an introduction to network codes & stakeholder engagement codes documents/genera… · an...
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About ENTSO-E
41 TSOs
from 34 countries
532 million
citizens served
828GW
generation
305Thousand Km
of transmission lines
Ten-Year
Network
Development
Plans
Adequacy
forecastsR&D plans
Tools for Market
IntegrationNetwork Codes
The IEM: meeting Europe’s low carbon target
Variable generation Thousands of small units Huge flows all over Europe
System Stability, Resource Variability, Uncertainty, New connections, Changed power flows
Challenges
The IEM: creating benefits for European customers
Real choice
New business
opportunities
Cross border trade
•Efficiency
•Competitive prices
•Better service
•Security of supply
•Sustainability
Source: 3rd Energy package and EC communications
420 billion €
electricity sector’s annual turnover
80 % of power generation
still controlled by the long-established utilities
13 billion € / year
saved by EU customers through IEM
System operation:Delivering coordinated schemes
Market:Delivering well designed
pan-European markets
Infrastructure:Delivering a fit for purpose network
Three pillars for delivering the IEM
Efficiency
Competitive prices
Better
service
Security of supply
Sustainability
System
stability
Resource
variability
Uncertainty
Changed
power flows
Konstantin Staschus | 6 February 2013 | Page 5
Therefore: network codes matter; they form the foundation
on which the IEM is being built
3Connection
Network Codes 3Market
Network Codes 4Operational
Network Codes
set requirements for
- Generators
- Demand-side
- HVDC connections
set market rules for
- Day ahead/intraday &
Capacity calculation
- Long-term timeframes
- System balancing
set common rules for
- Assessing adequacy
- Planning outages
- System security
- Emergency situations
Internal electricity market
… day-ahead market
coupling…
…paving the way for
offshore wind…
…regional security
coordination initiatives…
Konstantin Staschus | 6 February 2013 | Page 6
What is a network code?
A set of rules applying to one aspect of the energy sector
Which are developed by ACER, ENTSO-E & market participants
And become legally binding after the Comitology process
Hence they will have the same status as any other Regulation
Article 4: ENTSO
•Charged with working to complete the internal energy market.
Article 6: Creating network codes
•In line with ACER framework guidelines.
•Which become binding.
•And involve extensive consultation.
Article 8; Para 7: The scope of network codes
•Cross border & market integration issues.
•Without prejudice to Member States’ right to establish codes.
Article 8: ENTSO-E’s activities
•Network codes
•Ten-Year Network Development Plans.
•Generation adequacy reports.
•Winter and summer outlooks.
•Work programs and annual reports.
ENTSO-E’s legal role
Under the designation of Regulation 714/2009
How are network codes developed?
Comitology process (where appropriate)
ECIn consultation with all stakeholders resulting in a legally
binding network code
Assessment of network code
ACER Recommendation of network code to the European Commission
Period in which ENTSO-E can develop a network code (12 month period)
ENTSO-E In consultation with stakeholders according to FWGL
Request for ENTSO-E to draft a network code
EC According to FWGL submitted by ACER
Development of the FWGL (6 month period)
ACER In consultation with ENTSO-E, stakeholders and Expert Group
Request to draft a FWGL
EC On a topic identified in art.8 (6) of Regulation EC 714/2009
Development of
Framework
Guidelines
(FWGL)
Development of
network code
Assessment,
agreement &
entry into force
… through a collaborative process
Benefits
Security of supply
Competitiveness
Sustainability
Enabling renewables
Creating clear connection
rules.
Providing harmonisation
to benefit manufacturers.
Creating markets to
reduce risks.
Ensuring security of
supply
A coordinated approach to
system operations.
Greater optimisation to
enhance efficiency.
More flexible markets (e.g. balancing).
Enhancing competition
A single market design across Europe (in all timescales).
Promoting cross border
trade & enhancing liquidity.
