Questions & Answers
The Nordic CCM project publishes the received questions and answers below. To post new questions, please email email@example.com.
For the abbreviations used, please see the List of abbreviations.
The ATC extraction method
Questions received within the consultation of the ATC extraction method in 2021
Q: What are the optimization variables in addition to the capacities Cn and Cn,o? I was thinking that the net positions could be part of the optimization variables but you would then end up with one particular set of net positions in the optimal solution which is not what is desired. Basically, I have difficulty understanding how to capture “for all possible net positions” in an optimization setting.
A: No other variables besides the Cn and Cn,o are in the ATCE method. The ATCE method takes the DA FB domain as input to compute the DA NTCs. Under the ID allocation, the extracted NTCs are the constraints, as inputs, for the single intraday market coupling to determine the net positions, and all necessary grid constraints are already represented in the FB domain. If further constraints are needed on the net positions as inputs to the single intraday market coupling, those will be allocation constraints, to be considered directly by the intraday market coupling algorithm.
Q: How do capacities Cn and Cn,o relate to the constraints? Are they included in the RAM term of cross-border CNECs?
A: The Cn and Cn,o are the exogenous variables in the ATCE optimization. This optimization needs to respect the FB constraints, which are on the CNEC level. The extracted NTCs (i.e. Cn and Cn,o, being the results of the ATCE optimization) are on the bidding zone border level. The formula z2zPTDF * exchanges (i.e. exogenous variables) < RAM links the CNEC level z2zPTDF to the bidding zone border level exchanges. The Cn and Cn,o are not directly applied to the RAM of any CNECs.
The FB domain is modelled in the ATCE as z2zPTDF+ * C <= DA_RAM, where z2zPTDF+ refers to the z2zPTDF applying the positive PTDF filter and the threshold parameter. C refers to the variable vector of Cn and Cn,o.
In the mathematical terms, the inequality constraints are modelled as A*x<=b.
- A is the z2zPTDF+
- x is the vector C containing Cn and Cn,o variables
- b is the DA_RAM
Corresponding to the matrix implementation, the z2zPTDF+ is a m-by-n matrix, m is the number of constraints, e.g. the number of presolved CNECs. n is the number of directional borders. Thus, the C is an n-by-1 vector consisting of [Cn and Cn,o], and the DA_RAM is also a n-by-1 vector.
Capacity calculation (parameters / capacity)
Q: Remedial Actions (RA), how are they included in the capacity calculation process?
A: Non-costly RAs are always considered in the capacity calculation process. For the costly RAs it will be assessed whether they are available and can be utilized to increase the capacity on internal CNECs or internal combined dynamic constraints, and whether it is economically more efficient to apply redispatch or to submit the internal CNEC or internal combined dynamic constraint to the allocation mechanism without the impact of redispatch being reflected.
Q: Domain Validation – what is it?
A: It is a quality check performed by the TSO operators to validate the capacities calculated by the coordinated capacity calculator (Nordic RSC).
Q: What would happen if you are forced to use intuitive FB?
A: Some part of the benefits of introducing FB are discarded. ACER decision 04/2020 removed the possibility of having an intuitive patch in the market coupling algorithm; as such, the application of FB intuitive is no longer an option.
Q: Will there be overloads in FB?
A: There are no overloads on monitored CNECs or combined dynamic constraints (i.e. the CNECs and combined dynamic constraints taken into account in the market coupling) in the DA market outcome, but due to changing conditions close to real-time, there may be overloads in the operational hour that are mitigated by means of redispatch.
Q: Can you have negative capacity under FB?
A: Yes; however, when a negative RAM is calculated for the DA timeframe, the RAM value shall be set to zero and the potential overload shall be managed by redispatch. This is different for the ID timeframe, where a negative RAM will be applied in the allocation.
Q: In regard to GSK strategies; what are the choices to be made by the TSOs?
