25.05.2012

European Market Design Working GroupApril 3rd 2012

Summary Feedback for Users’ Group of May 25th 2012

Discussed Items

1. Status update on Intraday Cross-Border on NL-NO border

2. Status update on the CACM Network Code

3. Status update on NWE Day Ahead and Intraday projects

4. Status update on CWE Flow Based project

Capacity Allocation & Congestion ManagementNetwork Code – process overviewPrinciples of Network Code explained to EMD WG Members. CACM NC will set out : the methods for allocating capacity in day-ahead and intra-day timescales, and the method for capacity calculation across the different zones.These rules will provide the basis (European law) for the implementation of a single energy

market across Europe.Process July 29th 2011, ACER had released its “Framework Guidelines on Capacity Allocation

and Congestion Management for Electricity” March 23rd, ENTSO-E launched public consultation on the Network Code for CACM

As part the web based public consultation, ENTSO-E issued a supporting document &FAQ explaining the rationale for decisions.

May 7th: 1st public workshop organized by ENTSO-E Stakeholders have two months, until 23 May to provide comments and feedback. ENTSO-E’s assessment of all comments, as well as the final code submitted to ACER,

will be published by the end of September 2012.

Capacity Allocation & Congestion ManagementNetwork Code – scope

Framework Guidelines on

Balancing released on 24/4

Capacity Allocation & Congestion ManagementNetwork Code – Capacity Calculation Individual grid models prepared by each System Operator will be merged into a single

European or Common Grid Model. Capacity calculation shall be done at least on a regional basis, with target to merge

regions Validation or calculation results is performed on System Operator level Network Code allows using Flow Based (FB) or Coordinated NTC method for DA & ID

Capacity Allocation & Congestion ManagementNetwork Code – DAM process/functional approach

Capacity Allocation & Congestion ManagementNetwork Code – IDM process/functional approach

NWE DA project – status update

PCR Agreements (contractual arrangements between PXs) ready to be signed

joint TSO/PX APCA ready to be signed : sets forth the rights and obligations betweenPXs & TSOs regarding cooperation, project governance and organisation, taskdivision, deliverables, budget, funding, cost sharing & recovery for both Design andImplementation Phase of NWE Market Coupling project

Technical architecture : Technical solution (“Price Matcher Broker”-system)provider selected and development agreements ready to be signed.

PXs have defined TSO algorithm requirements (have been validated by TSO)

joint PX/TSO project organization staffed

Target go live: end 2012

NWE ID project – status update

MoU between Europex - entso-e sets the high-level principles of the design of the IDsolution, both Interim and Enduring

The PX-PX Cooperation agreement sets the terms of cooperation between theExchanges for the development and implementation of the Cross Border IntradaySOB/CMM solution based on ELBAS-like system

With these steps, PXs commit to pool ID liquidity into a single SOB

Technical gap analysis between Interim Solution requirements and ELBAS featuresperformed. Outcome appears more challenging than expected. Therefore…

Phased development of ELBAS-like system is required to ensure robustness and atimely implementation. Further discussion between PXs and TSOs ongoing on

- Technical readiness of ELBAS-like SOB/CMM by end of 2012- Scoping of requirements (PX, TSO, performance and trading related),- roll-out of Interim Solution via local implementation projects in FR-BE, NL-DE,DE-DK, FR-DE and NL-UK

NWE ID - Local Project Status

Status update on CWE Flow Based project CWE TSOs and PXs reconfirm the target Flow Based GO LIVE in Summer 2013, exact

date is subject to the 2nd forum in March/April 2013, CWE FB project progress, otherprojects (NWE) and CWE NRA’s and MPs feedback.

The initial start of the internal parallel run has shifted from Jan 2012 to March 2012 forthe following reasons:

- the combined methodological and organizational complexity of the FB method lead to a longerexperimental phase,

- the winter period was not favorable for knowledge transfer from FB experts to operators due toheavy workload.

A Forum and a Public Consultation are still scheduled this year and will take place beforethe start of the external parallel run (Sep 2012).

In March / April 2013 a second forum will be organized based on 6 months experienceand results of external // run (including part 2 daily results).

CWE FB planning update2012 2013

IT systems available

Internal parallelrun

Internal parallelrun

External parallel runExternal parallel runPart 1 – weekly publication Part 2 – daily publication

REGs

approvalForum 2Forum 1

Forum 1 ⁽*⁾

preparation

GO Live

window

Prerequisite for external

parallel run part 1 (weekly

publication):

•advanced FB Process V2

Prerequisite for external

parallel run part 2 (daily

publication):

•TSOs industrialized tool

Prerequisite for GO Live:

•REGs approval

•MPs acceptance

•Manage dependency with other projects such as

NWE

Flow Based User Group meetings

Public

Consultation ⁽*⁾

Forum 2 ⁽*⁾

preparation

NWE GO livewindow

(*)The exact content of the Fora and the Public Consultation still need to be fine tuned; following MP feedback last

PLEF timing&length consultation is also being reviewed d by project

12

External Parallel Run

As from start external // run simulation results of FB Market Coupling will be published ex-post, first on a weekly basis, than on a daily basis afterwards

based on: FB parameters produced in parallel to ATC by TSOs. Real order books of the operational ATC market coupling.

Published data: FB parameters will be publicly available1. Simulated FB plain MC and FB bilateral intuitive MC net positions and clearing prices

accessible to all.Publication platforms: FB parameters: CASC website or “Utility Tool” can be demonstrated at next EMD WG FB parameters, clearing prices, net positions: PX FTP server. A common CWE website is under development for the publication of all operational data

(ATC, and FB later on)

1Anonymous non-redundant FB constraints, represented by their PTDF factors and RAM (Remaining Available Margin)

1325.05.2012

IntuitivenessIf FB intuitive is chosen over plain FB, bilateral intuitiveness is preferred to Source-to-sink

intuitiveness:

- Source-to-sink intuitiveness is more difficult to understand than bilateral intuitiveness.

- Bilateral intuitiveness is more robust than source-to-sink intuitiveness to the extension of thegeographic scope of flow-based allocation.

- At the CWE level, the impact on the welfare is very low.

Therefore source-to-sink intuitive MC will not be simulated during the parallel run.

Hybrid CouplingWhen CWE FB will go live, there will not be a single FB capacity calculation process with neighbouring

regions. Two methods have been studied: “standard ” and “advanced” hybrid coupling.

The CWE project plans to start CWE FB with standard hybrid coupling as- no delay on implementation needed

- current methodology interconnectors to/from CWE to other areas/region’s is maintained

On both topics, a more detailed presentation will be given at the next EMD WG

1425.05.2012

Model update CWE Flow Based