market rules - ecb
TRANSCRIPT
Namibia MSB Market Workshop:
Market Rules
20th September 2019
1. Review of Market Rules
2. Review of the Processes & Procedures
3. Review of Wheeling Framework
Lunch
4. Wheeling Examples Using the Models
20 September 2019 MSB Market Rules & Wheeling Framework 2
INTRODUCTION
Purpose of this Workshop
1. MSB Market opened - 1st September 2019
2. All pending licence applications and all new licence applications - will now be
assessed in terms of the MSB Market Design, Rules and Wheeling Framework;
Generators & Exporters
3. ECB will now accept applications from Contestable Customers – All Transmission
connected customers including Distributors are now Contestable; ECB will confirm
Contestable Supply Points & Quantities in conjunction with MO
4. ECB/ MO are ready to accept trades under Draft Rules and Procedures
5. MSB Market is open!
20 September 2019 MSB Market Rules & Wheeling Framework 3
MARKET DEVELOPMENT PROCESS
Timelines for Implementation
TRADING ARRANGEMENTS
1a
20 June 2019 MSB Presentation - Distributors Workshop 5
ELIGIBILITY CRITERIA
Summary
Phases1a
(1st Sep 2019 – June 2021)
1b
(July 2021 – June 2026)
2
(July 2026)
Contestable Purchases -National Cap
• 30% of total national purchases • 30% of total national purchases • As determined by Regulator
Contestable Purchases –Customer Supply Point Cap
• 30% of total customer purchase • For Distributors this volume is
reduced by 30% of the purchases by ≥1MVA connected customers
• As determined by Regulator • As determined by Regulator
Contestable Customers • Tx Connected
• Tx connected• Dx connected (≥1MVA)• Dx connected (<1MVA) as
determined by Regulator
• Tx connected• Dx connected (≥ 1MVA)• Dx connected (<1MVA) as
determined by Regulator
IPPs
• Licensed• Tx or Dx connected• Capacity ltd by sales to Contestable
Customers
• Licensed• Tx or Dx connected• Capacity ltd by sales to Contestable
Customers
• Licensed• Tx or Dx connected• Capacity ltd by sales to Contestable
Customers
Exporters• Licensed• No size limit
• Licensed• No size limit
• Licensed• No size limit
Traders• On application and approval by
Regulator; Licensed• No trading volume limit
• Licensed• No trading volume limit
• Licensed• No trading volume limit
Importers • Not allowed • Not allowed• Licensed• Capacity ltd by sales to Contestable
Customers
Aloe Investment No 27 (5MW) – Rosh Pinah
MARKET RULES
MARKET RULES
-
OVERVIEW &
APPLICATION OF RULES
1. MSB Market Design: approved by the Government of the Republic of Namibia in April
2019.
2. ECB:
a) is mandated by legislation as the administrative authority of the Market Rules
compile, approved and implemented for the benefit of the electricity industry.
b) will amend and update the Rules as required, through a consultative process, and
in accordance with a transparent rule change methodology
c) will submit Rules for gazetting in October 2019
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MARKET RULES
Governance
These rules pertain to the services offered in Phase 1 of the MSB Market, that are required to facilitate bilateral trading.
In Phase 1, these services include:
20 September 2019 MSB Market Rules & Wheeling Framework 9
MARKET RULES
Trading Products & Services for Phase 1
Service Impacted Notes
Scheduling of binding hourly bilateral energy trades
Between Eligible Sellers (ES) and Contestable Customers (CC)
For each of the 24 hours of the Delivery Day, starting at midnight (00h00)
Energy balancing ES In case of deviations from the agreed schedules
Voluntary Energy Banking MO To deal with any planned excess generation by ES
Metering, invoicing and settlement
MO for Distributor and CC Check Timeline
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MARKET RULES
Future Products & Services (incl. Phase 2)
1. It is anticipated that future
developments of the MSB may
include:
a) A Day-ahead Market
b) An Intra-day Market
c) A Balancing Market
d) Demand side participation
e) Specific Ancillary Services
products
1. In subsequent phases, including
Phase 2, the Market Rules and
services maybe be expanded to
include:
a) a facility to match short term
trading (e.g. bulletin board)
b) a day-ahead, ancillary service
and balancing trading platform
c) access to regional trading
d) financial trading platforms
Markets Services
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MARKET RULES
Market Participants & Authorisations
Participant Authorisation
Market Operator (MO) Included in Transmission License
System Operations (SO) Included in Transmission License
Eligible Generator Generation License
Contestable Customer Approval from Regulator
Trader Trading License
Importer Import License
Exporter Export License
1) The MSB Market Rules apply to all MP, taking into account the following exemptions:
a) All Generators licensed before 1st September 2019
b) All off-grid Generators
2) Any Generator that is exempted from the MSB Market Rules, will become subject to
the MSB Market Rules upon application and approval to participate in the MSB
Market, or automatically upon renewal of their licence.
