AWERProcedia Information Technology & Computer Science

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1 AWERProcedia Information Technology & Computer Science Vol 3 (213) rd World Conference on Information Technology (WCIT-212) Congestion Management in South East Europe (SEE) in Integration Process of Turkish and European Electricity Systems by Using Flow- Based Coordinated Auction Methodology Hakkı Ozata *, Energy Market Regulatory Authority,Muhsin Yazıcıoğlu Bulvarı No:51/C, Ankara, 653, Turkey. Musa Aydin, Department of Electrical-Electronics Engineering, Selcuk University, Konya, 423, Turkey. Suggested Citation: Ozata, H. & Aydin, M. Congestion Management in South East Europe (SEE) in Integration Process of Turkish and European Electricity Systems by Using Flow-Based Coordinated Auction Methodology, AWERProcedia Information Technology & Computer Science. [Online]. 213, 3, pp Available from: Proceedings of 3 rd World Conference on Information Technology (WCIT-212), November 212, University of Barcelon, Barcelona, Spain. Received 12 March, 213; revised 9 May, 213; accepted 2 August, 213. Selection and peer review under responsibility of Prof. Dr. Hafize Keser. 213 Academic World Education & Research Center. All rights reserved. Abstract Congestion Management (CM) is a key issue to an efficient and fair market. Badly-designed CM scheme may introduce problems to the market such as resulting in fluctuation of the market equilibra. Assesment of the CM is of difficulty, especially in the bilateral electricity market due to the distributed decision-making of the market participants under imperfect and incomplete information scenarios [1]. The allocation of cross-border transmission capacities is a basic precondition for cross-border electricity trade. Congestions (bottlenecks) are the factors that limit the exchanges [2]. The synchronous operation of the Turkish electricity system with ENTSO- E CESA (European Network Transmission System Operators for Electricity Continental Europe Synchronous Area) started successfully on 18th September, 21. In this paper, flow-based coordinated auctioning method in South East Europe (SEE) is practically implemented on the system models in SEE and the changes in the power flows and congestions are analyzed following the synchronization of Turkish electricity system with ENTSO-E. Keywords: Congestion management, flow-based coordinated auctioning methodology, cross-border transmission capacity, capacity allocation, Turkish electricity system; * ADDRESS FOR CORRESPONDENCE: Hakkı Ozata, Energy Market Regulatory Authority, Muhsin Yazıcıoğlu Bulvarı No:51/C, Ankara, 653, Turkey, address: hozata@epdk.org.tr / Tel.:

2 1. Liberalization in the Electricity Sector and Turkey s Progress Liberalization efforts of electricity sector initiated in many countries have been continuing considering the effects of power cuts in the USA, England and Italy in 23. The casual problems that arose in transmission grids due to interconnections, brought up measures regarding technical enforcement of electric system and the revision studies by revising market structures. In this context, the Standard Market Design approach that has been tried to be implemented in the U.S., the new Electricity Directive (1228/23) that was issued in 23 by EU and the studies regarding implementation of the Regulation Regarding Cross Border Trade, are the most noteworthy developments with respect to electricity markets in 24 [3]. On the other hand, the connection between the first and the second synchronized regions of Union for the Coordination of the Transmission of Electricity (UCTE), which was disconnected due to the Bosnian war, was established in October 24. Thus, an electricity system has been set up all over the Europe that works as parallel. With this development, the physical connection of Turkey s west neighbours Greece and Bulgaria to the European Internal Electricity Market has been established. In Turkey, with the law No: 4628 dated 2 February, 21, a competitive and liberalized market has been established by replacing the vertically integrated sector structure. New regulations aim at establishing a competitive, stable and transparent market structure in which private sector conducts all activities except transmission. Turkish Electricity System with its about 54.5 MW (as of June 212) installed capacity, 1. MVA transformer capacity, 67 substations and 5. km transmission lines, is one of the leading transmission systems in Europe. As of 211, Turkey s electricity production is about 229,5 billion kwh and consumption is around 23 billion kwh. Besides, in the context of regional cooperation with neighbours, especially EU, the synchronous connection with ENTSO-E has been established on September 18th, 21 via two 4 kv transmission lines with Bulgaria and one 4 kv with Greece. The commercial exchanges have been started on 1st June, 211 with Bulgaria and Greece and capacities are allocated on the basis of explicit auction. After one year trial period, Turkish TSO (TEIAS) will be a full member of ENTSO-E. Thus, a greater electricity transmission system has been established in Europe including Turkey and Balkans in the east. Turkey has a geopolitical importance due to its nearness to Russia, Middle East and Caspian Region which have most of the gas and oil reserves. It has good political and economical relations with neighboring countries which have abundant energy resources and functions as an energy bridge between east and west [4]. In this context, connection of Turkey with ENTSO-E is important with respect to EU supply security and procurement of more qualified, sustainable and cheaper energy for EU consumers. 2. Congestion Management Principally, congestion occurs at any point of the interconnected network due to electricity trade. The term congestion explains the situation of overloading of transmission system. In this article, congestion term is used for limited transfer of energy between countries because of the overloading interconnection capacity. 119

