To better integrate an ever-growing share of renewable energy sources into the wholesale power market, a better use of interconnections is needed, stressed the European power lobby group Eurelectric last week, calling for strengthening of the regional approach to system operation.
According to Eurelectric, one of the most significant problems for the further integration of wholesale markets is the limited amount of cross-zonal capacity made available by the transmission system operators (TSOs).
The annual report on the results of monitoring the internal electricity and gas markets in 2016 released by the Agency for the Cooperation of Energy Regulators (ACER) (HERE) thus shows that less than 50% of the “benchmark capacity” was offered to the market in 2016. On many EU borders the “benchmark capacity” offered to the market was even residual, mentioned Eurelectric.
Eurelectric, Orgalime, Solar Power Europe, and Wind Europe have called on the European Parliament and the Council of the European Union to support and strengthen the following articles put forward by the European Commission in November 2016 in the Clean Energy Package for All Europeans:
1. Article 6 in the Renewable Energy Directive 1 which introduces the principle of no retroactivity on support schemes. The signatories think that retroactive measures stifle market growth and create uncertainty, and must therefore be outlawed.
2. Article 4 Paragraph 2 (c) and Article 11 Paragraph 4, sentence 1 in the Electricity Regulation regarding the grandfathering clause on priority dispatch and balancing exemptions, which are also crucial for investor confidence.
ʺA third of the gap is due to insufficient TSO co-ordination, while the remaining part is due to internal flows being prioritised over cross-border ones,ʺ assessed the power lobby group, which thinks that ʺaction must be taken to maximise cross-border transmission capacity released to the markets in a cost-efficient wayʺ.
A step-wise regional approach to system operation is a key prerequisite to reaching the objective of a truly integrated internal energy market, said Eurelectric, adding that the implementation of network codes and guidelines is a good start.
However, real optimisation of social welfare at a regional level is hindered by the current framework (guidelines on system operation and market) as it continues to attribute all tasks related to network access to national players, with only a certain level of regional co-ordination.
Whilst Eurelectric welcomes the principles behind the European Commission’s proposal for enhanced regional co-ordination in the draft Clean Energy Package for All Europeans, to the extent that it builds on what already exists (regional security coordinators - RSCs) and allows for linear progression, it sees some room for improvement.
Thus, Eurelectric is calling for ambitious regional methodologies for fully transparent and co-ordinated capacity calculation, and access to interconnections through the allocation of transmission rights by the TSOs that should be granted to market participants in forward timeframes, in addition to the allocation made implicitly in day-ahead and intraday. Eurelectric is also calling for a fully transparent and systematic justification each time a TSO decides to derogate from a regional co-ordination centre’s (RCC's) instructions. This derogation should only happen in cases where the safety of the system is threatened.
Eurelectric also thinks that the RCCs should actively facilitate the co-ordination of balancing capacity sizing and procurement, which will enhance the regional co-operation and the role of RCCs as facilitators.
Additionally, consistent regional governance is necessary to allow further regional system operation.
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