reviewed before the publication of the ACER Balancing Implementation - PowerPoint PPT Presentation

G AS B ALANCING IMPLEMENTATION Balancing systems performance and design, including information provision Network Codes Team, Gas Department

D ISCLAIMER All results shown are provisional and may be reviewed before the publication of the ACER Balancing Implementation Report (2018). The views expressed belong to the authors and do not represent the official view of the Agency, except for those that have been published already by the Agency. ACER-ENTSOG BAL workshop Brussels – 12 June 2018

The Agency’s assessment of Balancing Code implementation ACER-ENTSOG BAL workshop Brussels – 12 June 2018

T HE R EPORTS OF THE A GENCY THE FIRST (2016) REPORT, • Reviewed 24 covered a wide range of critical design elements of balancing implementation • Proposed to monitor the progress in each country and called for improved knowledge sharing and dialogue across EU. THE SECOND (2017) REPORT, • the Agency developed a Balancing Analytical Framework (BAF) to measure regime performance - given the local circumstances. • enhanced the qualitative assessment review for 26 EU balancing zones . THE UPCOMING THIRD (2018) REPORT, • Extension of the second Report to 5 balancing zones • Testing further the analytical framework , with regimes applying special features like tolerances and linepack service . The Agency is keen to support the meaningful implementation of the NC. ACER-ENTSOG BAL workshop Brussels – 12 June 2018 3

APPLICATION OF THE BAF IN 2017 AND 2018 Using data GY 15/16 & GY 16/17 . 2 reports covered 12 balancing zones: • NWE and S GRI • SSE GRI • DK & UK-GB (in both reports) H-cal • 2 transitory regimes; * NCG NCG • 3 Within-day regimes GRTgaz East (WDOs); Nord • 2 zones with Linepack flexibility; • 1 zone with tolerances • 2 zones with incentives ACER-ENTSOG BAL workshop Brussels – 12 June 2018

H OW THE BAF MEASURES PERFORMANCE A quantitative analytical framework is essential. » The Agency’s BAF measures balancing market functioning by reviewing: • TSO’s balancing activity (balancing actions volumes and prices) – is it residual? • NUs’ balancing activity (imbalance volumes and prices) – how does it evolve? • And their combined effects on the system (neutrality – both TSO and NUs) ACER-ENTSOG BAL workshop Brussels – 12 June 2018

T HE BAF OUTCOME IN 2018 The BAF allows to make basic conclusions on how the key balancing design elements work. Preliminary findings: » TSO residual role varies across countries; » Relief from tolerances and LFS could be considered to provide adequate incentives for NU balancing; NDM forecast accuracy has an impact on NU balancing activity; » Small adjustment to be sufficient, but not excessive; » Neutrality per unit of market volume is low and comparable across selected zones. ACER-ENTSOG BAL workshop Brussels – 12 June 2018

TSO S ’ BALANCING ACTIONS , GY 16/17 Buy quantities balancing actions Sell quantities balancing actions Price of Balancing action Buys Price of Balancing action Sells % entry Buy-Sell volumes EUR/MWh spread 2.0% 22 [EUR/MWh] 5.43 2.92 20 1.53 1.5% 18 1.37 1.05 0.31 1.0% 16 Absolute volumes [TWh] 14 11.0 0.5% 12 1.2 4.8 0.8 0.2 0.1 0.4 2.0 0.2 0.2 0.3 1.1 0.0% 10 PL H-cal IT CZ HU UK - GB DK ACER-ENTSOG BAL workshop Brussels – 12 June 2018

TSO S ’ BALANCING ACTIONS , GY 16/17 » Residual ( <0.5% of entry volumes) activity in relative terms for all zones • IT is the exception ( > 1.5% ) » Relative asymmetry of TSOs’ balancing actions quantity (Buy nearly doubles Sell) for UK, DK, IT • The opposite for HU » Average price spreads are limited ( < 2 EUR/MWh ) • except HU ( > 5 EUR/MWh ) • and IT ( >2.5 EUR/MWh ) ACER-ENTSOG BAL workshop Brussels – 12 June 2018

