Single Day-Ahead Coupling (SDAC)A success story – is expansion possible?

Athens Forum 28th-29th May 2019

Ole Jacob Høyland (TSO)

Co-Chair

Rafael Gómez-Elvira González (NEMO)

Co-Chair

Single Day-Ahead Coupling: a success story

Sources:

APEX – GO15 conference 2017, Bente Hagem (ENTSO-E),

EPEX Spot: Successful_operation_of_PCR_solution_Power_Exchanges_focus_on_Pan-European_power_market

PCR

algorithm calculating prices

and cross border flows

% of EU is coupled

TWh / year in one market

solution

B€ in annual European

welfare gain

M€ average daily value of

matched trades

minutes to solve a large and

complex optimization problem

1

95

1500

1

200

12

More

competition

Cost

efficiency

Security

of supply

2

Single Day-Ahead Coupling: the journey

Since 2014 approx. 2000 days of successful coupling !

Not a single failure

04.02.2014

NWE Go-Live +

SWE in common

synchronised

mode using PCR

2014 2015 2016 2017 2018

13.05.

SWE Full

Coupling

TGE, IBEX

(non-

coupled)

joining

24.02.

CSE Coupling

(Italian Northern

borders

20.05.

CWE flow-

based

implementation

11.02.

Croatia

(independent

operation)

AT-SI

coupling

Market growth

Scope extensions

In 4 years, approx. growth:

• From 50k to 75k hourly orders (+50%)

• From 2500 to 4000 blocks (+60%)

30.09

Split DE/AT

+ SEM

coupled

19.11.

Go-live

4MMC

2019

19.06.

SI-HR

coupling

Start ofMRC

3

14.02.17: start CACM

cost sharing

28.03.19: entry into

force SDAC DAOA

30.01.

Nemo Link

(GB-BE)

Implementing CACM

• Commission Regulation (EU) 2015/1222 (CACM) of 24 July 2015 was pivotal to move from bottom-up initiatives towards a top-down NEMO-TSO governance under EU regulation.

– NEMO competition

– Roles and responsibilities for TSOs and NEMOs

– Responsibility for operating the day-ahead and intraday market (SDAC and SIDC)

– Development of methodologies (Algorithm, products, max/min prices, etc.)

– Capacity calculation methodology, bidding zones configuration, intraday capacity pricing, cost sharing, etc.

• Day-Ahead Operational Agreement (DAOA)

– Signed by all TSOs and all NEMOs after more then one year of negotiation and entered into force end March 2019 covering two phases:

• “Interim Phase” during which there are two parallel market couplings, one of MRC and one of 4MMC, jointly forming the Single Day-Ahead Coupling (SDAC) in implementation of CACM;

• “Enduring Phase” during which there will be one Single Day-Ahead Coupling only (MRC and 4MMC coupled).

Parties forming SDAC

Coupling Members

MRC Operational parties:

NEMOs: BSP, Cropex,

Eirgrid/SONI (SEMO PX), EMCO

Nord Pool, EPEX, GME, IBEX

(non-coupled), OMIE, TGE

TSOs: 50Hertz, Amprion, APG,

AST, BritNed, EirGrid, Elering,

ELES, Elia, Energinet, ESO,

Fingrid, HOPS, Litgrid, Nemo Link,

NGIC, PSE, REE, REN, RTE,

SONI, Statnett, SvK, Terna,

TransnetBW, TTG, TTN

Non-operational parties:

NEMOs: EXAA, HEnEX

TSOs: Admie, Creos

4MMC NEMOs: HUPX, OKTE, OPCOM,

OTE

TSOs: ČEPS, MAVIR, SEPS,

Transelectrica

Currently 49 parties forming SDAC 5

Current SDAC governanceD

ecis

ion

Coo

rdin

ation

Op

era

tio

n a

nd D

eve

lop

me

nt

Step 2 To be merged into OPSCOM once technical coupling is

effective (Enduring Phase according to DAOA)

Joint Steering Committee (JSC)Budget

Management TF

Communication

TF

Legal TF

Integrated

Coordination Team

(ICT)

4MMC

OPSCOMProcedures TF

All

Parties

Meeting

MSD

Market & System

Design

All

Parties

Meeting

MRC

OPSCOM

All Parties

Meeting

IC

Incident

Committee

6

The interim governance & ToR for all project bodies were approved in April and practical implementation is currently ongoing.

High level planning SDAC

7

Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul-Dec 2019

DAOA

SECScheduled Exchange

Calculation

CRs + extensions

MN

A

Mu

lti-

NEM

O A

rran

gem

ents

PC

RC

WE

Bal

tic

No

rdic

Po

lish

NRAs: Implementation plan

MRC

Test

Testing plan

Procedures

adaptation

PCR technical

readinessSystem

adaptationProcedures adaptation

Impact

Assess-

ment

Testing

Go-Live window, Agreed Go-Live mechanism: MNA project by

MNA project

Testing

System adaptation

Procedures adaptation Regional Testing

System adaptation

Procedures adaptation

TBD

18/06

Nov

MRC

Test

Legend:

Planned milestone ProcessDD

Completed milestoneDD DD MNA Go-Live

SEM GB

Split DE-AT

31

Italian BZs

System adaptation

Procedures adaptation

TSOs: amended proposal

for SEC methodologies

Approval SEC methodologies

NRAs: Monitoring of approved SEC and CCM

MRC

Test

02/04

Nemo Link

go-liveCobra cable

go-liveElecLink

go-live

Approval

NRAs +

signatories

Signature

process28 Entry into

force 08

Today

SEC implementation preparations

17

TBD

Go-live Euphemia

version “MNA”

Impact

Assess-

ment

Impact

Assess-

ment

Impact

Assess-

ment

Challenges on algorithm

8

SDAC Algorithm

Euphemia

Performance & Scalability

CACM

Algorithm

requirements New

NEMO

requirements

Market

growth

Topology

changes

New

TSO

requirements

Switch from

NTC to

Flow based

Geographical

extensions

Joint NEMO & TSO Research and Development program kicked-off !

Further expansion is possible

… when the following conditions are met:

• Harmonized laws and rules

– National legislation, implementing 3rd IEM Package

– CACM adoption/implementation

• Establish a PX

– Can also be a PCR serviced solution

– Agree on NEMO committee adherence

– PX to be designated as NEMO by the relevant NRA

• Identify a partner inside SDAC

• Establish a bilateral/regional coupling project

Thank you very much for your attention!

Questions?

Ole Jacob Høyland (TSO)

Co-Chair

Rafael Gómez-Elvira González (NEMO)

Co-Chair