Afry Ab Class B · OMXSTO:AFRY
Afry Ab Class B — Technical Presentation (November 2024)
38 slides from Afry Ab Class B's technical presentation, November 2024
Slide 1: How 24/7 Carbon Free Energy (CFE) trading will impact stakeholders
How 24/7 Carbon Free Energy (CFE) trading will impact stakeholders Webinar NOVEMBER 2024
Slide 2: Introduction to the project team
INTRODUCTION TO THE PROJECT TEAM AFRY is working with Granular Energy and Nord Pool to understand implications of Trading of 24/7 Carbon Free Energy (CFE) for NESO AFRY AFRY NESO Granular Energy Nord Pool Stephen Woodhouse Kerry Anne Shanks Sarah Keay-Bright Toby Ferenczi Jwalith Desu 2 NOV 2024 | C
Slide 3: Agenda
Agenda 1. Introduction to the project 3 1. Introduction to the project 3 2. Modelling objectives and initial learnings 6 2. Modelling objectives and initial learnings 6 3. Update on the trading pilot 14 3. Update on the trading pilot 14 4. Implications for stakeholders wanting to trade 24/7 CFE 25 4
Slide 4: 24/7 CFE energy trading is likely to have significant benefits for many stakeholders
WHY IS INTEREST IN 24/7 CFE GROWING? 24/7 CFE energy trading is likely to have significant benefits for many stakeholders SAMPLE WEEK GB ELECTRICITY SYSTEM 18 - 24 FEBRUARY 2024 Increase transparency in CFE energy procurement Unlocking 24/7 carbon accounting and reporting Accelerate grid decarbonisa
Slide 5: Regulations could start influencing 24/7 CFE as part of greater market energy reform
WHY IS INTEREST IN 24/7 CFE GROWING? Regulations could start influencing 24/7 CFE as a part of greater market energy reform and decarbonisation with some changes already under review EXISTING/IN PROGRESS UNDER REVIEW FUTURE REGULATIONS 24/7 Electricity Hourly Matching UK Reform of Electricity Market
Slide 6: Agenda
Agenda 1. Introduction to the project 3 1. Introduction to the project 3 2. Modelling objectives and initial learnings 6 2. Modelling objectives and initial learnings 6 3. Update on the trading pilot 14 3. Update on the trading pilot 14 4. Implications for stakeholders wanting to trade 24/7 CFE 25 4
Slide 7: Project timeline
PROJECT TIMELINE This is our third webinar, and we will have a final presentation in early 2025 2024 2025 Activity Apr May Jun Jul Aug Sep Oct Nov Dec Jan Phase 1 - Scoping Phase 1 kick-off Phase 2 scope agreed Scoping and engagement Case study development Case studies Phase 1 Report Phase 2 – Model
Slide 8: About the organisations
ABOUT THE ORGANISATIONS AFRY is working with Granular Energy and Nord Pool to understand implications of Trading of 24/7 Carbon Free Energy (CFE) for NESO AFRY is modelling the GB electricity system to understand how Nord Pool and Granular Energy are running a trading pilot 24/7 CFE will affect stak
Slide 9: Key questions
KEY QUESTIONS The modelling AFRY is doing will address the following key questions SYSTEM 24/7 CFE 24/7 CFE INTERCONNECTORS ASSET OPERATION VALUE CHARACTERISTICS & ZONES VALUES Is energy balancing How much might How much does the What would 24/7 Does CFE trading and redispatch CFE certificates shape
Slide 10: Key unknowns
KEY UNKNOWNS Currently the 24/7 CFE market is still emerging – analysis will need to be revised as rules are established GRANULARITY DEMAND DRIVERS − Should matching be 15 minutes, − What carbon free energy 30 minutes, 1 hour or another attributes do consumers want? duration? − Interaction with RE10
Slide 11: The number of periods with a shortage of supply is the primary driver of price level
HOW MUCH MIGHT CFE CERTIFICATES COST? The number of periods with a shortage of supply is the primary driver of the 24/7 CFE EAC price level SAMPLE 5 DAYS GB ELECTRICITY SYSTEM ON AVERAGE WE FIND PRICE LEVELS SIMILAR TO GB REGO 18 - 24 FEBRUARY 2024 Meeting 24/7 CFE PRICE RANGES – BUT HIGHLY SENSITIV
