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Statnett's System Operations and Market Development Plan 2014-20 Statnett 2015-04-28 http ://SMUP 2014-2020.pdf

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Page 1: attached presentation gives an overview

Statnetts System

Operations

and Market

Development Plan

2014-20

Statnett 2015-04-28 httpSMUP 2014-2020pdf

Contents

1 About Statnett

2 The System Operations and

Market Development Plan

(SMUP) ndash background

3 System operations today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measureshttpSMUP 2014-2020pdf

This is Statnett

bull Statnett is the Transmission System Operator in the

Norwegian power system

bull Statnett is a state enterprise owned by the Norwegian

state through the Ministry of Petroleum and Energy

bull Statnett is responsible for maintaining the balance in

the Norwegian power system and has the overall

supervision responsibility and physical control in the

Norwegian power system

bull Statnett operates and owns about 11 000 km of lines

and cables and approximately 150 transformer

stations throughout Norway

bull Operations are monitored 277365 from one national

control center and three regional control centers

bull Statnett is also responsible for interconnectors to

Sweden Denmark and the Netherlands

The future is electric

- 420 kV

- 300 kV

- 132 kV

Max production

26 512 MWhh (Jan 2015)

Max load

24 180 MWhh (Jan 2013)

Our main objectives

bull Ensuring a stable and secure

supply of electricity by coordinating

production and consumption

bull Ensuring long-term quality of supply

by developing the Norwegian main

grid

bull Offering equal access to the main

grid to all market players

bull Ensuring available transmission

routes by means of good

maintenance practices

The future is electric

Our strategy

Security of supply

Maintaining security of supply

through operations

development monitoring and

preparedness

Climate

To facilitate the realisation

of Norways climate goals

Value creation

To facilitate value creation

for our customers and

Norwegian society at large

The future is electric

Key figures

Norway

Yearly production

1401 TWh (2014)

Yearly consumption

1248 TWh (2014)

Max production

26 512 MWhh (Jan 2015)

Max load

24 180 MWhh (Jan 2013)

Fremtiden er elektrisk

-3

-2

-1

0

1

2

3

2010 2011 2012 2013 2014TW

h

Norwegian net exchange per month 012010 ndash 122014

0

50

100

150

200

Norway Sweden Finland Danmark

TW

h

Nordic power production 2012

Wind Hydro Nuclear Thermal

In short

Everything is dependent on electricity

The future is electric

The power system is a balancing act

We are building the next generation power system

The future is electric

Contents

1 This is Statnett

2 The System Operations and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

SMUP communicates important trends

and high priority measures towards 2020

bull Outlines priorities and plans for system

operations development towards 2020bull Ongoing measures

bull Central trends and their consequences

bull High priority measures

bull Important contribution in the dialogue with

the energy industry and stakeholdersbull Regular dialogue meetings

bull Downloadable from Statnett web site

bull Update every second year

bull The SMUP and the Grid Development Plan

(NUP) constitute the correlated plans for

realization and operation of the electricity

system of tomorrow

Contents

1 This is Statnett

2 The System Operation and Market Development Plan (SMUP)

3 System operation today

4 Future development trends and consequences for system

operation

5 Short term and long term measures

Increasing complexity and risk

bull Faster larger and more frequent changes in generation

and flowsbull The frequency quality is not satisfactory

bull Secure system operation is becoming more challenging

The Nordic frequency quality is not

satisfactory today

The largest frequency deviations occur

morning and evening with large

changes in production demand and

HVDC exchange

The main cause is considered to be

structural imbalances

Number of minutes per week outside 499-501 Hz

Number of incidents per day

outside 499-501 Hz

(average for 2009-2010)

The frequency quality measures the

balance between production and

consumtpion

What are Structural Imbalances(Deterministic Frequency Deviations)

bull Structural imbalancesbull Imbalances within an hour due to a repetitive and

predictive mismatch between generation demand

and exchange mainly caused by

13

tn tn+1

Frequency Demand

Generation

Bilateral or market trade with hourly resolution or longer

Hourly resolution in plans for generation and exchange

Administrative rules for HVDC exchange

Note Nobody can be blamed for the structural imbalances nobody is

doing anything wrong to cause the imbalance

bull Stochastic imbalancesbull Imbalances caused by sudden and unpredictable events during operation

Outages and other contingencies

Forecast errors

Simplified illustration of imbalance types

Fremtiden er elektrisk

Source NC LFCampR supporting document

Existing operator tools

bull General requirements

ndash The Regulations for System Responsibility and NordPool Spot both require

energy balance per hour

ndash Hourly balances are monitored in the Balance Settlement

bull Structural imbalances within an hour

ndash In the planning phase Administrative requirement for quarterly schedules

when generation schedules change more than a given thresholds

ndash During operation TSO can shift schedules with up to +-15 min from plan

bull Stochastic imbalances (during operation)

ndash Automatic reserves FCR and FRR-A

ndash Manual reserves Regulating Power Market (FRR-M)

ndash Frequency operated system protection

Note Automatic reserves are also influenced by the structural imbalances

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 2: attached presentation gives an overview

Contents

1 About Statnett

2 The System Operations and

Market Development Plan

(SMUP) ndash background

3 System operations today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measureshttpSMUP 2014-2020pdf

This is Statnett

bull Statnett is the Transmission System Operator in the

Norwegian power system

bull Statnett is a state enterprise owned by the Norwegian

state through the Ministry of Petroleum and Energy

bull Statnett is responsible for maintaining the balance in

the Norwegian power system and has the overall

supervision responsibility and physical control in the

Norwegian power system

bull Statnett operates and owns about 11 000 km of lines

and cables and approximately 150 transformer

stations throughout Norway

bull Operations are monitored 277365 from one national

control center and three regional control centers

bull Statnett is also responsible for interconnectors to

Sweden Denmark and the Netherlands

The future is electric

- 420 kV

- 300 kV

- 132 kV

Max production

26 512 MWhh (Jan 2015)

Max load

24 180 MWhh (Jan 2013)

Our main objectives

bull Ensuring a stable and secure

supply of electricity by coordinating

production and consumption

bull Ensuring long-term quality of supply

by developing the Norwegian main

grid

bull Offering equal access to the main

grid to all market players

bull Ensuring available transmission

routes by means of good

maintenance practices

The future is electric

Our strategy

Security of supply

Maintaining security of supply

through operations

development monitoring and

preparedness

Climate

To facilitate the realisation

of Norways climate goals

Value creation

To facilitate value creation

for our customers and

Norwegian society at large

The future is electric

Key figures

Norway

Yearly production

1401 TWh (2014)

Yearly consumption

1248 TWh (2014)

Max production

26 512 MWhh (Jan 2015)

Max load

24 180 MWhh (Jan 2013)

