Slide 1: Presentation of the downward procurement study
FOR DISCUSSION Presentation of the downward procurement study Ensuring sufficient downwards flexibility for the system Context System needs Elia has conducted a study assessing the need and effectiveness of downwards capacity procurement, the results of • Balancing services which will be presented h
Slide 2: Elia – WG BDS 11/06 Downward procurement study
Elia – WG BDS 11/06 Downward procurement study
Slide 3: Table of content
Table of content 1. Context & objective of the WG BDS topic of 11/06 on downward procurement 2. Context of the study 3. Scope and key questions addressed in the study 4. Qualitative assessment of the impact of downward FRR procurement 5. Assessment of the options to procure additional downward FRR 6
Slide 4: Context & objective
Context & objective
Slide 5: Market-based solutions supported by technical measures
Market-based solutions supported by technical measures Elia has consistently driven a market-based approach to unlock flexibility; progress remains too slow to match the pace of RES deployment. Alongside continued market facilitation a robust backstop is essential to always guarantee the system secu
Slide 6: Context of the study
Context of the study
Slide 7: Mapping and first prioritisation – Consolidated action plan 2025
Intern Confidential and work in progress Mapping and first prioritisation – Consolidated action plan 2025 2024 2025 2026 2027 • Interactions with regulators EXPL: CONNECT TO EU and OPEN IN MV AND LV • Identify barriers for implicit IMPL: CREATE AWARENESS IN LV & BRING MV FLEX VOLUMES ON THE MARKET p
Slide 8: Possible Downward procurement FRR
Possible Downward procurement FRR • Study: Assess need for ELIA to procure additional downward frequency restoration reserve with manual activation. • Study focus: o Short-term benefits and downsides of downward procurement. o Additional market volume from downward procurement. o Mid- and long-term
Slide 9: So far, Elia has managed to meet its downward FRR needs without procuring
So far, Elia has managed to meet its downward FRR needs without procuring downward mFRR balancing capacity, but it is unclear whether this will remain possible in the future mFRR Down Up to now, Elia has considered the availability of non-contracted bids Non-contracted aFRR balancing mFRR balancin
Slide 10: Summer outlook: Conclusion
Summer outlook: Conclusion LESS TENSE SPRING & SUMMER '26 compared to ’25 • Absence of nuclear generation • Flexibility and storage contribute to excess management Despite that Elia welcomes the effort of market players • Exports support excess mitigation to a limited extent, due to regional corre
Slide 11: Summer outlook | type B – Deviations to perfect foresight
Summer outlook | type B – Deviations to perfect foresight Uncovered flexibility shortages are expected to become worse in the coming years with increasing renewables (mainly PV) and the return of nuclear during spring & summer (as from 2029) Adeqflex’25 : Decentralized PV or consumer flexibility to
Slide 12: Scope and key questions addressed in the study
Scope and key questions addressed in the study
Slide 13: The study consists of two main parts
The study consists of two main parts Part 1: Qualitative assessment of the impact of a downward FRR procurement Key question 1: Under which conditions and to what extent does procurement of downward FRR improve operational security? Key question 2: Are there adverse side-effects that would be
Slide 14: Part 1: qualitative assessment of the impact of downward FRR procurement
Part 1: qualitative assessment of the impact of downward FRR procurement
Slide 15: Impact of the procurement on the locally available downward flexibility
Impact of the procurement of additional downward FRR on the locally available downward flexibility While the procurement of downward FRR could ensure sufficient downward FRR to cover the dimensioned downward FRR needs, different attention points are assessed: 1. Is there a risk that procurement of a
Slide 16: Risk of conversion of non-contracted bids to contracted bids
Risk of conversion of non-contracted bids to contracted bids – A pure conversion of non-contracted aFRR/mFRR energy bids to contracted aFRR/mFRR Energy Bids has no impact on operational security No additional downward flexibility is made available (at least on the short term) No additional downw
Slide 17: Shifting flexibility from other market segments to the explicit balancing market segment
Shifting flexibility from other market segments to the explicit balancing market segment – The procurement of additional downward FRR could lead to already available downward flexibility being reserved for the real-time timeframe. The available flexibility would hence no longer be used to respond to
Slide 18: Impact on locally available downward flexibility – key takeaways
Impact of the procurement of additional downward FRR on the locally available downward flexibility – key takeaways Key question 1: Under which conditions and to what extent does procurement of downward FRR improve operational security? Procurement of additional downward FRR does not lead under all c
Slide 19: Impact of the procurement on export capacity available in the balancing timeframe
Impact of the procurement of additional downward FRR on export capacity available in the balancing timeframe – In case downward FRR capacity would be provided by assets already responding to DA/ID price signals today, the changed bidding behavior could impact the DA/ID market outcome and hence i) th
Slide 20: Impact of the procurement on export capacity available in the balancing timeframe
Impact of the procurement of additional downward FRR on export capacity available in the balancing timeframe – The figure below shows the distribution of the ATCs available for exports (excl. UK) at the start of the ID timeframe on key incompressibility days identified in the period June 2024-May 20
Slide 21: Impact of the procurement on export capacity available in the balancing timeframe
Impact of the procurement of additional downward FRR on export capacity available in the balancing timeframe – In case downward FRR capacity would be provided by assets already responding to DA/ID price signals today, the changed bidding behavior could impact the DA/ID market outcome and hence i) th
Slide 22: Impact on export capacity – key takeaways
Impact of the procurement of additional downward FRR on export capacity available in the balancing timeframe – key takeaways Key question 2: Are there adverse side-effects that would be important to consider when evaluating possible procurement options? There is a risk that the gain in locally ava
Slide 23: Part 2: Assessment of the options to procure
Part 2: Assessment of the options to procure additional downward FRR
Slide 24: Doing nothing also comes with a consequences
Doing nothing also comes with a consequences • Continuing business as usual is a possibility, but has certain impacts • Belgium would remain exposed to incompressibility risks • Increasing situation with operational risks on downward side • Situations with high imbalance price due to oversupply can
Slide 25: Elia has retained following key options from the study
Elia has retained following key options from the study Full downwards Cover all reserve needs via contracted balancing capacity (accounting for procurement reserve sharing) with mainly mFRR down but possibly some additional aFRR as well Procure higher Expand aFRR procurement with limited additional
Slide 26: All options have (dis)advantages
All options have (dis)advantages System Procurement Ease of Attracting new reliability* costs implementation flexibility Full downwards Significant procurement procurement + impact on tariffs for end + ~ consumers aFRR might be more cost- Procure higher volume of aFRR + efficient than mFRR, but buyi
Slide 27: Conclusion
Conclusion
Slide 28: Guiding principles/storyline for the selection of the right solution
Guiding principles/storyline for the selection of the right solution Continued assessment • Continue monitoring whether the currently of needs versus procured means manage to cover the means situation needs, and take action when necessary Continued monitoring • Continue evaluating the key drivers If
Slide 29: Next steps
Next steps
Slide 30: Market-based solutions supported by technical measures
Market-based solutions supported by technical measures Elia has consistently driven a market-based approach to unlock flexibility; progress remains too slow to match the pace of RES deployment. Alongside continued market facilitation a robust backstop is essential to always guarantee the system secu
Slide 31: Timeline for the upcoming months
Timeline for the upcoming months Flexibility Needs Assessment Foreseen second half of 2026 June July August September October November 11/06 18/09 12/11 WG BDS WG BDS WG BDS Presentation of Bilateral exchanges with Workshop on possible Proposed way forward procurement study results Market Parties wa