Elia Group SA/NV · EURONEXT:ELI
Elia Group SA/NV — Investor Presentation (June 2019)
88 slides from Elia Group SA/NV's investor presentation, Jun 25, 2019
Slide 1: Working Group Balancing
Working Group Balancing Tuesday 25/06/2019
Slide 2: Agenda
Agenda 1. Approval of the MoM of previous WG Balancing 6. Status Updates projects • FCR product developments • ID market access 2. Imbalance prices on the 7th of June • mFRR: stakeholder consultation feedback & next steps • iCAROS • ToE pass-thourgh contracts 3. Volumes reserves 2020 7. Winter produ
Slide 3: 1. Approval of the MoM of previous WG Balancing
1. Approval of the MoM of previous WG Balancing
Slide 4: Agenda
Agenda 1. Approval of the MoM of previous WG Balancing 6. Status Updates projects • FCR product developments • ID market access 2. Imbalance prices on the 7th of June • mFRR: stakeholder consultation feedback & next steps • iCAROS • ToE pass-thourgh contracts 3. Volumes reserves 2020 7. Winter produ
Slide 5: 2. Imbalance prices on the 7th of June
2. Imbalance prices on the 7th of June
Slide 6: Imbalance Prices on 7 June (1)
Imbalance Prices on 7 June (1) SI α MIP MDP SI < -I C POS NEG Status Date Quarter (MW) (€/MWh) (€/MWh) (€/MWh) (€/MWh) (€/MWh) Not validated 07/06/2019 14:00 -> 14:15 -1211,234 37,84 1036,75 0,00 1036,75 1074,59 Not validated 07/06/2019 14:15 -> 14:30 -1477,258 54,80 515,47 0,00 515,47 570,27 Not va
Slide 7: Imbalance Prices on 7 June (2)
Imbalance Prices on 7 June (2) All data available on Elia website: http://www.elia.be/en/grid-data/balancing/using-regulation-capacity 7 WG BALANCING 25/06/2019
Slide 8: Agenda
Agenda 1. Approval of the MoM of previous WG Balancing 6. Status Updates projects • FCR product developments • ID market access 2. Imbalance prices on the 7th of June • mFRR: stakeholder consultation feedback & next steps • iCAROS • ToE pass-thourgh contracts 3. Volumes reserves 2020 7. Winter produ
Slide 9: 3. Volumes reserves 2020
3. Volumes reserves 2020
Slide 10: Regulatory framework Volumes 2020
Regulatory framework Volumes 2020 Dossier Volume 2018 #N/A# #N/A# 2018 -> explain methodology for needs -> determination of needs -> determination of means Dossier Volume 2019 LFC BOA 2019 2019 -> explain methodology for needs #N/A# -> explain methodology for needs -> determination of needs -> deter
Slide 11: Status LFC BOA 2019
Status LFC BOA 2019 • Elia submitted it’s LFC BOA to the CREG on September 14, 2019 • May 14, Elia submitted modifications to the document following CREG’s Request for Amendment on Mars 14, 2019 • The document was approved by CREG on May 27, 2019 with a few modifications on the original version • Sp
Slide 12: Expectations regarding contracted volumes
Expectations regarding contracted volumes 2019 Applicable volumes Upwards Downwards aFRR: 145 MW aFRR: 145 MW mFRR: 844 MW mFRR: 0 MW 2020 expectations • No mFRR down will be contracted • Similar volumes of aFRR and mFRR up will be contracted Disclaimer: Volumes on this slides are indicative. Final
Slide 13: Minimum volume R3 standard
Minimum volume R3 standard • Initial proposal by Elia – conform the initial road map R3 - was to stop the mFRR flex product at February 2020 • Stakeholders feedback: such a change is too sudden and too soon. • Elia has developed a new proposal with a transition period: Disclaimer: new proposal still
Slide 14: Agenda
Agenda 1. Approval of the MoM of previous WG Balancing 6. Status Updates projects • FCR product developments • ID market access 2. Imbalance prices on the 7th of June • mFRR: stakeholder consultation feedback & next steps • iCAROS • ToE pass-thourgh contracts 3. Volumes reserves 2020 7. Winter produ
Slide 15: 4. aFRR: open points new design
4. aFRR: open points new design
Slide 16: Content
Content • aFRR capacity tender methodology • Priority aFRR/mFRR activations • Participation of batteries at the aFRR design 16 WG BALANCING 25/06/2019
Slide 17: aFRR capacity tender
aFRR capacity tender
Slide 18: Trajectory of the methodology for the aFRR capacity tender