Fremtiden er elektrisk

-3

-2

-1

0

1

2

3

2010 2011 2012 2013 2014TW

h

Norwegian net exchange per month 012010 ndash 122014

0

50

100

150

200

Norway Sweden Finland Danmark

TW

h

Nordic power production 2012

Wind Hydro Nuclear Thermal

In short

Everything is dependent on electricity

The future is electric

The power system is a balancing act

We are building the next generation power system

The future is electric

Contents

1 This is Statnett

2 The System Operations and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

SMUP communicates important trends

and high priority measures towards 2020

bull Outlines priorities and plans for system

operations development towards 2020bull Ongoing measures

bull Central trends and their consequences

bull High priority measures

bull Important contribution in the dialogue with

the energy industry and stakeholdersbull Regular dialogue meetings

bull Downloadable from Statnett web site

bull Update every second year

bull The SMUP and the Grid Development Plan

(NUP) constitute the correlated plans for

realization and operation of the electricity

system of tomorrow

Contents

1 This is Statnett

2 The System Operation and Market Development Plan (SMUP)

3 System operation today

4 Future development trends and consequences for system

operation

5 Short term and long term measures

Increasing complexity and risk

bull Faster larger and more frequent changes in generation

and flowsbull The frequency quality is not satisfactory

bull Secure system operation is becoming more challenging

The Nordic frequency quality is not

satisfactory today

The largest frequency deviations occur

morning and evening with large

changes in production demand and

HVDC exchange

The main cause is considered to be

structural imbalances

Number of minutes per week outside 499-501 Hz

Number of incidents per day

outside 499-501 Hz

(average for 2009-2010)

The frequency quality measures the

balance between production and

consumtpion

What are Structural Imbalances(Deterministic Frequency Deviations)

bull Structural imbalancesbull Imbalances within an hour due to a repetitive and

predictive mismatch between generation demand

and exchange mainly caused by

13

tn tn+1

Frequency Demand

Generation

Bilateral or market trade with hourly resolution or longer

Hourly resolution in plans for generation and exchange

Administrative rules for HVDC exchange

Note Nobody can be blamed for the structural imbalances nobody is

doing anything wrong to cause the imbalance

bull Stochastic imbalancesbull Imbalances caused by sudden and unpredictable events during operation

Outages and other contingencies

Forecast errors

Simplified illustration of imbalance types

Fremtiden er elektrisk

Source NC LFCampR supporting document

Existing operator tools

bull General requirements

ndash The Regulations for System Responsibility and NordPool Spot both require

energy balance per hour

ndash Hourly balances are monitored in the Balance Settlement

bull Structural imbalances within an hour

ndash In the planning phase Administrative requirement for quarterly schedules

when generation schedules change more than a given thresholds

ndash During operation TSO can shift schedules with up to +-15 min from plan

bull Stochastic imbalances (during operation)

ndash Automatic reserves FCR and FRR-A

ndash Manual reserves Regulating Power Market (FRR-M)

ndash Frequency operated system protection

Note Automatic reserves are also influenced by the structural imbalances

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 3: attached presentation gives an overview

This is Statnett

bull Statnett is the Transmission System Operator in the

Norwegian power system

bull Statnett is a state enterprise owned by the Norwegian

state through the Ministry of Petroleum and Energy

bull Statnett is responsible for maintaining the balance in

the Norwegian power system and has the overall

supervision responsibility and physical control in the

Norwegian power system

bull Statnett operates and owns about 11 000 km of lines

and cables and approximately 150 transformer

stations throughout Norway

bull Operations are monitored 277365 from one national

control center and three regional control centers

bull Statnett is also responsible for interconnectors to

Sweden Denmark and the Netherlands

The future is electric

- 420 kV

- 300 kV

- 132 kV

Max production

26 512 MWhh (Jan 2015)

Max load

24 180 MWhh (Jan 2013)

Our main objectives

bull Ensuring a stable and secure

supply of electricity by coordinating

production and consumption

bull Ensuring long-term quality of supply

by developing the Norwegian main

grid

bull Offering equal access to the main

grid to all market players

bull Ensuring available transmission

routes by means of good

maintenance practices

The future is electric

Our strategy

Security of supply

Maintaining security of supply

through operations

development monitoring and

preparedness

Climate

To facilitate the realisation

of Norways climate goals

Value creation

To facilitate value creation

for our customers and

Norwegian society at large

The future is electric

Key figures

Norway

Yearly production

1401 TWh (2014)

Yearly consumption

1248 TWh (2014)

Max production

26 512 MWhh (Jan 2015)

Max load

24 180 MWhh (Jan 2013)

Fremtiden er elektrisk

-3

-2

-1

0

1

2

3

2010 2011 2012 2013 2014TW

h

Norwegian net exchange per month 012010 ndash 122014

0

50

100

150

200

Norway Sweden Finland Danmark

TW

h

Nordic power production 2012

Wind Hydro Nuclear Thermal

In short

Everything is dependent on electricity

The future is electric

The power system is a balancing act

We are building the next generation power system

The future is electric

Contents

1 This is Statnett

2 The System Operations and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

SMUP communicates important trends

and high priority measures towards 2020

bull Outlines priorities and plans for system

operations development towards 2020bull Ongoing measures

bull Central trends and their consequences

bull High priority measures

bull Important contribution in the dialogue with

the energy industry and stakeholdersbull Regular dialogue meetings

bull Downloadable from Statnett web site

bull Update every second year

bull The SMUP and the Grid Development Plan

(NUP) constitute the correlated plans for

realization and operation of the electricity

system of tomorrow

Contents

1 This is Statnett

2 The System Operation and Market Development Plan (SMUP)

3 System operation today

4 Future development trends and consequences for system

operation

5 Short term and long term measures

Increasing complexity and risk

bull Faster larger and more frequent changes in generation

and flowsbull The frequency quality is not satisfactory

bull Secure system operation is becoming more challenging

The Nordic frequency quality is not

satisfactory today

The largest frequency deviations occur

morning and evening with large

changes in production demand and

HVDC exchange

The main cause is considered to be

structural imbalances

Number of minutes per week outside 499-501 Hz

Number of incidents per day

outside 499-501 Hz

(average for 2009-2010)

The frequency quality measures the

balance between production and

consumtpion

What are Structural Imbalances(Deterministic Frequency Deviations)

bull Structural imbalancesbull Imbalances within an hour due to a repetitive and

predictive mismatch between generation demand

and exchange mainly caused by

13

tn tn+1

Frequency Demand

Generation

Bilateral or market trade with hourly resolution or longer

Hourly resolution in plans for generation and exchange

Administrative rules for HVDC exchange

Note Nobody can be blamed for the structural imbalances nobody is

doing anything wrong to cause the imbalance

bull Stochastic imbalancesbull Imbalances caused by sudden and unpredictable events during operation