A: As we have a zonal market system, the TSOs need, for each time frame, to make assumptions about how a variation in a zonal net position will be distributed amongst generating units and loads in the bidding zone. It should be noted though, that there is no difference between the NTC and FB world in this respect, and also – it is done already in today’s NTC calculations – though not as formalized nor coordinated. In FB capacity calculation, all uncertainties in the capacity calculation process add up in the RM, including the uncertainties linked to the GSK. As such, the different GSK options can be assessed by computing the corresponding RM values, reflecting the uncertainty that is linked to the use of the different GSK strategies, and to opt for the one that brings the lowest uncertainty.
Q: Is the GSK system prone to gaming?
A: The GSK in itself does not affect how a producer is selected over another in the market coupling, as such it is not prone to gaming.
Q: Will the operational expertise and experience be part of the FB capacity calculation process?
A: Yes, but the FB capacity calculation is a more formalized methodology than the one applied today so that there is less dependency on operator experience. The TSOs are, however, responsible for providing the input data, as well as for validating the results from the capacity calculation – the FB capacity domain.
Q: There is a perceived disadvantage that under FB internal constraints can be taken into account, as this is not transparent. Would it not be preferable to countertrade or redispatch and have cross-border constraints only?
A: Both FB and NTC are equally able to take the same internal constraints into account. With NTC being a “black box” where scenarios and internal constraints are captured in one single value on each bidding-zone border, the level of detail under FB is higher, and the use of internal constraints more transparent.
As described in Article 8 of the CCM, to avoid undue discrimination between internal and cross-zonal flows, the TSOs will take actions to meet the requirement from Regulation 943/2019. For the costly RAs it will be assessed whether they are available and can be utilized to increase the capacity on internal CNECs or internal combined dynamic constraints, and whether it is economically more efficient to apply redispatch or to submit the internal CNEC or internal combined dynamic constraint to the allocation mechanism without the impact of redispatch being reflected.
Q: How does the ACER recommendation on internal constraints affect the Nordic FB methodology and what happens if you are not allowed to have internal CNEs affecting cross-border exchange?
A: The Nordic CCM follows the Regulation 943/2019 and the ACER recommendation 01/2019. This is elaborated upon in Article 8 of the CCM.
Q: Are stability / dynamic issues simulated in offline grid models?
A: Online grid models are only used for the real-time system operations. The CGMs (Common Grid Models) created by the TSOs together with the RSC are intended for offline study purposes, such as capacity calculation. The CGMs currently developed do not allow for dynamic security analysis yet; those studies are currently performed on dedicated dynamic grid models. The development of a dynamic CGM is foreseen after FB go-live, as indicated in Table 1 in Article 26 of the DA/ID CCM.
Q: What will happen with unforeseen outages of e.g. power plants?
A: If the information is available before the DA / ID capacity calculation starts, it will be taken into account. Please note that an unforeseen outage may trigger a recalculation of the ID capacity.
Q: Will the PTDF matrix be stable for all 24 hours?
A: No, they will vary from hour to hour, as grid topology and grid usage changes over time.
Q: How to translate what is happening in the real system to the FB world (e.g. outage of a line or generation unit)?
A: The UMM (in the future NUCs) system may need to be adjusted to make it ‘fit’ to the FB world. This is under discussion with stakeholders, under the umbrella of the Nordic CCM Stakeholder Group meeting.
Q: To what extent are the exchanges with Germany and the Baltics influenced by a Nordic FB?
A: A so-called advanced hybrid coupling will be used. A DC link (being a fully controllable active power flow) is an NTC by nature. Combining these NTCs with the FB methodology applied for the AC grid is done by means of the advanced hybrid coupling: the converter stations of the DC interconnectors are modelled as ‘virtual’ bidding zones in the FB system (a bidding zone, without order books though), having their own PTDF factors reflecting how the exchange on the DC link is impacting the AC grid elements. Or in other words: the flows on the DCs are competing for the scarce capacity on the AC grid, like the exchanges from any of the other bidding zones (SE1, SE2, NO1, FI, and so on). The exchanges with Germany and the Baltics are thus competing for the scarce capacity in the Nordic grid like the exchanges within the Nordic synchronous area do.
Q: There are currently no phase shifters in the Nordics. If such a device is installed, does it fit in the FB methodology?