Slide 12: 24/7 CFE EACs could provide a stronger demand side response signal
HOW MUCH MIGHT CFE CERTIFICATES COST? 24/7 CFE EACs could provide a stronger demand side response signal than electricity prices alone SAMPLE 5 DAYS GB ELECTRICITY SYSTEM PRICE DURATION CURVE AS PERCENTAGE OF PRICE CAP FOR 18 - 24 FEBRUARY 2024 NOT MEETING 24/7CFE DEMAND 35,000 100% If demand is muc
Slide 13: 24/7 CFE certificates will generally encourage helpful behaviors for system operations
IS ENERGY BALANCING AND REDISPATCH MORE DIFFICULT WITH A 24/7 CF E MARKET? 24/7 CFE certificates will generally encourage helpful behaviors for system operations BATTERY MARGINS WOULD BE EXPECTED TO IMPROVE DUE TO NEW REVENUE STACK Counterfactual When CFE supply is abundant certificate prices will b
Slide 14: Agenda
Agenda 1. Introduction to the project 3 1. Introduction to the project 3 2. Modelling objectives and initial learnings 6 2. Modelling objectives and initial learnings 6 3. Update on the trading pilot 14 3. Update on the trading pilot 14 4. Implications for stakeholders wanting to trade 24/7 CFE 25 4
Slide 15: Quick Recap
NORD POOL A EURONEXT COMPANY O1 —Quick Recap
Slide 16: At a glance
− GRANULAR WORKSHOP At a glance Iceland Current markets Serviced markets ▪ Nord Pool offers day-ahead and intraday Nord Pool offices trading, clearing and settlement services Sweden Finland ▪ More than 400+ customers from 20 Norway Helsinki countries trade on Nord Pool’s markets Stockholm Oslo Talli
Slide 17: Role of Nord Pool in this project
− GRANULAR WORKSHOP Role of Nord Pool in this project −To run a trial ex-post auction, complementing the current framework on the European integrated electricity market, with ambitions to: − establish a price reference for hourly clean energy − Bolstering of maximization of liquidity and increase ac
Slide 18: Contract definition
− GRANULAR WORKSHOP Contract definition Unit of Trading MW Contract size 1 MW Type of products Granular Certificates as defined by the EnergyTag guidelines and issued by the UK GC registry (any type of generation type) 1 - PRODUCT Contract period One hour DESCRIPTION Quotation Continuous submission
Slide 19: Curve Orders
− GRANULAR WORKSHOP Curve Orders Single hourly For each individual and separated hour, submission of a table combining price and orders volume GBP • Order to buy and/or sell GCs for the 1-24 hours on each day of the previous month: • 0.00 MWh resolution • An order consists of both price and volume •
Slide 20: Market framework for the Pilot
− GRANULAR WORKSHOP Market framework for the Pilot • An ex-post auction, which means the Auction would be held after the GC issuance • Double sided blind auction, Fully anonymous market with Nord Pool acting as a central counterpart. • Both the February(696 hours) and May(744 hours) month auctions w
Slide 21: Price Results
NORD POOL A EURONEXT COMPANY QO2 —Price Results
Slide 22: On a high level what it means…
− WHAT HAPPENS AT NORD POOL?? On a high level what it means… The primary role of a market operator is to establish a cross over between supply and demand curves based on an economic merit order. GBP/MWh So, any seller whose price and volume falls to the left of the cross over has their positions cle
Slide 23: High level Summary
− GRANULAR WORKSHOP High level Summary −T E S T P E R I O D O F T W O M O N T H S – F E B R U A R Y A N D M A Y 2 0 2 4 − February 2024 − May 2024 − 3 participants − 5 participants • A total of 696 hours • A total of 744 hours • A total of 169 hours with No price situation -24% of • A total of 143 h
Slide 24: What more can be done?