Outages and other contingencies

Forecast errors

Simplified illustration of imbalance types

Fremtiden er elektrisk

Source NC LFCampR supporting document

Existing operator tools

bull General requirements

ndash The Regulations for System Responsibility and NordPool Spot both require

energy balance per hour

ndash Hourly balances are monitored in the Balance Settlement

bull Structural imbalances within an hour

ndash In the planning phase Administrative requirement for quarterly schedules

when generation schedules change more than a given thresholds

ndash During operation TSO can shift schedules with up to +-15 min from plan

bull Stochastic imbalances (during operation)

ndash Automatic reserves FCR and FRR-A

ndash Manual reserves Regulating Power Market (FRR-M)

ndash Frequency operated system protection

Note Automatic reserves are also influenced by the structural imbalances

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 4: attached presentation gives an overview

Our main objectives

bull Ensuring a stable and secure

supply of electricity by coordinating

production and consumption

bull Ensuring long-term quality of supply

by developing the Norwegian main

grid

bull Offering equal access to the main

grid to all market players

bull Ensuring available transmission

routes by means of good

maintenance practices

The future is electric

Our strategy

Security of supply

Maintaining security of supply

through operations

development monitoring and

preparedness

Climate

To facilitate the realisation

of Norways climate goals

Value creation

To facilitate value creation

for our customers and

Norwegian society at large

The future is electric

Key figures

Norway

Yearly production

1401 TWh (2014)

Yearly consumption

1248 TWh (2014)

Max production

26 512 MWhh (Jan 2015)

Max load

24 180 MWhh (Jan 2013)

Fremtiden er elektrisk

-3

-2

-1

0

1

2

3

2010 2011 2012 2013 2014TW

h

Norwegian net exchange per month 012010 ndash 122014

0

50

100

150

200

Norway Sweden Finland Danmark

TW

h

Nordic power production 2012

Wind Hydro Nuclear Thermal

In short

Everything is dependent on electricity

The future is electric

The power system is a balancing act

We are building the next generation power system

The future is electric

Contents

1 This is Statnett

2 The System Operations and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

SMUP communicates important trends

and high priority measures towards 2020

bull Outlines priorities and plans for system

operations development towards 2020bull Ongoing measures

bull Central trends and their consequences

bull High priority measures

bull Important contribution in the dialogue with

the energy industry and stakeholdersbull Regular dialogue meetings

bull Downloadable from Statnett web site

bull Update every second year

bull The SMUP and the Grid Development Plan

(NUP) constitute the correlated plans for

realization and operation of the electricity

system of tomorrow

Contents

1 This is Statnett

2 The System Operation and Market Development Plan (SMUP)

3 System operation today

4 Future development trends and consequences for system

operation

5 Short term and long term measures

Increasing complexity and risk

bull Faster larger and more frequent changes in generation

and flowsbull The frequency quality is not satisfactory

bull Secure system operation is becoming more challenging

The Nordic frequency quality is not

satisfactory today

The largest frequency deviations occur

morning and evening with large

changes in production demand and

HVDC exchange

The main cause is considered to be

structural imbalances

Number of minutes per week outside 499-501 Hz

Number of incidents per day

outside 499-501 Hz

(average for 2009-2010)

The frequency quality measures the

balance between production and

consumtpion

What are Structural Imbalances(Deterministic Frequency Deviations)

bull Structural imbalancesbull Imbalances within an hour due to a repetitive and

predictive mismatch between generation demand

and exchange mainly caused by

13

tn tn+1

Frequency Demand

Generation

Bilateral or market trade with hourly resolution or longer

Hourly resolution in plans for generation and exchange

Administrative rules for HVDC exchange

Note Nobody can be blamed for the structural imbalances nobody is

doing anything wrong to cause the imbalance

bull Stochastic imbalancesbull Imbalances caused by sudden and unpredictable events during operation

Outages and other contingencies

Forecast errors

Simplified illustration of imbalance types

Fremtiden er elektrisk

Source NC LFCampR supporting document

Existing operator tools

bull General requirements

ndash The Regulations for System Responsibility and NordPool Spot both require

energy balance per hour

ndash Hourly balances are monitored in the Balance Settlement

bull Structural imbalances within an hour

ndash In the planning phase Administrative requirement for quarterly schedules

when generation schedules change more than a given thresholds

ndash During operation TSO can shift schedules with up to +-15 min from plan

bull Stochastic imbalances (during operation)

ndash Automatic reserves FCR and FRR-A

ndash Manual reserves Regulating Power Market (FRR-M)

ndash Frequency operated system protection

Note Automatic reserves are also influenced by the structural imbalances

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 5: attached presentation gives an overview

Our strategy

Security of supply

Maintaining security of supply

through operations

development monitoring and

preparedness

Climate

To facilitate the realisation

of Norways climate goals

Value creation

To facilitate value creation

for our customers and

Norwegian society at large

The future is electric

Key figures

Norway

Yearly production

1401 TWh (2014)

Yearly consumption

1248 TWh (2014)

Max production

26 512 MWhh (Jan 2015)

Max load

24 180 MWhh (Jan 2013)

Fremtiden er elektrisk

-3

-2

-1

0

1

2

3

2010 2011 2012 2013 2014TW

h

Norwegian net exchange per month 012010 ndash 122014

0

50

100

150

200

Norway Sweden Finland Danmark

TW

h

Nordic power production 2012

Wind Hydro Nuclear Thermal

In short

Everything is dependent on electricity

The future is electric

The power system is a balancing act

We are building the next generation power system

The future is electric

Contents

1 This is Statnett

2 The System Operations and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

SMUP communicates important trends

and high priority measures towards 2020

bull Outlines priorities and plans for system

operations development towards 2020bull Ongoing measures

bull Central trends and their consequences

bull High priority measures

bull Important contribution in the dialogue with

the energy industry and stakeholdersbull Regular dialogue meetings

bull Downloadable from Statnett web site

bull Update every second year

bull The SMUP and the Grid Development Plan

(NUP) constitute the correlated plans for

realization and operation of the electricity

system of tomorrow

Contents

1 This is Statnett

2 The System Operation and Market Development Plan (SMUP)

3 System operation today

4 Future development trends and consequences for system

operation

5 Short term and long term measures

Increasing complexity and risk

bull Faster larger and more frequent changes in generation

and flowsbull The frequency quality is not satisfactory

bull Secure system operation is becoming more challenging

The Nordic frequency quality is not

satisfactory today

The largest frequency deviations occur

morning and evening with large

changes in production demand and

HVDC exchange

The main cause is considered to be

structural imbalances

Number of minutes per week outside 499-501 Hz

Number of incidents per day

outside 499-501 Hz

(average for 2009-2010)

The frequency quality measures the

balance between production and

consumtpion

What are Structural Imbalances(Deterministic Frequency Deviations)

bull Structural imbalancesbull Imbalances within an hour due to a repetitive and

predictive mismatch between generation demand

and exchange mainly caused by

13

tn tn+1

Frequency Demand

Generation

Bilateral or market trade with hourly resolution or longer

Hourly resolution in plans for generation and exchange

Administrative rules for HVDC exchange

Note Nobody can be blamed for the structural imbalances nobody is

doing anything wrong to cause the imbalance

bull Stochastic imbalancesbull Imbalances caused by sudden and unpredictable events during operation

