Recommendations on the Use of Flexibility Within Distribution Networks

Transcript

1. Recommendations on the use of flexibility in distribution networks 1 Carolina VEREDA (Chair of WG Business Models & Network Customers, Eurelectric) Getting Started with DSO Flexibility Markets – 14 May 2020
2. Who we are 18/5/20 2 Eurelectric represents the European electricity industry Representing the power sector in over 30 European countries, speaking for more than 3,500 companies in power generation, distribution & supply. GENERATION & ENVIRONMENT DISTRIBUTION & MARKET FACILITATION CUSTOMERS & RETAIL SERVICES ELECTRIFICATION & SUSTAINABILITY MARKETS & INVESTMENTS
3. Key figures of the power industry 60% 800,000 3,500 140,000 3,700 22% 1,100 2,500 200,000,000 34% 22%
4. Clean Energy Package 18/5/20 4 Article 32: Incentives for the use of flexibility in distribution networks Electricity Directive Member States implementation before 31/12/2020
5. Incentives for the use of flexibility (art 32) 18/5/20 5 • cost-effectively alleviate the need to upgrade or replace eletricity capacity • support the efficient and secure operation of distribution system. • Transparent, non-discriminatory and market based procedures. • Include all relevant users and TSOs to establish specifications for services procured and where appropriate, standardised products at least at national level. Member States shall provide a regulatory framework to allow and provide incentives to DSO to procure flexibility services, including congestion management in their areas. How? When?
6. Incentives for the use of flexibility (art 32) 18/5/20 6 • DSO shall exchange all necessary information with TSOs • DSO shall coordinate with TSOs • DSOs shall be adequately remunerated to recover their costs, including the necessary information and technology expenses and infrastructure costs. Cost of the service TSO-DSO • At least every 2 years. • Include flexibility services needed and any other resource that DSO is to use as alternative to system expansion. • To consult system users and TSO. Network development plans
7. General overview Procurement of flexibility services is not widely implemented in Europe. Some MS are testing local flexibility market with pilot project or using an experimental framework (e.g. sandboxes). France: Enedis will launch experimental call for tenders to procure flexibility services in 2020. They correspond to real life opportunities and will give some feedback to further work if flexibility is seen as a valid alternative. Flexibility is also remunerated. NL: sandbox process (‘Experimenteer Regeling’). However, this arrangement is meant to learn from flexibility and other transition cases for future policy decisions. 18/5/20 7
8. How to start with procurement of flexibility 18/5/20 8
9. NRAs to define proper incentives for DSOs 18/5/20 9 such as… risk incentives or output based incentive
10. Cost of the service must be carefully defined 18/5/20 10 Determined by the value it provides in each particular network configuration. Open and transparent auctions appear to be a possible mechanism to set the appropriate market price. Transparency in the whole auction process as well as in the selection of the technologies and activations is key. This is a huge challenge for DSOs and further investigations are required.
11. DSO’s needs require different approaches 18/5/20 11 Network tariffs Connection agreements Network reinforcement Flexibility procurement
12. Step by step approach for flex procurement 18/5/20 12 DSO needs Network tariffs Procurement Long term Tender Short term Local market Connection agreement
13. Conclusions 18/5/20 13 DSOs call on NRAs to regulate flexibility procurement at national level. Member States should already start at least with pilot projects or sandboxes. NRA should define proper incentives for DSO and define the cost of the service together with DSOs. DSOs will first define their needs and later, will choose the adequate tool. Market based procurement will always be transparent and open to all market participants.
14. Thank you! 18/5/20 14 You can contact me for further questions: carolina.vereda@enel.com