A: Phase shifters can be implemented in the FB method in the same way as a DC link, where the allocation mechanism sets the power flow on the controllable device.
Q: Under FB, will the capacity on the DC cables deviate from the nominal capacity (e.g. due to the west-coast cut)?
A: No, the capacity on DC connectors will – in principle - be the nominal value; it is the market clearing algorithm that determines the optimal flow on the DC cable. By applying the advanced hybrid coupling, the DC links compete with all other exchanges to make use of the scarce capacity in the AC grid. A restriction on the west-coast cut may in this way have an impact on the resulting flow on the DC cable.
Q: Loop and transit flows under FB and NTC: are they taken into account?
A: Loop flows originate from an internal bidding zone trade, and are taken into account in the FB capacity calculation, as they are part of the CGM basecase. Loop flows have however no impact (on RAM) in the market coupling / allocation. Transit flows originate from exchanges between bidding zones, and their impact is taken into account in the FB market coupling / allocation.
Q: Are losses in the AC grid taken into account in the FB model?
A: No, as this would require a non-linear market model.
Q: Will you remove so-called collinear constraints?
A: The TSOs will perform a presolve to remove redundant constraints before providing them to the market and the NEMOs. Collinear constraints surfaced in CWE in the context of the German-Austrian bidding zone split. They originate from the creation of virtual CNEs. This procedure is not applied by the Nordic TSOs.
Q: Regarding DC links - how will ramping constraints be handled in FB?
A: They are treated as separate allocation constraints and are provided to the NEMOs to be taken into account in the market coupling. They are not part of the, or expressed as, FB parameters.
Q: Can you confirm that the FB domain will always be larger than the NTC domain?
A: Yes, from theory, and yes from a practical point of view, when both the FB and NTC are subject to the same level of operational security.
Q: In case of better forecasts, could the NTC domain – and the TSOs’ choices in sharing capacity on borders - be more accurate?
A: Yes, but the NTC concept in itself is limited. With better forecasts and grid models, the TSOs may provide a better NTC domain.
Q: If you were to prohibit counter-intuitive flows, would this be done in the PTDF matrix?
A: No, it would be an additional (allocation) constraint imposed to the market coupling algorithm, and as such reduce the size of the FB-domain.
Capacity allocation (market results)
Q: How are you able to perform market simulations today?
A: We are using the simulation facility in Euphemia, but with a limited geographical scope.
Q: What setup has been used in the market simulations?
A: Historical order books and capacities in the CWE, UK, Baltics, Poland, and the Nordics for the NTC market simulations (today’s reference situation). For the Nordic FB market simulations, the same setup is used but the NTC capacity constraints in the Nordics are replaced by FB constraints.
Q: During parallel runs, will you use both FB plain and FB intuitive to be able to compare the two?
A: No. It is the assessment of the Nordic TSOs that FB Intuitive (FBI) is not in line with legislation and decreases the welfare generated in the day-ahead market. The Nordic TSOs put the following main argument forward to support this assessment: to suppress non-intuitive flows, FB-intuitive decreases the capacity domain below what can be justified based on arguments of operational security and economic efficiency, hence FBI is not compliant with Regulation (EC) No 714/2009, point 1.7 of Annex I and as such it must be concluded that FBI leads to undue discrimination.
ACER decision 04/2020 removed the possibility of having an intuitive patch in the market coupling algorithm; as such, the application of FB intuitive is no longer an option.
Q: Currently there is quite often one single price in the Swedish price areas; FB may change this. Will TSOs provide hedging instruments for the retailers?
A: Whenever there is a price difference under FB, most area prices will differ, but the differences between the area prices will be smaller. At the other hand, we would expect more hours with a single Nordic price (more price convergence). As such, the system price forward as a hedging tool may prove even more useful in the FB world. The link to the FCA implementation is made in this respect, where the introduction of transmission rights is currently under discussion. NRAs will decide whether there are sufficient hedging possibilities inside bidding zones and between bidding zones or if additional measures are needed.
Q: If you change the maximum price at the PXs will the outcome of the optimization change?
A: No, in essence not (unless the market clears at the maximum price).
