Participation of demand in Belgian Balancing market

Report
Transmission, system management
& ancillary services
Hubert Lemmens
Agenda
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•
•
•
•
Elia Group
Electricity market
Role of the different players
Elia products and services
Ancillary services
•
•
•
•
Balancing
Ancillary services
AS markets
Challenges & opportunities
Agenda
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•
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•
•
Elia Group
Electricity market
Role of the different players
Elia products and services
Ancillary services
•
•
•
•
Balancing
Ancillary services
AS markets
Challenges & opportunities
Elia Group - reliable and resilient
networks
Ownership
Elia
• 100% of 380-150kV network
• 94% of high voltage network (70-30kV)
50Hertz
• 100% of 380-220kV network
 34% of the German 380kV network
 19% owner of the German 220kV network
Age of networks
Elia
• Less than 15 years for 50% of underground cables
• Less than 25 years for 50% of lines & substations
50Hertz
• Around 10 years for 90% of the network (refurbished
after German reunification in 1989)
4
Elia + 50Hertz Transmission = Top 5 in Europe
Elia Group
110-380 kV lines and cables
13,431 km
30 tot70 kV lines and cables
4,800 km
Substations
Served territory (km2)
872
~ 143,000
Direct consumers
~ 130
Inhabitants
> 30m
Staff (FTE)
~ 1,900
Regulated Asset Base
(RAB)
€ 5,843m
5
5
Elia’s Role
Elia operates, maintains and develops a network consisting of lines,
underground cables, transformers and substations linking producers and
consumers of electricity
Elia
France
Netherlands
Luxembourg
U.K.?
Germany?
France
Netherlands
Luxembourg
U.K.?
Germany?
Exports
Imports
Large &
Medium
Industry
Belgian
producers
Small
Industry
Electricity
Generation
Transmission
380 to 30 kV
Distribution
from 15 kV
to 230 V
Domestic
Customers
6
The transmission grid: key in energy
policy
The European transmission system:
• 34 interconnected countries
• 532 million consumers
• 880 GW installed generation
• 3.200 TWh/year consumption
• 380 TWh/year international exchanges
The European transmission grid:
• 305.000 km interconnections
 A remarkable technological
accomplishment of the 20th
century !
7
Agenda
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Elia Group
Electricity market
Role of the different players
Elia products and services
Ancillary services
Balancing
Ancillary services
AS markets
Challenges & opportunities
Regulatory framework Europe
• Liberalisation is an European initiative:
– Creation of one European market
– Free market …
•
Producers
•
Supply
•
System operator
- Natural monopoly
- Independent system operator
- Strong regulation
– With social and environment corrections
9
Power market design
Power
exchanges
Power system
operation
ISO model
3rd pty
Asset
management
3rd pty
TSO model
Brasil, US, Korea,
Australia,…
Europe
Critical interface
Elia Group
10
EU Market Model
Forward
Day Ahead
Intraday
Balancing
•Manage forward
price and vol.
Risk
•Arbitrage
•Maintenance
planning
•Investment
planning
•Manage STprice
and vol. Risk
•Close forward
positions
•Generation
optimization
(Make or buy)
•Volume
adjustment/fine
tuning (T°,
wind,…)
•Outage
management
•System security
11
Power Markets: general framework
Energy only markets
Forward
Multilateral market
Capacity market
Day ahead
Intraday
Balancing
Reserves
TSO is single buyer
12
Different electricity markets
Retailers
Retail Market
Wholesale Market
OTC and Exchange
Traders
Balancing
Market
13
European power exchanges
Products
Bilateral, brokered or
exchange-based
Physical or financial
delivery
Forwards, futures, options
and other derivatives
Years, quarters, months,
weeks, days, hours
Price per delivery zone (~
country)
14
Agenda
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•
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•
•
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Elia Group
Electricity market
Role of the different players
Elia products and services
Ancillary services
Balancing
Ancillary services
AS markets
Challenges & opportunities
Market actors
•
•
•
•
•
16
Producers
– Produce electricity
– Have a licence for production
Suppliers
– Sell the energy to the consumers
– Have a supplier licence
Traders
– Buy and sell the energy, but don’t supply
Grid Users
– Are connected to the Grid (Transmission or Distribution)
– Take energy off or inject energy in the Grid
Grid operators (Transmission / Distribution)
– Build and maintain Grid
– Guarantee security and quality of supply
– Control and manage balance, voltage, frequency and congestions
– Promote the opening of the market
16
Roles and responsibilities
Resource Adequacy
Energy Balancing
Ancillary
service
Responsibility: government/market
Tools:
• Measurement/ forecasts
• Capacity remuneration schemes
• Strategic Reserves
Responsibility: energy market actors/ TSO (residual)
Tools:
• Direct control (dispatchable load)
• Response to price signals (non-dispatchable load)
Responsibility: TSO as buyer - generation&load as provider
Tools:
• Direct control (dispatchable load) options (pre-contracted)
• DSOs involved, especially when Distribution grid congestion
issues
17
Elia’s tasks
Electrical system
management
High voltage infrastructure management
Market facilitator
Operation of the transmission network, including the management of
the energy flows and the organisation of ancillary services.
