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

Transcription

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

2 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? NAREM-Workshop, Essen 07 May

3 Nominations (D-1) UIOSI FB-Parameter The European Target Model and Network Codes Explicit Auctions Implicit Auctions Yearly Capacity bilateral (NTC) Monthly Capacity bilateral (NTC) Yearly Auction Monthly Auctions Day-Ahead (Flow-based Market Coupling) Intraday (continuous trading) Y-1 M-12 Forward Market Yearly transmission rights Monthly transmission rights M-1 D-2 D-1 Spot Market D Day-Ahead: hourly contracts Intraday: hourly contracts or 15mincontracts Delivery Forward NC Operational Planning and Scheduling NC CACM NC (+ Governance GL) Balancing NC NAREM-Workshop, Essen 07 May

4 ENTSO-E Bidding Zone Study (CACM NC early implementation) Regional Implementation Where are we? NWE Market Coupling (currently Interim Tight Volume Coupling) North Western UK & Europe Ireland South Western Europe Central Western Europe Nordic Countries Central South Europe Central Eastern Europe Baltic Countries CWE Market Coupling CWE Flow-Based Capacity Calculation Trilateral Market Coupling (CZ, SK, HU), extension by PL, RO planned Central CWE/CSE Long-Term Product Auction Platform Regions with TenneT s involvement NAREM-Workshop, Essen 07 May

5 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? NAREM-Workshop, Essen 07 May

6 Market Coupling! and Harmonization? Nord Pool Spot / EPEX Spot DKK/MWh Day Ahead Day Prices Ahead 2012/12/25 Prices, 25/12/2012 in DKK/MWh Energinet.dk Wind infeed DE in MW minimum price DK: DKK/MWh (-200 /MWh) minimum price EPEX: /MWh Curtailment of Danish must-run capacities Denmark West Denmark East EPEX (Germany) Must-run capacities curtailment by functioning of the Price Coupling Algorithm Reason: unharmonized price caps in local markets. NAREM-Workshop, Essen 07 May

7 Outside the market: Forecasted RES development in Germany installed capacity in MW 160, , , ,000 80,000 maximum load approx MW 60,000 40,000 minimum load approx MW 20,000 0 Geothermie/andere reg. Erz. Wasserkraft Biomasse Wind onshore Wind offshore Photovoltaik Currently not/limited influenceable with market mechanisms Sources: BMU, Langfristszenarien und Strategien für den Ausbau Erneuerbarer Energien in Deutschland, 2009 Szenariorahmen B für den Netzentwicklungsplan 2012 NAREM-Workshop, Essen 07 May

8 The TSO s dilemma: The grid is not a copper plate Redispatch frequency increases: Year Days Redispatch Actions Nuclear phase out Germany NAREM-Workshop, Essen 07 May

9 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 arranging fuel storage structuring gas procurement and gas contracts coordination of power plant revisions, including financing power plant maintenance and repairs Are we back to the future of market design? NAREM-Workshop, Essen 07 May

10 Quo vadis energy market? Patchwork or Single IEM RES Schemes Capacity Markets Remedies to heal adverse effects of other remedies NAREM-Workshop, Essen 07 May

11 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 NAREM-Workshop, Essen 07 May

12 TenneT is Europe s first cross-border grid operator for electricity. With approximately 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