Trajectory of the methodology for the aFRR capacity tender Decisions already taken for the aFRR capacity tender: • Separated procurement FCR and aFRR • Daily procurement for aFRR • Allow sourcing in 6 times 4-hour blocks aFRR workshop in May • Elia has presented several options and has indicated his
Slide 19: Reminder: Fundamental criteria for the aFRR capacity tender methodology
Reminder: Fundamental criteria for the aFRR capacity tender methodology – Impact on the aFRR cost: The cost of the new aFRR design should remain acceptable (compared to today’s budget). Therefore cost risks should be mitigated were possible. – Attractiveness for non-CIPU assets: Enable new entrants
Slide 20: Combination of CCGTs assets and new entrants
Combination of CCGTs assets and new entrants • The combination of opening the aFRR market to non-CIPU units together with taking into account the specific characteristics of the CCGTs is not a straight forward exercise. • At the beginning of the opening of the aFRR market to all technologies, CCGTs
Slide 21: Last proposal of Elia: Total cost optimization with 4-hour blocks
Last proposal of Elia: Total cost optimization with 6 blocks of 4-hours where the start-up costs are offered separately • Bidding methodology: Allow only 4-hour blocks (6 blocks of 4 hours) with symmetrical bids Variable cost in €/MW/h Fixed cost (start-up cost) in € is added separately Tota
Slide 22: Feedback of the stakeholders (summary)
Feedback of the stakeholders (summary) Feedback of producers: • Last proposal of Elia: • Unfair that start-up cost have to compete with non-CIPU for each block that they are not selected. • The design does not sufficiently take into account the technical constraints of CCGTs • Proposal for a two ste
Slide 23: New proposal of Elia: 2 step approach
New proposal of Elia: 2 step approach • Methodology 2 step approach: o Step 1 @ D-2: independent total cost optimization for the 24-hour block for aFRR up and aFRR down together (e.g. 140MW) o Step 2 @ D-1: a merit order selection for upward and downward reserves separately and pure divisible 4-ho
Slide 24: Priority aFRR versus mFRR during the activations
Priority aFRR versus mFRR during the activations
Slide 25: Recap: impact of new aFRR design on available aFRR volumes
Recap: impact of new aFRR design on available aFRR volumes for activation Future: merit order activation Today: Pro-rata activation • Volume cap = reserved volume • No volume cap • Price cap ≈ 100€/MW/h • Re-introduction of a price cap 145 MW selected for • Not selected for aFRR 145MW This volume wi
Slide 26: Balance between aFRR and mFRR activations
Balance between aFRR and mFRR activations • aFRR is activated automatically • Risk that more expensive aFRR is activated before mFRR • This situation is also linked to the limited liquidity of aFRR aFRR mFRR 145 MW This volume will be available for activation (no volume cap) 26 WG BALANCING 25/06/20
Slide 27: Balance between aFRR and mFRR activations
Balance between aFRR and mFRR activations preventive activations of mFRR not realistic: A forecast of the power deviations is required These preventive activations require arbitrage rules for Elia. Preventive activations of mFRR will also affect the activation of cheaper aFRR bids This metho
Slide 28: Balance between aFRR and mFRR activations
Balance between aFRR and mFRR activations The only way to avoid the activation of aFRR bids which are more expensive than the mFRR bids is the introduction of a price cap. Elia proposes to re-introduce a price cap: • 1000€/MWh in the upward direction • -1000€/MWh in the downward direction If the pri
Slide 29: Participation of energy limited assets larger than 25MW
Participation of energy limited assets larger than 25MW
Slide 30: Energy limited assets (e.g. batteries) > 25MW
Energy limited assets (e.g. batteries) > 25MW Proposal: • Unit based prequalification: test takes 90 min Since the test is well planned beforehand, this should be feasible • Unit based availability test: test takes 30 minutes The delivery of the service should be always possible for at least 30 minu