1. Apply to ECB to become a Market Participant - signifies intent to take up 30%
the ECB will confirm your contestable quantity for each supply point (aggregation is
allowed)
2. Submit ECB approval and Register with the MO as a Market Participant; agree
to comply with the Market Rules
the MO will acknowledge that you are registered to participate in the MSB Market
3. CC trading will be monitored on a monthly basis to ensure that CC does not
exceed their Contestable Quantity –
MO
4. ES must nominate their CC for license application and for each transaction –
Generator cannot make license application without indicating a CC as offtaker (LOI)
if CC is not registered, they cannot nominate them on schedule;
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MARKET RULES
Qualifying Requirements to Trade – CC (All Tx connected in
Phase 1; incl. with plant behind meter)
5. There are no participation fees
for either EG or CC
6. Contestable Customers shall retain their right to their approved Contestable
Quantity, subject to their remaining connected to the Transmission or
Distribution grid in Namibia
7. Contestable Customers are not obliged to use their approved Contestable
Quantities
any Contestable Customer can de-register as a MP at any time
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MARKET RULES
Qualifying Requirements to Trade – CC (All Tx connected in
Phase 1)
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MARKET RULES
Qualifying Requirements to Trade – ES (Generator Phase 1a/
Trader Phase 1b/ Importer Phase 2)
1. Apply for Licence; indicate off-take customer type – End customer/ RED/ Export;
LOIs
ECB to Review & Recommend; All tariffs will be approved; Tariffs with REDs will be
set by ECB – Competitive process or RED must demonstrate value
Application forms, criteria and process are on ECB website
2. Register with the MO as a Market Participant incl. agree to comply with the
Market Rules, before commencement of production
the MO will acknowledge that you are registered to participate in the MSB Market
3. Apply for Connection Agreement, Balancing Agreement….etc.
All approvals and agreements required before trading commences
4. Submit Financial Security -
Lodged with MO – see Financial Section of Market Rules for more information
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MARKET RULES
Qualifying Requirements to Trade – Exporters
1. Apply for Licence
ECB to Review & Recommend
Application forms, criteria and process are on ECB website
2. Register with the MO as a Market Participant incl. agree to comply with the
Market Rules, before commencement of exports
the MO will acknowledge that you are registered to participate in the MSB
Market
3. Choose between 2 options to facilitate exports
a) Use MSB Office
b) Become SAPP Member
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MARKET RULES
Qualifying Requirements to Trade – Exporters
1. USE MSB OFFICE:
a) Negotiate with MSB Office to trade energy on your behalf in SAPP
b) Pricing arrangement amendable to both parties – link to SAPP markets
c) Agree point of delivery – at busbar
d) MSB Office responsible for the transport of the power to the border –
no wheeling cost for EP
e) Export license – not necessarily required
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MARKET RULES
Qualifying Requirements to Trade – Exporters
1. BECOME SAPP MEMBER:
a) Register with MO as Exporter
b) Need to apply and receive SAPP Membership
c) Enter into Balancing arrangements for Exports with MO
d) Agree point of delivery – at border
e) Exporter takes risk for the transport of the power to the border –
wheeling cost for Exporters is still to be determined; several options to
be discussed – less than
f) Export license – is required
MARKET RULES
-
TRADING
1. ES can enter into a Network Capacity Reserve Arrangement with the NO(s) -
Network Reserve Capacity payment will effectively be in exchange for a deemed
energy payment
2. This is for “Financial” Network Rights and not a physical capacity reserve
arrangement
3. In the case of network congestion, the following shall apply:
a) The MO shall have the authority to constrain (up or down) the position of any MP
in order to relieve network congestion;
b) The MO shall follow an approved procedure in deciding which MP(s) to
constrain, but such discretion should take (i) least cost to the total system as
well as (ii) equitable distribution of the constraint between MPs, into account;
c) If a Generator with a Network Capacity Reserve Arrangement is constrained
down, they will receive a deemed energy payment
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MARKET RULES
Network Capacity Management
1. The ES (not the CC) shall submit their bilateral trading nominations to the MO for every Delivery Day
2. Forward nomination of bilateral schedules is permitted for the number of trading days defined by the MO , however only nominations for the Delivery Day will be binding.
