Working Group Balancing Arbeitsstand Working Group Balancing UG 25 April 2018

Study on separate procurement of FRC and aFRR mFRR evolutions 2018: state of affairs ToE: state of affairs iCaros: state of affairs ARP contract changes EU Balancing: state of affairs elia presentation template / City, 19.11.2013 / Firstname Lastname

Study on separate procurement of FCR and aFRR Arbeitsstand Study on separate procurement of FCR and aFRR

Study on Separate procurement of FCR and aFRR Why are we doing this study? Identify potential points of improvement of the AS market and create equal opportunities for new entrants. Assess the need for the existing design with a future oriented view. Comply with Electricity Balancing Guideline related to separate procurement R2 up/down. Scope of the study? Analyze the conditions and consequences for: R1/R2 split & evaluation of the sequences of separated auctions. Asymmetric procurement of R2 and evaluation of sequence between R2up / R2down. Footer

Preliminary results FCR aFRR Current Illiquid FCR & aFRR markets Interim solution Target Mature FCR & aFRR markets A target solution with full merge with FCR Cooperation and split of R2 products is desired but only when the necessary conditions are there. A stepwise approach is proposed to arrive to the target solution based on expected market maturity: Volume availability Number of participants Competitive prices Development of FCR capacity Development of aFRR capacity FCR Regional FCR Regional FCR Local FCR Different steps proposed aFRR R2-UP R2-DOWN R2-UP R2-DOWN The sequence and granularity of the steps are still to be defined. Footer

Next steps of the study A public consultation is ongoing and will be finalized on 22nd May 2018. Everyone is welcome to provide comments. A workshop is planned on 9th May 2018 to further explain the study and help stakeholders reply to the consultation in the most efficient way. After the consultation, Elia will process the comments collected and adapt the document in order to give its view on an implementation approach. Footer

Arbeitsstand mFRR evolutions 2018

R3 – Evolution for End of Year 2018 In a nutshell Activation price and ToE for R3 non-CIPU Two key objectives Common merit order activation for mFRR (1)  Merit Order: move towards simplification and level playing field 2017 1st of Jan 2018 1st of Dec 2018 1. Free bids € € 1. Free bids € 1. Free bids & R3 Standard 2. R3 Std CIPU € € (Non) contracted mFRR unlimited # act 2. R3 Std CIPU 3. R3 Std Non CIPU No € 3. R3 Std Non CIPU No € 4. R3 Flex CIPU € 4. R3 Flex CIPU € 2. R3 Flex € Contracted mFRR limited # act. 5. R3 Flex non CIPU No € 5. R3 Flex non CIPU No € 6. ICH No € Act. Price and ToE R3 non-CIPU Merit Order mFRR Stop ICH (1) for mFRR energy bids with unlimited number of activation (free bids and R3 Standard). R3 Flex will still be at the end of the merit order 

R3 – Evolution for End of Year 2018 Planning Go Live R3 ToE MO mFRR BAL TFs Feb. March April May June July August Sept. Oct. Nov. Dec. 01/12 t Consult. Balancing Rules Publication of IT Tech. Doc. Design Note: Publication Design Note: FB of stakeholders Enquiries for GFA sign. 18/04 04/05 Signature GFA

R3 – Evolution for End of Year 2018 Design Note Published on 18/04 Objective Provide stakeholders with a clear view on the functional evolutions that will be released in December 2018 for mFRR and all their impacts: Activation price and ToE for R3 non-CIPU Common merit order activation for mFRR energy bids with unlimited number of activation (free bids and R3 Standard)