Q: In reference to the Belgian situation; even when the Belgium price is at 3000 EUR, there is a risk that Belgium doesn’t get the energy; could this happen in the Nordics?
A: Indeed, in the FB mechanism it is not only the bid price, but also the impact of a bid on a network congestion (by means of the PTDF factors, aka “flow factor competition”) that determines whether or not a bid is contributing to the maximum social welfare and is accepted. The behaviour mentioned, is mainly linked to the non-equally-sized bidding zones in CWE, and to the price bounds implemented in the allocation mechanism. The bidding zones in the Nordics are more equally sized, and a mitigation (‘patch’) has been implemented in Euphemia that prevents price taking orders (orders submitted at the price bounds set by the exchanges) to be curtailed because of “flow factor competition”.
Q: What is the optimization that will be used in the FB allocation mechanism?
A: It is the same as today: it is the social welfare (consisting of consumer surplus, producer surplus, and congestion rent) that is optimized. The change is introduced through the constraints to the optimization. NTC applies constraints to the flows on each bidding zone border (NTCs), and FB introduce constraints on the maximum allowed flows on CNEs (PTDF matrixes).
Q: Why is the Congestion Revenue (CR) part of the social welfare?
A: The objective function of the NTC and FB market coupling is the same: it is the social welfare that is maximized. Congestion revenue as such is not maximized; congestion revenue is a natural part of the social welfare when transmission capacity turns out to be a scarce good, expressed by the price difference.
Q: Are the simulation results – so far - in line with those in CWE, when they compared FB and NTC?
A: Yes, they are. Overall, FB provides more capacity, higher DA welfare, and leads to a lower price spread between the bidding zones. An overall income redistribution has been noted: lower congestion income, lower producer surplus, and a higher consumer surplus (compared to the current NTC world), this redistribution though naturally varies between scenarios and locations. FB may also allow for higher exports from the Nordics to the continent, compared to today’s NTC world, leading to a higher Nordic producer surplus.
Q: It has been mentioned that counter-intuitive flows have a significant impact on the welfare. What will be your recommendation on this one?
A: This is an integral part of the FB system. The counter-intuitive flows will relieve congestions in the system, thereby allowing for flows to be induced by market exchanges leading to an overall higher socio-economic welfare.
ACER decision 04/2020 removed the possibility of having an intuitive patch in the market coupling algorithm; as such, the application of FB intuitive is no longer an option.
Q: In general: what do you think about the effect of flow based on the Nordic system versus CWE? Since we have a lot of price areas already, while Germany for example is just one big area with a lot of internal bottlenecks; will the effect of flow based be limited here? Are most of the bottlenecks quite good handled in the price area division already?
A: In theory, the FB approach is more efficient with more bidding zones especially for meshed grids. However, the incremental benefit of adding more bidding zones declines. Adding more bidding zones with the current NTC system may not be efficient, compared to the implementation of the flow based approach. This is due to the extended grid information that is provided to the allocation mechanism in FB. In addition, in the FB approach, the interdependencies between cross-border trades and the flows induced on the CNECs and combined dynamic constraints are taken into account in a better way compared to the NTC approach.
Q: FB-intuitive - did you study the impact of non-intuitive flows on the Financial Market?
A: We did study the impact of FB intuitive vs FB plain in terms of socio-economic welfare, but not to the financial market as such.
Q: How will the system price be calculated in FB?
A: As today - calculate the price without constraints (no difference if it is NTC or FB constraints that are removed or put to a very high capacity)
Q: Will the auction structure on the DA be changed?
A: No, it is at least not within the scope of this project.
Q: ID in CWE is not functioning well, what preventative measures are being done in the Nordic methodology to not end up in the same situation?
A: When the CWE region went live with the FB DA system, they applied DA left-over capacity as initial capacity for the ID market, without having a dedicated ID capacity calculation based on updated grid models. CWE is in the process of having a dedicated ID capacity calculation. This is what is foreseen in the Nordic region as well: after the ID gate opening, a dedicated capacity calculation based on updated input data (D-1 CGM) is to be performed. This should prevent some of the claimed issues mentioned for CWE.
