French Capacity Mechanism " certification process " - April 2015 - Portail clients RTE

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French Capacity Mechanism " certification process " - April 2015 - Portail clients RTE
French Capacity Mechanism
  « certification process »

          April 2015
French Capacity Mechanism " certification process " - April 2015 - Portail clients RTE
SOMMAIRE

     1.    CONTEXT

     2.    MARKET PLAYERS

     3.    DUTIES COMING WITH CERTIFICATION

     4.    DEMAND SIDE MANAGEMENT

 2                   Mechanism of Capacity
French Capacity Mechanism " certification process " - April 2015 - Portail clients RTE
CONTEXT

3   DATE
French Capacity Mechanism " certification process " - April 2015 - Portail clients RTE
Background

                                                New electricity usages
                 To make
             Energy transition
                succesfull,
                                                Development of renewable energy
           the electrical system
                  is faced
                 with many
                                                Gap between the moments where electricity can be
                 challenges                     produced and those in which it is consumed

                A major risk
                 to assess

     CONSUMPTION PEAKS CAN CREATE TENSION ON
     THE SYSTEM AND UNDERMINE THE SECURITY OF
     SUPPLY OF FRANCE.

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French Capacity Mechanism " certification process " - April 2015 - Portail clients RTE
MAIN ISSUE

                      Security of Supply
                               =
              Ability to deal with winter peaks

                                                                            Reduce
                                                                          Consumption
                                      Obligation of suppliers to
 Engagement of availability
                                     acquire guarantees relative
    from Consumers or
                                    to the consumption in pekas
        Producers                                                             Buy
                                               periods
                                                                           Guarantees
PP2                                PP1

      Capacity market allows to sell the availability or to cover suppliers’ obligation
                          when the electrical system needs it

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French Capacity Mechanism " certification process " - April 2015 - Portail clients RTE
MARKET PLAYERS

6   DATE
French Capacity Mechanism " certification process " - April 2015 - Portail clients RTE
ACTORS OF THE MECHANISM

                Players                        Obliged Entities
                 ELECTRICITY                         Suppliers
                  SUPPLIERS
                                                     Consumers
 Obliged
 entities
                  Based on the                       Grid operators for the
               consumption of the
                    portfolio                       Network losses

                  PRODUCERS
                                               Capacity Operators
              Based on availability            Production / Demand response
Capacity
Operators                                            Producers
                 DEMAND SIDE
                 MANAGEMENT                          Demand Side Operators
            Help consumers to reduce                 Consommateurs
            their consumption during
                    peak times

             RESPONSIBLE OF A PERIMETER OF CERTIFICATION

             Wheter it is the capacity opertor or any actor who signed a contract with RTE

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French Capacity Mechanism " certification process " - April 2015 - Portail clients RTE
HOW IT WORKS?

                                                                                                                                 Forecasted
Forecasted consumption
                                                         Market for Guarantees                                               Production/Demand
                                                                                                                                 Responses

                 LIABILITY                                         PRICE OF                                 LIABILITY OF
               OF SUPPLIERS                                        CAPACITY                             CAPACITY OPERATORS

                                                                                                                 Are available.
           Obliged to cover thier portfolio                                                                 Receive the same levels
                                                                                                                of guarantees

                                     1 Guarantee                 1 Guarantee                  1 Guarantee

                                         • Renewables                 • Thermal                   • Demand
                                                                         plants                     response

                                               The price of capacity is linked to the security of supply.

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French Capacity Mechanism " certification process " - April 2015 - Portail clients RTE
SURROUNDING ACTORS

               Rôle of RTE             Rôle of regulator

                  CREATE
                CERTIFICATES

                                           MONITOR
                                          THE MARKET
                  NOTIFY
                OBLIGATIONS

                                         PUBLISH DATA
                                         on transactions,
             CHECK THE LEVEL OF           obligations and
               ENGAGEMENTS                  certificates

              UPDATE REGISTERS
              AND MAINTAIN THE
                 MECHANISM

        GOVERNMENT, REGULATOR AND RTE WILL NOT ACT ON THE MARKET.
     THEY HAVE A SPECIFIC ROLE OF ORGANIZATION, MONITORING AND CONTROL.

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French Capacity Mechanism " certification process " - April 2015 - Portail clients RTE
SCHEDULING

3 Years at the same time
          2015       2016        2017        2018       2019          2020

                                Year 1
                                                         Settlement

                                             Year 2
                                                                       Settlement

                                                         Year 3

                  New parameters for delivery year 4 : 2020
         Certification of existing power plants
         Certification of coming plants or demand response
         Obligation (forecasts / real time)
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A NEW MECHANISM

THE MARKET OF CAPACITY IS NOT REPLACING EXISTING MECHANISMS SUCH AS :

     BALANCING
     DEMAND RESPONSE
     ENERGY SUPPLIES
     FEED IN TARIFF
     ANCILLARY SERVICES
     RESERVES (FRRA, FCR)

          THE MECHANISM OF CAPACITY IS DESIGNED AS AN INSURANCE.