Management of the balance between injection and off-take of the
network around the clock (7 days/7, 24 hours/ day)
Maintenance of the transmission network and the implementation of
the necessary investements to develop and improve the network.
Grant access to the network on an objective and transparant basis.
Development of instruments and systems that should enhance the
good functioning of the market: hub, nominations, auction of
transmission capacity at the borders, energy exchange, market
coupling.
18
Elia is a market facilitator
Nominations
•
•
•
•
Transmission programme for every ARP and balance responsible party
Validation by Elia
Day ahead: normal procedure
Intraday: in the event of an imbalance, restore balance through exchanges on the hub
HUB
•
•
IT platform for bilateral exchanges between ARPs to safeguard the balance
Day ahead & intraday (intraday = in the event of unexpected imbalances)
Balancing: offset imbalances
Allocation of border capacities
Energy exchanges: purchase and sell electricity anonymously
•
•
Belpex: Belgian energy exchange with trilateral market coupling (Belgium – the Netherlands –
France); APX: energy exchange between Belgium, the Netherlands and the UK
Participation in Powernext, France’s energy exchange (via HGRT)
CWE and CWE-Nordic ITVC market coupling: launched 9 November 2010
19
Agenda
•
•
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•
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Elia Group
Electricity market
Role of the different players
Elia products and services
Ancillary services
Balancing
Ancillary services
AS markets
Challenges & opportunities
Product overview
In its interactions with the market, we distinguish following categories of products:
Services supplied to Grid Users
•
Connection to the Grid
•
Access to the Grid


•
•
Use of the Grid
Supply of ancillary services
Management of balance
Allocation of interconnection capacity
Services contracted with third parties
•
Supply of energy for ancillary services
•
Coordination of Injection of Production (CIPU)
21
Product overview
For each of them specific contracts are signed:
22
Principle BRP balanced day-ahead
(ARP = BRP)
23
Goal : BRP must be in balance
All Injections = All Off-takes (Sum IN = Sum OUT)
Injections :
 Import from NL/FR
 Purchase on HUB
 Generation/ injection
Off-takes :




Export to NL/FR
Sale on HUB
Offtakes for direct clients or DGO
Losses
24
Imbalance tariffs: objectives
•
–
–
–
–
•
Incentive to avoid imbalances
By good forecasting
By participation on the intraday markets
By use of own flexibility
Incentive not to source on real time market
=> Ideal situation no regulating power need to be activated by the TSO
Avoid excessive charges deterring market entry
–
ARP whose imbalances are zero on average and are not correlated to system
imbalance will pay small imbalance charges on average.
•
Incentives to execute requested regulating power
•
•
Transparency; real time publication
XB harmonization
Agenda
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Elia Group
Electricity market
Role of the different players
Elia products and services
Ancillary services
Balancing
Ancillary services
AS markets
Challenges & opportunities
General principles balance management
Electricity consumption = generation on interconnected network
otherwise: BLACK OUT!