Slide 31: Next steps
Next steps
Slide 32: Next steps
Next steps • Update of design note (foreseen in July) • Working further on the implementation trajectory • Technical implementation note is foreseen in Q4 2019 • Go-live is foreseen in July 2020 32 WG BALANCING 25/06/2019
Slide 33: Agenda
Agenda 1. Approval of the MoM of previous WG Balancing 6. Status Updates projects • FCR product developments • ID market access 2. Imbalance prices on the 7th of June • mFRR: stakeholder consultation feedback & next steps • iCAROS • ToE pass-thourgh contracts 3. Volumes reserves 2020 7. Winter produ
Slide 34: 5. Offshore: feedback workshop & next steps
5. Offshore: feedback workshop & next steps
Slide 35: T&C BRP
T&C BRP FGC approval process Today 2018 May Jul Sep Nov 2019 Mar May 2019 18 Jun, 2018 RfA CREG Submission T&C BRP • Content = ARP contract (v. of 20/4) 27 May, 2019 • Terminology aligned to EBGL and Approval CREG ‘draft FGC’ decision (B) 1913/2 • Structure aligned to art; 18.6 of EBGL 8 May, 2019 s
Slide 36: Offshore integration – Planning
Offshore integration – Planning Go-live Today Q1 2018 Q1 2019 End 2019 1.11.2018 31.3.2019 11/2019 Test period Lessons learned Storm Elaboration storm forecast tool 15.10.18 12/06/2019 forecast tool Workshop with IRM Workshop (12/06) 16.10.2018 9.11.2018 30.6.2019 Clarification specific parameters D
Slide 37: Offshore integration: workshop 12/06/2019 – Topics
Offshore integration: workshop 12/06/2019 – Topics Description of the storm forecast model and possible improvements Presentation of the model by the storm forecast supplier Improvements of the Storm forecast Tool Lessons learned on storm forecast tool Assessment of the to forecast accurac
Slide 38: Offshore integration: workshop 12/06/2019 - Feedback
Offshore integration: workshop 12/06/2019 - Feedback 1. On the storm forecast model and possible improvements The integration of new wind park technologies (“high-wind ride through”) in the model is considered as a critical point The willingness from involved market parties to help improving the
Slide 39: Offshore integration - Next steps
Offshore integration - Next steps Specific workshop to detail results of storm forecast test period, define procedure 12th June parameters and present improvements of the model Q2 End of • No IT specs for market parties Storm tool is a web application June • Update of the design note based on feed
Slide 40: Offshore integration in T&C BRP
Offshore integration in T&C BRP T&C BRP will be modified to integrate the elements related to the storm mitigation procedure Individual balancing obligation for BRP’s (art. 15). BRP has to take measures to consider and anticipate forecastable Storm Events that could lead to imbalances on its per
Slide 41: Agenda
Agenda 1. Approval of the MoM of previous WG Balancing 6. Status Updates projects • FCR product developments • ID market access 2. Imbalance prices on the 7th of June • mFRR: stakeholder consultation feedback & next steps • iCAROS • ToE pass-thourgh contracts 3. Volumes reserves 2020 7. Winter produ
Slide 42: 6. Status updates FCR product developments
6. Status updates FCR product developments
Slide 43: FCR – Reminder of main evolutions for 2020
FCR – Reminder of main evolutions for 2020 Daily Procurement with 4 hours product • Procurement via the regional platform only EU harmonization • 4 hours product • Procurement separated from aFRR EU harmonization Procurement of 200mHz service only • Symmetric FCR 200mHz only • End of procurement f
Slide 44: FCR – Design note feedback
FCR – Design note feedback The design note describing the evolutions was consulted from April to end of May Feedback was provided by market parties on the design note: 1. Principles related to energy limited assets need to be clarified • Requirements for the energy limited assets • Requirements
Slide 45: FCR – Planning and next steps
FCR – Planning and next steps FCR evolution planning Local Weekly Procurement Regional Weekly Daily Procurement Design note integrating the received feedback is available on Elia website Next step: T&C BSP FCR 45 WG BALANCING 25/06/2019