− GRANULAR WORKSHOP What more can be done? −O B S E R V A T I O N S • Still a very nascent product. • We see that the auction needs more diverse mix of resources like Solar, Wind, Biogas etc. participating in the trial. • Clearly boosting liquidity is needed to get more realistic results • A second
Slide 25: Agenda
Agenda 1. Introduction to the project 3 1. Introduction to the project 3 2. Modelling objectives and initial learnings 6 2. Modelling objectives and initial learnings 6 3. Update on the trading pilot 14 3. Update on the trading pilot 14 4. Implications for stakeholders wanting to trade 24/7 CFE 25 4
Slide 26: Granular Energy is an all-in-one software tool for energy providers
Granular Energy is an all-in-one software tool that helps energy providers give more transparency to their customers We provide energy companies with the tools Our platform is used by over 40 energy they need to manage their energy certificates companies in 10 countries including supporting and gree
Slide 27: Temporal matching aligns power and EAC markets
Temporal matching aligns power and EAC markets, strengthens green claims, and creates an important new price signal • Annual certificate matching does not reflect the physical reality of electricity supply Annual matching: Hourly matching: • Understanding their matching score enables consumers to 10
Slide 28: Adding a timestamp to energy certificates increases alignment with wholesale markets
Adding a timestamp to energy certificates increases alignment between certificate markets and wholesale power markets Today, two parallel and unconnected markets are used to Time-stamped energy certificates bring traceability to power match production and consumption. market transactions and create
Slide 29: Electricity suppliers use EACs to offer optional green tariffs
In most energy markets, electricity suppliers use EACs to offer optional ‘green electricity tariffs’ to their customers when they purchase electricity PPAs Wholesale power Electricity tariffs Electricity Energy and EAC Suppliers markets Optional clean Energy Attribute electricity tariffs Certificate
Slide 30: Hourly EAC price forecasts can optimize demand response, batteries and trading
Just like in power markets, forecasts of the expected hourly EAC ‘price’ can be used to optimize demand response, batteries and trading PPAs Wholesale power Demand response Electricity and hourly Energy EAC Suppliers markets Hourly matched Hourly Energy tariffs Attribute producers Certificates All c
Slide 31: In an hourly-matching world, demand response, storage and trading improve matching score
In an hourly-matching world, demand response, storage and trading can all be used to improve matching score and ‘fill-in’ missing hours 31
Slide 32: A range of trading venues, products and services will emerge
Just like in the power market, we expect to see a range of different trading venues, products and services emerge over time to support this Hourly matching 24/7 storage Spot markets for tariffs agreement hourly EACs* Forward * Requires independently tradeable ‘Shaped EAC’ bilateral hourly EACs issue
Slide 33: Two new activities feasible today to increase hourly matching
We are launching two new activities that are feasible today to increase hourly matching score Shaped EAC trading 24/7 storage agreement for hourly claims • Source EACs with the ‘hourly generation shape’ • Storage assets can be used to improve the based on actual generation data hourly matching score
Slide 34: Agenda
Agenda 1. Introduction to the project 3 1. Introduction to the project 3 2. Modelling objectives and initial learnings 6 2. Modelling objectives and initial learnings 6 3. Update on the trading pilot 14 3. Update on the trading pilot 14 4. Implications for stakeholders wanting to trade 24/7 CFE 25 4
Slide 35: 24/7 CFE is being driven by consumers, retailers and regulatory changes
THE TAKEAWAYS 24/7 CFE is being driven by consumers, retailers and regulatory changes − Hourly (or shorter) EACs are coming and can be implemented in parallel with annually matched certificates − The market is evolving there are things that can be done today, with strong potential advantages for fir
Slide 36: Annex: Glossary of key terms
Annex: Glossary of key terms TERM CFE Carbon Free Energy or "energy produced from resources that generate no carbon emissions” ECA Energy Attribute Certificate 24/7 CFE Hourly or sub-hourly Carbon Free Energy 24/7 CFE EAC Hourly Carbon Free Energy Electricity Attribute Certificate. In this study, AF
Slide 37: About us
AFRY IN BRIEF About us AFRY provides engineering, design, digital and advisory services to accelerate the transition towards a sustainable society. Countries with projects Offices We are AFRY's business drivers 19,000 devoted employees creating impact for generations to come. Decarbonisation Circula
Slide 38: We accelerate the transition towards a sustainable society
OUR MISSION We accelerate the transition towards a sustainable society 38 NOV 2024 |