TF CRM #11 - Minutes - Elia
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TF CRM #11 – Minutes
Tuesday 5 May 2020
09h00 – 12h30
Agenda
- Welcome & Agenda
- Approval of Minutes of meeting TF CRM #10 – 06.02.2020 – comments
FEBEG
- State of Play - FPS Economy [#1]
- Implementation Plan – Thibaut Gérard [#2]
- Motivational letter in the context of an opt-out notification – Glenn Plancke
[#4]
- Public consultation on scenarios, sensitivities and data for the CRM
parameter calculation for the Y-4 Auction for Delivery Period 2025-2026 -
Louis Magein, Rafael Feito-Kiczak & Glenn Plancke [#3]
1Present
Name Organisation/Company
Baudhuin Serge Eneco
Baugnet Christophe Engie
Bayart Pierre Rent-A-Port Green Energy N.V.
Block Guy Janson Baugniet
Bobula Adrian Dils Energie
Boisseleau François ENGIE
Boucquey Pascal CREG
Boury Jonas Yuso
Bruninx Jolien BASF
Canière Hugo Belgian offshore platform
Catrycke Mathilde Electrabel
Claes Peter Febeliec
Clerbois Pierre Inovyn
De Waele Bart CREG
Debaere Elias Yuso
Debrigode Patricia CREG
Decrop Jehan EDORA
Devogelaer Danielle Planbureau
Gillet Amélie FOD Economie
Harlem Steven Luminus
Jourdain Sigrid FOD Economie
Meynckens Geert Centrica Business Solutions
Mortier Jo RWE Supply & Trading GmbH
Ottoy Pauline VREG
Pycke Bart Yuso
Ramm Peter Dils Energie
Schjelderup Ina RWE
Selderslaghs Katrien FOD Economie
2Sijssens Yannick Tessenderlo Group
Strosse Tom Eneco
Van Bossuyt Michaël Febeliec
Van De Keer Lieven T-Power
Van de Pol Lorenzo VoKa
Van den Bosch Sven Fluvius
Van den Kerckhove Olivier ENGIE
Van der Biest Piet Siemens
Van Nuffel Margot Otary
Vandersyppe Hans COGEN Vlaanderen
Vanneste Aron Flexcity
Vermeiren Christian Varioza bvba
Verrydt Eric BASF
Waignier Jean-François FEBEG
3Minutes
Welcome & Agenda
James Matthys-Donnadieu welcomes the audience and goes through the agenda of
today’s meeting. He adds that despite the current exceptional circumstances, the
process of implementing the CRM continues given the numerous deadlines. Elia is
fully aware that a lot of stakeholders have currently other concerns and priorities
due to the COVID crisis. Therefore Elia tries to provide the information upfront.
Moreover Elia insists upon the fact that discussions are not closed after the different
meetings and that in case there is a need, topics can still be further clarified in the
future.
Approval of Minutes of meeting TF CRM #10 – 06.02.2020 – comments FEBEG
No further comments were received. The minutes are approved and will be
published on the website.
State of Play - FPS Economy [#1]
FPS Economy outlines the status of the activities in recent months and the progress
made.
Regarding version 2 of the federal grid code Luminus wonders if there will be a
modification of the process to notify a decommissioning to bring it in line with the
timing of the CRM. FPS believes that this is currently not foreseen, but it will be
checked.
RWE asks if the modifications to the electricity law will be presented during a next
CRM meeting. FPS Economy explains that there are a lot of modifications (ex. Due
to the adoption of the electricity regulation) and may not be worthwhile explaining
all proposed changes. However the process elaborated on the production permit
can be explained in an upcoming TF CRM meeting. FPS Economy however remarks
that it currently only considers proposals that are submitted towards the minister
and that the parliament finally decides on the modification of the law.
COGEN Vlaanderen wonders if FPS Economy could elaborate on the cumulation of
CRM participation and (regional) operational support for decentralised production.
FPS Economy explains that the focus is currently on the process, not yet on the
content of the document itself. Stakeholders are invited to have a look on the
4proposal of the Royal Decree on aid cumulation which is published on FPS
Economy’s website. Questions may be sent and FPS Economy will provide answers.