3 Figure 1. Phases of congestion management The cross-border trade among countries is not only affected by the physical limitations in interconnected transmission lines, but also by the limitations in the internal network. In general, congestion management includes all of the measures that are required to prevent losing network connection during any congestion situation. The phases of congestion management are illustrated in Figure 1 where the allocation of interconnection capacity in the second phase is the main problem that needs to be addressed [5]. 3. Capacity Allocation Methodologies 3.1. Capacity allocation methodologies in European internal electricity markets The two main groups of methods are Net Transfer Capacity (NTC) based methods, which are widely used across Europe, and flow-based methods which are still in elaboration (Figure 2). NTC-based methods rely on publicly published values of Net Transfer Capacity (NTC), defined for each border between countries, control blocks or TSOs. Figure 2. Capacity allocation methods in Europe NTC is the maximum exchange program between two areas compatible with security standards applicable in both areas and taking into account the technical uncertainties on future network conditions. NTC is related not directly to the physical power flows, but to the commercial exchange programs reported at some border. NTC- based methods are briefly explained below [5]. 12

4 -First come/first served: Capacity is allocated according to the order in which the transmission requests have been received by TSO. Starting from the earliest request, all requested amounts of capacity are fully granted until the available capacity is used up. -Pro-rata: All requests are partially accepted in the way that each applicant is granted a fixed share of his requested capacity amount. -Explicit auction: Along with the requested capacity amount, the applicants have to declare how much they are willing to pay for this capacity. These bids are ordered by price and the capacity is allocated starting from the highest one until the available capacity is used up. In this method, network users incur cost for obtaining transmission capacity. Usually the marginal price is set to the bid price of the lowest accepted bid. -Implicit auction: The functioning of electricity spot market is combined with the transmission capacity allocation procedure. Transmission capacity is managed implicitly by the spot markets. Network users submit purchase or sale bids for energy in the geographical zone where they wish to generate or consume, and the market clearing procedure determines the most efficient amount and direction of physical power exchange between the market zones. The price also includes the transmission constraints. A separate allocation of transmission capacity is not required. Flow-based methods: For each commercial exchange program, the set of load-flow factors (Power Transfer Distribution Factors - PTDF) is defined, which determines the influence of particular transaction on the power flows over the network elements (tie-lines on borders). In accordance to this, the physical constraints for the power flows are defined, called Border Capacity or Bottleneck Capacity (BC) for each border, instead of program constraints such as NTC. This method is applied in Central East Europe (Germany, Poland, Slovakia, Hungary, Austria and Slovenia) Assessment criteria Assessment criteria are driven by EC Regulation for cross-border electricity exchanges (No: 1228/23 dated 26th of June, 23) These criteria: fair and non- discriminating, market based, maximization of economic efficiency and welfare, ease of implementation, network operation security According to the criteria above, the rule-based methods like first come/first served and pro-rata rationing fail to meet the most of the criteria and are not convenient for the SEE Region as well as whole Europe. All other methods are market-based and organized in a form of auctions [6] Main congestions in SEE In SEE, studies on congestion management started in 23. At that time, the SEE region was operating as two separate UCTE synchronous zones due to the Bosnian war. These two zones were successfully resynchronized into one UCTE synchronous zone in 24. The identification of the congestions is related to the separate zones, but most of the congestions are still continuing after the reconnection. 121