3. If no nomination is submitted by the ES for the Delivery Day, the MO will view this as if no bilateral transactions have been entered into.
4. The currency of trade is the Namibian Dollar.
5. The SO shall determine the available network capacity.
6. The MO shall allocate the Available Network Capacity between bilateral nominations, taking into account the priority allocation of network capacity
7. The bilateral nominations form shall be completed in full, in order to be valid.
8. Invalid or faulty nominations shall be rejected.
9. In case of rejection, the MO shall inform the relevant ES within the defined time periods
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MARKET RULES
Instructions
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MARKET RULES
Verification & Adjustments
1. The MO shall confirm receipt of the ES’s bilateral trade nomination submission -via an automated electronic notification
2. The MO shall determine and publish a Constrained Schedule
3. The MO shall inform the relevant ES and CC in the case of a non-compliant submission, including if the approved total Contestable Supply Quantity is exceeded, and shall indicate timelines for resubmission of nominations
1. The MO has the right to adjust (i.e. increase or decrease) any bilateral nominations to ensure system stability and reliability, as well as the protection of people and plant safety, according to the procedure approved by the Regulator.
2. The MO shall take the following into account when adjusting any nominations: People and plant safety; System reliability and security; Allocation of available network capacity; Lowest overall cost.
Verification Adjustment
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MARKET RULES
Timelines
No. Activity Timing Responsible
1 Trading DayThe day before
the Delivery DayAll
2 Specify Available Network Capacity Up to 09:00 on
Trading DaySO
3Submission of Bilateral Nominations
for Delivery Day
Up to 10:00 on
Trading DayES
4Submission of Bilateral Nominations
Gate Closure
10:00 on Trading
DayMO
5Confirmation of Receipt of Bilateral
Nominations
Up to 10:00 on
Trading DayMO
6
Verification, matching and
adjustments of Bilateral
Nominations
Up to 11:00 on
Trading DayMO
7 Constrained Schedule publication11:00 on Trading
DayMO
8 Notification of error(s)Up to 11:30 on
Trading DayES
No. Activity TimingResponsibl
e
9Revised Constrained Schedule publication for
Delivery Day
12:00 on
Trading DayMO
10
Dispatch of generators and imports in
accordance with Revised Constrained Schedule,
least cost and technical requirements
Each hour of
the Delivery
Day
SO
11Final Dispatch Schedule publication for Delivery
Day
Delivery Day +
1 day at 10:00MO
12 Metered values for Delivery DayDelivery Day +
1 day at 12:00MO
13
Balancing and Settlement calculations and
publication of results. Publish invoices for
Eligible Generators and Importers
Delivery Day +
1 day at 15:00MO
14 Publish invoices for CCs
As specified in
current supply
conditions
CC
15 Payment of invoices by EGs and Importers
Delivery
Month + 10
days
ES
16 Payment of invoices by CCs
As specified in
current supply
conditions
CC
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MARKET RULES
Bilateral Trading Nomination Form (Generator)
Addendum 9: Example of Generator/Importer Schedule Notification
Name of Eligible Seller: [As printed on license from Regulator]
Identification No of ES: __________________________
License Type: [Generator, Trader or Importer]
Delivery Date: [dd-mm-yyyy]
Published Date [dd-mm-yyyy hh:mm]
CC1 ID no.
_________
CC2 ID no.
_________
CC3 ID no.
_________
% of Total % of Total % of Total % of Total
00-01 0.0%
01-02 0.0%
02-03 0.0%
03-04 0.0%
04-05 0.0%
05-06 0.0%
06-07 0.0%
07-08 0.0%
08-09 0.0%
09-10 0.0%
10-11 0.0%
Revision: 1.0
Hour
Contestable Customer(s) Allocation
Total Schedule
(MW)
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MARKET RULES
Bilateral Trading Nomination Form (Trader)
Addendum 8: Example of a Bilateral Trading Nomination FormRevision: 1.0
Name of Eligible Seller: [As printed on license from Regulator]
Identification No of ES: __________________________
License Type: [Generator, Trader or Importer]
Delivery Date: [dd-mm-yyyy]
Completed By: [Name of authorised person]
ES1 ID no.
_________
ES2 ID no.
_________
ES3 ID no.
_________
CC1 ID no.
_________
CC2 ID no.
_________
CC3 ID no.