Q: FB is the better capacity calculation methodology close to real time (ID, balancing). Why start with DA instead of ID?
A: The majority of the trades occur on the DA. The ID platform XBID cannot support FB yet. As the DA platform Euphemia already supports FB it has been decided to harvest the benefit of FB as soon as possible.
Q: There is a risk to end up in a corner of the FB domain after the DA stage, and that the ID trade is stuck.
A: Capacity calculation is a continuous process: by using the latest information available, the most capacity is provided for the upcoming timeframe(s). Or in other words: for the ID timeframe dedicated grid models will be created and dedicated capacity calculation will be performed to serve the ID market as good as possible. Note, in this respect, that an integral part of the capacity calculation is the assessment of the uncertainty that the TSOs are facing in their capacity calculation. It is expected that the uncertainty for the DA stage is larger than that for the ID stage, as better forecasts are available for the ID and less assumptions need to be made. The Reliability Margin (RM) reserved at the DA stage can thus partly be released on the ID stage. Please note that this provides an automatic balance: if the variability in the system increases, a larger need for ID capacity may be foreseen. This larger variability is likely to increase the uncertainty for the TSOs in their DA capacity calculation: a larger DA RM needs to be taken into account, thereby shifting more capacity to be released at the ID stage.
Q: If you use non-intuitive FB in the DA market, how will this work out on the ID market?
A: DA and ID market flows can be different, like today. The ID capacity will result from a dedicated ID capacity calculation. As such, there may be ID capacity available or not.
ACER decision 04/2020 removed the possibility of having an intuitive patch in the market coupling algorithm; as such, the application of FB intuitive is no longer an option.
Q: Is there less capacity for the ID after FB is introduced?
A: On the contrary to today, where the ID capacity is left-over capacity, the ID will have its own dedicated capacity calculation based on dedicated CGMs. But assuming that FB is more efficient on the DA, we might face situations where there is less capacity left for ID (in certain directions).
Q: Is it true that the optimal solution (in terms of welfare), referred to, holds only for the spot market?
A: Indeed, the welfare assessed is ‘day-ahead welfare’ only. Welfare considerations of subsequent market timeframes, ID and balancing, are not considered.
Q: How to split capacity between DA and ID?
A: Capacity calculation is a continuous process: by using the latest information available, the most capacity is provided for the upcoming timeframe(s). Or in other words: for the ID timeframe dedicated grid models will be created and dedicated capacity calculation will be performed to serve the ID market as good as possible. Note, in this respect, that an integral part of the capacity calculation is the assessment of the uncertainty that the TSOs are facing in their capacity calculation. It is expected that the uncertainty for the DA stage is larger than that for the ID stage, as better forecasts are available for the ID and less assumptions need to be made. The Reliability Margin (RM) reserved at the DA stage can thus partly be released on the ID stage.
Q: Shouldn’t there be the same capacity calculation methodology (CCM) for DA and ID?
A: This is indeed the target: FB for both DA and ID. The CACM requires that a CCM is proposed for both the DA and the ID; they can be different. As the first release of the XBID solution does not support a FB model, FB ID is not feasible initially, and an ATC extraction will be applied as an intermediate solution for ID.
Q: Can FB work with a continuous ID trading mechanism?
A: From a theoretical point of view, FB parameters (PTDFs and RAMs) can be used as constraints in a continuous ID trading mechanism.
Q: The SH information tool shows the border flows based on the Nordic NPs. If you plug in the DA NPs that are determined by the PXs, can you assess the expected ID capacity?
A: The initial capacity provided to the ID market at 15.00 D-1, is left-over capacity from the DA market. In a FB ID setting, this would be the DA FB domain shifted by the DA market outcome. In an ATC ID setting, this would be the DA FB domain shifted by the DA market outcome from which an ATC domain is extracted. After that, e.g. for later ID auctions (22.00 D-1, or 10.00 D) a new capacity calculation may be performed, based on an updated / dedicated (D-1 or ID) CGM.
Q: ID ATC extraction. In case we have counter-intuitive flows in the DA, and we extract ATCs, does this offer some opportunities for arbitrage on the ID?