5 Figure 3. Main congestions in SEE As shown in Figure 3, in Balkan area, the main congestions are generally north-south oriented due to the deficit generation in Greece, Macedonia and Albania, and simultaneous imports of these countries from the north (Bulgaria, Romania and partially Serbia). Also, the flow of electricity from Romania and Bulgaria towards Serbia can induce congestions due to the strong interdependence and meshed network in the region [7]. 4. Coordinated Auction Available cross- border transmission capacities may be allocated using several methods. First method suggested by ETSO in April 21 is the Coordinated Auctioning (CA) model based on an explicit auction of cross border transmission capacities. The coordinated auction method is the extension of bilateral explicit auction mechanism, enhanced with more accurate presentation of the physical behaviour of the interconnected system, by considering the existence of the loop flows in a highly meshed network. Main idea is the simple presentation of the meshed network effects through the flow-factors (Power Transfer Distribution Factors - PTDF) where each exchange scenario is coupled with the set of PTDFs that show the distribution of the physical active power flows in the interconnected network. The main difference of the coordinated flow-based auction, compared with NTC-based auctions is that the commercial transactions are not limited at the borders where they are reported, but those commercial transactions are converted into the physical power flows at the borders by using PTDF. The influences of all transaction are summarized on each border, and breaching of the allowable flow is observed. If the sum of the influences of all transactions is higher than allowable physical limit (border capacity) at some border, the transaction with lowest offered price per one MW of the flow on congested border is the first to be eliminated or decreased [8] [9] PTDF matrix Flow based coordinated auction is a using matrix of zonal PTDFs in order to calculate active power flow over the each border caused by certain commercial energy exchange between two countries [1]. 122

6 After obtaining one commonly agreed model of the regional transmission network, first step is the calculation of the Power Transfer Distribution Factors (PTDF) matrix. They represent the sensitivity of the line flows with respect to incremental changes in the generation at the nodes of the system [11]. Those elements represent the influence of power transfers between each pair of TSOs (in both directions) on power flows on border lines between all TSOs. Thus, PTDF matrix will have: - Z*(Z-1) rows where Z stands for number of participating TSOs, - L columns, where L stands for number of (electrical) borders between TSOs. The PTDFs will be determined for the aggregated tie-lines per each bilateral border. The solution for the calculation of the PTDF factors is the increase of the generation in all generation nodes of TSO A, and simultaneous decrease of the generation in all generation nodes of TSO B, for 1 MW, proportionally to their engagement in base case [12]. The ratio between the flow change at the respective border and ΔP is the PTDF factor for the border: Source system: A, Sink system: B; {A, B ε Z; A B} Power transfer: ΔP Border: i, {i ε L } Active flow change at border l: ΔPi 4.2. Clearing Mathematical formulations are based on ETSO report which is published in 21. In this study, calculations are based on a zonal model of the SEE region and Turkey. The network is represented as a set of Z zones where, each zones are linked by L interconnections. Every interconnection i ε L is limited by a border capacity BC (i). Supposing that there are N bids. Each bid includes an identification, a ε Z - source (origin), b ε Z -sink (destination), Vreq- requested bid volume and p- offered bid price. Price and requested bid volume can be written as functions of bid x ε N, source and sink: p(a,b,x) and Vreq(a,b,x). The clearing process results the accepted volumes per bid Va(a,b,x). The network is represented by a PTDF matrix. The elements PTDF (a,b,i) reflect the impact of the bid volumes for a specific pair of a source zone a and of a sink zones b in terms of flows on an interconnection i ε L. Accordingly the optimization problem can be written as a set of linear equations as follows. (1) The clearing price of the bids is the marginal price for the capacity of the congested line or the price of the last (fully or partially) accepted bid. Due to the interdependence of the power flows in a meshed network, the calculation of the marginal price is a major problem. The correct solution is to use the dual values of the border capacity constraints which represent the shadow prices (SP) in this context. The charges of the accepted bids, which contribute to the congestion of a transmission line, are (2) (3) (5) (4) 123