RWE questions when an updated implementation plan can be expected, taking into
account the remarks from DG energy. FPS Economy explains that the opinion from
DG Energy was only received on May 4th 2020 but that at first sight the remarks
seem not be very complicated. This opinion will now be analysed further and
discussed within the follow-up committee with CREG and ELIA. FPS Economy
believes that at first sight this process can go rather quickly.
Rent-A-Port Green Energy wonders if there will be a consultation on the financing
mechanism (by FPS/minister/European commission). FPS Economy explains that
there will be no consultation on this subject by them. FPS Economy made some
preparations in order that the politicians can debate and decide on this topic in the
parliament.
Implementation Planning 2020 – Thibaut Gérard [#2]
Elia introduces the implementation planning it has foreseen this year in order to
prepare a detailed version of the functioning rules which will be consulted upon
after summer and which will be officially submitted to CREG afterwards.
RWE wonders how the DG COMP approval process will be integrated in the
implementation planning; in other words, when does Elia foresee an update of the
design notes and functioning rules in order to anticipate possible
advices/suggestions/requests from DG COMP. Elia replies that the feedback from
DG COMP can only by judged once received. Before submission of the notification
file to DG COMP there have been already some discussions with them. Belgium
proposes a design which is in many respects in line with what has been approved in
other countries. DG COMP mostly looks into high-level principles and does not focus
on design details. For the time being, Elia continues the implementation based on
the design that has been submitted. Elia believes it is a solid design since it has been
intensively been discussed with the stakeholders. However Elia is aware that some
agility may be needed depending on DG COMP’s feedback, once known.
FPS Economy adds that the decision on financing is currently awaited but hopes it
will be known in the near future. Once the notification file is complete, DG COMP will
have to decide if they want to proceed with an in-depth investigation or not. DG
COMP indicated that such in-depth investigation can take about one year, however
the Belgian state responded that one year may be too long. DG COMP is thus aware
of the Belgian timeline. The period of one year is only based upon former experience
and nothing has been decided yet. Since the Belgian state already intensively
discussed with DG COMP, FPS Economy is hopeful that a possible in-depth
5investigation will not take so much time. FPS Economy adds that answers and
additional information will be provided as quickly as possible in case of questions
or remarks from DG COMP.
Febeliec raises some questions about the facts that, notwithstanding the COVID-
crisis, Elia intends to accelerate and intensify the implementation process. Elia
replies that it fully understands that for many stakeholders there are currently
different priorities. Nevertheless, there is a CRM law and the willingness of the
minister to move forward in order to be ready on time for the first auction in October
2021. Elia tries to combine both aspects and tries to accommodate as much as
possible by sending the documentation upfront. Another element is also that the
regulator needs enough time to approve (or reject) the functioning rules since these
need to finalised by May 2021. If all these aspects are put together, this is the
resulting timeline. Elia insists on the fact that the discussions are not frozen before
summer; there is still the public consultation organised by Elia after the summer
and also the regulator foresees a formal trajectory. Consequently there are still
plenty of opportunities to react upon the proposed functioning rules.
Elia adds that the Implementation TF has no mandate to change the principles of the
proposed design; only the way how these principles will be implemented
operationally will be discussed. Thibaut Gérard (Elia) will chair these
Implementation TF sessions. In case modifications to the design are needed, these
will be discussed in the normal TF CRM meetings.
Febeliec wonders if the same participants need to be present in the Implementation
TF meetings as in the normal design TF CRM meetings. Elia answers that ideally, it
should not be the same people; rather implementation managers and IT people are
aimed for in order to have a look at the exchange of data, the interfaces, etc. That is
the main reason why Elia has opted to split the discussion on the design from the
discussions on the implementation.
Febeliec states that TF design has not agreed any design; the design has been
discussed and Elia has proposed functioning rules. However Febeliec emphasizes
that it has not approved the proposed design. Elia responds that this statement from
Febeliec has been understood. Elia adds that DG COMP will first have to give its
green light on the design and afterwards it will be approved by the regulator,
through the functioning rules.