Balance between electricity
consumption and generation: coordination
between TSO’s
Every BRP is responsible for
maintaining ¼ h balance between
total injections and total off-takes in
his portfolio
TSO ensures balance
in its control area
Balancing - Elia
•Means of maintaining
balance
R1
R2
R3
Control
Power stations: automatic VFR
Elia: automatic SCADA
Elia: manual
Time unit
ms
sec - min
15 min
•Primary reserve
•Secondary control (LFC)
•Incremental or decremental bids (non-contractual R3)
•Contractual tertiary reserves (production and interruptible customers)
•Inter-TSO emergency reserves
–
All the other small production
units (‘MW Action’)
–
Defence Plan: U-5%
–
Defence Plan: interruption
of load
–
Curtailing (in theory)
Agenda
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•
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•
•
•
•
•
•
Elia Group
Electricity market
Role of the different players
Elia products and services
Ancillary services
Balancing
Ancillary services
AS markets
Challenges & opportunities
System Services organised by Elia
•
–
–
–
–
–
–
–
Essential for quality and reliability of power supply: #products
R1, R2, R3: different kinds of reserve capacities to be activated by TSO
Interruptible customers ICH
Inter TSO support
Voltage regulation
Black start
Congestion relieve
Compensation for grid losses
•
–
–
–
TSO responsibilities
-> market design/architecture
-> contracting/tools
-> settlement/monitoring
•
Pass trough in tariffs – but good housekeeper principle (Regulatory scrutiny)
30
Primary Reserves
Objective: to maintain a balance between GENERATION and consumption (DEMAND) within
the SYNCHRONOUS AREA, using “primary controllers”
• The activation of Primary reserves is based on local frequency
measurment, installed by the supplier.
–
–
Accurancy of 10mHz
Minimum sample rate every 1-2seconds
• The minimum activation time for R1 is:
–
–
50% of the contracted value after 15seconds
100% of the contracted value after 30seconds.
31
Primary Reserves
Contracted capacity – transfer of obligations via sec. market
• Suppliers can exchange their contractual obligation via the
secondary market for R1 symm & R1 down.
ARP A
? €/MW/h
Bilateral transaction, price not
known by Elia
TRANSFER OF OBLIGATIONS
ARP B
R2 energy payment
@ Pact(B)
Reservation penalties
Capacity payment
@ Pres(A) €/MW/h
Activation penalties
Elia
•
•
•
Reservation penalties must be recovered from ARP B
=> Reservation penalties must become independent from reservation price!
=> Reservation penalties on QHs need to be independent from each other
32
Primary Reserves
R1 remunerations
• Remuneration for the reservation (capacity fee):
–
Paid on monthly basis
• KB 2013: 45€/MW/h for the symmetrical part
• Attention, in case of increased liquidity on the market, these prices are not
representative.
• No remuneration for the Activation: Energy up and energy down
are the same in the time.
33
Secondary Reserves
Principles
Objective: SECONDARY CONTROL maintains a balance between
GENERATION and consumption (DEMAND) within each CONTROL AREA
•
SECONDARY CONTROL makes use of a centralized AUTOMATIC
GENERATION CONTROL,
•
Via a setpoint, Elia ask to modify the active power of GENERATION SETS
in the time-frame of seconds to typically 15 minutes.
•
There are two types of regulation:
•
Upwards regulation: Elia can ask to produce more electricity than scheduled
•
Downwards regulation: Elia can ask to produce less electricity than scheduled
•
In case of multiple supplier, all suppliers are activated simultaneously and
pro rata based on the total volume secondary that can be activated
34
Secondary Reserves
Contracted capacity / selection
•
Contracted capacity:
– Elia Contracts 140MW of Secondary reserves on a yearly basis from different suppliers.
• Upwards/downwards regulation
• Peak / off-peak
–
The contracted capacity must be available 100% of the time.
• Possibility to exchange via a secondary market
•
Free Bids:
–
Every Supplier with an R2 contract can offer, day-ahead on quarterhour basis secondary
reserves to Elia @ an activation price.
35
Secondary Reserves
Contracted capacity / selection
•
Selection of Seconday reserves
– Day ahead, Elia selects 150MW
– The selection is done separately for upwards and downwards volumes
– The selection is done every quarter hour
– Economial ranking:
•
Lowest prices for upwards regulation (Elia buys energy and pays money to supplier)
•
Highest prices for downwards regulation (Elia sells energy and receives money from the
supplier)
36
Secondary Reserves
Secondary Market
• Suppliers can exchange their contractual obligation via the
secondary market.
