Page 33 - European Energy Innovation - winter 2017 publication
P. 33
Winter 2017 European Energy Innovation 33
ELECTRICITY MARKET INNOVATION
and commercial interest of the and operational needs, it is providers’ bids and possible
providers. fundamental to ensure a coherent and limitations is essential especially
integrated wholesale and retail market close to real time.
DSOs and TSOs need to coordinate building on the IEM, and allow further
closely and exchange the necessary cross-border opportunities. FLEXIBILITY SERVICES TO BE USED
information for operating their WHERE THEY GENERATE THE
network securely and ensuring KEY RECOMMENDATIONS HIGHEST VALUE
market efficiency. Such coordination We further detail our key • Flexibility providers should be able
will, among others, avoids double or recommendations for the integration
counter activation of the same service of DFR in the market as follows with a to offer their flexibility by placing
at the same time. focus on TSO-DSO cooperation: their bids in such a way that they
can be activated where they have
Local and national pilot projects are A SOUND DEFINITION OF the highest value to them.
good steps forward as they allow PRODUCTS TO SUIT THE SYSTEM • The market design should minimise
testing different strategies within a AND GRID NEEDS the number of different bidding
fast-evolving framework. Nevertheless, • DSOs and TSOs need to assess processes to answer the various
economic efficiency principles must needs of system operators.
be considered at an early stage. It the potential needs for DFR in For instance, all congestion
must also be ensured that solutions their network for congestion management needs for the TSO
are consistent with EU market design management. Such needs should network and DSO network should
principles. DFR integration should be compared with existing and preferably be fulfilled by a common
not lead to market fragmentation nor foreseeable capacities of the bid submission process, which
competition distortion, but should potential flexibility providers and could possibly be merged with
ensure neutrality, confidentiality and defined clearly to attract the interest the bidding processes used for
transparency. In particular, effective of all relevant market parties. balancing.
DSOs unbundling is key to ensure • Suitable products should be
neutral market facilitation and fair defined jointly by DSOs and TSOs A SINGLE MARKETPLACE IS A
competition in procurement of before NRA approval, in order POSSIBLE SOLUTION TO ADDRESS
flexibility services. to facilitate standardisation for THESE CHALLENGES
efficiency purposes. A certain • A single marketplace at national
ENTSO-E highlights that the degree of flexibility may be needed
implementation and specific design to allow for more local specificities level1) for collecting and activating
questions of such a flexibility or certain technical parameters distributed flexibilities may be
marketplace are up to national in implementation. The number a practical answer to different
decisions. At the same time, ENTSO-E of products needs however to challenges: ensuring liquidity,
recommends defining and agreeing be limited to minimise negative building a level playing field for
overarching market design principles impacts on market liquidity. different service providers in a
at the EU level, ensuring a direct user-friendly way and allowing the
relation between any buyer and COORDINATION OF PROCESSES coordination of different market
provider of a product, and avoiding AND INFORMATION EXCHANGE processes such as balancing and
a fragmentation of the market BY TSOS AND DSOS IS KEY TO congestion management.
depending on voltage level. GUARANTEEING OPTIMAL USE OF • It allows TSOs and DSOs to access
RESOURCES AND SYSTEM SECURITY all bids and to mutually coordinate
In that sense, DFR providers should be • Activation of DFR within the activations.
able to interact both with DSOs and • It simplifies access to all markets for
TSOs, depending to whom the service is balancing or congestion DFR and ensures that DFR providers
sold. National implementations in which management process shall not can participate in all processes
DFR providers can only beactivated negatively impact the other collecting the maximum value for
through their local connecting DSO processes. Therefore, TSOs and their flexibility.
should be avoided (a scheme often DSOs shall be able to set limitations
referred to as “cascading principle”), as or activate DFR to solve congestions Based on these principles, ENTSO-E
it would inevitably fragment liquidity considering the geographical recommends assessing different
and prevent system wide aggregation location of the assets in a bid. options and benchmarking them
in the balancing process. Also, the availability of contracted against each other, as a basis for
balancing reserves to TSOs must agreeing on a future market design for
In the interest of both end consumers not be endangered. DFR. ENTSO-E is looking forward to
• Coordination between System closely cooperate on this with DSOs
Operators on activation of flexibility and stakeholders. l
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