Arbeitsstand ToE: state of affairs

Status Transfer of Energy Rules Elia organized a 2nd formal public consultation on the Transfer of Energy rules between 26/3 - 9/4. The amendments made to these Transfer of Energy rules are based on comments from the 1st public consultation (from 13/11/2017 to 8/12/2017) adjustments resulting from the decision B (1677) of the CREG implementing Article 19bis, §§ 3 to 5 of the law of 29 April 1999 on the organization of the electricity market, to enable Transfer of Energy (bank guarantee, standard price formula, pass through contract, standard clauses) Elia submitted final version of ToE-rules for approval to CREG on 16/4. CREG approval expected by mid-May and entry into force ToE for mFRR from non-CIPU (Bidladder) as from June 1st Link towards the public consultation + consultation report on website Next step is opening of ToE to reserved mFRR in Q4, facilitated via T/DSO Datahub T/DSO Datahub development ongoing to facilitate the transfer of ToE-volumes to FSP & Supplier, incl. Pass Through contracts No volumes available yet despite swift development on demand from market participants

iCAROS : state of affairs Arbeitsstand iCAROS  : state of affairs    

Public Consultation of iCAROS design notes Consultation period: 11/12/2017 – 15/01/2018 6 responses: Set of design notes on future coordination for ELIA-connected assets & assets in ELIA-connected CDS: Edora – Febeg – Ode (‘EFO’) Restore Direct Energie (in addition to support of ‘EFO’) Anode – TeamWise Febeliec 1 anonymous & confidential contribution

General feedback Concerns on the large scope and complexity of the subject, with respect to both design as implementation trajectory. Appreciation of Elia’s approach on - the design notes - involvement of stakeholder - expressed intention for pragmatism for the implementation of the new framework. Overall conclusion of the consultation results: No fundamental issues identified that require a review of the proposed design for asset coordination and redispatching, but finetuning needed Stabilize design as input for implementation trajectory Design still to be validated by the regulatory authorities Keep in mind that reviews are possible in the future based on experiences with new design

Next steps The results of the public consultation together with an update of the design notes on the coordination of assets are published on the ELIA web site: http://www.elia.be/en/about-elia/publications/Public-Consultation/New-eu-guideline-compliant-approach-for-the-coordination Next steps Finetune proposed design In collaboration with the DSO set up a design for distribution-connected assets 1st implementation steps: via the new Federal Grid Code when entering into force Transition phase for non-CIPU units to assure compliance with SO GL requirements (CIPU units are already compliant) T&C Outage Planning Agent/Scheduling Agent version 1.0: public consultation late 2018/early 2019 Preparation of implementation trajectory together with stakeholders (operational workshops will be organized)

Arbeitsstand ARP Contract Changes    

Changes in the ARP contract New GB-BE border with go live of Nemo Link Interconnector New ARP Status “ARP Offshore Interconnector” ToE + SDR Import/Export on the BE-GB border Included specific provisions and procedures for the nominations on the new BE-GB Border Nominations have to be submitted in the RNP nomination system (similar as for other Interconnectors in Channel Region) Balancing Obligation for Nemo Link: Symmetrical set-up: balancing obligation also applicable in GB Difference between programmed flow and measured flow on the interconnector As every other ARP, Nemo Link will: be able to access the local hub or market to restore its imbalance be charged with regulated imbalance tariff Transfer of Energy: ToE for Reserved mFRR for non CIPU units Strategic Demand Reserve: Align with approved functioning rules on SDR-baseline for TSO access points (Nomination  X out of Y) Next steps: Launch of Public consultation Submission for regulatory approval Process for ARP contract: Implementation of NC Electricity Balancing: ARP contract will evolve into T&C BRP 28/03/2018

EU Balancing: state of affairs Arbeitsstand EU Balancing: state of affairs

European integration of balancing markets Entry into force of the guideline on Electricity Balancing (EBGL) on December 18th 4 years to integrate the balancing energy markets at European level Further than integration, a certain level of harmonisation is required and will affect the product definition in Belgium 2018: many proposals will be consulted and several workshops will be organised before or during the consultations All consultations and workshops will be announced by ENTSO-E and Elia Actual implementation facilitated by implementation projects and product harmonisation: IGCC for the European platform for imbalance netting PICASSO for the European platform to exchange aFRR (R2) MARI for the European platform to exchange mFRR (R3) Current and next important milestones: Consultation on additional requirements for FCR providers within synchronous area continental Europe: until May 3rd Launch of the consultation on aFRR implementation framework on April 26th (2 months) Launch of the consultation on mFRR implementation framework expected mid-May (2 months) Next stakeholder workshop on June 20th and 21st (Brussels)