7 determined in respect of the sensitivity (PTDF) of the bids to the congestion. The total price (accepted price) of a bid pa(a,b,x) is the sum of all charges [8]. (6) (7) a, b ε Z source, sink zones x(a, b) ε N bid from source zone a to sink zone b i ε L line in the network (interconnection between two zones) p(a,b,x) offered price of bid x from a to b Vreq(a,b,x) requested volume of bid x from a to b Va(a,b,x) accepted volume of bid x from a to b PTDF (a,b,i) PTDF of the bid path from source a to sink b at line i BC (i) border capacity at interconnection i c(a,b,i) charge for bids from source a to sink b at line i SP (i) dual value (shadow price) of the capacity constraint for line i pa(a,b,x) accepted price (clearing price) of bid x from a to b 5. Coordinated Auction: Test Case Study In this section, the test case of the flow-based coordinated auction method is executed based on models of electricity models in SEE region including Turkish electricity model for July, 21 (summer peak) and the effects of synchronization of Turkish electricity system with ENTSO-E, on the load flows and congestions are evaluated Modeled systems In the test case study, the electricity system models of 14 countries in SEE with Turkish electricity system are used for the reference 21, summer peak. In SEE, electricity power systems of Turkey (TR), Greece (GR), Bulgaria (BG), Romania (RO), Macedonia (MK), Albania (AL), Serbia (RS), Montenegro (ME), Bosnia and Herzegovina (BA), Hungary (HU), Croatia (HR), Slovenia (SI), Austria (AT) and Ukraine (UKR) are modeled. From these countries, non-participating (perimeter) countries to the coordinated allocation mechanism, AT, HR, HU, SI and UKR are not in the bid area. 124

8 Figure 4. Modeled TSOs in SEE The electricity system models of perimeter countries are very important due to the outside flows as they affect the power flows between the borders of the participating and non-participating areas. The Outside Flow (OF) is a physical active power flow at the border between the two TSOs applying the coordinated flow-based transmission capacity allocation. These flows are mainly caused by the electricity transactions with the TSOs that are not participating in such an allocation mechanism, but have synchronous connection with them. The others are participating countries to the coordinated allocation mechanism and are in bid area. Modeled TSOs in the context of test case are shown in Figure PTDF matrix After obtaining merged model of the regional network in Figure 4, Power Transfer Distribution Factors (PTDF) matrix is calculated for each TSO. As an example, PTDF matrix which is calculated for Turkish TSO (TEIAS) is given in Table 1. Table 1. PTDF matrix for TEIAS 125

9 5.3. Bids Exemplary list of the bids for the capacity allocation is given in Table 2. Table 2. List of bids 5.4. Comparative results Base case power flows Base case power flows on the border tie-lines for SEE and SEE+Turkey are given in Table -3. Base case power flows are physical active power flows at the borders between the two countries/tsos which would exist between the two countries/tsos, if all systems in an synchronously interconnected network would be balanced in case of base case exchange between them. While calculating the base case power flows, capacity allocation bids are not considered. 126

10 Table 3. Base case power flows on the border tie-lines for SEE and SEE+Turkey (TR) Border from SR SR SR SR SR SR ME ME MK RO BG GR TR TR to RO BG MK AL ME BA BA AL GR BG GR AL BG GR - SEE -29,3-41,1 356,2,4 7,5 22,4 371,4 82,6 92,5 47,7 548,5 98,4 - - SEE+TR (after MW synchronization of Turkish EPS) 1, Border capacities and flows Border capacities and flows for SEE and SEE+Turkey are given in Table 4 and Table 5. Border flows are calculated under the assumptions of bids (Table 3) for the capacity auction. Congested borders are dark coloured in Table 4 and Table 5. BORDER Table 4. Border capacities and flows for SEE Forward Reverse Flow Capacity Flow Capacity [MW] [MW] [MW] [MW] EMS_TEL 6,97 211, -75,81-22, EMS_ESO 12,12 21, -19, -19, EMS_MEPSO 192, ,49-27, EMS_ATSO 43,66 49, -,45-5, EMS_EPCG 39,25 69, -4,8-113, EMS_NOS 29, 29, -49,81-15, EPCG_NOS 18,24 184, -134, -134, EPCG_ATSO 83,36 91, -8,75-29, MEPSO_HTSO 127,65 24, -77,11-296, TEL_ESO 192,48 245, -35,39-479, ESO_HTSO 21,64 396,, -23, HTSO_ATSO 33,55 114, -42, -42, BORDER Table 5. Border capacities and flows for SEE+Turkey (TR) Forward Reverse Flow Capacity Flow Capacity [MW] [MW] [MW] [MW] EMS_TEL 73,16 196, -68,1-221, EMS_ESO 16,88 25, -21, -21, EMS_MEPSO 26, ,67-151, EMS_ATSO 42,5 55, -,87-2, EMS_EPCG 4, 66, -46,72-125, EMS_NOS 28, 28, -52, -13, EPCG_NOS 2,86 167, -154, -154, EPCG_ATSO 86,24 13, -9,84-19, MEPSO_HTSO 125,57 283, -91,9-24, TEL_ESO 215,97 26, -58,81-447, ESO_HTSO 191,65 449, -,55-176, HTSO_ATSO 35,72 99, -53,75-56, TEIAS_ESO 11,6 47, -12,6-398, TEIAS_HTSO 193,5 25,, -492, 127