Reducing risk for all market
players
Overview of current & future network codes
• Requirements for Generators (RfG)
• Demand Connection Code (DCC)
• HVDC Connection Code (HVDC)
Grid Connection
Related Codes
• Operational Security Network (OS)
• Operational Planning & Scheduling (OPS)
• Load Frequency Control & Reserves (LFCR)
• Operational Procedures in an Emergency (EP)
System Operation
Related Codes
• Capacity Allocation & Congestion Management(CACM)
• Forward Capacity Allocation (FCA)
• Balancing Network Code (EB)
Market Related Codes
Order of work
Through a ‘Priority List’ agreed upon through consultationDecided by the EC
ENTSO-E’s Three- Year Work PlanInfluenced by and informs
HVDC High Voltage Direct Current Connection requirements
EB Electricity Balancing
FCA Forward Capacity Allocation
LFCR Load Frequency Control and Reserves
OPS Operational Planning and Scheduling
OS Operational Security
DCC Demand Connection Code
CACM Capacity Allocation and Congestion Management
RfG Requirement for Generators
Therefore current
network codes are developed in this order
Grid connection related network codes
DCC
Both linked to energy efficiency directive
RfG
All connection
codes linked to existing standards
All connection
codes link to EB
HVDC
All connection codes link
to OS
Linked to smart grid initiatives
through DSR
• RfG was developed first
• Followed by DCC
• Next is HVDC
• These codes link into (and
are influenced by) several
important policy areas
• And are also related to
existing standards
Some of the more substantial
links to other codes are:
• Electricity Balancing and
• Operational Security
System operation related network codes
EPLFCR/OS/
OPS all linked
OSLFCR closely linked to EB
OPS
OPS/OS link to CC due to
CGM
LFCR
OS links to all
connection codes
• Operational Security was first
• Closely followed by Operational
Planning & Scheduling
• Next is Load Frequency Control &
Reserves
• They will be followed later by
Emergency Procedures
The operational codes have strong
links between themselves and to other
codes:
• OS links to all connection codes
• LFCR is closely tied to EB
• All the operational codes are linked
• OS and OPS are linked to the CC
part of CACM (because of the
Common Grid Model).
DAID CC
Market related network codes
CACM• Capacity Allocation and Congestion
Management was the first market
code to be developed
• It contains three main subsections
that were merged at an early stage:
• Intraday (ID)
• Day Ahead (DA)
• Capacity Calculation (CC)
• This was done to ensure
consistency between these heavily
interrelated areas
• The CACM code is based on the EU
wide “Target Model” for market
design.
Market related network codes
IDDA/ID link to
EC Governance
guideline
DA
CC link to OS/OPS due
to CGM
CC
All market codes link to transparency
regulation
FCA
FCA Linked to MIFID
EB
All connection codes link
to EB • Capacity Allocation and Congestion
Management was the first market code
to be developed
• Followed by Forward Capacity Allocation
• And Electricity Balancing
• All market related codes tie into
transparency regulation
• Day Ahead & Intraday are closely linked
to the EC Governance Guideline
• FCA links to financial regulation
These codes have direct links to others:
• EB to all connection codes
• Also to LFCR operational code
• Capacity Calculation links to both OS
and OPS
EB closely linked to
LFCR
Network code overviewHow do all the network codes fit together?
Network
CodesID
DA/ID link to
Governanceguideline
DA
CC
All market codes link to transparency regulation
FCA
FCA Linked to MIFID
EB
DCC
Both linked to energy efficiency directive
RfG
All connection
codes linked to existing
standards
HVDC
Linked to smart grid initiatives through
DSR
All connection codes link
to EB
All connectioncodes link
to OS
CC link to OS/OPS due
to CGM
LFCR closely
linked to EBOS
OPS EP
LFCR
LFCR/OS closely linked
DA
Of course this is not exhaustive.
There are further extensive links between codes…
Network
CodesID
DA/ID link to Governance guideline
DA
CC
All market codes link to transparency regulation
FCA
FCA Linked to MIFID
EB
DCC
Both linked to energy efficiency directive
RfG
All connection
codes linked to existing standards
HVDC
Linked to smart grid initiatives through
DSR
All connection codes link
to EB
All connection codes link
to OS
CC link to OS/OPS due
to CGM
LFCR closely linked to EB OS
OPS EP
LFCR
LFCR/OS/ OPS all linked
Network Code on:
Requirements for Generators
6 Months 12 Months 3 Months > 12 Months
Framework Guidelines DraftingInternal
Approval
Public
ConsultationUpdating
Internal
ApprovalACER Opinion Comitology Process ….
Scoping Development Approval
Code Overview
Purpose: Provide a set of coherent requirements for
generators (of all sizes) in order to meet the future power
system challenges.
Status: An ACER recommendation to adopt the code was
made on 27 March 2013. The EC is currently preparing the
network code for entry into Comitology.
Contents:
• Requirements
• Operational Notification Procedure for Connection
• Compliance
• Derogations
Links to other codes/ areas
• DCC – Balances demand and
generation requirements and
uses similar processes..
• HVDC – Reference to part of the
RfG requirements for offshore
HVDC connected generation.
