nemo link brexit webinar … · nemo link’s team page 5 nemo link brexit webinar - 09 november...

Nemo Link Brexit Webinar9th November 2020

14:00 – 15:30 GMT

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Welcome

Nemo Link Brexit Webinar - 09 November 2020

FORMAT OF THE SESSION

⚫ Please make sure you are on mute and your camera is off

⚫ Please use Slido App on your mobile phone (preferred option) or login to www.slido.comas we will

be using it for questions and polling

Q&A

⚫ If you have a question on the content during the presentation, either

➢ raise a hand in MS Teams; or

➢ Use Slido #41536 to write your question and we will address it at the end (please leave your name)

⚫ Q&A at the end of the session: Slido #41536

FALLBACK PROCEDURE

⚫ Please use the slides distributed before the webinar in case there is any issue with the screen sharing

⚫ Dial-in details in case of technical issues:

➢ Dial +44 20 3321 5208

➢ conference ID: 362 020 898#

Introduction

Nemo Link Brexit Webinar - 09 November 2020page 3

http://www.slido.com/


About Nemo Link

Nemo Link’s Team


Bart Goethals

-

Chief

Commercial

Officer

Nigel Wood

-

Senior

Operations

Manager

Nick Pittarello

-

Customer,

Regulation

and Policy

Manager

Martin Croucher

-

Operations

Director

Sandy Lalli

-

Finance

Manager

Raj Bhogal

-

System

Operations

and ICT

Manager

Bert Maes

-

CEO

Munti Nguyen

-

Customer

Relations

Monne Depraetere

-

Product and

Services Manager

Please log in to Slido using the above code

page 6 Nemo Link Brexit Webinar - 09 November 2020

➢ Click on the "Polls" tab

➢ Indicate in which country you are located

➢ Write your organisation's name

Content

General Updates

Martin / Monne

Brexit and cutover to Non-IEM

Nick / Munti

Beyond Brexit: Honing our rules

Monne

What’s next

Nick

Q&A


General Updates


Nemo Link’s Operations in 2020

• YTD Availability 99%

• Managing through COVID-19

• September Outage

• Few Operational Issues

• Look Ahead


-20 €

-10 €

0 €

10 €

20 €

30 €

40 €

50 €

60 €

70 €

Jan Feb Mar Apr May Jun Jul Aug Sep Oct

Spread Price GB Price BE

GW

1GW

2GW

3GW

4GW

5GW

6GW

7GW

8GW

BE Solar BE Wind BE Nuclear

GW

20GW

40GW

60GW

Jan Feb Mar Apr May Jun Jul Aug Sep Oct

DA

po

we

rp

ric

es

& s

pre

ad

BE

ge

ne

ratio

nF

RN

ucle

ar

ge

n

Markets Update2020 YTD spreads and fundamentals


Depressed pow er demand &

high solar & w ind output →

Oversupply disproportionally

drives dow n BE prices

Demand recovery, low er w ind

output & outages at FR and BE

reactors push up BE prices.

Source: Energy Quantified, NLL analysis

⚫ Current forward prices imply price

direction towards GB (even for

winter peak)

⚫ Cal 21 spreads recovered

significantly over last months

based on higher gas prices and

improving nuclear availability

⚫ Low off-peak prices in Belgium as

price falls below gas plant short

run marginal cost.

Markets Update2021 outlook (forward prices)


To BE

To GB

€(10)

€(5)

€-

€5

€10

€15

€20

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2019 2020 2021

intrinsic value Base spread Peak Spread Offpeak spread

Spre

ads

& In

trin

sic

Actual - Forwards

€-

€20

€40

€60

€80 BE peak-offpeak range GB peak-offpeak range BE base GB base

Po

wer

Pri

ces

Source: Energy Market Price (forward prices as per 3 Nov 2020, NLL analysis, nominal prices

⚫ On 31st January 2020 the UK ceased to be a member of the EU

➢ Under the terms of the Withdrawal Agreement the UK continues to follow EU rules until 23:00 GMT on 31/12/20

⚫ EU and UK negotiating an enduring Free Trade Agreement (FTA) to apply from 01/01/21

⚫ However on 9th July 2020, the European Commission confirmed in a stakeholder notice that regardless of the FTA negotiations

➢ “…although electricity and gas interconnectors can of course still be used, the United Kingdom will no longer participate in the Union’s dedicated platforms. Alternative fall-back solutions will be used instead to trade electricity on interconnectors with Great Britain.”