ARP A
? €/MW/h
Bilateral transaction, price not
known by Elia
TRANSFER OF OBLIGATIONS
ARP B
R2 energy payment
@ Pact(B)
Reservation penalties
Capacity payment
@ Pres(A) €/MW/h
Activation penalties
Elia
•
•
•
Reservation penalties must be recovered from ARP B
=> Reservation penalties must become independent from reservation price!
=> Reservation penalties on QHs need to be independent from each other
37
Secondary Reserves
Activation
•
•
•
Elia transmits a dynamic and continuous setpoint.
The dynamic setpoint, represents the volume with which the supplier must
increase/decrease its production.
The supplier is required to keep the activated reserves equal to this signal.
– Maximum deviation of 15%
– The slope of the setpoint is defined by the total selected volume in a direction devided by 7,5
minutes.
– The dynamic setpoint is updated every 5 seconds.
38
Secondary Reserves
Remuneration
•
Remuneration for the reservation (capacity fee):
– Paid on monthly basis
•
KB 2013: 22,5€/MW/h in one direction
•
Attention, in case of increased liquidity on the market, these prices are not representative.
• Remuneration for the Activation:
– Remuneration for the energy (separate for upwards and downwards for each QH)
– Day-ahead the supplier communicates the volume of reserves + the price of
activated energy. These prices are subject to price caps
•
Price for upwards energy < the fuelcost of a standard CCGT +40€
•
Price for downwards energy > 0€
– These prices are used for the selection of R2
39
Tertiary Reserves
Principles
Objective: Reserve power with which ELIA can restore the balance between the supply of and demand
for active power within the Control Area.
•
Specifically: “A third line of reserve to resolve major imbalances”
–
–
–
Cope with a major or systematic imbalance in ELIA control zone
Offset a significant frequency variation
Resolve major congestion problems
•
Only upwards
•
Activated manually
•
To be activated within 15 minutes
•
400MW from Production units
40
Tertiary Reserves
Contracted capacity
•
Contracted capacity:
–
Elia Contracts 400MW of Tertiary reserves on a yearly basis from different
suppliers.
• Upwards regulation
• Peak / off-peak
–
•
The contracted capacity must be available 100% of the time.
Free bids: Free bids are managed via the CIPU contract (coordination for
injection of production units)
–
–
Principle: all production units that are minimum stand-by (not in revision) offer
their capacity to Elia on a quarter-hour basis.
Upwards and downwards volumes.
41
Tertiary Reserves
Activation
•
Activations of tertiary reserves are based on a technical-economic merrit
order:
–
–
•
First activation of free bids, merrit-order
When all free bids are used, activation of R3, merrit order
Manual activation by the system operation via a communication platform
“Probid”
42
Tertiary Reserves
Remuneration
•
Remuneration for the reservation (capacity fee):
–
Paid on monthly basis
• Cost-based + margin
•
Remuneration for the Activation:
‒ Energy delivered
• ~ incremental in procedure nomination of daily bids (D-1 for day D) in CIPU Art.13.2.5
‒ Startup-costs
• ~ as specified in CIPU (depending on fueltype & cost)
• If and only if
•
Pnom ≤ Pmin before and after activation quarter (calculated as average on 4 qtrs)
•
Startup-time <= 15 minutes (=M)
•
No FO during bid
43
Interruptible demand
Principles
•
Objective: Reserve power, with which ELIA can restore the balance between the supply of and
demand for active power within the Control Area.
•
a grid user interrupts a part of its offtake in a timeframe of 3minutes
•
An interruption = lowering the actual offtake of that moment below a contractual fixed value,
SL(“Shedding Limit”)
P(offtake)
SL
Activation period
•
•
time
3 different variations of the product
–
SLA2: 12 activations of maximum 2 hours
–
SLA4: 4 activations of maximum 4 hours
–
SLA8: 4 activations of maximum 8 hours
Different Accespoints per contract are possible. (open for aggregators)
44
Interruptible demand
Contracted capacity
•
Contracted capacity:
–
Elia Contracts yearly 261MW from different suppliers
• Upwards regulation (interuption of offtake)
• Peak/offpeak/weekend
–
In average 100% availability during the year:
• the average reserve made available over the whole year must be at least 100%
• 87 hours(1% of the time) unavailability is allowed.
