Elia Grid International
as an International Pioneer

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 1

自己紹介
Rena Kuwahata – 桑畑玲奈

中学校まで日本の公立の学校
高校・大学はオーストラリア 電気工学と言語（日本語、スペイン語、中国語）専攻
2003～2006年 Australian Energy Market Operator
2007～2008年 南米でボランティア
2008～2017年 ヨーロッパ・ドイツで System Integration of Renewables に関連した仕事•

Energynautics: Thomas Ackermann•

Ecofys•Elia Grid International （現在所属）

2017年～

日本で活動をひろめることが是非できれば！

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 2

Elia Grid International: Backed by two major grid operators

50%

50%

Brussels
Berlin

EGI offers consultancy andengineering services basedon experiences from TSOs in
Europe: Advisory services /Consultancy assignments
 Insights into up-to-datedevelopments in European
market Workshops

Dubai

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 3

Elia Grid International: international and industry experts working withexternal partnerships
Cross-border
andTSO/DSO
coordination

50%

50%

50%
penetrationof variable
renewables

International andindustry experts
 SMA
 Younicos
 Ecofys Australia / Italy etc…
Partnerships
 Fraunhofer Poyry Eridge

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 4

Elia Grid International: providing assistance in adapting to change
Cross-border
andTSO/DSO
coordination

50%

50%

50%
penetrationof variable
renewables

International andindustry experts

Key Driver of Change: Energy Transition
Market Reform & Renewable Energy Integration

Example services

Asset Management

how to optimise with uncertainty from cross-border
operation, renewables and unbundled market

Strategical & Organisational advisory

how to reorganise with unbundling from verticallyintegrated utility to TSO/ISO

System operations & grid development

how to secure and optimise with uncertainty from crossborder operation, renewables and unbundled market

Market development and regulatory frameworkpros and cons of (past and future) European / German
development compared to other markets

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 5

German Balancing Mechanisms

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 6

Overview of presentation

1. Need for balancing due to changing power mix

2. Mechanisms for balancing in Germany•

Short-term markets•

Imbalance settlements•

Balancing reserves

3. Performance of the balancing mechanisms

4. GCC and IGCC

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 7

Need for balancing due to changing power mix: German policy goals ofEnergiewende
What are the core elements of German „Energiewende“?
Policy-driven structural changes in the German energy system:
Phase out of nuclear energy production by 2022
Dynamic Renewables development (EEG 2.0)
Targets: 40-45% share of total electricity consumption until 2025, 80% until 2050
Greenhouse gas reduction: Future of coal-fired generation in question
Target: 40% CO2 reduction by 2020, 80-95% by 2050

Energy efficiency: 50% increase of electricity efficiency by 2050
Grid extension to transport renewable energy to the big industrial centres inSouthern Germany
Source: 50Hertz
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 8

Need for balancing due to changing power mix

Peak demand

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Installed
capacity 2016
53% RE
46% VRE

Production in
2016
33% RE
21% VRE

Slide 9

Changing power mix: example production in Germany in week 11 2017

In March, Germany posted yet another wind power record, with production peaking at
38.5 GW on March 18, just topping the of 38 GW on February 22.
https://www.energy-charts.deRena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 10

Renewables share of yearly electricity production in percentage:
50Hertz is leading development
GERMANYhttps://www.energy-charts.de

50Hertz

60%
50%

Source: 50Hertz

40%
30%
20%
10%
0%
2008

Germany reached 10% penetration in 2004, and 32%
in 2016.

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

2009

2010

2011

2012

2013

2014

2015

50Hertz reached 10% penetration prior to 2008, andclose to 50% in 2015.

