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Cross Border TSO Balancing Procurement - a Generator/Trader Perspective Malcolm Taylor Head of Electricity Trading Association of Electricity Producers ☏ +44 (0)207 930 9390 mtaylor@aepuk.com www.aepuk.com. Background & Aims Developing Regional Markets Efficiencies of cross-border trading
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Cross Border TSO Balancing Procurement - a Generator/Trader PerspectiveMalcolm TaylorHead of Electricity Trading Association of Electricity Producers☏ +44 (0)207 930 9390mtaylor@aepuk.comwww.aepuk.com
Background & Aims • Developing Regional Markets • Efficiencies of cross-border trading • Parallel development to energy trading • Model 1: Provider1↔TSO2 • Model 2: Provider1↔TSO1 ↔ TSO2 • First Steps with Model 2 • Introduces further beneficial competition in balancing services provision • Does not distort commercial energy trading over Interconnector • Improves transparency & facilitates non-discriminatory access • Protects Security of both Systems • Does not reserve interconnector capacity preferentially for TSOs • Compatible with both markets & developments • Does not prevent subsequent development of model 1
The Challenge of Market Compatibility • Intra-Market and Inter-Connector differences • Gate closures per day • Neutralisation Period • Settlement period duration • Detailed price formulation • Other connected markets
The Proposals for Balancing Service • Up to 5 @ 100 MW tranches • Settlement Period begins at Gate Closure + 1h • Service Duration 1h • Consistent with expected evolution of Inter-Connector timings • Simultaneous web-site posting of prices • Gate closure + 15 mins • Subsequent web-site posting of bids/offers used • End of delivery period + 15 mins • Prices formulated consistent with intra-market methodologies • Principles of price formation (including constraints effects) published • Emergency assistance/ Rescue arrangements remain • Use of inter-Connector charging to be determined
Generator/Trader Response • Useful codification and formalisation of process • Improved transparency will help market functioning • Inter-Connector usage charges impact competition amongst providers • Interaction in UK of 1h balancing services and ½ h Settlement Periods • Review progress after 6-12m