Motivational letter in the context of an opt-out notification – Glenn Plancke [#4]
Elia explains the principles it proposes regarding the information that should be
provided in case of an opt-out notification.
6Febeliec does not understand that an inaccurate derating factor could be a reason
for an opt-out. Elia answers that the derating is standard, but there could be reasons
to deviate individually. It could be that a production unit (ex. an old installation) is
not able to provide up to the derating factor of the technology.
Febeliec wonders if this can only happen when the derating was not sufficient. Elia
replies that that an opt-out is only to lower the derating factor, not to increase it.
Febeliec questions if all of this information should not be available in REMIT. Elia
answers that information available through REMIT will be used for the CRM.
However, for instance, smaller units are not included in the REMIT obligation.
Additionally, the opt-out notification in the context of CRM requires some specific
information which is not included in the REMIT obligation.
Luminus wonders if the relevant authorities already agreed on the first three
reasons. Elia clarifies that this is currently only a proposal from Elia and it is open
for discussion.
ENGIE asks if in case of an “other” reason there will be a process to check the
provided information before the prequalification process. Elia answers that there
is no formal check. Elia just provides the candidate the possibility to an opt-out in
the best possible way and Elia tries to make use of any available information.
Therefore Elia uses as much as possible the closure notifications in the context of
article 4bis of the electricity law. In the other reason, the candidate has to motivate
its decision of an “in” or “out” option. However Elia will not judge this option, it just
takes note of the information and will share it with the relevant authorities.
Elia adds that any feedback on this design proposal is welcomed. The topic is also
foreseen in the afternoon implementation TF, however it should be regarded as a
draft.
Febeliec wonders if some document will be provided or if the presented slides are
the only input. Elia answers that these slides explain the proposal but there is also
a draft annex foreseen in the functioning rules.
Public consultation on scenarios, sensitivities and data for the CRM parameter
calculation for the Y-4 Auction for Delivery Period 2025-2026 - Louis Magein,
Rafael Feito-Kiczak & Glenn Plancke [#3]
Elia gives an overview on the public consultation that will be launched on May 5th
2020 regarding the scenarios, sensitivities and data for the CRM parameter
calculation for the Y-4 Auction for the delivery period 2025-2026.
EDORA wonders why the delivery period runs from November 2025 to October
72026 and why also the summer is taken into account for delivering capacity. Elia
answers that some parameters (among others market revenues) should be
calculated over the entire year.
Febeliec wonders if the impact of COVID 19 will be taken into account. Elia answers
that 2025 is being considered as time horizon. For the time being, no elements are
available that the Corona crisis would impact 2025. Elia states that market parties
having different information than what is being said, may provide the remarks
during the public consultation.
Febeliec states that the impact of the 2008 financial crisis was visible for several
consecutive years. Elia answers it has already foreseen a sensitivity called “low
demand” but that there is currently no evidence whether the crisis will have impacts
until 2025. Therefore, the demand forecasted in the final National Energy and
Climate Plan (WAM scenario) is considered as the reference.
About the fact that Elia will use the MAF data and the decrease of 2,5 GW of gas units
in Belgium, ENGIE wonders if the same principle will be handled for other countries.
Elia answers that for the other countries the data from the MAF 2019 study will be
taken and will be updated with the PLEF study that will be published soon.
Febeliec asks for some more details on the 2,5 GW of new CCGT that will be removed
from the MAF 2019 study. Elia answers that the scenario for Belgium used in the
MAF study assumed already 2.5 GW new thermal capacity (arbitrary choice) in 2025
as it is assumed that Belgian will be adequate in 2025 and will be compliant with the
legal security of supply criteria as defined in article 7undeices, §3 of the Electricity
Law.. For the construction of the scenario for the CRM calibration, it is therefore
proposed to remove this arbitrarily added capacity and add the required capacity
(with several pre-selected types) according to the article 7, §1 of the proposed RD.