Slide 11

Volatile RES feed-in – Wind Energy in 50Hertz

Exact forecasts and an extremely flexible and a fast-reacting control system areessential to compensate fluctuations.
Source: 50Hertz
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 12

Volatile RES feed-in – Solar PV in 50Hertz

Exact forecasts and an extremely flexible and quickly reacting control systemare essential to compensate fluctuations.
Source: 50Hertz
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 13

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 14

Need for balancing due to changing power mix•

Stochastic imbalances: unplanned outages (plants and lines) and forecast errors (load and VRE)•

In Europe, primary reserve is not impacted by variable renewables•

Main driver for the need of balancing is forecast error of demand•

Increase of variable renewables increases supply-side forecast errors, and residual load ramps which are higher
than traditional load ramps•

DE studies find that need for secondary and tertiary reserves increase with increasing variable renewables (VRE)•

reserves requirement will increase by 4-6% of the additional installed capacity of VRE•

improvements in forecast errors in the range of 30-60% will decrease the requirement by (2-4%)•

If imbalance prices are high, operational decisions (forecast quality, portfolio managements) will be made in a way that
forecast errors and outage rates will be reduced.

•

Deterministic imbalances: deviations between the discrete schedules and continuous physical deliverables (schedule
leaps)•

Schedule leaps cause significant deterministic imbalances (up to 1500 MW based on 2011 data).

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 15

Variable renewables impact on reserves requirement•

HOWEVER: in DE, while VRE capacity has increased from 27 -> 78 GW since 2008, reserve
requirement has reduced by 15% . Also reserves did not increase either in DK, ES & PT. Possible
reasons for this:•

Improvement of wind and solar forecasts•

Improvement of load forecasts•

Reduced frequency of plant outages•

TSOs reduced security margins•

TSO cooperation in reserve sizing•

Improved intra-day market liquidity, allowing better portfolio management

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 16

Mechanisms for balancing: stakeholder roles and responsibilities•

Balancing responsible parties (BRPs): market entities (utilities, sales companies, industrial
consumers) that balance portfolio of generators and/or loads. Each physical connection point isassociated with one BRP. Quarter-hourly1 schedules are submitted one day ahead (but can be
adjusted one hour ahead of delivery). Deviations from these schedules are penalized.

•

TSO: activate balancing power in balance area if the sum of BRP imbalances is non-zero.

•

1.

Determine capacity of reserves required ex ante

2.

Acquire capacity and determine price (capacity and/or energy) ex ante

3.

Activate balancing power and determine imbalance price (energy) in real-time

4.

Allocate costs (via imbalance price and/or grid fees) ex post

Suppliers of balancing power: generators and consumers that meet prequalification criteria.
Remunerated with capacity payment (EUR/MW per hour) and energy payment (EUR/MWh)

1: half-hourly in France
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 17

Mechanisms for balancing: market setup in Germany

Source: 50Hertz
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 18

Performance of the balancing mechanisms:
Electricity trading volumes - short term markets

Source: 50Hertz
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 19

Performance of the balancing mechanisms: imbalance power

Source: 50Hertz
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 20

Mechanisms for balancing: categories of balancing reserves

Source: 50Hertz
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 21

Mechanisms for balancing: categories of balancing reserves
Primary Control

Secondary Control

Tertiary Control (Minute Reserve)

Response time

30 secs, direct (continuous)

15 min or less, direct

15 min, direct or scheduled

SystemUCTE

UCTE and BA

UCTE and BA

Target variable

Frequency

ACE and frequency

Current and expected level of SC
activation

Activation

Based on local frequency
measurement

Centralized (TSO); IT signal (AGC)

Centralized (TSO); phone / IT signal

Suppliers (typical)

Synchronized generators (large
consumers)

Synchronized generators, stand-byhydro plants, large consumers

Synchronized and fast-starting standby generators, large consumers

Reserved capacity

3000 MW in UCTE (600 MW in DE)

Determine by TSO (2000 MW in DE)

Determined by TSO (2500 MW in DE)

Sizing methodcommon European deterministic-static
approach

TSO decides
DE static-probablistic

TSO decides
DE static-probablistic

State-of-art suppliers inmarket5 MW batteries in DE
30 MW Aluminium electrolysis

10 MW CHP (DR) in DE

Demand blocks in BE
60 MW wind farms in DE

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 22

Performance of the balancing reserves market: number of suppliers

Source: Lion Hirth, neon neueenergieökonomik
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 23

Enhancement of Balancing Power: prequalified balancing power service
providers in 50Hertz region
1200

PRL

SRL

MRL

1000
800

600
400
200
0
2009

2010

2011

2012

2013

2014

事前審査済みのSRL(Secondary Reserve)とMRL(Tertiary reserve)数が大幅に増加
Source: 50Hertz
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 24

Performance of the balancing reserves market: market size

Neon analysis. Based on data from Bundesnetzagentur, Regelleistung.net,
TSO websites. Power (capacity) payments only.
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017•

In 2015, the market for balancing power
contracted further. Revenues totalled€340m, 60% less than in 2009 and 25%
less than in 2014.

