3.000MW of primary-type reserves over continentalEurope (following ENTSO-E assessment and recommendation)
This amount (capacity) is shared among all system operators
For DK1, this share is of +/−27MW
Response to frequencydeviation
31761 - Renewables in Electricity Markets 22
Primary reserve activation and market (DK1)
Required characteristics ofreserve response (prior certification)
daily day-ahead auctions
inflexible demand (27MW)
need for upward and downward capacity
merit order on capacity offers
energy is not considered (Energy-neutralservice)
31761 - Renewables in Electricity Markets 23
Primary reserve payment (DK1)
For market participant i :
RevenueGi = PGi λc
where
Pi : accepted capacity
λc : clearing price
In this example:
G1: 10MW × 10DKK/MW = 100DKK
G1: 5MW × 10DKK/MW = 50DKK
G1: 5MW × 10DKK/MW = 50DKK (out of the 6MW originally offered )
others: 0DKK
Here, only generators are considered... Though demand could also provide such services(e.g., batteries, electric boilers)31761 - Renewables in Electricity Markets 24
Secondary reserves (DK1)
Two distinct goals:
Relieve the primary reserve which has been activated
Restore any imbalance on the interconnections
The capacity requirement for DK1 is of +/−90MW (following ENTSO-E assessment andrecommendation)
31761 - Renewables in Electricity Markets 25
Secondary reserve market (DK1) (1)
Payment for capacity AND for energy (This is not an energy-neutral service!)
Capacity
purchased on a monthly basis
combined and symmetrical upward and downward products
based on bilateral contracts (negotiated, non-public)
→ Result for Generator Gi : PGi (MW) and λG
i (DKK/MW)
31761 - Renewables in Electricity Markets 26
Secondary reserve market (DK1) (2)
Energy
All energy ∆Ei generated/consumed is to be paid for (for given generator Gi )
Two reference prices are to be considered: day-ahead price λS for that time, as wellas balancing price λB (from balancing market - to be discussed next week)
Minimum revenues are ensured by always having a spread of at least 100 betweenday-ahead and balancing prices
In practice, in the upward regulation case:
Energy revenue(Gi ) =
{(λS + 100)∆Ei if λB < λS + 100,
λB∆Ei otherwise
And, in the downward regulation case:
Energy revenue(Gi ) = −{
(λS − 100)∆Ei if λB > λS − 100,λB∆Ei otherwise
The (negative) revenue in the downward regulation case consists in buying backenergy that was already sold through the day-ahead market!31761 - Renewables in Electricity Markets 27
Secondary reserve payments (DK1)
Example (for a given time unit, upward regulation cases):
RT R© is to generate 50MWh through the day-ahead market (λS = 200DKK/MWh)
RT R© has a contract for secondary reserve provision, with PGRT = 10MW,
λGRT=20DKK/MW
2 illustrative cases:
Need for upward regulation, energy fully delivered, balancing price λB =250DKK/MWh,
Revenue(RT R©) = 10× 20 + 10× (200 + 100) = 3200DKK
Need for upward regulation, energy half delivered, balancing price λB =320DKK/MWh,
Revenue(RT R©) = 10× 20 + 5× 320 = 1800DKK
31761 - Renewables in Electricity Markets 28
Secondary reserve payments (DK1)
Example (for a given time unit, downward regulation cases):
RT R© is to generate 50MWh through the day-ahead market (λS = 200DKK/MWh)
RT R© has a contract for secondary reserve provision, with PGRT = 10MW,
λGRT=20DKK/MW
2 illustrative cases:
Need for downward regulation, energy fully “consumed” (/reduced), balancing priceλB = 150DKK/MWh,
Revenue(RT R©) = 10× 20− 10× (200− 100) = −800DKK
Need for downward regulation, energy half “consumed”, balancing price λB =50DKK/MWh,
Revenue(RT R©) = 10× 20− 5× 50 = −50DKK
31761 - Renewables in Electricity Markets 29
Manual (/tertiary) reserves (DK1)
The full timeline forreserve products
daily day-ahead auctions
varying demand
need for upward and downward capacity
merit order on capacity offers
energy is paid for at the balancing price λB
31761 - Renewables in Electricity Markets 30
Tertiary reserve payments (DK1)
Example (for a given time unit, upward regulation cases):
RT R© is to generate 50MWh through the day-ahead market (λS = 200DKK/MWh)
RT R© gets cleared to provide tertiary reserves, with PGRT = 20MW, λG
RT=2DKK/MW
2 illustrative cases:
Need for upward regulation, energy fully delivered, balancing price λB =250DKK/MWh,
Revenue(RT R©) = 20× 2 + 20× 250 = 5040DKK
Need for upward regulation, energy half delivered, balancing price λB =320DKK/MWh,
Revenue(RT R©) = 20× 2 + 10× 320 = 3240DKK
31761 - Renewables in Electricity Markets 31
Tertiary reserve payments (DK1)
Example (for a given time unit, downward regulation cases):
RT R© is to generate 50MWh through the day-ahead market (λS = 200DKK/MWh)
RT R© gets cleared to provide tertiary reserves, with PGRT = 20MW, λG
RT=2DKK/MW
2 illustrative cases:
Need for downward regulation, energy fully “consumed” (/reduced), balancing priceλB = 150DKK/MWh,
Revenue(RT R©) = 20× 2− 20× 150 = −2960DKK
Need for downward regulation, energy half “consumed”, balancing price λB =50DKK/MWh,
Revenue(RT R©) = 20× 2− 10× 50 = −460DKK
31761 - Renewables in Electricity Markets 32
Activation sequence
Two main approaches:
Reactive (/corrective)approach
Proactive approach
31761 - Renewables in Electricity Markets 33
Questions / discussion
31761 - Renewables in Electricity Markets 34
For you to do...
Before the next session on Monday 5 March 2018
For those who want to know more energy and services:
J.M. Morales et al. (2014). Integrating Renewables in Electricity Markets, Chapter 3: “Clearing theday-ahead market with a high penetration of stochastic production” (pdf)
For those who want to understand how reserve needs may be quantified:
R. Doherty and M. O’Malley (2005). A new approach to quantify reserve demand in systems withsignificant installed wind capacity. IEEE Transactions on Power Systems 20(2): 587–595 (pdf)
M. Matos and R. Bessa (2011). Setting the operating reserve using probabilistic wind power forecasts.IEEE Transactions on Power Systems 26(2): 594–603 (pdf)
31761 - Renewables in Electricity Markets 35
Thanks for your attention! - Contact: [email protected] - web: pierrepinson.com
31761 - Renewables in Electricity Markets 36