Regarding the electricity consumption (slide 29) Febeliec repeats its concern that
no COVID impact is foreseen. Elia answers that the dataset used for the scenarios
will take into account the value from the final NECP as reference and that a low
demand sensitivity will be introduced based on the draft NECP (which resulted to
give lower values). This can be considered as an option to include the impact from
COVID. Elia specifies that the data and assumptions regarding the sensitivities
should be justified and documented as mentioned in the Royal Decree proposal. Elia
reiterates its request that all feedback and justifications on the data, the scenarios
or the sensitivities may be provided during the public consultation.
Febeliec adds that the Synergrid website shows that the Belgian total demand for
the period before the financial crisis (2007-2008) is above 90 TWh while 5 years
after the crisis the demand, in 2013, it still around 5 TWh less than before the crisis.
Febeliec considers that the impact of COVID-19 will be bigger than the impact of the
financial crisis in 2008. Febeliec notices on the same website that the latest number
for the total Belgian demand is 83 TWh for 2019. Febeliec has questions about the
8growth path as proposed by Elia for the coming years. Elia answers that this is a
proposal from Elia (based on the figures of the National Energy and Climate plan)
and that stakeholders are free to react to the public consultation with motivated
justifications and to provide quantified alternatives. Elia will then analyse the
feedback received and they will be definitely considered. RWE and ENGIE wonder
if the “low demand” sensitivity could be considered as a kind of “COVID 19 long term
impact sensitivity” which could cover the concern of Febeliec. Febeliec cannot agree
as it insists on the fact that also the starting point is presumably no longer correct.
Elia confirms that the data on the Synergrid website are the historical data.
However Elia adds that the data on the slide shows the normalized electricity
consumption which could result in a 1,5 to 2 TWh difference depending on the
climate year due to the temperature and other weather factors. This is also the
reason why in the figure on the slide that data of 2019 does not correspond with
data on the Synergid website. Elia also mentions that the data provided in the public
consultation regarding 2025 are exactly based on the data from the final NECP
which were provided by the three regions and the federal authorities to the
European Commission end of last year. Elia explains that also losses are added to
these data. Febeliec replies that these data were thus provided end of 2019, which
was pre-COVID. Elia reacts that the blue sensitivity could be used instead of the
orange one (slide 29) if better alternatives can be motivated and quantified during
the public consultation. Such alternatives will be looked at with great care, a
consultation report will be written, the regulator can provide its opinion and in the
end the minister will decide. Elia believes this is a very transparent process.
Febeliec wonders if it is possible to receive the Elia normalised demand data for
Belgium for the 2000-2019 period. Elia will look it up and see what is possible.
Febeliec asks if Elia assumes that countries with a CRM will be adequate for their
own needs in 2025. Elia confirms and explains that the same data as from the MAF
study will be taken into account, which will be modified with the PLEF updates.
Looking at the MAF results, those countries (for the ones having a security of supply
criteria) are resulting to be adequate. It is currently not foreseen to make them
adequate if they aren’t. However this could be foreseen if required.
Febeliec wonders if it is not required under the CEP to apply ERAA instead of MAF.
Elia answers that for this first CRM calibration there is not yet a European Resource
Adequacy Assessment that can be used. So the data is based on the last European
study for this dataset; so MAF 2019 is used as reference.
Febeliec states that ERAA is not just a dataset but also a methodology. Elia answers
that the methodology in the proposed Royal Decree should be followed and for the
other aspects as specified in the proposal Royal Decree, the latest European
adequacy study will be used (RD, Article 12), which is the one used in the latest MAF
as the ERAA methodology is not yet approved. Febeliec states that this methodology
has not been consulted upon nor validated by the stakeholders.
9EDORA wonders if there will be an update as the MAF 2020 will be published end of
2020. Elia answers that for the CRM calibration for the 2025-2026 delivery period
there won’t be any update based upon MAF 2020 since the Elia report should be
finalised by November 15th, 2020. There is thus no possibility to update the data
with the MAF 2020 study. This will be used for the CRM calibration for the delivery
period 2026-2027.