•

The markets for secondary and tertiarybalancing (minute reserve) continue todecline. Primary balancing remains
stable.

•Since 2009, revenue has declined by
60% in secondary balancing –and by
80% in tertiary.
Source: Lion Hirth, neon neueenergieökonomik
Slide 25

Side note: comparison of market size

The retail electricity price forhouseholds is about €280 per MWh.
Of this, €0.38 (0.1%) pays for holding
balancing reserves.

Neon analysis. Based on data from Bundesnetzagentur, Regelleistung.net,
TSO websites. Power (capacity) payments only.

Source: Lion Hirth, neon neueenergieökonomik
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 26

Performance of the balancing reserves market: prices in different market
segments

Source: Lion Hirth, neon neueenergieökonomik
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 27

Performance of the balancing reserves market: procured volume

Source: Lion Hirth, neon neueenergieökonomik
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 28

Performance of the balancing reserves market: procured volume andprocurement cost

Since 2008, installed wind and solar capacity tripled. At
the same time, SRL requirement decreased by 20%

After the Introduction of the GCC in 2010, costs went
down almost 50%

Source: 50Hertz
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 29Performance of the balancing reserves market: activated volume

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 30

European harmonisation of balancing power••

TOP-DOWN: European Union aims to harmonize and integrate European balancing systems and markets•

NC: FCR (Frequency Control and Reserves)•

NC: EB (Electricity Balancing)

BOTTOM-UP: TSO cooperation initiatives in four stages:i.

Imbalance nettingii.

Common reserve sizing

iii.

Common reserve procurementiv.

Common reserve dispatch/activation•

GCC: covers all stages•

IGCC: focuses on secondary reserve, and imbalance netting (sizing is done individually). Includes DK, NL, CH,
BE, CZ, AT, FR TSOs.

•

Other: common procurement of primary reserve by bilateral cooperation of CH, FR, DE, AT TSOs.

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 31

Grid Control Cooperation (GCC) and International Grid Control
Cooperation (IGCC)
Participating in
all Modules
Participating only
in Module 1

Grid control cooperation (GCC)
functioning in four modules

Energinet.dk• Module 1: Avoid activation of secondary control power in the
opposite direction
 reduction of secondary control energy

TenneT NL
50HertzČEPS
Elia
Amprion• Module 2: Joint dimensioning and mutual support with secondary
control power among participating TSOs
 reduction of secondary control power• Module 3: Joint activation procedures: Activation signal will be
provided by that TSO where the generator is connected one common market area

• Module 4: Common Merit Order List or common control energy
pricesTenneT D  further cost optimization

TransnetBW
Swissgrid

APG

Technical solution via connection of load-frequency controllers.

GCC – full harmonized German market
IGCC – cooperation of TSOs to avoid activation of aFRR
Source: 50Hertz
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 32

Introduction of the (I)GCC
GCC as an initiative from German TSOs•

No legal obligation from the Regulator or Government to introduce the GCC•

Cost saving potential seen•

Potential for a reduction of secondary control power seen•

Eases the integration of renewables by freeing control reserves

Introduction of the IGCC•

An independent effort of European TSOs triggered by Germany•

Benefits of the GCC seen by other European TSOs•

Easy adoption to other (non-German) control areas (Module 1)•

The more participants (German and non-German) the more potential for cost savings, however the technical implementation might get
more complex

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 33

Primary reserve cooperation
 Common procurement of primaryreserves for Austria, Switzerland,
Germany, Netherlands, Belgium
and France

TenneT

01/2014Elia

 Currently in discussion with
Denmark to broaden cooperation

08/2016
RTE

APG

01/2017
Swissgrid04/2015

03/2012

Common procurement of primary reserve and imbalance netting are
the “low hanging fruits“ of international balancing power cooperation
Source: 50Hertz
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 34