N ETWORK U SERS ’ ACTIVITY , GY 16/17 Short imbalance quantities Long imbalance quantities Short imbalance price Long Imbalance price % entry EUR/MWh volumes 6% 20 0.8 1.2 19 0.3 Buy-Sell 5% 1.7 spread 18 [EUR/MWh] 1.1 17 4% 0.1 16 3% 15 14 40.9 2% Absolute 34.7 2.1 13 imbalance 2.0 [TWh] 12 1% 12.0 12.0 11 2.3 2.3 2.1 2.0 0.3 0.3 0% 10 PL IT CZ HU GB - UK DK ACER-ENTSOG BAL workshop Brussels – 12 June 2018

N ETWORK U SERS ’ ACTIVITY , GY 16/17 » Low imbalances in PL, HU, GB ( <2% of entry volumes) • PL: 28% of imbalances within tolerances, shielded from marginal prices (sell: 15.8 EUR/MWh , buy 20.9 EUR/MWh ) » Very low in CZ ( <0.5% ), yet • Linepack flexibility service and • Unused flexibility market shield additional imbalances accounting for 3.4% of entry volumes » Higher levels in IT (>8%) and DK (>7%) • Possible reasons: information provision on NDM, not counterbalanced by other design elements? » Rather symmetric imbalances, with seasonality ACER-ENTSOG BAL workshop Brussels – 12 June 2018

TSO S ’ SHARE OF BALANCING ACTIVITY , GY 16/17 TSO's Balancing Action Quantities Total Imbalance Quantities Share of TSO's action over total balancing activity (right axis) TWh 80 50% 45% 70 40% 60 35% 50 30% 40 25% 20% 30 15% 20 10% 10 5% 0 0% PL H-cal IT CZ HU GB - UK DK ACER-ENTSOG BAL workshop Brussels – 12 June 2018

O VERALL EFFECTS OF BALANCING ACTIVITY The combined effect of NUs and TSOs’ activity can be caught by the neutrality indicator Net adjusted financial neutrality per unit of market volume (EUR/MWh, GY 6/17) EUR/MWh 0.020 0.010 0.000 -0.010 PL h-cal IT CZ HU UK - GB DK ACER-ENTSOG BAL workshop Brussels – 12 June 2018

Information Provision ACER-ENTSOG BAL workshop Brussels – 12 June 2018

T HREE I NFORMATION MODELS IN THE BAL NC » Base case • NDM info is min 1 DA + 2 WD forecasts - First update before 1 pm (W), 12 (S) UTC on the Gas Day. - Second update depends on access to STSPs, accuracy of NDM forecast, renomination window, first update » Variant 1 : • Info on NDM and DM offtakes is based on apportionment of measured flows during the Gas Day - For NDM, based on min 2 WD updates - Initial allocation/imbalance quantity considered as final. » Variant 2: • NDM info is min 1 DA forecast Irrespective of the selected model, the NRA appoints a forecasting party - TSO, DSO, or third party. The NC also requires TSOs, DSOs and forecasting parties to provide information. ACER-ENTSOG BAL workshop Brussels – 12 June 2018

. Art. 38: within 2 years from entry into force of the NC, TSOs C OST - BENEFIT ANALYSIS have to produce a cost-benefit analysis (to be consulted) on: » Increasing frequency » Reducing timeline » Improving accuracy of the information provided to NUs, with breakdown among affected parties . NRAs may decide to improve information provision, based on . Art. 42(3): Forecasting party to publish, every 2 years (at the results. least), report on the accuracy of the NDM forecast. » May serve as an input to the CBA ACER-ENTSOG BAL workshop Brussels – 12 June 2018

. …aims at adequately attributing imbalances to I MPROVING INFORMATION PROVISION … network users. » May create system-wide benefits • NUs confidence to act in the market may increase =>NUs more balanced on average/ TSOs more residual; • Level playing field for new NUs. » May create different impact on different parties • With better forecast, NUs’ imbalances may improve (depending on their portfolio). • Tolerances or others tools shielding from imbalances could be reduced. » Has cost that may be shared among all NUs • spread to all (via tariffs, if approved). ACER-ENTSOG BAL workshop Brussels – 12 June 2018

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