Cross border redispatching Central West Electricity Regional Energy Market Mini Forum Alain Marien 20 th of June 2006

20/06/20062 Plan Goal Regulatory context Experience Issues to be tackled

20/06/20063 Goal  Option 1: Guarantee the firmness of already allocated transmission rights?  Option 2: Allocate more transmission rights?

20/06/20064 Regulatory context Directive 2003/54/EC : Article 11, related to dispatching and balancing, § 2: The dispatching of generating installations and the use of interconnectors […] shall take into account the economic precedence of electricity from available generating installations or interconnector transfers and the technical constraints on the system.

20/06/20065 Regulatory Context (2) Regulation EC 1228/2003: article 6.2: –Article 6.2: Transaction curtailment procedures shall only be used in emergency situations where the transmission system operator must act in an expeditious manner and redispatching or countertrading is not possible. […] –Article 6.3: The maximum capacity of the interconnections and/or the transmission networks affecting cross-border flows shall be made available to market participants, complying with safety standards of secure network operation.

20/06/20066 Regulatory context (3) New Congestion Management Guidelines: –1.3. Where scheduled commercial transactions are not compatible with secure network operation, […] Curative redispatching or countertrading shall be envisaged in case lower cost measures cannot be applied. –1.8. When balancing the network inside the control area through […] redispatching, the TSO shall take into account the effect of these measures on neighbouring control areas. –2.5. The access rights for long- and medium-term allocations shall be firm transmission capacity rights. […] –3.5. With a view to promoting fair and efficient competition and crossborder trade, coordination between TSOs within the regions [… ] shall include, in particular: (h) Accounting and settlement of congestion management actions.

20/06/20067 Experience In the Central West region: –Bilateral agreements between TSOs on the triggering of cross border redispatching; case by case cost settlement –TSOs of the region are working on an Inter TSO agreement Nordel: –Congestion management: market splitting & countertrade –Proposal for a limited increase of (preventive) countertrade Objective: increase capacity and reduce periods with price difference between zones Can be inefficient Increased risk of abuse of market power PJM: –Optimised bid based nodal real-time redispatch

20/06/20068 Issues to be tackled Goal: to guarantee or maximise the capacity? Criteria: –Non discrimination: same mechanism for internal and cross border redispatching,… –Economic efficiency (regional) Mechanism: –Principle for the determination of the action to be taken: ex. choice of the generation units to redispatch –Remuneration of the service: bid based system? –Interaction with balancing? –Costs allocation mechanism: between TSOs or directly on market actors? Zonal or nodal approach?

20/06/20069 Issues to be tackled (2) Harmonisation: –Dispatch & nominations /re-dispatch sequence in the different countries –Role of the TSO in real time Market power issues –Risk of manipulation Legal issues: –Role of the TSOs? …

20/06/ Discussion Current regional initiative? Future development –Priority given to this issue? –Goal? –Timing?

20/06/ Cross border redispatching Thank you for your attention!