45
Interruptible demand
Activation
•
Elia activates, by remote control, a device located in the grid user’s process
•
When this signal is received, the grid user’s offtake must drop below the shedding limit
within 3 minutes after Elia’s request;
•
–
–
–
The offtake must remain below the SL until Elia send a deactivation signal of the
maximum contractual activation time is reached:
SLA2: maximum 2 hours
SLA4: 4 maximum 4 hours
SLA8: 4 maximum 8 hours
•
Between 2 activations is at least 24 hours
•
Elia cannot activate in case the Supplier has communicated unavailability to Elia (max
87h/year)
46
Interruptible demand
Remuneration
•
Remuneration for the reservation (capacity fee):
–
Remuneration for the actual reserve power made available through the year
•
Reserve power made available= average offtake of the year for the considered
period(Peak/Offpeak/Weekend) – Shedding Limit for the considered period
P(offtake)
Average offtake
SL
time
–
Monthly fixed fee for the contracted reserve Power
–
Settlement at the end of the year: average reserve power made available
1. Surplus: extra remuneration of 20% of the contracted price
2. Less than 3% missing reserve power: 100% recovering of the remuneration
3. More that 3% missing reserve power: 120% recovering of the remuneration reserve
power not made available (recuperation of the remuneration + 20% penalty)
Average Reserve power made available / Contracted reserve power
(2)
(3)
0
97
(1)
100
47
Interruptible demand
Remuneration
•
Remuneration for the Activation:
–
Remuneration for the energy
•
The activated energy is considered as the difference between the actual offtake and the
nomination, capped a the difference between the SL and the nomination.
•
Price= max [ 75€/MWh ; 108%*Belpex ]
Offtake
Remunerated
energy
Activation
Deactivation
48
Activation of ancillary services: Balancing
• All selected secondary reserves (150 MW) are activated proportionally
to obtain maximum flexibility with available R2 portfolio
• If the system imbalance exceeds 150 MW manual reserves are
activated in a merit order (Free bids)
• Once all free bids are exhausted, Elia start with activations of R3
production
• R3 load shedding contracts can only be activated 5 times a year
• InterTSO emergency reserves are activated once all available
reserves in the control area are exhausted
• Generally:
Other System services
Black start – MVAR
• Black Start
If black out occurs….
• Restore critical load (10%) after 7 hours
• Restore complete load after 14 hours
• For 5 zones in Belgium (NW, NE, SW, SE et Centre) one black start unit of at least
200MW is foreseen
• MVAR – Voltage
•
•
MVAR needed for quality of voltage – local
Different sources:
•
Investments: Self (capacitive) of condensator (inductive) (GD)
•
Contract producers (ENMAN)
50
Grid losses
• Federal grid losses
• Federal Grid code (380/220/150 kV)
• Grid losses need to be compensated in natura: ARP’s need to inject a
% more than the offtakes.
• +/- 950 GWh a year
• Currently +/- 1%
• Regional grid losses
• Regional Grid code (70/36/30 kV)
• Grid losses need to be purchased by the transport system operator
• +/- 500 GWh a year
51
Agenda
•
•
•
•
•
•
•
•
•
Elia Group
Electricity market
Role of the different players
Elia products and services
Ancillary services
Balancing
AS markets
Ancillary services
Challenges & opportunities
Belgian Ancillaries market
• 1 big player (≈65% production capacity)
• Few providers of AS
• Nuclear represent a dominant share but participation to ancillaries is
limited
• No modern coal plants with high running hours
• Continuous decrease of running hours of CCGT’s
53
Lack of liquidity
•
Pressure on reserves (and downward balancing energy) in Belgium
• Underlying facts:
– Penetration RES, increasing need of reserves but not delivering
System Services, and decreasing availability of flexible plants (CCGTs less
& less in operation, out of merit order)
– Market perceives price for System Services as too low and products/
sourcing process as inflexible (1Y cycle)
– Regulatory framework acts as a disincentive.