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DUTIES OF A CERTIFIED OPERATOR

12          DATE
WHERE DOES IT START ?

1.    CERTIFICATION IS A DECLARATIVE PROCESS

2.    FIRST, OPERATORS WILL NEED TO LINK WITH A REPONSIBLE OF PORTFOLIO

3.    CERTIFICATION ENTITIES (EDC) MAY BE GROUPED

     Volume of capacity
         unit (MW)                    MANDATORY FOR SITES
                                      STARTING AT 1 MW
                     No aggregation   minimum of certification : 1 MW
                        possible      minimum of transaction : 0.1 MW (1 guarantee)
     100 MW
                      Aggregation
                       possible
     1 MW
                      Aggregation
                      compulsory      VALUES WILL BE CHECKED DURING THE WINTER…

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CERTIFICATION PROCESS

   CONNECTED TO ONE DSO GRID                 DSO

   CONNECTED TO ONE TSO GRID

   VARIOUS DSO                        GRD
                                      GRD
                                       GRD
                                        DSO

                         CONTRACT WITH RTE
                                                   Delivery of certicifaction
                                And                         Level                    Registration
   CERTIFICATION
                                                               =                of Certified capacities
     PROCESS
                     CONTRACTS DSO / Operators      NCC of production or
                                                     demand response

                                                                                   Registration
  Request                                        Delivery of
                            Contract
                                                 Guarantees
        ?          DSO                                                   MW

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TWO METHODS

      REQUEST
                          Declarative
                                                                   NCC = Pavail [PP2] x Kweek x Kday
                          Certification

 Flexible Production

                                     Volume de garanties calculé par RTE sur l’historique

                           Historical
                                                                 NCC = Prod [historical] x Cfilière
                          Certification
      REQUEST

                       Any choice is defined for one year

  Fatal production        Declarative
                                                               NCC = Pavail [PP2] x Kweek x Kday
                          Certification

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CONTROL OF CERTIFICATION

                            Forecasts

         Operators                         Sells               MARKET OF
         Production /                                           CAPACITY
         Demand

                                                                      Any Guarantee
                Real Availability                                       detained by
                                                                   the RESPONSIBLE
                                                                  Will not be accounted.

                                    REAL LEVEL
      OR Activated Energy           OF CAPACITY
                                                                    Imbalances
                                                   CERTIFIED
                                                    LEVELS

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« PP1 » AND « PP2 » STARTING FROM 2017

                                  PP1                                                     PP2

 Periods in which the suppliers have to demonstrate their ability to      Operators are liable to a level of availabitilty for
  cover the consumption of their portfolio of clients during winter       their capacities during periods of stress for the
                               peaks                                                        system (PP2)

             Days are scheduled from                Time frames :                      PP2 is longer than PP1
             November to March                      7h – 15h                           (between 10 to 25 days each year,
             (Excluding Christmas                   and 18h – 20h                      with the same schedule starting on
             Periods) starting from 2017                                               january to march and novembre to
                                                                                       december in 2017)

 RTE :                                                                                 PP2 will adress also crucial
                                                                                       situations for the system that
   Planned on day ahead              performs a posteriori controls on                 are not linked to peak
   for each day PP1,                 the basis of actual consumption to                consumption periods.
   between 10 et 15 days
   per year                          verify that the supplier has the
   (days of maximum                  necessary guarantees for the
   consumption)                      consumption of their customers

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OPERATORS : PEAK PERIODS PP2

    PP1 (MEASUREMENT OF CONSUMPTION) AND PP2 (MEASUREMENT OF AVAILABILITY)

    PEAK PERIOD PP2  Collection and control
        MEASUREMENT OF AVAILABILITY ET CONTROL OF CERTIFIED   CAPACITIES

    NUMBER OF DAYS PP2 FOR EACH DELIVERY YEAR : [10 TO 25]

    EACH PP2 IS MANDATORY A DAY PP1

    PP2 DAYS WICH ARE NOT PP1 DAYS WILL BE WARNED BASED ON A CRITERAI OF
     TENSION FACED BY THE SYSTEM (DEMAND > OFFER)

Exemple (january)
PP1     X                                              X                   X   X
PP2     X               X                   X          X          X        X   X

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REBALANCING OF CAPACITY

  REBALANCING COSTS DEPENDS ON THE DATE OF REQUEST :

       Y-4               Y-3               Y-2              Y-1           Year of delivery      Y+1    Y+2

                                                                                             15/01

Certification
                       Costs of (new) certification                         Costs of (new) certification
                                                                                          +
                                                                  Penalties related to the number of PP2 already
                                                                        scheduled and total PP2 numbers
  Penalties will be invoiced with the settlement
  of imbalances (knowing the total number of PP2).