Outages and other contingencies

Forecast errors

Simplified illustration of imbalance types

Fremtiden er elektrisk

Source NC LFCampR supporting document

Existing operator tools

bull General requirements

ndash The Regulations for System Responsibility and NordPool Spot both require

energy balance per hour

ndash Hourly balances are monitored in the Balance Settlement

bull Structural imbalances within an hour

ndash In the planning phase Administrative requirement for quarterly schedules

when generation schedules change more than a given thresholds

ndash During operation TSO can shift schedules with up to +-15 min from plan

bull Stochastic imbalances (during operation)

ndash Automatic reserves FCR and FRR-A

ndash Manual reserves Regulating Power Market (FRR-M)

ndash Frequency operated system protection

Note Automatic reserves are also influenced by the structural imbalances

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 6: attached presentation gives an overview

Key figures

Norway

Yearly production

1401 TWh (2014)

Yearly consumption

1248 TWh (2014)

Max production

26 512 MWhh (Jan 2015)

Max load

24 180 MWhh (Jan 2013)

Fremtiden er elektrisk

-3

-2

-1

0

1

2

3

2010 2011 2012 2013 2014TW

h

Norwegian net exchange per month 012010 ndash 122014

0

50

100

150

200

Norway Sweden Finland Danmark

TW

h

Nordic power production 2012

Wind Hydro Nuclear Thermal

In short

Everything is dependent on electricity

The future is electric

The power system is a balancing act

We are building the next generation power system

The future is electric

Contents

1 This is Statnett

2 The System Operations and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

SMUP communicates important trends

and high priority measures towards 2020

bull Outlines priorities and plans for system

operations development towards 2020bull Ongoing measures

bull Central trends and their consequences

bull High priority measures

bull Important contribution in the dialogue with

the energy industry and stakeholdersbull Regular dialogue meetings

bull Downloadable from Statnett web site

bull Update every second year

bull The SMUP and the Grid Development Plan

(NUP) constitute the correlated plans for

realization and operation of the electricity

system of tomorrow

Contents

1 This is Statnett

2 The System Operation and Market Development Plan (SMUP)

3 System operation today

4 Future development trends and consequences for system

operation

5 Short term and long term measures

Increasing complexity and risk

bull Faster larger and more frequent changes in generation

and flowsbull The frequency quality is not satisfactory

bull Secure system operation is becoming more challenging

The Nordic frequency quality is not

satisfactory today

The largest frequency deviations occur

morning and evening with large

changes in production demand and

HVDC exchange

The main cause is considered to be

structural imbalances

Number of minutes per week outside 499-501 Hz

Number of incidents per day

outside 499-501 Hz

(average for 2009-2010)

The frequency quality measures the

balance between production and

consumtpion

What are Structural Imbalances(Deterministic Frequency Deviations)

bull Structural imbalancesbull Imbalances within an hour due to a repetitive and

predictive mismatch between generation demand

and exchange mainly caused by

13

tn tn+1

Frequency Demand

Generation

Bilateral or market trade with hourly resolution or longer

Hourly resolution in plans for generation and exchange

Administrative rules for HVDC exchange

Note Nobody can be blamed for the structural imbalances nobody is

doing anything wrong to cause the imbalance

bull Stochastic imbalancesbull Imbalances caused by sudden and unpredictable events during operation

Outages and other contingencies

Forecast errors

Simplified illustration of imbalance types

Fremtiden er elektrisk

Source NC LFCampR supporting document

Existing operator tools

bull General requirements

ndash The Regulations for System Responsibility and NordPool Spot both require

energy balance per hour

ndash Hourly balances are monitored in the Balance Settlement

bull Structural imbalances within an hour

ndash In the planning phase Administrative requirement for quarterly schedules

when generation schedules change more than a given thresholds

ndash During operation TSO can shift schedules with up to +-15 min from plan

bull Stochastic imbalances (during operation)

ndash Automatic reserves FCR and FRR-A

ndash Manual reserves Regulating Power Market (FRR-M)

ndash Frequency operated system protection

Note Automatic reserves are also influenced by the structural imbalances

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 7: attached presentation gives an overview

In short

Everything is dependent on electricity

The future is electric

The power system is a balancing act

We are building the next generation power system

The future is electric

Contents

1 This is Statnett

2 The System Operations and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

SMUP communicates important trends

and high priority measures towards 2020

bull Outlines priorities and plans for system

operations development towards 2020bull Ongoing measures

bull Central trends and their consequences

bull High priority measures

bull Important contribution in the dialogue with

the energy industry and stakeholdersbull Regular dialogue meetings

bull Downloadable from Statnett web site

bull Update every second year

bull The SMUP and the Grid Development Plan

(NUP) constitute the correlated plans for

realization and operation of the electricity

system of tomorrow

Contents

1 This is Statnett

2 The System Operation and Market Development Plan (SMUP)

3 System operation today

4 Future development trends and consequences for system

operation

5 Short term and long term measures

Increasing complexity and risk

bull Faster larger and more frequent changes in generation

and flowsbull The frequency quality is not satisfactory

bull Secure system operation is becoming more challenging

The Nordic frequency quality is not

satisfactory today

The largest frequency deviations occur

morning and evening with large

changes in production demand and

HVDC exchange

The main cause is considered to be

structural imbalances

Number of minutes per week outside 499-501 Hz

Number of incidents per day

outside 499-501 Hz

(average for 2009-2010)

The frequency quality measures the

balance between production and

consumtpion

What are Structural Imbalances(Deterministic Frequency Deviations)

bull Structural imbalancesbull Imbalances within an hour due to a repetitive and

predictive mismatch between generation demand

and exchange mainly caused by

13

tn tn+1

Frequency Demand

Generation

Bilateral or market trade with hourly resolution or longer

Hourly resolution in plans for generation and exchange

Administrative rules for HVDC exchange

Note Nobody can be blamed for the structural imbalances nobody is

doing anything wrong to cause the imbalance

bull Stochastic imbalancesbull Imbalances caused by sudden and unpredictable events during operation

Outages and other contingencies

Forecast errors

Simplified illustration of imbalance types

Fremtiden er elektrisk

Source NC LFCampR supporting document

Existing operator tools

bull General requirements

ndash The Regulations for System Responsibility and NordPool Spot both require

energy balance per hour

ndash Hourly balances are monitored in the Balance Settlement

bull Structural imbalances within an hour

ndash In the planning phase Administrative requirement for quarterly schedules

when generation schedules change more than a given thresholds

ndash During operation TSO can shift schedules with up to +-15 min from plan

bull Stochastic imbalances (during operation)

ndash Automatic reserves FCR and FRR-A

ndash Manual reserves Regulating Power Market (FRR-M)

ndash Frequency operated system protection

Note Automatic reserves are also influenced by the structural imbalances

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 8: attached presentation gives an overview

