old markets - new markets: an internal energy market ... · old markets - new markets: an internal...

12
Old Markets - New Markets: an Internal Energy Market beyond 2014? NAREM-Workshop, Essen Robert Wand 07 May 2013

Upload: others

Post on 25-Apr-2020

12 views

Category:

Documents


0 download

TRANSCRIPT

Old Markets - New Markets: an Internal Energy Market beyond 2014?

NAREM-Workshop, Essen

Robert Wand

07 May 2013

First, Second, and Third Best…

• Theory:

• first best solution according to textbook economics

• nodal pricing, energy only market

• Policy:

• second best solution by European Target Model

• zonal electricity markets, energy only market?

• Practice – the devil‘s in the detail:

• a third best solution: market and system interact!

• national market designs and the “single” Internal Energy Market

• Quo vadis energy market?

07 May 2013 NAREM-Workshop, Essen 2

The European Target Model and Network Codes

Explicit Auctions

Spot Market Day-Ahead: hourly contracts

Intraday: hourly contracts or 15min-

contracts

UIO

SI

Implicit Auctions

Yearly Auction

Day-Ahead (Flow-based

Market

Coupling)

Yearly Capacity

bilateral (NTC)

Monthly Capacity

bilateral (NTC) Monthly Auctions

Nom

ina

tio

ns

(D-1

) Forward Market Yearly transmission rights

Monthly transmission rights

M-1 D D-1 D-2 M-12 Y-1

FB

-Para

mete

r

Intraday (continuous trading)

Forward NC CACM NC (+ Governance GL)

Balancing

NC

Operational Planning and Scheduling NC

Delivery

07 May 2013 NAREM-Workshop, Essen 3

Regional Implementation – Where are we?

Nordic

Countries

UK &

Ireland

Central

Western

Europe

Baltic

Countries

Central

Eastern

Europe

Central

South

Europe South

Western

Europe

North

Western

Europe

CWE Market Coupling

CWE Flow-Based Capacity

Calculation

Trilateral Market Coupling

(CZ, SK, HU), extension by PL,

RO planned

NWE Market Coupling

(currently Interim Tight Volume

Coupling)

Central CWE/CSE Long-Term

Product Auction Platform

Regions with TenneT‘s involvement

EN

TS

O-E

Bid

din

g Z

on

e S

tud

y

(CA

CM

NC

earl

y i

mp

lem

en

tati

on

)

07 May 2013 NAREM-Workshop, Essen 4

First, Second, and Third Best…

• Theory:

• first best solution according to textbook economics

• nodal pricing, energy only market

• Policy:

• second best solution by European Target Model

• zonal electricity markets, energy only market?

• Practice – the devil‘s in the detail:

• it’s a third best solution: market and system interact!

• national market designs and the “single” Internal Energy Market

• Quo vadis energy market?

07 May 2013 NAREM-Workshop, Essen 5

Denmark West Denmark East EPEX (Germany)

DKK/MWh Day Ahead Prices, 25/12/2012

-1800

-1600

-1400

-1200

-1000

-800

-600

-400

-200

0

200

400

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

© Energinet.dk

Nord Pool Spot / EPEX Spot

Day Ahead Prices 2012/12/25 in DKK/MWh

Market Coupling! …and Harmonization?

• minimum price DK:

-1500 DKK/MWh (-200 €/MWh)

• minimum price EPEX:

-3000 €/MWh

Must-run capacities curtailment by functioning of the Price Coupling Algorithm

Reason: unharmonized price caps in local markets.

Curtailment of

Danish must-run

capacities

Wind infeed DE in MW

07 May 2013 NAREM-Workshop, Essen 6

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

ins

tall

ed

ca

pa

cit

y i

n M

W

Geothermie/andere reg. Erz. Wasserkraft Biomasse Wind onshore Wind offshore Photovoltaik

Outside the market:

Forecasted RES development in Germany

Currently not/limited influenceable with market mechanisms

NAREM-Workshop, Essen

minimum load approx. 35.000 MW

maximum load approx. 84.000 MW

Sources: BMU, Langfristszenarien und Strategien für den Ausbau Erneuerbarer Energien in Deutschland, 2009

Szenariorahmen B für den Netzentwicklungsplan 2012

7 07 May 2013

The TSO’s dilemma:

The grid is not a copper plate

Redispatch frequency increases:

Nuclear

phase out

Germany

Year Days Redispatch

Actions

2003 2 2

2004 14 15

2005 51 51

2006 105 172

2007 185 387

2008 144 228

2009 156 312

2010 161 290

2011 308 998

2012 344 970

07 May 2013 NAREM-Workshop, Essen 8

Quo vadis energy market? From a market with some regulation to regulation with a bit of market …

• triggered by the “Energiewende”, TenneT as an

unbundled Transmission System Operator has

contracted eight power plants with ca. 2,000 MW

generation capacity and in addition has been

involved in

07 May 2013 9

Are we back to the future of market design?

NAREM-Workshop, Essen

• arranging fuel storage

• structuring gas procurement and gas

contracts

• coordination of power plant revisions,

including financing power plant maintenance

and repairs

Quo vadis energy market?

Patchwork or “Single IEM”

RES Schemes

Capacity Markets

… Remedies to heal adverse

effects of other remedies …

07 May 2013 NAREM-Workshop, Essen 10

Current market design issues …

What “Market” if the market share is decreasing ?

How to attract investments in conventional generation ?

How to grant back-up and reserve for intermittent generation ?

How to incentivize market parties to contribute to Security of Supply in the

operating planning phase ?

How to smooth the problem of grid expansion not keeping pace with changes

in the generation pattern ?

How to align diverging (national) repair actions to save the IEM ?

How to bring back on track various unstable regulated components ?

Now‘s the time to set the course for a post-2014

clean, secure, competitive and European energy

system with a functioning IEM

07 May 2013 NAREM-Workshop, Essen 11

TenneT is Europe´s first cross-border grid

operator for electricity. With approximately

20.000 kilometres of (Extra) High Voltage

lines and 36 million end users in the Netherlands

and Germany we rank among the top five

grid operators in Europe. Our focus is to

develop a north-west European energy

market and to integrate renewable energy.

Taking power further

www.tennet.eu