  EXCEPT FOR REBALANCING IN CASE OF INCIDENTS DURING DELIVERY YEAR
  REBALANCING will be « free » but limited to 2 times for each responsible and each year.

                 Only certification costs will be applied (due to change of certified volumes)

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TWO CASES OF REBALANCING

               1 : UPWARD
                                                 Register ISSUANCE
         Adding guarantees to the market            of
                                                 Certified   MW
                                                                      OPERATOR

                                                capacities
        New capacities will be delivered to
                   operators

                                                                 MARCHÉ DE
                                                                  CAPACITÉ

              2 : DOWNWARD
                                                                       MARCHÉ DE
                                                                        CAPACITÉ
      Removal of capacities from the market

      Transfer to RTE of the refunded volume            Refund       RESPONSIBLE
                                                                         OF
                                                                      PORTFOLIO
                                                            MW
Global rebalancing in the portfolio is affordable.
  Controls will still be adressed by each site

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COLLECTION ET CONTROL

        Y-4               Y-3              Y-2              Y-1        Year of delivery     …   Y+2

                                                                        Control on energy

                                                 AUDITS

                                                                          Needed tests

   3 TYPES OF CONTROL ARE POSSIBLE :

              - BY THE ENERGY ACTIVATED :             Check of produced energy during PP2

              - BY AUDITS :           on records or on the site, between the date of entry into force
              of the contract for certification and the end of the year of delivery

              - BY TESTS D’ACTIVATION from 0 to 3 tests

   Each Capacity Entity has to be activated at least one for each year.

                 DSO            Control and collection of DATA
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MANAGEMENT FEES

         Operators
         Production /
         Demand response

  Certification Costs                                     10 €/MW (RTE) or DSO
  Yearly fees for access to the register                  1000 €/year
  Transaction fees                                        paid by the buyer
                                 (rebalancing and first transfer to the RPC are excluded)
  Audit and control costs                                 on demand
  Rebalancing costs                                       free before delivery year

      Suppliers

  Yearly fees for access to the register             1000 €/year
  Transaction fees                                   1 € / guarantee (with limitation)
  Fees to calculate the level of consumption         4 €/MW (RTE) + DSO

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HOW ARE IMBALANCES CALCULATED ?

Two separated Imbalances
• Obliged Actor : Notified volume of obligation – guarantees in the portfolio
• Certified responsible : Real level of capacity – certified level of capacity

 Administered price
                                                          Two prices to be defined
                             Reference
                             Price of Market

            - 2 GW                             0   Global Imbalances

 The price of settlement of imbalances is an incentive to favour the market.

                     The administered price cannot exceed 40 k€ / MW

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DEMAND SIDE MANAGEMENT

24       DATE
A CHOICE HAS TO BE MADE

                                                          Suppliers

                        Reduce        Activated during peak period : PP1
                  (the consumption)
             1       The level of     Need to activate the energy to reduce directly the
                       obligation     consumption

  Flexible
 Consumer    OU

                   Certification of
                                      Available during peak period : PP2
             2          Load
                                      Need to be available
                     capacity
                                      Not mandatory to be activated

                                                               Operators
                                                               Production /
                                                               Demand Reponse

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EXEMPLE OF CERTIFICATION

                                                          x0,93          Consumer
                                                                  18
20                                                                MW     Available
                                                                                        10
                                                                                        MW
     No demand response activated

                                                                       Operators
                              Or
                                                                       Production /
                                                                       Demand Reponse

                                                          x0,93         Consumer
                                                                  18    Activated
20                                                                MW                    10
                                                                                        MW

     In case of activation, energy will be compensated.

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THANKS FOR YOUR ATTENTION

27        DATE
FURTHER DETAILS

                                                                                      Rules
                                                                                      Contracts
                                                                                      Practical guide
                                                                                      Registers

http://clients.rte-france.com/lang/an/clients_traders_fournisseurs/services_clients/dispositif_mecapa.jsp

                     HOTLINE CAPACITY MECHANISM

                      phone : +33 1 41 66 71 03

                      mail : rte-mecanismecapacite@rte-france.com

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