Development of balancing requirements in Germany
Standard deviation of balancing requirements per month
Cold period

Stricter BRP control¼h-Auction
Shortening GCT
45 to 30 min

Oktober 2015

Juli 2015

April 2015

Januar 2015

Oktober 2014

Juli 2014

April 2014

Januar 2014

Oktober 2013

Juli 2013

April 2013

Januar 2013

Oktober 2012

Juli 2012

April 2012

Intro. Market premium of EE
Increasing imbalance prices

Januar 2012

Oktober 2011

Juli 2011

April 2011

Januar 2011

Oktober 2010

Juli 2010

April 2010

Januar 2010

Oktober 2009

Juli 2009

April 2009

Start ¼h-ID-trading
Januar 2009

1600
1400
MW
1200
1000
800
600
400
200
0

Source: 50Hertz
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 35

daniel.baumgartner@eliagrid-int.com

ご清聴ありがとうございました
Elia Grid International
Rue Joseph Stevens 7 Joseph Stevensstraat

Heidestraße 21000 Brussels – Belgium

10557 Berlin – Germany

Tel. +32 2 204 38 11

Tel. +49 30 5150 37 11

Fax +32 2 204 38 10

Fax +49 30 5150 37 10

www.eliagrid-int.com

An Elia Group company
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 36Monthly Volumes of Netted Imbanlances
Amount of Netted Imbalances (Short+Long) - Monthly Values (GWh)
275
DE

DK

NL

CH

CZ

BE

AT

250
225
200

GWh

175
150
125
100
75
50
25
0

10/11

01/12

04/12

07/12

10/12

01/13

04/13

07/13

10/13

01/14

04/14

07/14

10/14

01/15

04/15

07/15

Month

From October 2011 to October 2015 (Source 50Hertz)

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 37

Monthly Values of Netted Imbanlances
Value of Netted Imbalances - Monthly Values (Million €)
13
DE

12

DK

NL

CH

CZ

BE

AT

11
10
9

Mil. €

8
7
6
5
4
3
2
1
0

10/11

01/12

04/12

07/12

10/12

01/13

04/13

07/13

10/13

01/14

04/14

07/14

10/14

01/15

04/15

07/15

Month

From October 2011 to October 2015 (Source 50Hertz)

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 38

Barriers for VRE (and DR) provision of (negative) balancing power•

Some implementation issues may persist, but larger obstacle is:•

Design of balancing markets constitutes a prohibitive entry barrier. Options to remove barrier are:••Adjust balancing power auction design•

PC and SC auctions in DE require provision for a full-week. Weather forecasts in this horizon are much too
uncertain to provide firm reserves.

•

E.g., daily auction with contract duration of one hour (like day-ahead spot)

Introduce a second energy auction•

Generators are rewarded only with energy payments for provision of balancing services (DK, NL)•

Conditional bids: joint bids on spot and balancing power markets, e.g., offering balancing services only in those
hours where plants are dispatched.

•

Pay-as-bid could be replaced with uniform (marginal) pricing•

Foster passive balancing

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 39

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 40

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 41Performance of the balancing mechanisms:
Solar eclipse 2015: A successful trial-run for the future’s electricity system
Conclusions

Megawatt (MW)25.000- The market mechanisms that weredeveloped and introduced over thelast years work well

20.000~13,7 GW
15.000- TSOs were able to grant highsystem stability by adapting
additional measures~6 GW
10.0000

00:15:00
01:00:00
01:45:00
02:30:00
03:15:00
04:00:00
04:45:00
05:30:00
06:15:00
07:00:00
07:45:00
08:30:00
09:15:00
10:00:00
10:45:00
11:30:00
12:15:00
13:00:00
13:45:00
14:30:00
15:15:00
16:00:00
16:45:00
17:30:00
18:15:00
19:00:00
19:45:00
20:30:00
21:15:00
22:00:00
22:45:00
23:30:00

5.000

PV-Kombi Germany, Day ahead Forecast 08.00am
Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017- A highly flexible control system as
adopted in this exceptional situation
will be required on a daily basis in
the future