Slide 46: 6. Status updates ID Market access
6. Status updates ID Market access
Slide 47: Intraday Market Access – Principle and objective
Intraday Market Access – Principle and objective • Due to the Go-Live of Nemo Link HVDC cable • The possible volumes to be compensated in case of countertrading could be much higher • It could be hard to find these volumes with the current means used for the compensation of countertrading • Intraday
Slide 48: Intraday Market Access – Rules and activation
Intraday Market Access – Rules and activation Rules for activation of the ID market as compensation mean: • ID market access will be used in the following cases: 1. A need of countertrading on Nemo Link is detected after 18h in DA by Elia to solve internal congestions on the axis Gezelle-Horta 2. A
Slide 49: Intraday Market Access – Status and next steps
Intraday Market Access – Status and next steps Intraday Market Access rules in the context of congestion management have been validated by the CREG for a trial period The trial period started on the 1st of May 2019 and will end on the 30th of April 2020 The objectives of the trial period are t
Slide 50: 6. Status updates mFRR: stakeholder consultation feedback & next steps
6. Status updates mFRR: stakeholder consultation feedback & next steps
Slide 51: Received feedback
Received feedback Stakeholder responses: Main points: • FEBEG - Availability test frequency & remuneration • FEBELIEC - Prequalification test profile CIPU • Restore - Pay-as-cleared settlement mechanism • Actility - Administration daily procurement • Eneco Other minor points (not presented today) 51
Slide 52: Point 1: Availability tests
Point 1: Availability tests Stakeholder concerns that Elia’s proposal on the availability tests will rule out Demand Response of mFRR. Issue: - Availability tests are not remunerated. Elia design: no change - The number of activations for availability tests may exceed the contracted amount of activa
Slide 53: Point 2: Prequalification test profile
Point 2: Prequalification test profile Stakeholder concerns with assumption of linear ramp up and how the energy during the ramp-up quarter-hour is used to determine the max prequalified power. Issue: - Prequalification process: half the requested energy is expected during ‘ramp up qh’. - But not al
Slide 54: Point 3: Pay-as-cleared settlement mechanism
Point 3: Pay-as-cleared settlement mechanism Stakeholder request to apply clearing price on both mFRR standard and mFRR flex activations. Issue: - Pay-as-clear for mFRR flex set based on the mFRR flex activated bids only. Elia design: no change mFRR flex is bound to less requirements than mFRR stan
Slide 55: Point 4: Administration daily procurement
Point 4: Administration daily procurement Stakeholder concerns on the administrative impact of daily procurement. Reference to FEBEG’s proposal of 2018 to buy part of the mFRR volume in another timeframe than daily. Elia design: no change Cfr. Study on dynamic procurement proving the added value of
Slide 56: Next steps
Next steps Elia will bilaterally contact stakeholders for responses on their other feedback. An updated version of the design note will be published online by mid July including the design adaptations based on the consultation feedback (see previous slides) Material for IT-implementation at st
Slide 57: 6. Status updates iCaros Implementation project
6. Status updates iCaros Implementation project
Slide 58: Deliverables 2019
Deliverables 2019 • Delivery of regulatory package version 1.0 (content : T&C OPA version 1.0, T&C SA version 1.0, coordination rules version 1.0 & implementation plan for iCAROS design) in line with current Elia procedures and tools – focus on TSOs connected PGMs D&C ≥ 25 MW (including those connec
Slide 59: High level indicative planning