⚫ SDAC have communicated the removal of GB from the implicit coupling process

➢ http://www.nemo-committee.eu/assets/files/information-note-about-the-exiting-gb-parties-in-sdac.pdf

⚫ Nord Pool and EPEX have adjusted their GB energy auction times ahead of SDAC

GB Leaving the Internal Energy Market


http://www.nemo-committee.eu/assets/files/information-note-about-the-exiting-gb-parties-in-sdac.pdf

Customs

Great Britain

⚫ “For no-FTA, and neither publicly proposed

text of EU and UK for FTA covering energy

proposes tariff on electricity trade. So

we can assume zero in either outcome”

➢ BEIS 03/11/20

⚫ Nemo Link will make import/ export

declarations on behalf of market

participants

Belgium

⚫ No tariffs expected

⚫ UK registered traders are expected to have

to be represented by an EU customs agent


VAT

⚫ All invoicing is carried out by JAO for explicit auctions

⚫ Unless a trader is based in Luxembourg, interconnector transactions are exempt from VAT

Great Britain

⚫ "VAT is zero – unlikely to be any fiscal impact"

⚫ "No fiscal risk even if things go slightly wrong"

⚫ "Can't guarantee it will stay like that for all eternity"

- HMRC 03/11/2020

⚫ See the following sites for confirmation of VAT

exemption for energy

➢ https://www.legislation.gov.uk/uksi/2010/2924/contents/made

➢ https://www.trade-

tariff.service.gov.uk/headings/2716?currency=EUR

Belgium

⚫ No VAT


https://www.legislation.gov.uk/uksi/2010/2924/contents/made

https://www.trade-tariff.service.gov.uk/headings/2716?currency=EUR

REMIT


Great Britain

⚫ The UK is adopting a "UK version" of

REMIT from 01/01/21

⚫ Parties will need to ensure that if they are

active in the EU they register with an EU

regulator

⚫ If currently only registered with Ofgem they

will need to transfer the registration to an

EU regulator

⚫ UK activities will need to be reported

through the ELEXON REMIT Portal

Belgium

⚫ REMIT continues to apply in the EU

⚫ EU activities will need to be reported

through the ENTSOe transparency

platform

After 1st Jan 2021 there is no longer an equivalence so reporting in the UK will no longer meet the EU requirements and vice versa

⚫ We have not received any indication that the ITC arrangements are to

deviate from their current arrangements whereby GB participates in the

ITC scheme via NGESO

⚫ Additional information for background

➢ ITC Scheme compensates onshore TSOs for losses related to transit flows resulting from cross border trade

➢ 3rd countries (e.g. Ukraine) pay a "perimeter fee" for imports and exports currently set at €0.7/MWh

➢ The relevant EU Regulation can be found here (paragraph 7)

– https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32010R0838

➢ Perimeter fee information can be found here

– https://www.entsoe.eu/news/2020/04/03/i tc-2020-perimeter-fee/

Inter-TSO Compensation (ITC)


https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32010R0838

https://www.entsoe.eu/news/2020/04/03/itc-2020-perimeter-fee/

⚫ UK to adopt EU regulations preventing application of transmission charges to interconnectors

⚫ Charging Futures work being led by NGESO has recommended that Balancing Services Use

of System Charges (~£2/MWh currently paid by both generation and demand) should only be

paid by demand

⚫ Implementation of these recommendations, if accepted by the regulator, is unlikely

before 2023

page 18

Transmission Charges


Brexit cut-over and timelines



Post Brexit Trading Framework (from 01/01/21)

Long term Day Ahead Intraday

Use-it-or-Sell-it = Loss Adjusted Market Spread Use-it-or-Lose-it

Explicit Auctions Implicit Auctions Explicit Auctions


Use-it-or-Sell-it = Day Ahead Auction Clearing Price Use-it-or-Lose-it

Explicit Auctions Explicit Auctions Explicit Auctions

IEM

Tra

din

g F

ram

ew

ork

(today)

Non-

IEM

Tra

din

g

Fra

mew

ork


Non-IEM Registration Check-list


Auctions

Nominations➢ Signed Nemo Link Participation Agreement➢ Registered with NGESO➢ Registered with Elexon➢ BMU’s registration with NGESO and Elexon➢ Registered with Elia

➢ Signed JAO Participation Agreement (PA)

➢ Signed JAO PA Amendments to accept GB-BE non-IEM Long Term Rules

➢ Signed JAO PA➢ Signed JAO PA Amendments to

accept GB-BE non IEM Day Ahead Rules

➢ Signed Nemo Link ParticipationAgreement

➢ Signed JAO PA➢ Signed JAO PA Amendments

to accept GB-BE Intraday Rules

➢ Signed Nemo Link Participation Agreement

page 21

Brexit Transition Timeline

01JAN

31DEC

First Explicit Day

Ahead AuctionsFinal Implicit Day

Ahead Auctions

30DEC

16NOV

First delivery day

under non-IEM Access

Rules

RNP

JAO

Nemo Link

SDAC

CUT OVER DATE BREXIT TRANSITION ENDS

Explicit Day Ahead Auctions

Customer Testing on eCAT (*)

(organised by JAO)

27NOV

Explicit Day Ahead Nominations

Customer Testing on RNP (**)(organised by Nemo Link , IFA, BritNed)

Linked (***)

(*): Customers notify JAO to register for the eCAT testing.

