Network Code for Requirements for Grid

Connection applicable to all Generators (RfG)

Progress Update – 28 January 2013

2

CAVEAT

Work in progress!

Final positions on all areas may change.

3

Issues & Implementation

As the first Code, RfG has pioneered the process…and definitions are expected to be used in other Network Codes.

Significant complications for application within GB, especially regarding new categorisation of users.

(replacing Large, Medium & Small Power Station classifications with A (800W to 1MW), B (1MW to 10MW), C (10 to 30MW) and D (larger than 30MW or connected at or above 110kV)

Initial options for implementation of RfG provisions being drafted by NG in discussion with other GB parties.

4

Code Development Process & ACER Opinion

Final code submitted to ACER 13 July 2012.

GB stakeholder workshop held 2&3 August 2012.

ACER workshop held 3 September 2012.

ACER review of code published 13 October 2012 (opinion of how code meets Framework Guidelines). Generally positive with 4 areas identified for improvement:

Significance test for small scale units

Insufficient justification for:

Deviation from existing practice with regards to Fault Ride Through requirements;

Exemption of CHP units (proposal that the exemption should be extended to cover heat as well as steam);

Amendments required to national scrutiny for those elements to be determined on a national level (to ensure appropriate oversight and clarity of requirements);

Recovery of costs incurred by TSOs and DSOs (not required in the Network Code and should be deleted).

5

Progress Since ACER Opinion

Two meetings held (22 Nov) with Pan-European Stakeholders regarding the

issues raised in ACER’s opinion.

User group meeting with all pan European organisations registered for RfG

re the 4 issues. ACER and EC present.

Meeting with DSO EG to examine practicality of ACER’s opinion related to

transfer of FRT requirement for Type B generators to DSOs at T-D interface.

ENTSO-E published its intended “next steps” 17 Dec

GB stakeholder meetings –

Teleconference with MicroCHP “community” 20 Dec

Meeting with AMPS (type B generators) 9th Jan

Further UG meeting 16 Jan – well attended – lively on all topics

Feedback from users:

Want to see national detail.

Support piloting using selected national examples.

6

Target Milestones

SDC 17th Jan agreed the following programme:

18/01 Meeting with EC on Art 4(3)

21/01 Short feedback to the User Group

Meeting with ACER/NRAs on all issues – TBA week commencing 28 Jan

Feb - DT finalises proposals, internal ENTSO-E approval process

Early March - public information session

ENTSO-E presentations on all 4 issues

Invite to EC and ACER to present

6th March target resubmission to ACER

7

Status of issues raised in Opinion

Significance test - Looking at exemption / derogation process.

Deviations from existing requirements:

(a) FRT for Type B – Required for frequency stability; difficult technical issue.

Progressing.

(b) Exemptions for CHP units – Agreed and closed.

Article 4 (3); determination of T&Cs in accordance with national law -Looking to pursue pilot national processes in parallel with Comitology.

Progressing 15 missing references to art 4(3) which fall into several categories.

Cost recovery – Importance of retention stressed by DSOs. Does CACM now

set precedent?

8

Significance test – 800W

ENTSO-E stresses that requirements are clearly limited to just

frequency stability for Type A

All these are justified based on aggregated impact, even for small scale

generators

Exemptions would lead to a discriminatory approach

Manufacturers continue to press for technology based exemptions

(especially small generators, micro-CHP)

Position:

Looking at exemption / derogation process.

9

Significant deviations from existing

requirements: (a) FRT for Type B

Previously:

ACER requirement was for voltage stability

ENTSO-E provided evidence including real fault examples to

demonstrate that the issue is frequency stability

DSO EG confirmed that requirement cannot be moved to T-D interface

Complex and difficult issue – also some limitations of technology (non-

synchronous plant).

Position:

Still progressing.

10

Significant deviations from existing

requirements: (b) Exemptions for CHP units

Request to extend an exemption on some power control

requirements from just “steam” to include “heat”

Following discussions with industry affected, need case

understood better.

Conclusion:

Exemptions for the limited requirements extended to include heat for

production processes of its own industrial site

This issue appears AGREED and CLOSED

11

Article 4 (3) – determination of T&Cs in accordance with national law

Previously:

Request to remove second para of article 4(3)

Problem relates to Spain, Norway and Sweden – NRA roles different

ENTSO-E acknowledge need for greater clarity

New clauses added to resolve uncertainties.

Position:

No major new arguments at 16 Jan user group meeting.

Post meeting: Looking to pursue pilot national processes in parallel with Comitology.