Contents

1 This is Statnett

2 The System Operations and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

SMUP communicates important trends

and high priority measures towards 2020

bull Outlines priorities and plans for system

operations development towards 2020bull Ongoing measures

bull Central trends and their consequences

bull High priority measures

bull Important contribution in the dialogue with

the energy industry and stakeholdersbull Regular dialogue meetings

bull Downloadable from Statnett web site

bull Update every second year

bull The SMUP and the Grid Development Plan

(NUP) constitute the correlated plans for

realization and operation of the electricity

system of tomorrow

Contents

1 This is Statnett

2 The System Operation and Market Development Plan (SMUP)

3 System operation today

4 Future development trends and consequences for system

operation

5 Short term and long term measures

Increasing complexity and risk

bull Faster larger and more frequent changes in generation

and flowsbull The frequency quality is not satisfactory

bull Secure system operation is becoming more challenging

The Nordic frequency quality is not

satisfactory today

The largest frequency deviations occur

morning and evening with large

changes in production demand and

HVDC exchange

The main cause is considered to be

structural imbalances

Number of minutes per week outside 499-501 Hz

Number of incidents per day

outside 499-501 Hz

(average for 2009-2010)

The frequency quality measures the

balance between production and

consumtpion

What are Structural Imbalances(Deterministic Frequency Deviations)

bull Structural imbalancesbull Imbalances within an hour due to a repetitive and

predictive mismatch between generation demand

and exchange mainly caused by

13

tn tn+1

Frequency Demand

Generation

Bilateral or market trade with hourly resolution or longer

Hourly resolution in plans for generation and exchange

Administrative rules for HVDC exchange

Note Nobody can be blamed for the structural imbalances nobody is

doing anything wrong to cause the imbalance

bull Stochastic imbalancesbull Imbalances caused by sudden and unpredictable events during operation

Outages and other contingencies

Forecast errors

Simplified illustration of imbalance types

Fremtiden er elektrisk

Source NC LFCampR supporting document

Existing operator tools

bull General requirements

ndash The Regulations for System Responsibility and NordPool Spot both require

energy balance per hour

ndash Hourly balances are monitored in the Balance Settlement

bull Structural imbalances within an hour

ndash In the planning phase Administrative requirement for quarterly schedules

when generation schedules change more than a given thresholds

ndash During operation TSO can shift schedules with up to +-15 min from plan

bull Stochastic imbalances (during operation)

ndash Automatic reserves FCR and FRR-A

ndash Manual reserves Regulating Power Market (FRR-M)

ndash Frequency operated system protection

Note Automatic reserves are also influenced by the structural imbalances

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 9: attached presentation gives an overview

SMUP communicates important trends

and high priority measures towards 2020

bull Outlines priorities and plans for system

operations development towards 2020bull Ongoing measures

bull Central trends and their consequences

bull High priority measures

bull Important contribution in the dialogue with

the energy industry and stakeholdersbull Regular dialogue meetings

bull Downloadable from Statnett web site

bull Update every second year

bull The SMUP and the Grid Development Plan

(NUP) constitute the correlated plans for

realization and operation of the electricity

system of tomorrow

Contents

1 This is Statnett

2 The System Operation and Market Development Plan (SMUP)

3 System operation today

4 Future development trends and consequences for system

operation

5 Short term and long term measures

Increasing complexity and risk

bull Faster larger and more frequent changes in generation

and flowsbull The frequency quality is not satisfactory

bull Secure system operation is becoming more challenging

The Nordic frequency quality is not

satisfactory today

The largest frequency deviations occur

morning and evening with large

changes in production demand and

HVDC exchange

The main cause is considered to be

structural imbalances

Number of minutes per week outside 499-501 Hz

Number of incidents per day

outside 499-501 Hz

(average for 2009-2010)

The frequency quality measures the

balance between production and

consumtpion

What are Structural Imbalances(Deterministic Frequency Deviations)

bull Structural imbalancesbull Imbalances within an hour due to a repetitive and

predictive mismatch between generation demand

and exchange mainly caused by

13

tn tn+1

Frequency Demand

Generation

Bilateral or market trade with hourly resolution or longer

Hourly resolution in plans for generation and exchange

Administrative rules for HVDC exchange

Note Nobody can be blamed for the structural imbalances nobody is

doing anything wrong to cause the imbalance

bull Stochastic imbalancesbull Imbalances caused by sudden and unpredictable events during operation

Outages and other contingencies

Forecast errors

Simplified illustration of imbalance types

Fremtiden er elektrisk

Source NC LFCampR supporting document

Existing operator tools

bull General requirements

ndash The Regulations for System Responsibility and NordPool Spot both require

energy balance per hour

ndash Hourly balances are monitored in the Balance Settlement

bull Structural imbalances within an hour

ndash In the planning phase Administrative requirement for quarterly schedules

when generation schedules change more than a given thresholds

ndash During operation TSO can shift schedules with up to +-15 min from plan

bull Stochastic imbalances (during operation)

ndash Automatic reserves FCR and FRR-A

ndash Manual reserves Regulating Power Market (FRR-M)

ndash Frequency operated system protection

Note Automatic reserves are also influenced by the structural imbalances

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 10: attached presentation gives an overview

Contents

1 This is Statnett

2 The System Operation and Market Development Plan (SMUP)

3 System operation today

4 Future development trends and consequences for system

operation

5 Short term and long term measures

Increasing complexity and risk

bull Faster larger and more frequent changes in generation

and flowsbull The frequency quality is not satisfactory

bull Secure system operation is becoming more challenging

The Nordic frequency quality is not

satisfactory today

The largest frequency deviations occur

morning and evening with large

changes in production demand and

HVDC exchange

The main cause is considered to be

structural imbalances

Number of minutes per week outside 499-501 Hz

Number of incidents per day

outside 499-501 Hz

(average for 2009-2010)

The frequency quality measures the

balance between production and

consumtpion

What are Structural Imbalances(Deterministic Frequency Deviations)

bull Structural imbalancesbull Imbalances within an hour due to a repetitive and

predictive mismatch between generation demand

and exchange mainly caused by

13

tn tn+1

Frequency Demand

Generation

Bilateral or market trade with hourly resolution or longer

Hourly resolution in plans for generation and exchange

Administrative rules for HVDC exchange

Note Nobody can be blamed for the structural imbalances nobody is

doing anything wrong to cause the imbalance

bull Stochastic imbalancesbull Imbalances caused by sudden and unpredictable events during operation

Outages and other contingencies

Forecast errors

Simplified illustration of imbalance types

Fremtiden er elektrisk

Source NC LFCampR supporting document

Existing operator tools

bull General requirements

ndash The Regulations for System Responsibility and NordPool Spot both require

energy balance per hour

ndash Hourly balances are monitored in the Balance Settlement

bull Structural imbalances within an hour

ndash In the planning phase Administrative requirement for quarterly schedules

when generation schedules change more than a given thresholds

ndash During operation TSO can shift schedules with up to +-15 min from plan

bull Stochastic imbalances (during operation)

ndash Automatic reserves FCR and FRR-A

ndash Manual reserves Regulating Power Market (FRR-M)

ndash Frequency operated system protection

Note Automatic reserves are also influenced by the structural imbalances

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 11: attached presentation gives an overview