High level indicative planning 2022 Target Go- Live of iCaros Go-live preparation design – including set-up of contractual Implementation and framework testing by Elia and Grid Users Description of business and system requirements April 2018 : Publication of the reviewed and consulted design notes 5
Slide 60: Collect input from users/stakeholders to fine-tune design and business requirements
Collect input from current (and future) users/stakeholders in order to fine-tune dessign and business requirements focus on assets on TSO grid & TSO-connected CDS 7 fine-tuning sessions (2hours) – topics of sessions are communicated to current (and future) users/stakeholders at least one week before
Slide 61: 6. Status updates ToE: pass-through contracts
6. Status updates ToE: pass-through contracts
Slide 62: Context
Context Feedback from market actors on consultation of aFRR design note (2018): • market players deplored the lack of a solution for net-injection delivery points in the context of ToE • 2 actors proposed an alternative set-up for delivery points where grid user signed a PT contract This allows sm
Slide 63: Comparative summary of possible schemes
Comparative summary of possible schemes Legend: ► Deviation induced by activation ► correction ToE Opt-out Pass-through +Edel -Edel - Ereq +Edel +Edel no correction +Edel no correction -Ereq -Ereq BRPsource € BRPfsp BRPsource BRPfsp BRPsource BRPfsp € € Supplier FSP Supplier FSP Supplier € FSP Grid
Slide 64: Target design
Target design AS IS TO BE BSP-Supplier couple BSP – Supplier couple Pass-through contract holders Net-offtake Net-injection (injection + offtake) Net-offtake Net-injection One regime Opt-out One (!) regime Opt-out Alternative solution for • ToE • ToE all pass-through • With PT • With PT contract hol
Slide 65: Next steps
Next steps Planning closely linked with consultations of T&C BSPs (+ go-live new mFRR and aFRR design in 2020) 18 - June: Public consultation ToE-rules End of august – September : submission ToE-rules for decision to CREG 67 FORBEG – 23/05/2019
Slide 66: Agenda
Agenda 1. Approval of the MoM of previous WG Balancing 6. Status Updates projects • FCR product developments • ID market access 2. Imbalance prices on the 7th of June • mFRR: stakeholder consultation feedback & next steps • iCAROS • ToE pass-thourgh contracts 3. Volumes reserves 2020 7. Winter produ
Slide 67: 7. Winter product
7. Winter product
Slide 68: Context
Context • In the context of the adequacy issues that had been identified for winter 2018-19 Elia implemented the “Slow Non-CIPU R3 NR” . • Goal of the product: • provide a quick alternative to the Strategic Reserve for the winter 2018-19 • provide to the slow flexibility a quick way to the market •
Slide 69: Feedback Analysis
Feedback Analysis • Despite the interest of stakeholders only a few MW had been contracted with delivery points located in distribution grid. All of them had participated to SDR drop-by in the past. • Besides that adequacy circumstances evolved positively in the first weeks of the winter period and
Slide 70: Evolutions ?
Evolutions ? • The product “as it is” is meant to be and can be used only for adequacy issues • Bids are called upon by Elia after adequacy trigger with a notice period of 8-12h • No firmness of bids as they can be withdrawn • For the coming winter, the interest for this product “as it is” strongly
Slide 71: Agenda
Agenda 1. Approval of the MoM of previous WG Balancing 6. Status Updates projects • FCR product developments • ID market access 2. Imbalance prices on the 7th of June • mFRR: stakeholder consultation feedback & next steps • iCAROS • ToE pass-thourgh contracts 3. Volumes reserves 2020 7. Winter produ
Slide 72: 8. RT DGO Allocation platform
8. RT DGO Allocation platform
Slide 73: CREG Discretionary Incentives
CREG Discretionary Incentives 2016 – CREG Requests study on feasibility of real-time BRP imbalance calculation through discretionary incentive for 2017 (cf. . DECISION (B)160630-CDC-658E/38) 2017 – Elia performs study Analysis of different imbalance components PoC for real-time estimation of DGO All
Slide 74: DGO Allocation estimation model