(**): Registered customers on RNP with access to RNP Training Environment will be able to participate.(***): Capacity bought on eCAT Test Environment can be nominated on RNP Training Environment.


Cutover Detail

01JAN

31DEC

Long Term Nomination Gate

for 01/01/2021 delivery

closes @ 09:00 CET

(Explicit UIoSI)

First Explicit Day Ahead Auction


opens @ 09:40 CET

closes @ 10:10 CET

First Explicit Day Ahead Nomination


opens @ 12:05 CET

closes @ 14:00 CET



closes @ 09:30 CET

(Implicit UIoSI)

Final Day Ahead

Implicit Auction


Gate Closure @ 12:00 CET

Results @ 12:42 CET



opens @ 16:30 CET

(Explicit UIoSI)

30DEC

29DEC

GB Day Ahead auction BE Day Ahead auction

(SDAC)

Closes @ 12:00 CET

Results @ 12:42 CET

Final Results @ 12:55 CET

First delivery day

under

non-IEM Access Rules

CUT OVER DATE BREXIT TRANSITION ENDS



opens @ 16:30 CET

(Implicit UIoSI)

NordPool

Closes @ 09:50 GMT

Results @ 10:00 GMT

EPEX SPOT

Closes @ 09:20 GMT

Results @ 09:30 GMT

IEM

AC

CE

SS

RU

LE

SN

ON

-IE

MA

CC

ES

S R

UL

ES

page 23

Final delivery day

under IEM Access Rules

Non-IEM Processes

08:00 08:30 09:3009:00 10:00 10:30 11:00 12:0011:30 12:30 13:3013:00 14:00

D-1

Long Term Nomination Window

Times

in CE(S)T

09:30 (D-1)16:30 (D-2)

Non-IEM Long Term and Day Ahead timings

IEM Long Term and Day Ahead timings (today)

SDAC

08:00 08:30 09:3009:00 10:00 10:30 11:00 12:0011:30 12:30 13:3013:00 14:00

D-1

Long Term Nomination WindowDay Ahead Nomination WindowGB-BE Day ahead

Explicit Auction

10:1509:00 (D-1) 09:40 - 10:10 12:05

Auctions

Results

14:0016:30 (D-2)

10:20 10:50

Times

in CE(S)T

EPEX SPOT

DA Auction Gate Closure

NordPool

DA Auction Gate Closure

12:00 – 12:55

SDAC

12:00 – 12:55

page 24

Firmness Rules

Timescales Before DAFD (11:00 CET/CEST) After DAFD (11:00 CET/CEST)

Long Term Capacity ❖ Can be curtailed❖ Compensation:

- initial price paid if no DA held

- DA auction clearing price if held

❖ N/A

Long Term Nominations ❖ Can be curtailed❖ Compensation:



❖ Can be curtailed❖ Compensation:



Day Ahead Capacity ❖ Can be curtailed❖ Compensation: initial price paid

❖ Can be curtailed❖ Compensation: initial price paid

Day Ahead Nominations ❖ N/A ❖ Can be curtailed❖ Compensation: initial price paid


Firmness Policy (Long Term)- in the event of a trip on the Nemo Link Interconnector- excluding curtailments initiated by onshore TSOs

08:00 08:30 09:3009:00 10:00 10:30 11:00 12:0011:30 12:30 13:3013:00 14:00D-1

Long Term Nomination Window

12:55

Day Ahead

Firmness Deadline

09:30 (D-1) 11:00

SDAC

Results

16:30 (D-2)

IEM Policy

CE(S)T

SDAC

Policy Not to CurtailLT Curtailment compensation:

Loss Adjusted Day Ahead Market Spread

Non-IEMPolicy

Long Term Nomination Window Day Ahead Nomination Window

GB-BE DA

ExplicitAuction

10:15

Day Ahead

Firmness Deadline

09:00 (D-1) 09:40 - 10:10 11:00 12:05

Auction

Results

14:0016:30 (D-2)

page 26

Policy Not to CurtailLT Curtailment compensation:

Initial Price Paid


Firmness Policy (Day Ahead)- in the event of a trip on the Nemo Link Interconnector- excluding curtailments initiated by onshore TSOs