11 The power flow calculations show that total 4 borders (the borders of Serbia-Bosnia-Herzegovina (EMS-NOS), Bulgaria-Serbia (EMS-ESO reverse), Bosnia-Herzegovina-Montenegro (EPCG-NOS reverse) and Albania-Greece (HTSO-ATSO reverse)) are congested in case of SEE network without Turkish electricity network (Table 4). It is clear that one of the 4 congestions - Albania-Greece (HTSO-ATSO reverse) border is relieved from congestion by the synchronization of the Turkey to the SEE network (Table 5) Accepted bids Table 6. Accepted bids (power) and Marginal Clearing Prices (MCP) No Source country Sink country Bidder Bid amount (MW) Bid Price ( /MWh) Accepted power (MW) MCP ( /MW) 1 Romania Greece A 3 14,88 3, 5,89 2 Romania Serbia B 4 12,65, N/A 3 Serbia Macedonia B 6 12,65 6, 1,71 4 Macedonia Greece B 2 12,65 2, 1,33 5 Bulgaria Greece B 2 11,16, N/A 6 Romania Macedonia A 1 11,16, N/A 7 Romania Macedonia A 1 8,93, N/A 8 Serbia Bosnia&Her. B 5 7,44 19,49 7,44 9 Romania Macedonia A 1 5,95, N/A 1 Romania Greece C 12 5,35 16,36 5,35 11 Bulgaria Serbia A 5 5,2, N/A 12 Bulgaria Greece C 2 3,72, N/A 13 Bosnia&Her. Macedonia A 1 3,72 1, 3,72 14 Serbia Montenegro A 2 2,23, N/A 15 Bosnia&Her. Albania C 1 1,11 1, 1,11 16 Bosnia&Her. Montenegro C 5,22, N/A 17 Serbia Greece C 6,15, N/A 18 Serbia Macedonia C 5,7, N/A 19 Turkey Greece D 15 1,5 15, 9,82 2 Turkey Bosnia&Her. E 1 9,, N/A 98 45,85 Accepted bids and Marginal Clearing Prices (MCP) for capacity allocation are shown in Table 6. After the clearing procedure, 45,85 MW of 98 MW is accepted (i.e. 41% of total bid amount) TSO revenues Revenues for SEE and SEE+Turkey are given in Table 7 and Table 8. Table 7. Revenues for SEE REVENUES No TSO Country Revenue 1 TEL Romania, 2 NOS BiH 267,67 3 EMS Serbia 739,19 4 MEPSO Macedonia, 5 ESO Bulgaria 493,45 6 HTSO Greece 2,32 7 EPCG Montenegro 21,93 8 ATSO Albania 2,32 9 HEP Croatio, 1 MAVIR Hungary, 128