PV-Kombi Germany, Extrapolation
Slide 42Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 43

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 44Performance of the balancing mechanisms: imbalance settlement•

The purpose of balancing power is to respond to unexpected events, but schedule leaps are known to occur
every day at the same time. A dedicated approach for this imbalance may be more appropriate. For example:•

Mandate smoother transitions between intervals•

Shorten intervals•

Introduce a dedicated ramping product•Passive balancing (use the imbalance price to incentivize BRPs to voluntarily stabilize the system)

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 45

Deterministic imbalance

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 46

Imbalance Settlement
TSO & BSP
Transmission System Operator (TSO)-

Overall a financial neutral position is achieved-

Costs for activated Balancing Energy are charged to BRP-

Costs for procured Balancing Capacity are part of grid tariff

Balancing Service Provider (BSP)-

Settlement is done „pay as bid“-

Incentive to be available and to deliver-

No payments if BSP is not available or cannot deliver-

Payment is based on metered delivery (aFRR) or requested delivery (mFRR)-

In case of non-delivery or to often unavailable penalties are possible-

Worst case: prequalification will be withdrawn

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 47

Imbalance Settlement
BRP
Balancing Responsible Parties (BRP)-

Settlement to BRPs is based on activated Balancing Energy-

Germany has an 1-price-system (symmetric price)

-

-

-

price for positive or negative imbalances of BRPs (reBAP) is the same-

Imbalance Settlement Period = 15min

Additional price components:-

Benchmark with Intraday price (intraday price is always “better”)-

If activated Balancing Energy exceeds 80%: +50% but min. 100 €/MWh

Incentive to be balanced-

By contract BRP is forced to be balanced-

reBAP gives an additional financial incentive

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 48

Imbalance settlements•

Determination of imbalance price•

EUR/MWh deviation from submitted schedule by BRP•

All costs are born by unbalanced BRPs (same price for under and over supplied BRPs)•

Since May 2010, there is a common German imbalance price reBAP, set for 15-minute settlement intervals as
the average dispatch cost (net energy payments divided by net balancing energy), which is different to theenergy price in the balancing market (not the marginal cost of activating balancing reserves, even though thiswould be most efficient allocation)•

Prices are published with delay of several months•

Capacity reserve costs are socialized and not recovered by imbalance settlement•

In late 2012, BnetzA introduced a punitive mark-up to increase price spread (difference between imbalance priceand corresponding day-ahead price). The imbalance spread is the economic incentive for BRP to follow
schedule. BRPs aggrevating system imbalance pay the spread, while those that correct system imabalance
earn the spread.

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 49

M1: Prevent counteracting control reserve activation-

avoid the activation of reverse control power through controlled andtargeted energy exchange between the control areas
Potential for cost saving in the reduced activatoin of secondary andminute reserve and related costs

TSO 1
+50MW

50 MW scheduled power
Exchange

Positive ACE

-

TSO 2
-50MW
Negative ACE

In this example none of the TSOs has to activate control reserves

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 50

Module 1 in Operatioin

Control Area 1

Control Area 3

Optimizer
Control Area 2
Further participating Control
Areas

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 51

M2: Common dimensioning of control reserve-

Only the 4 German TSO participate in module 2
A joint dimensioning of control reserve across control areas bears
potential for further cost savings
Access to commonly hold reserves of the 4 TSOs
Necessity for a common German market

BeforeTSO1

TSO2

Reserve1

Reserve2

TSO3

TSO4

Reserve3

Reserve4

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

After
TSO1

TSO2

TSO3

TSO4

CommonReserveSlide 52

M3: Common procurement of secondary control
reserve-

Only the 4 German TSO participate in this module
Allows procurement of secondary control from another control area
Activates and multiplies competition between the secondary control
reserve providers
Further cost savings on the TSO side

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 53

M4: Cost-optimised activation of control reserve-

Only the 4 German TSO participate in this module
Introduction of the Merit Order Lists
Automatic activation of reserves according to the Merit order
The aim of module one is a cost optimsation of the whole secondary
control power procurement process

Rena Kuwahata – Elia Grid International –Kyoto University – 04.2017

Slide 54