– > 50% of R3 (Tert. Reserve) could close in next 5 years
– More frequent and severe incompressibility situations
Possible solutions:
working on different axis
Improve System Imbalances at the source (ARP):
•
•
•
•
Single marginal imbalance tariff since 01/01/2012
Enhance balancing publications: e.g. wind and solar forecastings
Continued market integration (NWE intraday, etc.)
Etc.
Diversify assets providing balancing services:
•
•
•
•
•
In 2013 - R1/R2 contracts revised to allow a variety of assets
Load participating in supply of primary control (2013)
Participation of aggregators in the supply of interruptible load (2013)
RES,
Storage
Realise XB-synergies:
•
•
•
•
•
Participation of BE to iGCC (imbalance netting with 6 countries incl. DE)
Intensive participation in the Network code drafting team
Study into potential BE-NL XB synergies (with Tennet NL)
Further investigations for iGCC evolutions
Etc.
55
Agenda
•
•
•
•
•
•
•
•
•
Elia Group
Electricity market
Role of the different players
Elia products and services
Ancillary services
Balancing
Ancillary services
AS markets
Challenges & opportunities
Physical reality
Forecast –
actual: 5 GW
Max-min generation :
23 GW
Forecast – actual : 2 GW
Delta peak in 1 week: 9 GW
In Belgium:
Wind ~1400 MW
PV ~2200 MW
57
Low wind conditions (Germany)
58
Flexibility will be needed and Valued!
1 week wind generation in Germany
Examples: important differences
between minimal and maximal
generation from intermittent
sources
1 week solar generation in Belgium
 TSOs need flexibility to keep
the balance between supply
and demand, by mobilizing all
potential sources of flexibility
within the grid, generation and
the demand side!
 In the real-time balancing market
 In the Intraday market
 Outside the balancing market, but in
timeframes between DAY AHEAD and
REALTIME: Potential for strategic
reserves
59
Courtesy to Boston Consulting Group
60
Baseload Prices in Be and neighbours
• Continuing general downwards trend of prices
61
Courtesy to Boston Consulting Group
62
.. System Adequacy & EU Market model
… while shale gas in the US pushes gas out of the market in the EU
and support mechanisms drives RES investments…
2013: EON to close 11 GW, Gdf to close…, etc
x 1,4
 EU States moving quickly towards “capacity
markets”, “strategic reserves”, …
Daniel Dobbeni | 28-30.10.2013 | Page 63
.. System Adequacy & EU Market model
Concern:
How to ensure reliability when decisions are taken in an uncoordinated way?
How to avoid TSOs being blamed for this lack of coordination?
Source: ENTSO-E
Daniel Dobbeni | 28-30.10.2013 | Page 64
Storage
• Storage often considered as the silver bullet
• Able to provide short term fexibility
• Weak business case for arbitrage on power market
• Requires high investments
65
Technical performances from a grid perspective
•
•
•
•
•
Storage brings flexibility:
Easy start and stop
Fast ramping rates
Source of Ancillary services
Optimizing grid use – investment deferral
•Constraints:
• Limited energy content
• Mechanical based storage needs minimum generation or load
•Developments:
• Multi purpose optimizing tools
• Cost decrease
66
Belgian electricity system
Cases of interest
Energy Island (Offshore – Belgian Coast)
•
•
•
2,5 km diameter
10 m above sea level
300 MW
http://gtms1303.wordpress.com/2013/01/28/an-artificial-energy-atoll-at-the-belgian-coast/
•
Potential services:
• Reserves (e.g. R2)?
• Arbitrage?
• Bulk storage for integration of off-shore wind?
67
Storage in Europe
Elia current position
Storage offers resources for:
• Balancing (Balance resp. party)
• Ancillary services (TSO use)
In competition with other resources:
• Flexible generation
• DSM
Prefered path:
• Technology neutral markets for Ancillary services
• Multi purpose storage has best perspectives
Last resort: if market doesn’t deliver, regulated investment not excluded.
68
Thank you !
69

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