Increasing complexity and risk

bull Faster larger and more frequent changes in generation

and flowsbull The frequency quality is not satisfactory

bull Secure system operation is becoming more challenging

The Nordic frequency quality is not

satisfactory today

The largest frequency deviations occur

morning and evening with large

changes in production demand and

HVDC exchange

The main cause is considered to be

structural imbalances

Number of minutes per week outside 499-501 Hz

Number of incidents per day

outside 499-501 Hz

(average for 2009-2010)

The frequency quality measures the

balance between production and

consumtpion

What are Structural Imbalances(Deterministic Frequency Deviations)

bull Structural imbalancesbull Imbalances within an hour due to a repetitive and

predictive mismatch between generation demand

and exchange mainly caused by

13

tn tn+1

Frequency Demand

Generation

Bilateral or market trade with hourly resolution or longer

Hourly resolution in plans for generation and exchange

Administrative rules for HVDC exchange

Note Nobody can be blamed for the structural imbalances nobody is

doing anything wrong to cause the imbalance

bull Stochastic imbalancesbull Imbalances caused by sudden and unpredictable events during operation

Outages and other contingencies

Forecast errors

Simplified illustration of imbalance types

Fremtiden er elektrisk

Source NC LFCampR supporting document

Existing operator tools

bull General requirements

ndash The Regulations for System Responsibility and NordPool Spot both require

energy balance per hour

ndash Hourly balances are monitored in the Balance Settlement

bull Structural imbalances within an hour

ndash In the planning phase Administrative requirement for quarterly schedules

when generation schedules change more than a given thresholds

ndash During operation TSO can shift schedules with up to +-15 min from plan

bull Stochastic imbalances (during operation)

ndash Automatic reserves FCR and FRR-A

ndash Manual reserves Regulating Power Market (FRR-M)

ndash Frequency operated system protection

Note Automatic reserves are also influenced by the structural imbalances

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 12: attached presentation gives an overview

The Nordic frequency quality is not

satisfactory today

The largest frequency deviations occur

morning and evening with large

changes in production demand and

HVDC exchange

The main cause is considered to be

structural imbalances

Number of minutes per week outside 499-501 Hz

Number of incidents per day

outside 499-501 Hz

(average for 2009-2010)

The frequency quality measures the

balance between production and

consumtpion

What are Structural Imbalances(Deterministic Frequency Deviations)

bull Structural imbalancesbull Imbalances within an hour due to a repetitive and

predictive mismatch between generation demand

and exchange mainly caused by

13

tn tn+1

Frequency Demand

Generation

Bilateral or market trade with hourly resolution or longer

Hourly resolution in plans for generation and exchange

Administrative rules for HVDC exchange

Note Nobody can be blamed for the structural imbalances nobody is

doing anything wrong to cause the imbalance

bull Stochastic imbalancesbull Imbalances caused by sudden and unpredictable events during operation

Outages and other contingencies

Forecast errors

Simplified illustration of imbalance types

Fremtiden er elektrisk

Source NC LFCampR supporting document

Existing operator tools

bull General requirements

ndash The Regulations for System Responsibility and NordPool Spot both require

energy balance per hour

ndash Hourly balances are monitored in the Balance Settlement

bull Structural imbalances within an hour

ndash In the planning phase Administrative requirement for quarterly schedules

when generation schedules change more than a given thresholds

ndash During operation TSO can shift schedules with up to +-15 min from plan

bull Stochastic imbalances (during operation)

ndash Automatic reserves FCR and FRR-A

ndash Manual reserves Regulating Power Market (FRR-M)

ndash Frequency operated system protection

Note Automatic reserves are also influenced by the structural imbalances

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 13: attached presentation gives an overview

What are Structural Imbalances(Deterministic Frequency Deviations)

bull Structural imbalancesbull Imbalances within an hour due to a repetitive and

predictive mismatch between generation demand

and exchange mainly caused by

13

tn tn+1

Frequency Demand

Generation

Bilateral or market trade with hourly resolution or longer

Hourly resolution in plans for generation and exchange

Administrative rules for HVDC exchange

Note Nobody can be blamed for the structural imbalances nobody is

doing anything wrong to cause the imbalance

bull Stochastic imbalancesbull Imbalances caused by sudden and unpredictable events during operation

Outages and other contingencies

Forecast errors

Simplified illustration of imbalance types

Fremtiden er elektrisk

Source NC LFCampR supporting document

Existing operator tools

bull General requirements

ndash The Regulations for System Responsibility and NordPool Spot both require

energy balance per hour

ndash Hourly balances are monitored in the Balance Settlement

bull Structural imbalances within an hour

ndash In the planning phase Administrative requirement for quarterly schedules

when generation schedules change more than a given thresholds

ndash During operation TSO can shift schedules with up to +-15 min from plan

bull Stochastic imbalances (during operation)

ndash Automatic reserves FCR and FRR-A

ndash Manual reserves Regulating Power Market (FRR-M)

ndash Frequency operated system protection

Note Automatic reserves are also influenced by the structural imbalances

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 14: attached presentation gives an overview

Simplified illustration of imbalance types

Fremtiden er elektrisk

Source NC LFCampR supporting document

Existing operator tools

bull General requirements

ndash The Regulations for System Responsibility and NordPool Spot both require

energy balance per hour

ndash Hourly balances are monitored in the Balance Settlement

bull Structural imbalances within an hour

ndash In the planning phase Administrative requirement for quarterly schedules

when generation schedules change more than a given thresholds

ndash During operation TSO can shift schedules with up to +-15 min from plan

bull Stochastic imbalances (during operation)

ndash Automatic reserves FCR and FRR-A

ndash Manual reserves Regulating Power Market (FRR-M)

ndash Frequency operated system protection

Note Automatic reserves are also influenced by the structural imbalances

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 15: attached presentation gives an overview

Existing operator tools

bull General requirements

ndash The Regulations for System Responsibility and NordPool Spot both require

energy balance per hour

ndash Hourly balances are monitored in the Balance Settlement

bull Structural imbalances within an hour

ndash In the planning phase Administrative requirement for quarterly schedules

when generation schedules change more than a given thresholds

ndash During operation TSO can shift schedules with up to +-15 min from plan

bull Stochastic imbalances (during operation)

ndash Automatic reserves FCR and FRR-A

ndash Manual reserves Regulating Power Market (FRR-M)

ndash Frequency operated system protection

Note Automatic reserves are also influenced by the structural imbalances

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 16: attached presentation gives an overview

Planning phase Operation phase

Frequency (Hz)