A: If the DA market ends up with counter-intuitive flows, it indicates that there is a congestion in the system. The ID capacity that will be provided for the gate opening at 15.00, will be the left-over capacity from the DA market (no dedicated ID capacity calculation can be performed in that limited amount of time). In other words: it will be the DA FB domain, that is shifted by the DA market outcome, that represents the left-over capacity for the ID gate opening. In case of a FB ID auction, the left-over capacity is used as is. In case of ID ATC continuous trading, an ATC domain needs to be extracted from this left-over FB domain. As there is a congestion in the system, on all directional borders that would contribute to the congestion no left-over capacity is available; in the other direction there may be capacity though. As such, no arbitrage options will appear from this left-over capacity. From the dedicated ID recomputations, some additional capacity may be released.
Q: FB ID: when will this be applied?
A: We may face a situation as depicted in the image below: three ID FB auctions, with ID ATC continuous trading in between:
Q: How often will you recompute the ID capacity?
A: This depends on the updates of the CGM. Please note that the timeline depicted above does show some natural points in time to re-compute the ID capacity (22:00 D-1, and 10.00 D).
Data provision and tools provided
Q: Are you able to do an ATC extraction from the FB domain (for information purposes)?
A: Yes, but you have to be aware that the ATC domain extracted from the FB domain is arbitrary – there is actually an infinite solution space. Also, the extracted ATC domain is by default smaller than the FB domain.
Q: Will the shadow prices of the internal CNECs and internal combined dynamic constraints be published?
A: This information will be shared with the NRAs for their monitoring purposes.
Q: What is the shadow price?
A: The shadow price is a by-product of a constrained optimization; there is a shadow price for each constraint in a constrained optimization. Within the FBMC context, where the FB constraints act as constraints in the market optimization, the shadow price of a FB constraint indicates the social welfare increase when we would increase the margin of the FB constraint with 1 MW. It is a kind of ‘price-tag’ that is labelled to the FB constraint on a specific hour and day.
Q: For how large area are you creating prototype CGMs?
A: The entire Nordic area (SE,NO,DK,FI) is included in the prototype CGM. The market simulations though, cover a larger area.
Q: During the external daily parallel operation, will the FB capacities and simulated market results be published on a daily basis?
A: Yes, it is of utmost important to have this in place at that time.
Q: Is input expected from the generators to build the D-2 CGM?
A: No, it is a TSO-only forecast, for the moment.
Q: Does the FB model in the SH information tool include the voltage and dynamic limits?
A: Yes, it does, expressed as Fmax on combined dynamic constraints.
Q: In the data to be published, can you identify from the hourly results if a constraint is internal or cross-border?
A: Even if constraints are anonymized, the geographical information on the bidding zone, or the bidding zone border, where the CNEC or combined dynamic constraint is located, will be published.
Q: What are bidding zones DK1A and NO1A?
A: DK1A and NO1A are virtual areas (DK1A is a sum constraint on the flow on Skagerrak and Kontiskan. NO1A is a sum constraint between (NO5 and NO2) and NO1), not having producers /consumers, that are applied under the current NTC.
Q: Will the PTDFs published in the Nordics contain the names or unique IDs (from day to day) for CNECs or combined dynamic constraints? Indeed, “decoding” of the PTDFs seemed to be a big topic in CWE.
A: ACER decided on the Nordic LT CCM (decision 16-2019). In their decision, ACER aligned the data publication to that of their decision on the Core DA/ID CCM (decision 02-2019), but there is the exemption added by ACER: “If a TSO provides evidence to its national regulatory authority that the provision of anonymised stable identifiers is not sufficient to prevent the identification of network elements, and is therefore not compliant with its national legislation, they can be exempted from the requirements of stable identifiers pursuant to Paragraphs 3 and 4.”
The Nordic TSOs, in their second amendment of the DA/ID CCM, copied in the same articles on data publication that ACER introduced in the LT CCM.
Q: Will the common grid model be available?
A: It is not likely that the common grid model will be publicly available.
