Imbalance Netting Platform Markus Maurer Balancing Stakeholder Group

GLEB Requirements @ENTSO-E All rights reserved 2

Implementation Framework By six months after entry into force of this Regulation, all TSOs shall develop a proposal for the implementation framework for a European platform for the imbalance netting process. TSO-TSO Settlement By one year after the entry into force of this Regulation, all TSOs shall develop a proposal for common settlement rules applicable to all intended exchanges of energy TSO-TSO Settlement @ENTSO-E All rights reserved Implementation By one year after the approval of (…) the implementation framework (. . ), all TSOs performing the automatic frequency restoration (. . ) shall use the European platform to perform the imbalance netting process, at least for the Continental Europe synchronous area. 3

Implementation Framework Discussion points from last BSG @ENTSO-E All rights reserved 4

Discussion points from last BSG 1 Determination of Cross-Zonal-Capazity 2 Optimization regions @ENTSO-E All

Hierarchy of Operational Areas Synchronous Area consists of (one or more) is sub-area of LFC Block consists of (one or more) is sub-area of LFC-Area consists of (one or more) is sub-area of Monitoring Area consists of (one or more) is sub-area of Scheduling Area @ENTSO-E All rights reserved 6

SO GL: Definition of imbalance netting SO GL, Art. 146 (1): The control target of the imbalance netting process shall aim at reducing the amount of Synchronous Area simultaneous counteracting FRR activations of the different participating LFC areas by imbalance netting power interchange. consists of (one is sub-area of or more) LFC Block consists of (one or more) is sub-area of SO GL: Imbalance netting defined on LFC-Area level between LFC Areas LFC-Area consists of (one or more) is sub-area of Monitoring Area consists of (one or more) is sub-area of Scheduling Area @ENTSO-E All rights reserved 7

Possible Configurations – Impact on CZC Synchronous Area Bidding Zone LFC Block LFC Area LFC Block LFC Area LFC Block LFC Area Bidding Zone CZC of border calculated in accordance with Article 37 of the GLEB CZC on this border is considered infinite or equal to the respective technical limit CZC on this border is not considered and by this equals to infinite in the process @ENTSO-E All rights reserved (e. g. bound by number of digits) 8

Determination of CZC Day-ahead Market Coupling (Flow-Based) Extraction of ATC values Continous XB Intraday-Market (ATC based) Previous Balancing Actions (ATC based) Remaining ATC values after XB-ID Imbalance Netting Remaining ATC values after Balancing Actions • In case XB-Intraday-Market might be flow-based, same ATC extraction as currently done for Dayahead could be used for the balancing timeframe. • Currently determination of ATC values is done by participating TSOs, which send the ATC to the IGCC. • Separate function not necessarily needed and by this a very detailed implementation question. @ENTSO-E All rights reserved 9

Optimization Regions - Summary • Compromise achieved by all TSOs • Mainly needed for the transition period to not disadvantage first movers (exchanging a. FRR) • No detrimental effects on the netting potential of TSOs not part of an a. FRR cooperation can be seen • No discrimination @ENTSO-E All rights reserved 11

Optimization Regions – Stepwise Optimization regions Opt. step 1: Opt. region: Prior access to:

Netted volumes Optimization Regions – Impact Assessment • The total netting volume of the smaller optimization region (AT/DE) decreases compared to the scenario without optimization regions. • For most of the TSOs within the bigger optimization region the total netting volume increases • For a limited number of TSOs the netting volume decreases slightly @ENTSO-E All rights reserved 13

TSO-TSO settlement @ENTSO-E All rights reserved 14

TSO-TSO Settlement - Principles Imbalance Netting import or export shall be settled at a price, different from reference zero price (meaning here a situation where a reference price for all settlement period would be used and set equal to zero) 2 Imbalance Netting shall benefit to all TSO in a sense that no TSO shall loose once the cooperation gets benefits as a whole on a settlement period basis 3 Opportunity prices shall reflect the avoided activation of a. FRR @ENTSO-E All rights reserved 15

TSO-TSO Settlement options Weighted Average of Opportunity prices plus avoidance of negative individual benefits Determination of settlement price (Weighted average of opportunity prices) Equal Benefit per MWh Determination of overall benefit Settlement of import and export of imbalance netting with settlement price Avoidance of negative individual benefits (redistribution of individual positive benefits to cover individual negative benefits) @ENTSO-E All rights reserved Distribution of benefit proportional to netted volumes 16

Next steps Timeline @ENTSO-E All rights reserved 17

Next steps - timeline 2017 1 2 3 4 5 6 7 2018 8 9 10 11 12 1 F B LE EI G DESIGN I – Development of implementation framework Governance Algorithm Optimization regions 2 3 4 5 6 ion ss ean i m ub urop s E or e f l on orm n i a tf l ad pos pla e D pro IN of 7 2019 8 9 10 11 12 1 ion ss SO i m T ub SOs T or e f l on ent n i l a m ad os ttle De prop se of 2 NRAs approval of the design DESIGN II – TSO-TSO Settlement Principles Equations 3 4 5 6 7 NRAs approval of the TSO-TSO settlement 8 9 10 11 12 Deadline for Accession Adaption of IGCC in order to fulfil the approved all TSO proposals Accession of new IGCC members Impact Assessment PUBLIC CONSULTATION @ENTSO-E All rights reserved 18

Implementation plan Implementierung finalized IGCC INC E-GCC Implementation started Status Quo @ENTSO-E All rights

Implementation Plan • Technical IGCC accession has to be performed sequentially to enable sufficient testing and ensure stable system operation • Possible accession order – based on preliminary feedback in PT IN: Country Slovenia Croatia Hungary Poland Spain Portugal Slovakia Romania Greece Bulgaria Italy Serbia TSO ELES HOPS MAVIR PSE REN SEPS Transelectrica Admie ESO Terna EMS 1 2 3 4 2018 5 6 7 8 9 10 11 12 1 2 3 Decision on Communication Infrastructure needed Communication and SCADA implementation @ENTSO-E All rights reserved 4 2019 5 6 7 8 9 10 11 12 Deadline for Implementation of European platform Interoperability tests Operational tests 20