Task Force Implementation of Strategic Reserve Arbeitsstand Task Force Implementation of Strategic Reserve UG 25 April 2018

Timeline 2018 (15.02.2018) 2018 2018 Jan Feb Mar Apr May Jun Jul Aug Possible review of volume by Minister (following Ministerial Decree) Entry into force Ministerial Decree 1/9/2018 15/1/2018 Contracts signed Call for Candidates Deadline Submission offers CREG advice reasonability prices 15/2/2018 16/4/2018 28/6/2018* 31/10/2018 Call for Tender Elia report analysis offers Start Winterperiod 15/3/2018 16/5/2018* Award Notice 1/11/2018 14/9/2018 2018 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2018 Today 26/3/2018 Request certification SDR Pref 6/4/2018 29/5/2018 17/8/2018 Certification issuing Checklist Submetering & CDS Deadline Order Submeter 7/3/2018 16/10/2018 Submission Application Deadline Submeter Commissioning 15/2/2018 Publication final Functioning Rules & Procedure for Constitution * Notwithstanding the legal deadline of 31/5/2018, ELIA strives to submit its report to CREG already by 16/05/2018. As a consequence and following the legally stipulated terms, CREG would conclude its advice by 28/06/2018 (in stead of the legal deadline of 12/07/2018).

New proposal for the Administrative Imbalance Price Context An administrative imbalance price (4.500 €/MWh) is implemented as a fixed value, set above today’s Day-Ahead Market price cap of 3.000 €/MWh, to have an incentive effect. The Belgian commitment towards Europe requires another approach as the AIP has to be adapted towards Winter 2018/19 to a value which has to be higher as the intraday price cap , i.e. 9999,99 €/MWh (i.e. current intraday price-cap) It is therefore proposed to set the AIP at a fixed level of 10500 €/MWh. This value complies with commitment from Belgium towards Europe (higher as the current intraday price cap) This increases from 4500 €/MWh seriously increases the “incentive effect” wrt day-ahead and will avoid arbitrage This increase towards 10500 €/MWh also ensures an “incentive effect” wrt to the intra-day market It is proposed to allow balancing market prices rising above the AIP if reserve bids are offered and selected at a price above the AIP (if they reflect the activation cost of this asset). It is proposed to implement a new bid cap of 13500€, complemented with a dynamic mechanism in which the balancing bid cap may be increased with 1000 EUR/MWh in the event that an activation bid is selected at a value of 80 percent of the balancing market bid cap in place. Task Force 08/02/2018, Brussels

Volume determination 2019-2020: two public consultations are held Stakeholder comments were taken into account: sufficient duration of consultations is foreseen. 23.04 21.05

Main new elements compared to the assessment of winter 2017-18 Flow-Based modelling (impact NEMO and ALEGrO) Market Response (same methodology, but updated data) Total Demand growth Forced outage rates and availabilities Modelling non-CIPU units  

Workplan SR Design Winter 2019/20 Topic Trigger Planning 1 Potential design changes resulting from E-law amendment Modification E-Law  Subject progress and exact wording of the amended E-Law 2 3 Clean-up functioning rules, procedure for constitution and contracts following E-Law amendment Modification E-Law 4 Application of Transfer of Energy for SDR Modification E-Law + Transfer of Energy Rules Subject to CREG approval on pending ToE rules 6 Improve transparency towards parameters following the Adequacy Study (activation criteria, heat map,…) Request CREG (Decision FR) After summer (linked to publication of the volume report). 7 Investigate exceptions to the full exclusion DPs participated or participating in AS Market Request Conclude in TF before summer 8 Investigate the revision design tests for SGR (planning and penalties) Task Force iSR - April 23, 2018