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Published byDamian Higgins Modified over 6 years ago
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Context 12 TSOs in North West Europe (NWE) have commenced a project to facilitate a single price coupling across a region covering CWE, Scandinavia and GB Project outline presented to AHAG Appointed project leader and project office Solution as fast as possible in order to replace ITVC, implying focus on NWE first? Uncertain path to European solution (is it expected that other regions conform to NWE model, including governance?) 6 PXs have commenced an project to implement a single matching algorithm that can be extended across Europe (PCR) Current parties cover Northern, CWE, FUI, SWE, SCE regions; plus other adjacent market areas already covered by PXs (i.e. Baltic, CH…). PXs in CEE are also associated Single algorithm is a prerequisite of the European target model, and recognised as a PX responsibility Decentralised model, accountable to TSOs/regulators according to the relevant governance frameworks Appointed project leader Progressing on several workstreams after concept proven with simulations Commission is to draft a Governance Guideline Agreed plan presented at the last Florence Forum, target to have draft for December FF Detail likely to be in “Operational Tier”, outside the Guideline – “preparation will continue by PXs and TSOs”, with regulatory oversight Allows for different ways of implementing the Operational Tier, reflecting national legislation/regulation
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Development of the Price Coupling of Regions (PCR) Initiative
Markets initially included in PCR TWh Markets which showed interest to join Markets that could join next as part of an agreed European roadmap *Source: UCTE 2007 power consumption data
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Development of the Price Coupling of Regions (PCR) Initiative
Key features of the initiative are: PXs using one single co-owned matching algorithm. Such an algorithm will be published on the internet Common operational procedures handling normal and emergency situations Each individual PX takes the responsibility to fulfill locally legal and regulatory requirements as well as TSO agreements Able to adapt to local/regional frameworks
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Simulations outcomes and analysis
Robustness tests - Prices Price deviation. Histogram of the number of hourly calculated prices by a single algorithm in one pass, in percentage, vs the value calculated by each of the algorithms for their own prices areas. Ability to handle diversity of products and scale of calculation has been demonstrated on 3 existing algorithms (154 days, 14 prices areas, hourly prices simulated) The calculation of the prices is of a good quality for a first attempt. Price deviation compared to local algorithm calculation is controlled .
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PCR has been welcomed by Florence Forum:
Way forward PCR has been welcomed by Florence Forum: “The Forum welcomed the Power Exchanges’ initiative PCR and asked to ensure that it is in accordance with the emerging governance framework. The Forum stressed the need for co-operation between regulators, TSOs and Power Exchanges. The Forum also stressed the importance of ensuring that the input and requirements of TSOs and regulators are taken into account.” AHAG has asked how NWE and PCR work together (concerns that projects might be conflicting) Highly complementary to each other: PCR delivers joint PX responsibilities (e.g., coordinated matching function); NWE a TSO regional implementation Different geographic scopes – regulators seem to want a solution for Europe and a clear roadmap, not just a NWE solution Be consistent with emerging governance framework under AHAG AHAG to review at next meeting on 21 Sep TSOs and PXs also asked to present to FUI Implementation Group on 13 Sep EuroPEX/ENTSO-E working level meeting planned on 14 Sep Day Ahead Governance Project to review on 15 Sep EuroPEX/ENTSO-E director level dinner on 20 Sep
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Development of the Price Coupling of Regions (PCR) Initiative
Implementation plan
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Possible project structure – Overview
PCR Implementation Project Regional Implementation Projects Adopt PCR coordinated matching function within existing regional solutions (e.g., Mibel, CWE, Nordic-Baltic, GB, Italy-Slovenia) Adopt PCR coordinated matching function as part of any new regional solutions (NWE?) Deliver common algorithm/ coordinated matching function that meets requirements of regional projects while enabling future single European market coupling Identify/resolve any conflicting requirements Facilitate convergence on common European “Operational Tier”
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Conclusions Simulations shows that technical feasibility of PCR has been proven in terms of single algorithmic computation Wide European dimension Regulators involvement considered as essential for the success TSOs – national and regional have to be key partners in the development and later the operation Clear roadmap for market participants
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