08:00 08:30 09:3009:00 10:00 10:30 11:00 12:0011:30 12:30 13:3013:00 14:00D-1

12:55

Day Ahead

Firmness Deadline

11:00

SDAC

Results

CE(S)T

SDAC

No Curtailment

Day Ahead Nomination Window

GB-BE DA

ExplicitAuction

10:15

Day Ahead

Firmness Deadline

09:40 - 10:10 11:00 12:05

Auctions

Results

14:00

Policy Not to Curtail

IEM Policy

Non-IEMPolicy


Firmness Policy (Intraday)- in the event of a trip on the Nemo Link Interconnector- excluding curtailments initiated by onshore TSOs

Timescales Before Final Nomination Gate Closure After Final Nomination Gate Closure

Intraday ❖ Non-nominated/Draft nominations can be curtailed❖ Compensation: initial price paid

❖ Physically firm (no curtailment)

➢ Further information on the Intraday process and curtailment can be found on our slide pack (here) that was presented in our Nemo Link’s Intraday Launch Event in Brussels on 23 October 2019.

https://www.nemolink.co.uk/wp-content/uploads/2019/10/Nemo-Link-Intraday-Launch-Workshop-23-Oct-2019-Brussels-1.pdf

Consultation on possible improvements to Nemo Link's

Non-IEM rules


Consultation

• Opened 16/10/2020

• Closes 13/11/2020

• Information and documents:

https://www.nemolink.co.uk/consultation-notices/nemo-link-consults-on-changes-to-non-iem-explicit-day-ahead-auctions/


https://www.nemolink.co.uk/consultation-notices/nemo-link-consults-on-changes-to-non-iem-explicit-day-ahead-auctions/

Proposal Non-IEM Processes

Proposal Non-IEM Explicit Capacity Auction

Long Term Nomination Window Day Ahead Nomination WindowDay ahead

Explicit Auction

09:25

Day Ahead

Firmness Deadline

08:45 (D-1) 09:00 –

09:20

09:00

12:05

Auctions

Results

13:3016:30 (D-2)

08:00 08:30 09:3009:00 10:00 10:30 11:00 12:0011:30 12:30 13:3013:00 14:00D-1

10:20 10:50

EPEX Spot

DAM CloseNordPool SPOT

DAM Close

SDAC

12:00 – 12:55

Long Term Nomination WindowDay Ahead Nomination WindowGB-BE Day ahead

Explicit Auction

10:15

Day Ahead

Firmness Deadline

09:00 (D-1) 09:40 - 10:10 11:00 12:05

Auctions

Results

14:0016:30 (D-2)

Approved Non-IEM Explicit Capacity Auction

PXs & Other IC auctions

CE(S)T

page 31

9:10 10:00

BritNed

DA auctionclose

IFA

DA auctionclose


Firmness (proposal for LT and DA)- in the event of a trip on the Nemo Link Interconnector

- excluding curtailments initiated by onshore TSOs

08:00 08:30 09:3009:00 10:00 10:30 11:00 12:0011:30 12:30 13:3013:00 14:00D-1


GB-BE Day ahead

Explicit Auction

10:15

Day Ahead

Firmness Deadline

09:00 (D-1) 09:40 - 10:10 11:00 12:05

Auctions

Results

14:0016:30 (D-2)

Approved Non-IEM Explicit Capacity Auction

CE(S)T

Proposal Non-IEM Explicit Capacity Auction


Day ahead

Explicit Auction

09:25

Day Ahead

Firmness Deadline

08:45 (D-1) 09:00 - 09:20

09:00

12:05

Auctions

Results

13:3016:30 (D-2)



⚫ Do you agree with the proposed Day Ahead auction time change?

⚫ Do you agree with the movement of the Day Ahead firmness deadline from 11:00 to 09:00

CE(S)T?

⚫ Do you agree with shortening the length of the DA nomination window from 14:00 to 13:30

CE(S)T?

⚫ Do you agree a Day Ahead energy auction in GB earlier than SDAC is desirable?

➢ Power exchanges have made announcements in this regard since the publication of the consultation

⚫ How important is a single GB energy reference price?


Consultation Questions



Click on the "Polls" tab

➢ DA auction window

➢ DA nomination window

What’s next?


Auction Calendar 2021


Nemo Link 2021 auction schedule

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Annual (2022) A1 A2 A3 A4

Quarterly Q2 Q3 Q4 Q1

Monthly Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

Further projects

• JAO 24/7 helpdesk?

• 30-minute resolution for intraday?

• Return to Implicit Auctions?

Questions and Answers

Slido: #41536




➢Click on the "Q&A" tab to insert your questions

From the Nemo Link Team


For registration or more queries: please contact [email protected]

mailto:[email protected]

nemo link brexit webinar … · nemo link’s team page 5 nemo link brexit webinar - 09 november...

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