12 Table 8. Revenues for SEE+Turkey (TR) REVENUES No TSO Country 1 TEL Romania 2 NOS BiH 3 EMS Serbia 4 MEPSO Macedonia 5 ESO Bulgaria 6 HTSO Greece 7 EPCG Montenegro 8 ATSO Albania 9 HEP Croatio 1 MAVIR Hungary 11 TEIAS Turkey Revenue ( /h) 254, , , , Conclusions The load flow analysis shows that the power flows are decreased significantly on the borders Romania-Bulgaria, Bulgaria-Greece, Greece-Albania, Montenegro-Bosnia and Herzegovina, Montenegro-Albania, Serbia-Macedonia with the synchronization of Turkish electricity system with ENTSO-E CESA. Rate of change at power flows are given in Table 9. On the other hand, the power flow on Macedonia-Greece border is reversed (in direction of Greece-Macedonia), and electrical energy is transferred to Greece, Macedonia and Albania over Turkey-Greece interconnection line. Consequently, north-south oriented over-loading of transmission lines and congestions are significantly decreased depending on the Net Transfer Capacities (NTC) of Turkey-Bulgaria and Turkey- Greece interconnection lines after synchronization of Turkish electricity system with ENTSO-E CESA. Table 9. Rate of changes at power flows after synchronization of Turkish electricity system with ENTSO-E CESA Border Rate of change (%) Bulgaria-Greece -45% Serbia-Bulgaria -15% Serbia-Macedonia -5% Montenegro-Bosnia Herzegovina -2% Montenegro-Albania -5% Romania-Bulgaria -7% Macedonia-Greece -2% Serbia-Montenegro 49% Greece-Albania 57% Synchronization of Turkish electricity system with ENTSO-E CESA will have the following benefits: With respect to security of electricity supply, not only additional reserve capacity for Europe will be created, but also the energy transfer capacity from the Northern countries (Russia-Ukraine- Romania) having electricity surplus to the Southern countries (Greece-Italy-Albania) having electricity 129

13 deficit will be increased. The connection of Turkish electricity system to the European electricity system will be strategically important as it relieves the congestions caused by weak transmission systems. Furthermore, with decreasing energy costs in Turkey in which the installed capacity of renewable energy resources (wind: 1.75 MW, hydro: 17.5 MW) is increasing steadily, the electrical energy exchange volume with European countries in which electricity is relatively more expensive will increase. This will provide a mutual benefit for the Turkish and European economies. Acknowledgements The authors acknowledge the support of this study provided by Selcuk University Scientific Research Projects. The authors have also thanked TUBITAK for their support of this study. References [1] Huang, T., Bompard, E., & Yan, Z. Congestion Management Impacts on Bilateral Electricity Markets Under Strategic Negotiation, Electric Power Systems Research, 211, Volume 81, pp [2] Vukasovic, M., Apostolovic, M., & Todem, C. Implementation Aspects of Partial Netting in Flow-based Auction Clearing Mechanism. 5th International Conference on European, IEEE 28, pp *3+ Perekhodtsev, D. Measuring Market Concentration in European Power Exchanges Coupled over a Meshed Cross-Border Network. 5th International Conference on European, IEEE 28, pp [4] Turkish Energy Market: An Investor s Guide. Turkish Energy Market Regulatory Authority (EMRA), 211, p. 1. [5] ETSO. Final Report on Analysis of Cross-Border Congestion Management Methods for EU Internal Electricity Market, Consentec GmbH in cooperation with Frontier Economics Ltd., 24, pp [6] Genesi, C., Granelli, G., Marannino, P., Montagna, M., & Zanellini, F. Opening a Larger Window on Network Flows to Enhance the Cross Border Capacity Allocation in Bulk Interconnected Systems. Bulk Power Systems and Control-VII. Revitalizing Operational Reliability, irep Symposium, IEEE 27, pp [7] SETSO-SUDEL Document. Activity Report of Coordinated Auctions in SEE Region, 25, pp [8] ETSO Final Report. Coordinated Auctioning: A Market based Method for Transmission Capacity Allocation in Meshed Networks, 21. [9] Genesi, C., Marannino, P., Montagna, M., Siviero, I., & Zanellini, F. A Multilateral Market Coupling Approach for the Allocation of Cross Border Transmission Capacity. 43 rd Universities Power Engineering Conference, Power & Energy General Meeting, 28, pp [1] Vukasovic, M., & Skuletic, S. Implementation of Different Methods for PTDF Matrix Calculation in Flow- Based Coordinated Auction. International Conference on Power Engineering, 27, pp [11] Audouin, R., Chaniotis, D., Tsamasphyrou, P., & Coulondre, J.-M. Coordinated Auctioning of Cross-Border Capacity: An Implementation. 5 th International Conference on Power System Management and Control, 22, pp [12] SETSO-SUDEL Paper. Network Access, Congestion Management and Power Flows,