1. Development of System Operation Network Codes ACER Workshop 24 August 2011 Ole Jan Olesen, Convenor ENTSO-E Working Group on European Operational Standards

2. The situation today Development of the Network Codes Scoping experiences Conclusions Presentation outline Development of System Operation Network Codes | 110824 | Page 2 of 23

3. The situation today Development of the Network Codes Scoping experiences Conclusions Presentation outline Development of System Operation Network Codes | 110824 | Page 3 of 23

4. What works today? All synchronous areas have rules for the operation of the interconnected system These rules are based on the physics of the system to which they apply These rules and operational practices, developed and improved over the last 50 years, are tested and confirmed by the high reliability of the systems Development of System Operation Network Codes | 110824 | Page 4 of 23

5. What is missing? The current rules for system operation mostly address TSO or TSO-TSO issues. Rules for other system users need to be addressed TSOs exercise different levels of generation control and have different contractual relations with DSOs, generators, HVDCs and other system users Existing rules are not enforceable towards system users other than TSOs Common rules for interoperability between synchronous systems do not exist yet Development of System Operation Network Codes | 110824 | Page 5 of 23

6. Why are the rules not the same? Different sizes of synchronous systems (Iceland – 2.6 GW, Continental Europe – 670 GW) Different frequency regulation philosophy (decentralized by PF Control in Continental Europe, centralized by F Control in Great Britain) Different interconnectivity with neighbours (Germany – 7 neighbours, Serbia – 8 neighbours, Ireland – 1 neighbour via DC) Different generation mix (12 % of hydro in CE, 56 % of hydro in Nordic system) Development of System Operation Network Codes | 110824 | Page 6 of 23

7. What’s the proposal? Pan-European Network Codes should stay concise and general (the “what”) The more detailed Network Codes (the “how”) should be requested at the synchronous level The existing detailed regional rules should be “integrated” in the Network Codes and by this become a legal reference Development of System Operation Network Codes | 110824 | Page 7 of 23

8. The situation today Development of the Network Codes Scoping experiences Conclusions Presentation outline Development of System Operation Network Codes | 110824 | Page 8 of 23

9. National Codes Summary table of existing codes Type IType II Regional Code: Continental Europe, Nordic, Baltic Regional Code = National Code: Ireland, UK TYPE I – regional inter TSO cooperation in synchronous area TYPE II – one TSO on regional level National Codes Conclusion Objective is on the basis of Type I to: (1) harmonise regional (inside synchronous areas) operational rules (2) develop interregional (between synchronous areas) operational rules Result Pan-European System operation codes (1) Development of System Operation Network Codes | 110824 | Page 9 of 23

10. Separate regional codes Pan-European Region Ireland Region Continental Europe Region Baltic Region Nordic Region UK Code Development Process FROM TO Region BalticRegion Continental EuropeRegion IrelandRegion UK General interregional and harmonised regional codes Region Nordic Pan-European System operation codes (2) Development of System Operation Network Codes | 110824 | Page 10 of 23

11. The future Network Codes related to System Operation as part of the agreed 3-year plan Proposed structure and timeline of the Operational NCs Development of System Operation Network Codes | 110824 | Page 11 of 23

12. NC on Operational security (Q1-Q4/2012) Scoping and preparing the Network Code (Q4/2011- Q1/2012) Workshop involving the stakeholders on the scoping of the Network Code (Q1/2012) Drafting of the Network Code (Q1-Q3/2012) Public Consultation (Q3/2012) Workshop involving the stakeholders on the draft Network Code during Public Consultation (Q3/2012) Delivery of the final Network Code for ACER approval (end of Q4/2012) Development of System Operation Network Codes | 110824 | Page 12 of 23

13. Some new applications Need to address the impact of significant RES increase (not only wind generation but current steep increase of installed PV) Need to ensure the compatibility with new market developments (e.g. flow-based capacity allocation) Operation of HVDCs between synchronous areas Development of System Operation Network Codes | 110824 | Page 13 of 23

14. time level of detail Combined “top-down” and “bottom-up” approach Improvement loop FG: framework Guidelines NC: Network Codes low high FG NC EXISTING RULES IN THE SYNCHRONOUS SYSTEMS NC Development of System Operation Network Codes | 110824 | Page 14 of 23

15. The situation today Development of the Network Codes Scoping experiences Conclusions Presentation outline Development of System Operation Network Codes | 110824 | Page 15 of 23

16. Interdependencies (1) Drafting of Network Codes for System Operation is more comprehensive than of former regional “Operational Handbooks” Technical issues Regional requirements Network Codes Codes Development Process Pan- European harmonis ation External stakeholders European law Development of System Operation Network Codes | 110824 | Page 16 of 23

17. Interdependencies (2) Drafting of Network Codes for System Operation requires extensive coordination Initial Impact Assessment Framework Guideline System Operation Network Codes Market Network Codes Pilot Network Code Other System Development Network Codes Terms and definitions Development of System Operation Network Codes | 110824 | Page 17 of 23

18. Meeting the expectations Workshops with stakeholders are very useful to: Stakeholders Inform about the drafting work taking place at ENTSO-E To gather overall expectations and inputs to the draft Network Code To discuss the options Development of System Operation Network Codes | 110824 | Page 18 of 23 ECConsumersGeneratorsDSOsACER ENTSO-E

19. Draft NC on Operational security (1)  Achieve common pan-European principles  State basics for Operational security  Increase coordination of System operation  Include all Stakeholders in System operation  Achieve common pan-European principles  State basics for Operational security  Increase coordination of System operation  Include all Stakeholders in System operation Why? What? Topic Number of pages 1. States of system operation3½ 2. Congestion and active power management3 3. Voltage control and reactive power management3 4. Short-circuit currents management3 5. Power system stability management3 6. Contingency assessment and handling5½ 7. System protection1½ 8. Frequency quality3½ 9. Operational testing, monitoring and investigation3½ 10. Operational training and certification3 Total including List of content and Introduction46 Development of System Operation Network Codes | 110824 | Page 19 of 23

20. Draft NC on Operational security (2) Development of System Operation Network Codes | 110824 | Page 20 of 23  Emergency operations  Capacity calculation  IT communication infrastructure and data standards  Emergency operations  Capacity calculation  IT communication infrastructure and data standards  Normal operational security issues  States of system operation  Testing and monitoring  Training and certification  Normal operational security issues  States of system operation  Testing and monitoring  Training and certification Code excludes Code includes

21. Draft NC on Operational security (3) Development of System Operation Network Codes | 110824 | Page 21 of 23  May result in unprofitable harmonisations of “How”  As a pan-European law difficult to adjust to future developments  May result in unprofitable harmonisations of “How”  As a pan-European law difficult to adjust to future developments  Express pan-European harmonisations of “What”  Open for future developments  Open for regional & national implementations  Legally stable  Express pan-European harmonisations of “What”  Open for future developments  Open for regional & national implementations  Legally stable More detailed requirements Mostly general requirements

22. The situation today Development of the Network Codes Scoping experiences Conclusions Presentation outline Development of System Operation Network Codes | 110824 | Page 22 of 23

23. Conclusions In the area of system operation a stepwise approach consists in building on the currently existing rules of the synchronous areas A continous improvement loop ensures consistent shift towards pan-European standards ENTSO-E is committed to work with ACER and EC towards the best possible quality of the Framework Guidelines and Network Codes Development of System Operation Network Codes | 110824 | Page 23 of 23