_________
Schedule
(MW)
Schedule
(MW)
Schedule
(MW)
Total
(MW)% of Total % of Total % of Total % of Total
00-01 0.0 0.0%
01-02 0.0 0.0%
02-03 0.0 0.0%
03-04 0.0 0.0%
04-05 0.0 0.0%
05-06 0.0 0.0%
06-07 0.0 0.0%
07-08 0.0 0.0%
08-09 0.0 0.0%
09-10 0.0 0.0%
Contestable Customer(s) AllocationEligible Seller(s) Delivery
Hour
Traders can aggregate, but not consolidate their bids
MARKET RULES
-
BALANCING
BALANCING
Mechanism & Tolerance Band
1. MO will monitor scheduled production against Final Dispatch Schedule
2. A deviation away from scheduled position may attract a balancing payment
3. A tolerance band defined as lesser of:
a) ± 0.5MW, or
b) ± 2.5% of the plants Revised Constrained scheduled production
4. Balancing charge:
a) for negative deviations the charge will be set as a 100% of energy component of Bulk Supply Tariff
b) for positive deviations there will be no charge
5. Balancing payment (plus sale to bilateral customer) to pay for balancing the system
a) Only negative deviations will attract a balancing payment – no compensation for over generation
b) Deviations between the Lower and Upper limits do not attract a balancing payment
c) The bigger the deviation the higher the balancing payment
July 2018 Detailed Market Design Presentation - Workshop 26
Deviation from Dispatch Schedule (MW/h)
0
Balancing Payment
Upper LimitLower Limit
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BALANCING
Taking into account (Under Delivery)
27
MO
CusGen10 MW
1 MW
9 MW
MO
CusGen1 MW @ bilateral
tariff
9 MW @ retail tariff9.75 MW @
balancing penalty
PHYSICAL FLOWS FINANCIAL FLOWS
= CONTRACTED ENERGY IN 1 HOUR
= DELIVERED ENERGY FROM ELIGIBLE SELLER
= DELIVERED ENERGY FROM SUPPLIER OF LAST RESORT (MSB)
= PAYMENTS ON ACTUAL ENERGY
= BALANCING PENALTY
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BALANCING
Taking into account (Over Delivery)
28
MO
CusGen10 MW
10 MW
MO
CusGen10 MW @ bilateral
tariff
4.75MW @ $0 balancing charge
PHYSICAL FLOWS FINANCIAL FLOWS
= CONTRACTED ENERGY IN 1 HOUR
= DELIVERED ENERGY FROM ELIGIBLE SELLER
= DELIVERED ENERGY FROM SUPPLIER OF LAST RESORT (MSB)
= PAYMENTS ON ACTUAL ENERGY
= BALANCING PENALTY
5 MW
July 2018 Detailed Market Design Presentation - Workshop 29
BALANCING
Penalty Mechanism Example
Assumptions:
• A 10MW generator must decide what capacity to declare to the MSB.
• Expected output of the plant is 5MW for a particular hour.
• Potential output can vary between 0 and 10MW - following a typical ‘normal
distribution curve’ profile as shown below.
July 2018 Detailed Market Design Presentation - Workshop 30
BALANCING
Penalty Mechanism Example
Assumptions:
• The first figure assumed a balancing charge of 50% of energy component of the bulk supply tariff. Profit maximisation point of 6.7MW suggesting the seller is incentivised to ‘over-declare’ and ‘under-deliver’.
• The figure in the middle assumed a balancing charge of 100%. It shows the profit maximisation point of 5.2MW. The outcome therefore balances risk and rewards.
• The third figure assumed a balancing charge of 200% of the energy component of the BST. It shows that profit maximisation would occur at a Declared availability of 4.6MW which is below the expected output of 5MW. There is therefore an incentive on the seller to ‘under-declare’ and to ‘over deliver’ in order to avoid the steep balancing charge.
MARKET RULES
-
METERING &
SETTLEMENTS
July 2018 Detailed Market Design Presentation - Workshop 32
METERING & SETTLEMENTS
Metering
1. Metering in the MSB Market shall be conducted in accordance with the rules and procedures established in the prevailing Transmission Grid Code and Distribution Grid Code.
2. Metering of a CC shall take place at each of the CC’s designated Contestable Supply Points, as approved by the Regulator.
3. The MO shall collect or receive metering data from the metering database, for the purposes of settlements, using the methods described in the Codes.
4. Exporters will be subject to metering at a designated substation inside the borders of Namibia – the designated substation shall be identified and agreed in advance with the MO.
