The outlook for cross-border

intraday electricity markets

Alberto Pototschnig
Director

Energy Risk Europe 2018

London, 26 June 2018
 The Flexibility Challenge
Greater system flexibility will be required in the
future due to the increased penetration of
intermittent generation from renewables

Absolute values of the residual load hourly ramps

per country
99.9% percentile = 3ơ

Source: ENTSO-E SOAF 2015 2

 Intra-day Market Liquidity

Increasing need for short-term adjustments

already showing in many intra-day markets

Ratio between intra-day traded volumes and electricity

demand in a selection of EU markets
2011–2016 (%)
25%

20%

15%

10%

5%

0%
ES IT PT GB DE/AT/LU CH NO/EE/LT/LV FR NL BE

2011 2012 2013 2014 2015 2016

Source: Power exchanges, Eurostat, CEER National Indicators Database and

ACER calculation (2017). From MMR 2017
3
 Intra-day Cross-border Trading

Upward trend in traded cross-zonal volumes in

the intra-day timeframe
Level of intra-day cross-zonal trade per year
absolute sum of net intra-day nominations for a selection of EU borders
2010–2016 (GWh)
30,000

25,000

20,000
GWh

15,000

10,000

5,000

0
2010 2011 2012 2013 2014 2015 2016

Source: ENTSO-E, NRAs, Vulcanus (2017) and ACER calculations.

From MMR 2017
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 Cross-border Capacity Utilisation

Significant scope for increasing the efficiency

in the use of cross-border capacity in the
intra-day and balancing timeframes
Level of efficiency in the use of interconnectors in Europe
(% use of available commercial capacity in the right economic direction)
2016

Day-ahead 86%

Intraday* 50%

Balancing*
(incl. netting) 16%

0% 20% 40% 60% 80% 100%

Source: ACER calculations, based on ENTSO-E, NRAs, EMOS and Vulcanus.

From MMR 2017
5
 Efficiency in the Use of Cross-border
Capacity in the Intra-day Market
Auction-based implicit allocation of cross-
border capacity seems to perform better than
implicit continuous trading
Level of utilisation of cross-zonal capacity in the intra-day timeframe
when it has a value (>1euro/MWh), for a selection of borders
2016
2,500

100% 100%
2,000
Number of hours

78%
1,500 74%
63% 63%

50% 53%
1,000 47% 47%
43% 41%
30% 30% 23%
500 23%
19%
8%
0
ES‐>PT PT‐>ES DE‐>FR FR‐>DE NL‐>NO NO‐>NL FR‐>CH CH‐>FR FR‐>ES ES‐>FR FR‐>IT IT‐>FR BE‐>FR FR‐>BE FR‐>GB GB‐>FR NL‐>GB GB‐>NL
ES‐PT FR‐DE NL‐NO FR‐CH ES‐FR FR‐IT FR‐BE FR‐GB NL‐GB
Implicit allocation* Explicit allocation**

Number of hours when intraday capacity is available (at least 100 MW) and has a value (> 1 euro/MWh ID price differential)
Number of hours when valuable intraday capacity is utilised (>50 MW nominated in the intraday timeframe)
% of hours when valuable ID capacity is utilised

Source: ENTSO-E, data provided by NRAs through the EW template, Vulcanus

(2016) and ACER calculations. From MMR 2017
6
 Procuring Balancing Energy

Significant differences in the procurement

schemes for balancing energy across the EU
Schemes for procuring balancing energy (activated from mFRRs)
2016

Missing data
N/A
Mandatory provision
Mandatory provision without reservation
Bilateral market
Organised market
Hybrid
Other
Pre‐contracted offers only
Pre‐contracted and mandatory offers
Pre‐contracted and free offer

Source: ENTSO-E (2017). From MMR 2017 7

 Balancing Energy Pricing Methods

Market design features (e.g. pay-as-bid) may

hinder the efficient formation of balancing
energy prices
Pricing methods for procuring balancing energy activated from aFRRs
2016

Source: ENTSO-E (2017). From MMR 2017 8

 Imbalance Netting

Imbalance netting covers an important share

of the needs of balancing energy in several
European markets
0% 20% 40% 60% 80% 100%
LV
(NO+SE+FI+DK)
NL
DE
Imbalance netting as a percentage EE
of the total need for balancing AT
energy (activated plus avoided CH
CZ
activation due to netting) from all
BE
types of reserves in national SI
balancing markets LT
2016 (%) HR
HU
FR
SK

Source: Data provided by NRAs through the EW template (2017) and ACER
calculations. From MMR 2017
9
 Electricity Balancing Market
Integration
Significant benefits from electricity balancing
market integration
Replacement Reserve in the Estimated Annual Benefits

Nordic Region (since 2003) € 220 million

+
Common reserve netting and Estimated Annual Benefits

common merit order across DE € 260 million

+
Pilot project on imbalance Estimated Annual Benefits

netting within and around DE € 80 million

+
TERRE Estimated Annual Benefits

Pilot project on replacement € 120 million

reserves across the Continent
=
Estimated Annual Benefits
€ 680 million
Estimated Annual Benefits
Full integration of the Balancing
Market across the EU
-> ≈ € 3 billion
Source: ENTSO-E 10
Thank you for
your
Thank you
for your attention

attention
www.acer.europa.eu

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