Coherence in processes.
• OS – Technical requirements to
strengthen coordination and
system security.
• EB – Must ensure RfG
characteristics are reflected in
products.
Network Code on:
Capacity Allocation and Congestion Management
6 Months 12 Months 3 Months > 12 Months
Framework Guidelines DraftingInternal
Approval
Public
ConsultationUpdating
Internal
ApprovalACER Opinion Comitology Process ….
Scoping Development Approval
Code Overview
Purpose: Translate the vision for a pan European Target
Model into a binding set of rules.
Status: An ACER recommendation to adopt the code and
proposals for change was made on 14 March 2013. The EC is
currently preparing the network code for the Comitology
process.
Contents:
• Capacity Calculation
• Bidding Zones
• Day Ahead Markets
• Intraday Markets
• Remedial Actions
• Firmness rules
• Cost recovery
Links to other codes/areas
• OS/OPS – Build on the CGM in
CACM.
• FCA – Bidding zones and
capacity calculation are common.
Structure is similar.
• EB – Strong link with intraday
markets and common capacity
calculation, bidding zones &
structure.
• OPS – Schedules are relevant in
day ahead markets.
• Transparency regulation – Vital
to efficient market functioning.
Network Code on:
Operational Security
6 Months 12 Months 3 Months > 12 Months
Framework Guidelines DraftingInternal
Approval
Public
ConsultationUpdating
Internal
ApprovalACER Opinion Comitology Process ….
Scoping Development Approval
Code Overview
Purpose: To set common rules for ensuring the operational
security of the pan- European power system.
Status: ENTSO-E has amended the network code in light of
the ACER reasoned opinion and resubmitted it to ACER in late
September. ACER will now assess the code.
Contents:
• Operational Security Requirements
• Testing and Investigation
• Data Exchange
• Training
• Compliance
• Staff Training
Links to other codes/areas
• OPS – Is an extension of the
OS code prior to real time.
• LFCR – Frequency control
operations uses the
coordinated schedules from
OPS.
• RfG/DCC – Contain technical
requirements to strengthen
coordination and system
security.
• CACM – Capacity calculation
uses a common grid model as
does OS.
Network Code on:
Operational Planning & Scheduling
6 Months 12 Months 3 Months > 12 Months
Framework Guidelines DraftingInternal
ApprovalPublic
ConsultationUpdating
Internal Approval
ACER Opinion Comitology Process ….
Scoping Development Approval
Code Overview
Purpose: Sets requirements, ranging from the year ahead
timeframe to real time, for assessing the adequacy and
operational security of the interconnected power system and
for planning outages required by TSO’s and grid users when
they have cross-border impacts on power flows.
Status: ENTSO-E has amended the network code in light of
the ACER reasoned opinion and resubmitted it to ACER in late
September. ACER will now assess the code
Contents:
• Data For Operational Security Analysis in Operational
Planning
• Operational Security Analysis in Operational Planning
• Outage Planning, Adequacy, Ancillary Services, Scheduling
• ENTSO-E Operational Planning Data Environment
Links to other codes/areas
• OS – Extension of OS
requirements prior to real time. .
• CACM – An overlap with
schedules in day ahead markets
and the Common Grid Model.
• Market Codes – Planning and
scheduling cooperation will
unlock transmission capacity in
the forward, DA, ID and –
indirectly – balancing.
• LFCR – Frequency control
operations: uses the coordinated
schedules from the OPS.
Network Code on:
Demand Connection
6 Months 12 Months 3 Months > 12 Months
Framework Guidelines DraftingInternal
ApprovalPublic
ConsultationUpdating
Internal Approval
ACER Opinion Comitology Process ….
Scoping Development Approval
Code Overview
Purpose: To set requirements for new demand users and DSO
connections and to outline demand side response
requirements related to system frequency.
Status: An ACER opinion and recommendation to adopt the
code was made on 27 March 2013. The EC is currently
preparing the code for entry into the Comitology process.
Contents:
• Requirements
• Operational Notification Procedure
• Compliance
• Derogations
Links to other codes/areas
• RfG/ HVDC – Balance between
demand and generation
requirements and coherence in
processes.
• LFCR – Impact of DSR SFC on
system reserve calculations.
• OS – Technical requirements to
strengthen coordination and
enhance system security.
• EB – Demand Response will be
an ever more needed building
block in balancing products.
• Ecodesign/labelling Directive
– Vehicle to develop DSR
requirements.