5. Importers will be subject to metering at a designated substation inside the borders of Namibia – the designated substation shall be identified and agreed in advance with the MO.
The MO will also require access to metering data for licensed plant located behind the meter –that are not exempted - and will be subject to balancing, all CCs will be subject to RS, levies etc. on their metered data
July 2018 Detailed Market Design Presentation - Workshop 33
METERING & SETTLEMENTS
Charges
1. The calculation of energy charges, loss charges, balancing charges, reliability
charges, wheeling charges, levies and network use of system charges are subject to
the approval of the Regulator and are summarised in the “Namibia Wheeling
Framework”.
2. Network Capacity Reserve charges shall be set out in an agreement between the EG
or Importer and the relevant NO.
July 2018 Detailed Market Design Presentation - Workshop 34
METERING & SETTLEMENTS
Settlements (EG/ Importers)
1. SO Settlement results shall be based on MPs metered data, the Final Delivery
Schedule data, regulated tariffs and calculations.
2. The SO shall determine settlements for EGs and Importers as follows:
a) Balancing Payment (according to Rules);
b) Losses quantity and payment (in accordance with the Namibia Wheeling
Framework);
c) Customer Service charge (in accordance with the Namibia Wheeling
Framework);
d) Point of Supply charge (in accordance with the Namibia Wheeling Framework).
July 2018 Detailed Market Design Presentation - Workshop 35
METERING & SETTLEMENTS
Settlements (CC/ Exporters)
1. Energy quantity and payment (in accordance with the Namibia Wheeling Framework);
2. Energy Rebates quantity and payment (in accordance with the Namibia Wheeling
Framework);
3. Energy Add-backs quantity and payment (in accordance with the Namibia Wheeling
Framework);
4. Use of System payment (in accordance with the Namibia Wheeling Framework);
5. Losses quantity and payment (in accordance with the Namibia Wheeling Framework);
6. Wheeling Charge (for Exporters) quantity and payment (in accordance with the
Namibia Wheeling Framework);
7. Reliability quantity and payment (in accordance with the Namibia Wheeling
Framework);
8. Customer Service payment (in accordance with the Namibia Wheeling Framework);
9. Point of Supply payment (in accordance with the Namibia Wheeling Framework);
10.Levies quantity and payment (in accordance with the Namibia Wheeling Framework).
MARKET RULES
-
FINANCIAL RULES &
INVOICING
July 2018 Detailed Market Design Presentation - Workshop 37
METERING & SETTLEMENTS
Financial Security (EP/ Importer)
1. Each EP and Importer, as security for the due payment of its imbalanced energy, shall:
a) Deposit a cash collateral, in a securities account nominated by the MO or,
b) Provide the MO with a bank guarantee from a bank of good credit standing
acceptable to the MO.
c) The minimum security required equals the average monthly settlement amount for
the three most recently published settlement reports provided that the security
amount shall never be less than the NAD equivalent of USD 5 000 (five thousand
US Dollars).
d) Exporters shall also comply with the SAPP Markets Financial Rules on Trading
Security Requirements, as appropriate.
July 2018 Detailed Market Design Presentation - Workshop 38
METERING & SETTLEMENTS
Invoicing & Crediting
1. The MO will prepare invoices and credit notes for Eligible Sellers and Exporters at
15:00 on the next Business Day, following Delivery Day (Delivery Day + 1 Day at
15:00).
2. The MO will prepare invoices and credit notes for CCs as per NamPower’s prevailing
supply arrangements.
3. The invoices will be based on the Settlement results and include any relevant
commercial terms.
4. Exporters may also be subject to the Invoicing and Crediting Rules as described in the
SAPP Market Rules.
MARKET PROCESSES &
PROCEDURES
Congestion Management Procedure
Bilateral Nomination Adjustment Procedure
Determination of Balancing Payments for Exporters
Detailed Ancillary Services Assessment
Invoicing Dispute Resolution Process
Energy Banking Service Procedures
CC Registration process and forms
CC Agreement to abide by Market Rules
Amend PSA for CC to allow for Wheeling
Transmission Adequacy Map to demonstrate current capacity avl. for RE integration
LRMC assessment of Tx corridors; to serve as wheeling charge for exports
LRMC for Gx
20 September 2019 MSB Market Rules & Wheeling Framework 40
MARKET PROCEDURES
Procedures Under Development
WHEELING FRAMEWORK
END
20 September 2019 MSB Market Rules & Wheeling Framework 42