Reserve

procure-

ment

RKOM

FCR

FRR-A

Bilat

Elspot

Trade

Elspot

clearing

F

C

R

F

R

R

A

Elbas

Trade

Elbas

clearing

Gate Closure

RPM and

schedulesOutage

occurs

45 min

lock

-1 hour

Gate Closure

12 - 36 h

Primary

control

FCR-ND

Secondary

control

FRR-A

Tertiary control

FRR-M

Control Automatic Automatic Manual

Product

Frequency

activated

reserve

Frequency

activated

reserve

Regulating Power (RK)

AcquisitionMarket +

Base delivery

Market based

(since 2013)

RegPower Market

Option Market

PaymentMarket price

CompensnMarket price Market price

Automatic and Manual reserves

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 17: attached presentation gives an overview

How different reserves balance the system

Fremtiden er elektrisk

tid

EffektMW FCR

FRR-A

RK

FCR

(Primary

response)

FRR-A

(Secondary

response)

FRR-M

(Tertiary response)

Objective Stabilise frequency Restore frequency to

50 Hz

Replace FCR and

FRR

Congestion

management

Controller

location

Decentralised at

power plant

Centralised at TSOrsquos

control center

Manually instructed by

TSO to reserve

provider

Control parameter Frequency (Hz) Frequency (Hz) Imbalance (MW)

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 18: attached presentation gives an overview

Increasing complexity and risk

bull Major changes in the operational situationbull New records and more extreme situations

bull Several years with constrained energy situation in regions

bull Extreme weather conditions more frequent with

major consequences for system operation

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 19: attached presentation gives an overview

System operation driven by extremeshellip

Recent records

Max production 26346 MW (23 Jan 2015)

Peak demand 24180 MW (24 Jan 2013)

2014 (March-May)

The warmest spring since

registrations started in 1900

2010

The coldest year in 70 years

2011 130 of normal

precipitation during January-

October ndash wettest year since

registrations started in 1900

Winter 200910

The driest since 1900

Only 52 of normal

precipitation (Decndash Febr)

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 20: attached presentation gives an overview

Increasing complexity and risk

bull Several areas have several hours in N-0 operation

bull Local challenges with small scale generation

bull Smaller operational margins make maintenance challenging

No of hours outside N-1 operation (2012)

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 21: attached presentation gives an overview

Necessary improvements

ndash challenging construction phase

bull Major development projects need periodical

disconnections bull Adding to challenges from increased reinvestments

and maintenance in coming years

bull Measures to reduce consequences bull Good planning coordination and communication

bull Minimize disconnection times

bull Use more of the year for revisions and maintenance

bull Live wire work smart switching by-looping and

advanced system protection schemes

bull Generation curtailment

Development and maintenance must be done

without compromising operational security

but considerably reduced spot market capacity is to

be expected

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 22: attached presentation gives an overview

Increased cost for system operation reflects

increased value creation

The costs have increased last years and growth is expected to continuebull Frequency quality must be improved

bull Increasing imbalances

bull Increased demand for flexibility in the Nordic market

bull More market based solutions

Focus on limiting the

increase in system

operation cost

bull Verify delivery of reserves

bull More efficient purchase and

dynamic volumes of reserves

bull Better procedures for revision

planning and reduced

disconnection times

Development of system operation cost 2003-13

Primary reserves

Secondary reserves

Tertiary reserves

Special regulation

Other cost

MN

OK

year

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 23: attached presentation gives an overview

Contents

1 This is Statnett

2 The System Operation and

Market Development Plan

(SMUP) ndash what and why

3 System operation today

4 Future development trends

and consequences for

system operation

5 Short term and long term

measures

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 24: attached presentation gives an overview

The power system is changing

Fremtiden er elektrisk

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 25: attached presentation gives an overview

Main development trends that will influence

the operation of the Nordic power system

bull Changes in European generation mix

Less predictable and less controllable renewable energy

Installed capacity (GW)

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 26: attached presentation gives an overview

Main trends influencing the

Nordic power system

bull European market orientation

and integration

bull Price coupling Day-Ahead for

West Europe

bull Common European Intra-day

marked under development

Implementation 2017

bull New joint European rules

Network Codes

Seller

Buyer

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 27: attached presentation gives an overview

Implementation of new European Codes in

Nordic System Operation Agreement (SOA)

bull 10 Network Codes in progressbull 3 planning codes (RfG DCC HVDC)

bull 3 market codes (CACM FCA EB)

bull 4 operational codes (OS OPS LFCampR ER)

bull Covering a very broad range of issues

that will influence system operation

bull Major work in the coming 2-3 yearsImplementation 2015-2021

bull The Network Codes will become

Norwegian law

bull Nordic cooperation is crucial

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 28: attached presentation gives an overview

The future is electric

Network Code Status

October 2014wwwentsoeeu

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 29: attached presentation gives an overview

Transition from centralized to

decentralized power system

bull Strongly reduced cost forbull Wind and solar

bull Battery technology

bull Electric vehicles

bull Introduction of AMS in

2019

bull Establishing Data Hub

bull New possibilities for

system control at lower

voltages

bull Requires further

technology development

and good market solutions

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 30: attached presentation gives an overview

bull Large amounts of new renewable generation in the Nordic region Large generation surplus

New operational characteristics

Wind Hydro Nuclear Thermal Demand

Denmark Finland Norway Sweden

Main trends influencing the

Nordic power system

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 31: attached presentation gives an overview

bull Closer integration with Europe through several new interconnectors

Main trends influencing the

Nordic power system (44)

Denmark FinlandNorway SwedenNordic

Baltic

Poland

Germany

Netherlands

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 32: attached presentation gives an overview

HVDC capacity

developments

up to 2020

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 33: attached presentation gives an overview

Larger and more rapid changes in power

flow to be handled during operation

bull Substantially increased transmission capacity to Continental Europe

bull Changed operational patterns within the dayweek to match price

differences to Continental Europe

Larger and faster changes in power flow to be handled during operation

Power exchange typical winter week (MWhh)

Current interconnectors

wPlanned interconnectors

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 34: attached presentation gives an overview

Increased risk and more challenging

operations due to increased imbalances

bull Efficient use of the HVDC interconnectors requires faster changes in flow

direction and ramping throughout the hour This will increase the structural

(deterministic) imbalances during the hour

bull More small-scale and wind power generation give increased uncertainty in

available generation and increase the stochastic imbalances

Increased imbalances reduce the frequency quality further This is not an

acceptable development

Current imbalance Future imbalance

Load and exch

Generation

Imbalance

Max imbalance

Hour 1Hour 1 Hour 2Hour 2Time Time

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 35: attached presentation gives an overview

Intermittent generation offers less

support to the system

bull Increasing shares of wind power in the

Nordic system

bull More small-scale hydro in Norway

bull Small-scale generators have different

characteristics than reservoir hydro

power and they are usually connected to

the distribution grid

bull Little or no contribution tobull Frequency control

bull Stabilization of oscillations

bull Voltage stability

bull Short circuit capacity

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 36: attached presentation gives an overview

