Market access: The Electricity Perspective BERN, OCTOBER 26TH 2018 - - PowerPoint PPT Presentation
Market access: The Electricity Perspective BERN, OCTOBER 26TH 2018 ELECTRICITY | BKW | 26.10.2018 2 Agenda Electricity cross-border trade Price as a result of market integration today and outlook Regulation and externalities
BERN, OCTOBER 26TH 2018
| BKW |
Electricity cross-border trade Price as a result of market integration – today and outlook Regulation and externalities Final remarks
26.10.2018 ELECTRICITY 2
| BKW |
26.10.2018 3 ELECTRICITY
18 11 9 6 14 13 8 3 3 32 3 2 5 1 2 4 2 2 18 5 1 1
Net Exporter Net Importer
[1] Exchanges may differ significantly from to actual physical flow
Commercial Exchanges1 2017 [TWh] Gains from trade
Commercial advantages: Economies of Scale, Location economies Energy security: Trade as a back up
export and transit
| BKW |
26.10.2018 4 ELECTRICITY
Generation2 61.5 8.5 5
Commercial Exchanges1 2017 [TWh]
[1] Exchanges may differ significantly from to actual physical flow [2] Total generation incl. pump storage hydro [3] Arrow sizes are indicative and not linear to actual exchanges
5.7 9.5 1.0
Import Export Net3
5.7 5.7 <0.1 17.8 18 0.2 5 5.7 10.9 12.5 1.6
Electricity hub
France and Germany: net exporter Italy: net importer Switzerland: transit
generation as transit
| BKW |
26.10.2018 5 ELECTRICITY
Effect of hydro seasonality
Higher demand during winter Lower hydro generation (run of river) during winter
1 2 3
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Monthly Balance [TWh]
2020 Export Import
[1] Simulation for 2020
| BKW |
26.10.2018 6 ELECTRICITY
20 40 60 80 100
Power Prices [€/MWh]
Italy Switzerland Germany
| BKW |
26.10.2018 7 ELECTRICITY
30 60 90 120
Solar Wind Gas Wasser Kern Kohle
Net-change of power plants - Switzerland and neighboring countries until 2040 [GW]* Need for back-up power plants
*Based on TSO's and Regulators projections
Hydro Nuclear Coal Germany: Accelerated Caol exit?
| BKW |
26.10.2018 8 ELECTRICITY
200 400 600 800 1000 1200 1400 1600 2017 2030 2040 Generation and Demand: CH & Neighbors [TWh/year]* Base Flexibel Stochastic
Nuclear & Coal Wind & Solar Gas Consumption Hydro
*Based on TSO's and Regulators and own projections
| BKW |
26.10.2018 9 ELECTRICITY
0% 2% 4% 6% 8% 10%
<=0 €/MWh >100 €/MWh Frequency of extrem prices [proportion of hours]*
today today 2040 2040
*Own price projections
More price spikes
Very low / very high prices Flexibility value
| BKW |
26.10.2018 10 ELECTRICITY
Coupled under MRC 4M MC Coupled under MRC (without capacities) Progressing toward market coupling
More efficient cross-border trade
Energy and (scarce) cross-border transmission capacities are traded simultaneously More efficient use of transmission capacities1
Switzerland in the market coupling? Loop flow issues without market coupling
[1] Lower transaction costs; higher use of existing capacities; more liquidity in short run markets
| BKW |
26.10.2018 11 ELECTRICITY
Capacity payment Strategic reserve Capacity market
Market design for energy security
Capacity mechanisms as a complementary instrument – beside spot market earnings Incentives to (re-) invest into power plants
| BKW |
More renewable energy in Europe
Location economies makes trade even more relevant Security of supply needs to be addressed in a more regional context Flexible power plant capacity as an asset – for trade and security of supply
Swiss specificities
Historical role as an electricity hub Trade as a pillar for business and security of supply – today and in the future Trade as an instrument to market the (growing) value of flexible hydro power
26.10.2018 ELECTRICITY 12
www.bkw.ch
urs.meister@bkw.ch