Q: What about information about transmission outages that are published in UMMs today? How will this be communicated in FB? One of our biggest concerns is how we will be able to assess the effect of grid outages – both in our short term and long term price models. This is both due to outages and other changes in the grid (e.g. new lines).
A: Outage information will be published, but it is not yet clear in which format the information will be provided. This is due to the change from NTC to FB, where capacity has a different meaning compared to the current NTCs.
Q: Is there a possibility to have 10-14 days forecast for the PTDFs published?
A: All published capacities, DA, ID and long term will be derived based on available common grid models. As of today, there are no plans for the creation of CGMs within the timeframes between daily and monthly. Thus, it is not foreseen to publish PTDFs for 10-14 days forecasts. However, the monthly forecasts, adjusted by information for planned outages which will be published, might provide a simple basis for such forecasts.
Q: Will the PTDFs be published in the external parallel run?
A: Yes, the hourly FB parameters (amongst others), being PTDFs and RAMs, will be published in the Market Information Tool (MIT).
Q: With regard to transparency – will you publish the same information as on the continent?
A: With the Nordic LT CCM being referred to ACER, ACER copied in many elements from their decision on the Core DA/ID CCM, a.o. on the publication of data. The Nordic TSOs are now in the process of amending the DA/ID CCM in line with ACER’s decision on the LT CCM. Please note that ACER added an additional paragraph to the “publication of data” Article in the Nordic LT CCM (that is not present in their decision on the Core DA/ID CCM):
Q: When will the ATC extracted capacities be published, so that we can compare the values to what we have today?
A: The ATC extraction should be up and running in the second part (last 6 months) of the external parallel run, but please note that we will use the ATC extraction to assess ID (being left-over) capacity, this does not make it easy to compare it to today’s operational (DA) NTC values.
Q: Transparency is now aligned to Core, except for the Svk/SN law prohibiting the publication of the names / unique IDs? That is troublesome. We need at least the indication of the bidding zone and a consistent ID to be able to track and trace the (internal) CNEs.
A: Indeed, transparency is now aligned to Core, except for the Svk/SN law prohibiting the publication of the names / unique IDs.
Other questions linked to CCM
Q: What is the difference between CACM & FCA?
A: They are different legal texts (guidelines), CACM handles DA & ID, FCA relates to the forward capacity allocation, thereby handling the long-term timeframes.
Q: Why wait 1.5 years (or longer) after CCM approval until the start of parallel runs?
A: We need to develop IT tooling and internal processes before we can start operating the new CCM, however we are already now performing calculations in the prototype tools developed within the CCM project. If the final tools are realized earlier, we can naturally start earlier – there is no reason in itself to wait for the planned date, but we estimate that this is the time needed for IT and business development.
Q: Are you using D-2 information for the DA capacity calculation?
A: Indeed, in order to have a common European model and a coordinated process, the CGM process needs to start at D-2. The Nordic RSC will look into updating the CGM according to the latest information as an input for the coordinated DA capacity calculation.
Q: The D-2 CGM as basis for DA capacities - when will the latest updates be applied (i.e. a new wind prognosis)?
A: It is being considered to have a CGM update in the morning of D-1. However the capacities can be updated closer to the market opening, by the operators during their domain validation.
Q: What will happen if the parallel runs do not deliver?
A: We cannot go live before FB works properly. KPIs are being developed, in dialogue with stakeholders, to monitor this.
Q: What are the problems with the prototype CGM?
A: Within the framework of ENTSO-E, a new standard has been developed for IGMs/CGMs, the so-called CGMES. The format and processes will remove most obstacles that TSOs bump into today. As the CGM process is currently under development, the CCM project has developed a prototype CGM using existing standards. A brief description of the process:
Each TSO makes a “photo” of its grid in its SCADA/EMS system, being a load flow model which contains the loads, generation, lines, voltages, power flows and so on. There are issues linked to the translation from the SCADA/EMS (very detailed so-called ‘breaker’ model) to a load flow model (‘branch-node’ model). The grid models of each TSO are called the IGMs (Individual Grid Models), and the process where the IGMs are put together into a CGM (Common Grid Model) is referred to as the merging process. When the IGMs are not created at exactly the same time (“photos” are taking at different times), deviations may occur among the models that need to be evened in the merging process; the bigger the deviations, the harder it can be to merge the models. In addition, some TSOs are in the process of replacing or upgrading their SCADA/EMS systems, making this task a bit more difficult.