Febeliec believes that prices are presumably “slightly” different now (slide 35). Elia
supposes that Febeliec makes also reference to the COVID impact. Elia answers that
prices may indeed vary a lot and depend on various factors not only due to Belgian
aspects but also what happens in Europe (policies, …) or in the world supply and
demand, geopolitics… Prices that are published in the world energy outlook end of
2019, they are subject to short term, mid-term or long term evolutions.
Febeliec wonders if the Elia methodology has been approved. Elia explains that Elia
applies the methodology mentioned in the Royal Decree proposal. The Belgian
methods follow Belgian laws and governance and where this refers to European
methods, those aspects are incorporated. The ERAA method follows the CEP
governance. Febeliec replies that the ERAA methodology is not yet applied
according to Elia. According to Elia, the ERAA methodology is currently in the
process of being approved by ACER, hence the methodology is not yet known.
EDORA wonders if other countries with an accelerated coal phase-out foresee
specific measures to compensate this and he states this should be taken into account
in this scenario. The reference data used are the data from MAF which are provided
by each country. Moreover, Elia generally states that these are those sensitivities for
which the Belgian government wants to hedge against to cover the unknowns. Elia
adds that it is not sure if Spain and the Netherlands have foreseen additional
measures to compensate a possible accelerated coal phase-out. However since Italy
has a market-wide CRM, it could be an option to make this country adequate
according to their reliability standards in case this sensitivity is used. Elia believes
this a fair comment which can be made during the public consultation.
EDORA asks why there is no sensitivity on increasing European efforts to -55% CO2
by 2030 with more renewable installations than on NECP. Elia clarifies that those
sensitivities are discussed and proposed in collaboration with FPS Economy and in
concertation with the CREG. If other numbers or sensitivities should be considered,
Elia requests to add through the public consultation the necessary justifications why
there would be a need to go beyond NECPs.
RWE wonders if the “PLEF low NUC” sensitivity can be considered as worse on
nuclear availability as it takes into account lower availability on nuclear generation
capacities in more countries. Elia answers that this sensitivity considers multiple
aspects about nuclear availability in France and Switzerland and import capabilities
through Switzerland. Elia believes this sensitivity is different but might not result
in worse results than the ‘nuclear availability in France’.
10RWE also asks which unavailability percentage will be applied in the “NUC +2GW
BE” sensitivity. Elia answers that this needs to be defined if this sensitivity is used.
The percentage could be calculated based upon historical data of the availabilities
on the nuclear units that would be considered for extension.
EDORA questions why there is no sensitivity on off-shore acceleration. Elia suggests
to propose this as an answer during the public consultation. It was also a sensitivity
in the latest Adequacy & Flexibility study and it could also be the case here.
FEBELIEC wonders if even the French CRM is not sufficient to guarantee adequacy.
Elia replies that Elia never made such statement. Elia is just looking at what
generation capacity is available in France with respect to the Belgian security of
supply in the framework of the Royal Decree proposal (Article 4, §4); Elia is not
looking at the French security of supply. Elia mentions that these two aspects may
not be confused.
ENGIE asks if Elia would also consider an uncertainty sensitivity with respect to RES
developments. ENGIE states that one could think of a “green deal sensitivity/green
stimulus package” since the European Union collectively invests more in RES than
the current plans. However, by contrast, one can think of a “NIMBY” scenario since
member states struggle to reach their target for different reasons. The two scenarios
would have opposite effects on the economics of thermal assets and the overall
capacity needs. Elia repeats that those sensitivities are discussed and proposed in
collaboration with FPS Economy and in concertation with the CREG. During the
public consultation the stakeholders are free to propose additional sensitivities.
However it should be kept in mind that these sensitivities will be used as situations
the minister wants to hedge the Belgian adequacy situation against.
T-Power wonders if also several combinations of sensitivities will be considered as
additional sensitivities. Elia answers that there will a base scenario and that the
minister will chose one or more sensitivities to be taken into account as part of the
scenario to be used for the CRM calibration (slide 12). Elia adds that in the end there
will be one reference scenario which will the basis for the calibration of the CRM
parameters for the Y-4 auction for the delivery period 2025-2026.
EDORA asks if the storage capacities are considered in type 4 “market response”.