• Cenelec M490 – Work on-going
to develop DSR standards.
Network Code on:
Forward Capacity Allocation
6 Months 12 Months 3 Months > 12 Months
Framework Guidelines DraftingInternal
Approval
Public
ConsultationUpdating
Internal
ApprovalACER Opinion Comitology Process ….
Scoping Development Approval
Code Overview
Purpose: To set rules for calculating and buying capacity in
timescales before day ahead and for hedging price risk between
bidding zones.
Status: ENTSO-E will submit the network code to ACER in late
September 2013
Contents:
• Governance
• Capacity Calculation for FCA
• Bidding Zones
• The Forward Capacity Market
• Single Platforms for Allocation and Secondary Trading
• Allocation Rules
• Firmness and Congestion Income Distribution
Links to other codes/areas
• CACM – Similar processes and
consistency with capacity
calculation.
• MIFID – Sets capital and
organisational requirements for
investment firms and markets
operators when dealing with
financial instruments/impact on
TSOs and joint platforms.
• Transparency Regulation –
Impacts on the information that
is published.
Network Code on:
Load Frequency Control and Reserves
6 Months 12 Months 3 Months > 12 Months
Framework Guidelines DraftingInternal
Approval
Public
ConsultationUpdating
Internal
ApprovalACER Opinion Comitology Process ….
Scoping Development Approval
Code Overview
Purpose: To set out coordinated and clearly specified load
frequency control processes and rules regarding the levels and
location of reserves (back-up) which TSOs need to hold.
Status: The ACER opinion is due on 25 September 2013.
Contents:
• Frequency Quality
• Load Frequency Control Structure
• Frequency Containment Reserves
• Frequency Restoration Reserves
• Replacement Reserves
• Exchange and Sharing of Reserves
• Co-operation with DSOs, Compliance
Links to other codes/areas
• EB – Specifies how the reserves
determined under LFC will be
procured.
• OS – Frequency quality;
deviation management; improves
operational security.
• OPS – Frequency control
operations: uses the coordinated
schedules from the OPS.
• DCC – Impact of DSR SFC on
system reserve calculations.
• CACM – Operational limits: have
an impact on transmission
capacity available for XB
exchanges.
• HVDC – Impact of loss of power
(e.g. from an offshore wind farm)
on system reserves.
Network Code on:
Balancing
6 Months 12 Months 3 Months > 12 Months
Framework Guidelines DraftingInternal
Approval
Public
ConsultationUpdating
Internal
ApprovalACER Opinion Comitology Process ….
Scoping Development Approval
Code Overview
Purpose: To define rules for the development, implementation
and operation of a pan-European balancing market.
Status: Over 2100 from 42 organisations were received via the
public consultation which ended in mid August. ENTSO-E is
now updating the code for delivery in December.
Contents:
• The Electricity Balancing System
• Procurement of Balancing Reserves
• Use; Allocation and Reservation of Cross Zonal Capacity
for Balancing Reserves
• Settlement
• Balancing Algorithm Development
• Reporting, Transitional Arrangements
Links to other codes/areas
• LFCR – Strong link with LFCR
setting rules for the volume of
reserves to be procured & BAL
creating rules to procure them.
• CACM – Overlap with capacity
calculation and links to intraday
markets (which close before
balancing opens).
• RfG/DCC – Important that
connection rules are reflected in
products available on balancing
markets.
Network Code on:
HVDC Connection
6 Months 12 Months 3 Months > 12 Months
Framework Guidelines DraftingInternal
Approval
Public
ConsultationUpdating
Internal
ApprovalACER Opinion Comitology Process ….
Scoping Development Approval
Code Overview
Purpose: Sets requirements for HVDC connections and
offshore DC connected generation.
Status: A Public Consultation on the Preliminary Scope
finished on 7 June 2013. ENTSO-E is continuing to work with
stakeholders to produce a draft; which will be consulted on in
November.
Contents: Requirements for long distance DC connections,
links between different synchronous area’s or DC connected
Power Park Modules such as offshore wind farms,
Links to other codes/areas
• RfG – Reference to part of the
RfG requirements for offshore
HVDC connected generation.
Coherence in processes.
• OS – Technical requirements
supporting frequency and
voltage stability, system stability
robustness and system security.
• LFCR – Impact of loss of power
(e.g. from an offshore wind farm)
on system reserves.
• EB – Ensure balancing
capabilities for reserve
transactions across cross-border
HVDC links where relevant.
• DCC – Coherence in processes
(operational notification,
derogations, …)