The electricity industry is undergoing a profound paradigm shift towards more decentralisation, decarbonisation and digitalisation driven by the EU Green Deal and Climate Target Plan 2030. We offer smart market-based solutions and tools to transmission and distribution system operators and flexibility providers to meet the challenges of today and tomorrow.
Market-based solutions to meet power grid challenges
We provide market-based solutions for tomorrow’s challenges of the power grid.
The challenge
The drivers of the energy transition – decentralisation, decarbonisation, and digitalisation – have put system operators in front of many new challenges. In particular, decentralised production is leading to growing frequency and balancing issues. More and more congestion needs to be tackled efficiently – using all grid infrastructure, both cross-border and local, to its full extent.
Regulatory context
The Clean Energy Package states that:
- Congestion-management has to be market-based (Regulation (EU) 2019/943 Art. 13);
- DSOs need to consider alternative options to grid investment such as market-based flexibility procurement (Directive (EU) 2019/944 Art. 32);
- TSOs and DSOs need to coordinate their operations (Regulation (EU) 2019/943 Art. 57).
European Balancing Guidelines (EBGL) reads that TSOs must make use of market-based mechanisms, as far as possible, in order to ensure network security and stability (Regulation (EU) 2017/2195 Art. 3).
The solution
We believe the answer lies in smart market-based solutions, driven by highly reliable, custom trading platforms. We combine the expertise of the exchange business with the knowledge of the electricity system. In so doing, we help system operators of all levels to master today’s and tomorrow’s challenges of the energy transition across the entire value chain of trading: market operations, market platform provisions, IT monitoring, settlement and more.
Implicit cross-zonal auctions
Interconnectors are key assets that can have a huge impact on social welfare of economies. Therefore, they need to be used efficiently. Improve the profitability and usage of your interconnector capacity with the help of our proven expertise in tailored auction markets and market coupling (applicable only outside of EU CACM regulation).
Our blueprint: Coupled Intraday Auctions
EPEX SPOT launched cross-border Intraday auctions in Switzerland, coupled with the Italian market. Even though the Swiss Intraday market was hit by the exclusion from the pan-European Single Intraday Coupling, the market regained access to implicit cross-border capacity allocation through these Intraday auctions. On the same note, EPEX SPOT operates two Intraday auctions in Great Britain which are coupled with the Integrated Single Electricity Market in Ireland.
Adequacy
Security of supply can be ensured by capacity certificates, traded on an auction-based capacity market. To help secure supply and demand adequacy – together with the French Transmission System Operator, RTE – EPEX SPOT has developed and implemented a voluntary capacity market. The organisation of such auctions provides significant advantages over bilateral trading. Since liquidity is consolidated in an auction, a robust reference price can be determined, and trading is anonymous and secure.
Our blueprint: The French capacity market
The French law specifies that electricity producers and demand-response operators receive capacity certificates by the French Transmission System Operator RTE. Suppliers have to contribute to the security of supply by holding sufficient capacity certificates to cover the peak consumption of their customers for each underlying year. EPEX SPOT has developed and is operating an auction market which is run regularly to secure supply for future periods of peak demand.
Local congestion management
Avoid congestions before they appear with our flexibility market solutions. To foster the integration of renewable energy sources and to enhance the engagement of consumers and producers in the power market, EPEX SPOT develops local flexibility markets. A neutral and transparent market platform consolidates local flexibility offers.
Benefits of local flexibility markets
- Market participants gain new opportunities to value their flexible assets
- System operators obtain new tools to manage congestion to optimise their grid planning and investment
- An overall improvement of social welfare
- Incentivises further development of flexibility assets in the market
We develop markets linking System Operators and Flexibility Providers for local congestion management
Our blueprint: The enera pilot project (2017-2020)
With the enera pilot project, EPEX SPOT created together with partners a marketplace where flexibility demand from system operators meets flexibility supply from different technologies – such as batteries, virtual power plants, renewables and industrial loads. In case of a forecasted congestion, system operators can buy flexibility on the market to efficiently manage their grid. Consequently, renewables are integrated more efficiently into the grid, while congestion issues are reduced.
Frequency & balancing response
Grids are more and more under continuous stress – balancing has become a major issue for many grid operators. Digital market-based solutions can help to decrease costs: rationalise, simplify and improve procurement for balancing and frequency response closer to real time.
Our blueprint: Balancing auctions for National Grid ESO (NGESO)
To tackle balancing and frequency response issues while being cost-efficient, National Grid ESO (NGESO) has chosen a market-based approach. Therefore, EPEX SPOT has designed and implemented a solution to aid NGESO in the procurement of capacity over a various range of assets – like storage or renewables – for the following week. The platform is extremely versatile in terms of products and delivery periods and could potentially support grid operators across Europe to procure flexible capacity according to predefined specifications.
Data intelligence & consulting
Grids are more and more meshed and complex. Data has been gaining a dominant role in investment decisions, power network operations and “what if” scenarios. EPEX SPOT data intelligence and consulting solutions shed light on the impacts of new coupling arrangements, new interconnectors or new topology configurations. Based on our state-of-the-art grid simulation tools, we will help you:
- Study the optimal implementation options
- Support the definition of realistic scenarios and prepare simulation data
- Run the simulation
- Lead the identification of potential improvement levers in computational performance when relevant
- Analyse the results and provide high-added value insights
Our blueprint: Simulations of flow-based market coupling for ALEGrO
The first power interconnector between Belgium and Germany has successfully transmitted at full capacity of 1000 MW in both directions in October 2020. But how do TSOs anticipate the way the power market would develop with a new physical line before its commissioning? In order to gain insights, EU TSOs Amprion and Elia have chosen EPEX SPOT’s expertise on algorithms and price formation to simulate prices, volumes and flows for this HVDC link between the two markets. The rich learnings derived from the simulations carried out by EPEX SPOT’s expert teams were valuable in providing full transparency to market participants and stakeholders across Europe.