DGO Allocation estimation model The estimation model built in 2017 is a linear regression model, the RT DGO Allocation for instant qh is calculated using variables also at instant qh 𝑁 𝑅𝑇 𝐷𝐺𝑂 𝐴𝑙𝑙𝑜𝑐 𝐸𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝐵𝑅𝑃𝑖 𝑞ℎ = 𝐼𝑛𝑡𝑒𝑟𝑐𝑒𝑝𝑡𝐵𝑅𝑃𝑖 + 𝐶𝑜𝑒𝑓𝑓𝐵𝑅𝑃𝑖 𝑗 ∗…
Slide 75: Additional variables in model for 2019
Additional variables in model for 2019 Infeed SLP Solar Forecast Wind Forecast Tested and selected in 2017 Solar RTU Wind RTU Tested but discarded in 2017* Tested and selected in 2019* Prices Temperature * variable selection has been fine-tuned in 2019 model. Some of DGO the variables discarded in 2
Slide 76: BRP ID-card – Variable selection
BRP ID-card – Variable selection The methodology improvement research in 2019 has shown that a selection of variables specific to each BRP provides better results than a general model, with all variables, for each BRP. The variable selection for each BRP is defined in a BRP ID-card. It can be done u
Slide 77: Training period extension
Training period extension Another improvement with respect to 2017 is the extension of the training window of the machine learning algorithm. In 2017, the algorithm used 4 weeks, where in 2019 this has been extended to 12 months, allowing capturing seasonal events. 2017 Model Aug Sep Oct Nov Dec Jan
Slide 78: Summary of methodology improvement impact
Summary of methodology improvement impact 83 WG BALANCING 25/06/2019
Slide 79: Data quality on real-time
Data quality on real-time Each variable has a weighting in the quality of the estimation (i.e. how much the estimation precision degrades when the variable is missing Available BRP A (%) BRP B (%) BRP C (%) Available BRP A (%) BRP B (%) BRP C (%) Yes No DGO Infeed 54% 17% 27% DGO Infeed 54% 17% 27%
Slide 80: Messages sent to BRP
Messages sent to BRP Messages will be sent to BRP, on quarter-hourly basis, with their DGO Allocation estimation for the current day The message format will follow the standards used by EVMS (cf. Metering Manual), allowing for different possibilities for BRP for receiving the message (csv or xml for
Slide 81: Implementation Planning
Implementation Planning IT Implementation Track Model training module Mar 1 - Aug 15 Real-time estimation module 17 Apr - 15 Aug Internal testing Aug 16 - Sep 30 Publication module 1 Aug - 1 Oct Parallel Run Internal testing Oct 1 - Nov 14 with BRP External testing with pilot BRP Nov 16 - Dec 16 Met
Slide 82: Agenda
Agenda 1. Approval of the MoM of previous WG Balancing 6. Status Updates projects • FCR product developments • ID market access 2. Imbalance prices on the 7th of June • mFRR: stakeholder consultation feedback & next steps • iCAROS • ToE pass-thourgh contracts 3. Volumes reserves 2020 7. Winter produ
Slide 83: 9. European Integration
9. European Integration
Slide 84: EU Balancing: Latest developments
EU Balancing: Latest developments - 2 proposals have been submitted to public consultation last May Standard balancing capacity product Methodology for cooptimized Cross-Zonal Capacity allocation - A workshop has taken place on these 2 proposals on the 6th of June. - The proposals, the explanato
Slide 85: EU Balancing: Proposals
EU Balancing: Proposals 2019 May Mar Nov Aug Dec Apr Feb Sep Oct Jun Jan Jul Approval of 6 proposals of Dec 2018 Amendment Implementation Framework Imbalance Netting Proposal list of Standard Balancing Capacity Products Proposal methodology for cooptimised CZC allocation Proposal methodology for mar
Slide 86: EU Balancing: Implementation projects
EU Balancing: Implementation projects - 10 additional TSOs to join IGCC in 2019/2020, in a sequential way IGCC - As of July 1st, D-2 daily auctions, 24h products, marginal pricing, divisible & indivisible bids FCR coop. - Aim to further harmonise rules on aggregation/power measurement location, back
Slide 87: AOB & questions
AOB & questions
Slide 88: Many thanks for your attention!
Many thanks for your attention! ELIA SYSTEM OPERATOR Boulevard de l'Empereur 20 1000 Brussels +32 2 546 70 11 info@ elia.be www.elia.be An Elia Group company