Previously:

Request to include 15 missing references to article 4(3)

Each of these 15 requirements analysed – 3 categories, with some in more than one:

“Plant Design”

Add specific reference to Article 4 (3)

“Parameters within same design”

Covers decisions needed to be taken quickly

NRA involvement through notification post decision

“Site specific decisions”

NRA informed through notification post decision

Position:

Still progressing

12

Cost Recovery

Previously:

Request to remove Article 5 -TSO cost recovery

ENTSO-E accept proposal not in FWGL but not in conflict with FWGL?

DSOs stress the importance of retaining this article

Position:

Does CACM precedent lead to agreement to retain?

European Electricity Balancing Code

Graham Hathaway

28 Jan 2013

14

EU Vision & ACER Balancing Code Objectives (1)

Integration, coordination and harmonisation of the

European balancing regimes

Efficient functioning of the internal market in electricity

and cross-border trade, security of supply, providing

benefits for customers

Objective, fair, transparent and non-discriminatory rules

for balancing

Take into account the regional specificities

Take into account both central dispatch and self-

dispatch arrangements

15

Roles and responsibilities of stakeholders involved in

electricity balancing, i.e.

The procurement of frequency restoration reserves (FRR)

and replacement reserves (RR)

The activation of balancing energy from frequency

restoration reserves and replacement reserves,

Reservation of interconnector capacity by TSOs for

balancing purposes

Imbalance settlement, pricing, rules, roles

Applied to cross-border and market intregration issues

EU Vision & ACER Balancing Code Objectives (2)

16

Content of Balancing Code

Procurement and

balancing product def’n

Capacity reservation on ICs

Imbalance settlement

17

Content of Balancing Code

Procurement and

balancing products

Reserves and

procurement

harmonisation

Procurement of

balancing services Procurement of

balancing energy

18

Content of Balancing Code

Capacity Reservation on

Interconnectors

Reservation for

operating reserves

Principle of co-

optimisationReserve sharing

19

Content of Balancing Code

Imbalance Settlement

Imbalance Settlement

Pricing

Settlement Period

DurationImbalance Calculation

20

What will it mean for GB Balancing?

New concepts,

products, contracts

Common merit order

Imbalance netting

GB Codes subservient

Share balancing

mechanism

Standard balancing

products

21

Coordinated Balancing Areas (CBA)

Coordinated Balancing Area (CBA)

Europe will be split into several CBAs

Each comprising a group of two or more adjacent control

areas with interconnected borders.

Intention is to make implementation more achievable

Towards 2020 extend code reqs to one single CBA pan

Europe

22

Common Merit Order (CMO) – proposed [1]

This is the keystone of the balancing code

TSOs obliged to offer all their “standard products” into CMO

– “standard products” to be defined

Will be several CMOs across Europe each corresponding to

its own CBA, and several CBAs may overlap like a big Venn

diagram

TSOs obliged to use or activate “standard products” for

national balancing first, from the CBA, before using any

specific national products.

23

Common Merit Order (CMO) – proposed [2]

TSOs initially can hold back a certain volume of bids from

the most expensive end of the bid stack (to secure system

only), but approaching 2020 none at all.

For GB actual availability limited by XB capacity.

TSOs obliged to share all information on unused generation

capacity / margins.

Transit TSOs within a CBA can only veto for system security

purposes (e.g. France buying from Ireland, GB can only veto

energy flow if system security concerns, but costs will be

ours to bear)

24

Strong links to other codes

LFC&R Code

[Market Codes]

BalancingCode

[Operational Codes]

Market Sphere

[Market Codes]

[Operational Codes]

Operations Sphere

Strong interaction

between market and

operational codes

25

Milestones and Project Plan I/II

05 06 07 08 09 10 11 12 01 02 03 04 05

2. S

take

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2012 2013

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DT

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Scoping w/ WGAS

& creation of KPIP

Step 1

Drafting

Step 2

Internal

Approvals

Step 3

Elaboration of

Supporting Document

Sta

rt (

EC

le

tte

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3. S

take

ho

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Wo

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Public Consultation

(2 months over

summer TBC)

Step 4

Analysis

and

updated

Drafting

Step 5/6

Internal

Approvals

Step 7

Approval of NCB

(ACER Opinion, Monitor &

Manage Comitology)

ca. 12 Month

Co

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tio

n r

evie

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an

d u

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(WG

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ER

Milestones and Project Plan II/II

2013 2014

06 07 08 09 10 11 12 01 02 03 04

27

Detail

28

X X+6X+1 X+2 X+3 X+4 X+5

Time [years]