More frequent periods with limited access to

support capabilities

bull Wind and small-scale generation nuclear power and import will cover a

major part of the Nordic demand during the summer in 2020

bull During summer periods there might be very few large-scale hydro

generators in operation

The system will have less flexibility reduced access to controllable

resources and challenges with short circuit capacity and stability

Flexible and intermittent generation in South Norway (MWhh)

Night hours (1-6) dry year scenario 2020

Intermittent

Flexible

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 37: attached presentation gives an overview

Need for more data

bull We need more data on system inertia bull Real-time estimate of inertia

bull Define inertia limits

bull Measures against low inertia

bull Possible contribution from new resources bull Automatic reserves from large industry

bull Smart grids

bull Pilot project in Northern Norway

bull Aggregation services

bull Smart metering - market solution for load

bull Take into account that an instrument can meet

multiple needs Minimum requirements for Primary

(FCR) and Secondary (FRR-A) reserves will also

contribute to system inertia

Fremtiden er elektrisk

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 38: attached presentation gives an overview

The challenges of system operation

will be enhanced in the future

bull Extended transmission capacity to other power systemsbull further reallocation of hydropower production

bull larger changes in the power flow on the DC cables throughout

the day

bull Flow changes in the mornings and evenings will be significantly

larger than today

bull More intermittent RES in Europe

Fremtiden er elektrisk

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 39: attached presentation gives an overview

Contents

1 This is Statnett

2 The System operation and

Market Plan (SMUP) ndash what

and why

3 System operation today

4 Future development trends

and consequences for system

operation

5 Short term and long term

measures

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 40: attached presentation gives an overview

New possibilities and increased challenges

require new measures

Main driversbull Challenging operation and increasing

risk

bull Expanded and reinforced central grid

bull Changes in European generation mix

bull European integration and grid codes

bull New technology and new solutions

Possibilitiesbull Improved operational security (N-1)

bull Increased value creation through more

trade and better exploitation of resources

bull Offer increased flexibility and contribute to

reach climate targets

bull New ldquosmartrdquo solutions for system

operation

Challengesbull Larger and more frequent flow changes

bull Increased imbalances

bull Increased competition for flexibility

bull Periods with insufficient reserves and

system support

bull Increased system operation costs

Measuresbull Ensure sufficient functionality in the

system (through requirements and

market solutions)

bull Improve energy market and trade

solutions

bull Reduce structural imbalances

bull Further development of balancing

services

bull Increased real time information smart

solutions and more automation

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 41: attached presentation gives an overview

1 Ensure sufficient functionality in the system

bull Ensure operation of

units with necessary

functionality

bull Better control of

deliveries

bull Reduce risk and

improve frequency

quality

bull Reduce costs of

reserves and ENS

Objectives bull Require new functionality adapted to

future challengesbull Requirements for small scale hydro

bull New requirements for reservoir hydro

bull Verify functionality before

commissioning new units

bull Verify functionality in existing units

bull Test response and verify frequency and

voltage support in existing units

bull Specific investments to maintain

voltage quality and short circuit capacity

bull Tuning response to reduce system

oscillations

Possible measures

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 42: attached presentation gives an overview

2 Improve energy market and trade solutions

bull Include losses in market algorithm for

HVDC connections

bull Flow based market coupling

bull Allocate capacity on HVDC connections

based on socio-economic profitability

bull Continuousfaster ramping on HVDC

connections to change flow direction

faster

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Good utilization of

resources

bull Increased value

creation

bull Cost effective solutions

for both energy and

reserve markets

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 43: attached presentation gives an overview

3 Reduce structural imbalances

bull Reduce time resolution in generation

scheduling (1 hour -gt 15 min)

bull More flexible schedule shifts during the

hour

bull New market(s) for shorter term reserves

to capture different flexibility costs (eg

15 min resolution in Elbas)

bull Ancillary service for ramping

bull Finer time resolution in all energy

markets in the longer term (Nordic and

European)

bull Secure and efficient

operation

bull Good utilization of

resources and

increased value

creation by enabling

continuous ramping of

interconnectors

bull Market solutions better

adapted to power

system physics

Objectives Possible measures

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 44: attached presentation gives an overview

4 Further development of balancing services

bull General improvement of market designs Shorter blocks more frequent purchase coordinated

acquisition

bull Adapt generation schedules during the hour

bull Primary reserve FCR Verify unit responses development to Nordic market

bull Secondary reserve FRR-A Dynamic volumes development to Nordic market

bull Tertiary reserve FRR-M Short term Reduce minimum size of bids introduce

electronic activation of bids

Long term Full Nordic harmonizing

bull FRR-M option market (RKOM) Better transparency and efficiency

Include down-regulation during low load

bull More providers of frequency activated reserves

bull Secure operation

bull Better frequency

quality

bull Reduce structural

imbalances

bull Ensure sufficient

amounts of

reserves

bull Better control of

deliveries

Objectives

Possible measures

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 45: attached presentation gives an overview

5 Increased real time information smart

solutions and more automation

bull Advanced solutions for supervision

and control of the system

bull Enhanced flexibility also from demand

bull Northern Norway Pilot to test solutions

bull New control center and market

systems

bull Increased automation of reserves and

balancing

bull Better forecasting of wind and small-

scale hydro power

bull Safe operation with

faster changes and

increased

complexity

bull Increased system

control

bull Better and faster

decisions

bull Increased efficiency

Objectives Possible measures

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 46: attached presentation gives an overview

New technology enables smarter operation

Fremtiden er elektrisk

Better communication tools

More accurate metering

Real time data

Better control systems

Better modelstools for

analysis and conclusion

bull RampD at several areas

bull Pilot testing of demand side response

Better monitoring and status reports

Better decision support

More automatic controlbull System protection

bull Automatic reserves (FRR-A)

bull Automating balance regulation

More flexibility bull Utilizing demand side response by

automatic control

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 47: attached presentation gives an overview

Influencing factors

bull Implementation of new Network Codes bull Exact content and consequences of new codes are not finalized

bull Nordic harmonization of solutionsbull Nordic cooperation is crucial for new solutions for system operation

Joint Nordic challenges require joint Nordic solutions

bull New solutions require broad Nordic consensus ndash might take long time

bull New European Network Codes implemented in new Nordic System

Operation Agreement (SOA)

bull New products and processes require new IT solutionsbull New operation and market systems are under implementation

bull Will give increased flexibility when operational

bull Everything cannot be solved simultaneously

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 48: attached presentation gives an overview

Realizing next generation power system

A secure power system requires proper functionality adequate balancing resources and reliable deliveries

Market design closer to physical system

New solutions to reduce imbalances

Better utilization of new and existing technology Smart solutions Demand Side Management

Nordic cooperation and common Nordic solutions is crucial

Fremtiden er elektrisk

The future is electric

Page 49: attached presentation gives an overview

The future is electric