Elia answers that the market response category is in line with the market response
category proposed in the scenario dataset, which does not consider specific storage
capacities. Elia adds that an additional specific category could be justified in the
context of the public consultation. EDORA replies it would indeed be interesting to
add a category type “storage”.
Centrica requests what will be the WACC value to define the net-CONE. Elia answers
that this is not in the framework of this consultation. The parameters like gross-
CONE, the implied WACC and the X-factor will be part of a public consultation to be
11organised by the regulator.
Regarding slide 58, Febeliec wonders if the forward market revenues will be taken
into account for the determination of the intermediate price cap (IPC). Elia answers
that for the IPC Elia will not perform separate calculations on market revenues. Elia
does a market modelling simulation but there is no explicit distinction between
forward, day-ahead or intraday markets.
Centrica wonders if the forward prices Elia uses are public. Elia replies that there is
no explicit use of forward prices since markets are simulated.
Febeliec asks what methodology will be used to simulate these market revenues.
Febeliec assumes it concerns an extrapolation instead of an “interpolation” (slide
55) because it concerns data for the future. Febeliec wonders how Elia can estimate
market revenues over a period of 20 to 30 years. Elia answers that this question
refers to estimate the life time revenues. In case the life time is higher than one year,
an assumption has to be made for the revenues after 2025. For this calibration for
delivery period 2025-2026 Elia will perform a market simulation which needs to be
complemented with other scenarios. For these, Elia proposes to use the “10 year
adequacy & flexibility” study as well as the scenarios made for the latest federal
development plan. The revenues from these market studies will be taken for the
different time horizons. The time horizons already available in the “10 year
adequacy & flexibility study” are 2028 and 2030; the time horizons 2035 and 2040
are available in the federal development plan. Finally, the simulation for 2025 will
be complemented with 2028, 2030, 2035 and 2040 and an interpolation can be done
between the values in order to obtain a yearly revenue estimation for the different
technologies.
T-Power wonders if the expert study for Fichtner can be made available. Elia
answers that it will be included in the public consultation.
RWE refers to article 17 of the draft Royal Decree which foresees an annualized
recurrent investment cost and a fixed and variable O&M cost. RWE asks if Elia also
foresees initial not recurrent investment costs below the three years threshold. Elia
replies that if for example the cost of a lifetime extension could be considered as an
initial non-recurrent investment cost, then this is not included in the determination
of the IPC.
Luminus seconds the question of RWE: the intermediate price cap does not leave
room for existing power plants with non-recurrent investment costs below the
threshold for a 3-year contract to bid in their missing money. Elia states that it is
not the purpose of the IPC to include new investments and to increase the IPC
because of those new investments.
Luminus reacts that this could mean that a lot of cheap lifetime extensions might be
excluded from participation to the CRM. RWE agrees but states that if the 3 years
12threshold is not hit, there is still missing money in a one year contract. RWE
concludes that the question is not yet fully answered but it will raise further
questions during the public consultation.
EDORA asks about slide 24 how the 200h reserve volume will be calibrated? Are
there also preselected capacity types for this volume?
Elia answer that it will be based on the load duration curve as mentioned in the
Royal Decree proposal and will be determined by the regulator, based on input from
the TSO.
Next steps
Elia shortly gives an overview of the foreseen upcoming meetings. New meetings
are indicated in orange. After the summer it will be evaluated whether the meetings
in blue will take place or not. It is requested to block the dates in the calendars for
the time being. Elia foresees the usual design TF CRM meeting in the morning and
the Implementation session in the afternoon.
TF CRM #12 : Thursday 28 May 2020
TF CRM #13 : Thursday 18 June 2020
TF CRM #14 : Thursday 9 July 2020
TF CRM #15 : Wednesday 19 August 2020
TF CRM #16 : Thursday 10 September 2020
TF CRM #17 : Thursday 1 October 2020
TF CRM #18 : Thursday 15 October 2020
TF CRM #19 : Friday 30 October 2020
TF CRM #20 : Wednesday 18 November 2020
TF CRM #21 : Friday 11 December 2020
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