MAX LENGTH OF THE TRANSITORY PERIOD

The determination of the transitory period shall be subject to consultation with the relevant stakeholders

FGEB foresees DEROGATIONS – a maximum period of 2 years when some provisions of the NCEB can be ignored (granted case-by-case)

Entr

y in

to f

orc

e o

f th

e N

CEB

After transitory period

Entry into force of the standards & requirements of NCEB for which there

is no specified deadline in FGEB

LEGEND

BE - Balancing EnergyCA - Control AreaCMO - Common Merit Order (all bids are shared)CMOm - Common Merit Order list with margins

(a certain among of the most expensive balancing energy bids can be not shared)

FGEB - Framework Guidelines on Electricity BalancingFRR - Frequency Restoration ReserveNCEB - Network Code on Electricity BalancingRR - Replacement Reserve

Entry into force of the multilateral TSO-TSO model with CMO of balancing energy from RR and manual FRR

Coordination between TSOs in activation of balancing energy from automatic FRR(it also includes coordination of automatic FRR with RR and manual FRR)

Entry into force of the multilateralTSO-TSO model with CMOm of BE from RR

Minimization of the counteracting active of balancing energy between CA (imb. netting)

TSOs’ proposal for the target model for the exchangesof balancing energy from automatic FRR

Harmonisation of the main features of the imbalance settlement

Entry into force of the multilateral TSO-TSO model with CMOm of balancing energyfrom RR and manual FRR

Implementation of the target model for automatic FRR

TSOs’ proposal for standard

balancing energy and balancing reserve

products

TSOs’ proposalfor the pricing

method based onmarginal pricing(pay-as-cleared)

TSOs’ proposal for modification of the FGEB’s multilateralTSO-TSO model with CMO of BE from RR and FRR manual

29

Progress and Timing

Code drafting team

formed July 12

Key concepts

Debated

Autumn 12

Ideas firmed up

Dec 12

Stakeholder draft

Mar 13

Stakeholder

Workshop Mar 13

Public Consultation

June 13

Demand Connection Code

Prioritisation Workshop Summary

28 January

2013

Demand Connection Code -

Overview

Key Dates

4th Jan 2013: ENTSO-e Code submitted to ACER

16th Jan 2013: DECC/Ofgem Prioritisation Workshop

20th Feb 2013: Additional DCC stakeholder meeting

4th Apr 2013: ACER opinion due

Prioritisation Workshop:

Subgroup of Stakeholder Group - facilitated by DECC and Ofgem

Informs the UK Position going into Comitology by providing the initial

prioritisation of the key issues and proposed amendments to DECC.

Stakeholders responsible for issue prioritisation and identification of

suitable amendments

Priority Issues

1. DCC Compliance, Data Provision and the Significance Test

Concern domestic consumers may be captured by default [e.g.purchase

of a DSR device (Art. 21(5)] triggering obligations on the consumer and

DSOs.

Clarification of the code intention and definition of “significant”.

2. National Regulatory Authority (NRA) Oversight (Art 9)

Needs to explicitly capture areas of code where decisions / definitions are

made outside of the code to ensure “reasonableness”

Adequate dispute resolution

Clarification required to ensure sufficient NRA oversight and involvement

3. Reactive Power

Limits imposed at the TSO/DSO interface for reactive power

Concerns re: location of assets and allocation of costs on TSO v DSO

Priority Issues (2)

4. Demand Side Response

General view that the code was a barrier to DSR although difficult to

identify key paragraphs.

E.g. Code compliance may be a disincentive to domestic/SME

participation

DCC scope is designed to identify technical capability – not commercial

arrangements

CBA may miss benefits delivered through the commercial

arrangements

Concerns re: market implications of mandatory System Frequency

Control (SFC) but no specific obstacles highlighted in code

SMEs may want to offer commercial services

More work by stakeholders required to identify key changes and

supportive arguments. Proposals to be presented on 20th Feb 2013.

Summary

The DCC prioritisation meeting defined the key areas of concern

Priorities 1-3:

DCC Compliance, Data Provision and the Significance Test

National Regulatory Authority (NRA) Oversight (Art 9)

Reactive Power

Specific code amendments can be developed by stakeholders

Priority 4: DSR – does not adequately take into account commercialisation

Problem is a generic concern with the code and is less easy to address

through specific amends

Specific code amendments difficult to identify currently

Responsibility rests with Stakeholders; additional time required to consider

best approach