Q: Are there no common Nordic grid models used at this moment in time in the operational NTC capacity calculation?
A: Today there are common Nordic grid models, but not with an hourly market time resolution for the purpose of capacity calculation. Or in other words: there are no hourly common Nordic forecast grid models used today in the Nordic capacity calculation. Within the Nordic CCM project those common grid models are being created (prototypes!) for the sole purpose of the development and testing of the capacity calculation methodology (at the same time, this is the main source of the data quality issues that the project is facing). These common grid models are only temporary models for the purpose of the project, anticipating the models that will be delivered by the European CGM project. It is those models that are to be used in the Nordic CNTC / FB capacity calculation; the Nordic CCM project is completely dependent on this input.
Q: Will there still be countertrade / redispatch under FB?
A: Yes, for two reasons:
- not all grid elements are considered in the FB mechanism; only those grid elements that are significantly impacted by cross-border trade,
- redispatch is an integral part of the capacity calculation methodology
Q: What is the reference for the work that you are doing and the comparisons that you are making?
A: The current situation - the operational NTCs and the corresponding market results - are the reference. The current (NTC) market outcome is compared with the simulated FB market outcomes.
Q: Does the CACM refer to a capacity calculation region (CCR) or the Nordic market?
A: It refers to a CCR rather than the Nordic market. Norway is formally not part of the Nordic CCR.
Q: CWE is used quite often as a reference. Does this make sense? The Nordic system is quite different?
A: CWE has a FB system in operation, and it is useful to learn from their experiences. But, indeed, the Nordic system is different in many ways: hydro-based system, many dynamic and voltage constraints, and better-balanced bidding zones, to name some of the differences.
Q: This project is a big risk for the market participants. How to manage this risk?
A: This is one of the purposes of the parallel run and the continuous dialogue in SHF / SHG: to create comfort among all stakeholders.
Q: Cost of countertrade: is it harmonized / shared among TSOs?
A: Today, all redispatch costs are taken by the TSO itself, whereas for countertrade, the requester pays. TSOs are in the process of defining the countertrade and redispatch, and cost sharing methodologies.
Q: What do you think will be the biggest challenges for analysts trying to make both short term and long term price forecasts?
A: It is hard to step into analysts’ shoes for the CCM project team members. Indeed, that is why we interact on a regular basis with market participants to hear your views, experiences, and concerns. What we heard so far is that it not so straightforward to replace the NTCs in the stack models / price forecasting simulation software with FB constraints.
Q: Will there be additional prototype simulations before the parallel run?
A: No, this is not expected due to the issues encountered with the prototype IGM / CGMs.
Q: Are you confident that you can start the external parallel run without any additional simulations?
A: The internal parallel run, using the industrialized tools providing additional simulations, is intended to increase the confidence level.
Q: Will you publish the results of the internal parallel run?
A: Yes, but the internal parallel run will not be a daily process (in contrast to the external parallel run).
Q: It seems that you have about 3 months of delay compared to earlier communication on the start of the external parallel run?
A: Yes, indeed. This is linked to the IT implementation.
Q: How will the external parallel run be done; are NEMOs involved?
A: Yes, during the external parallel run, the NEMOs will perform the market simulations. In order to realize this, the CCM & NorCap project reached out to the NEMOs to start their joint efforts early 2020.
Q: 70% percent rule. Different interpretations on how to calculate it. Are there discussions on a European / Nordic level on how to deal with this?
A: The 70% requirement is labelled to be a step backwards for the Nordics, as TSOs are compliant when they deliver 70% to the market. There is no need to maximize the capacity any further.
Long Term Capacity Calculation
Q: What does the LT CCM cover?
A: At least the year-ahead (YA) and month-ahead (MA) capacity calculation.
Q: MA forecasts are needed; what will be provided to the market participants?
A: The FB domain, and the ATC box extracted from it, will be provided to the market participants.