Presentation at the 17th German Norwegian Energy Forum in Berlin 2013

1. Buying-in Flexibility for Intraday Trading from the
Neighbours
Why do we need Intraday Flexibility in Germany?
Intraday Trading with(out) Borders: Status quo, Restrictions – and the Future.
Felix Buchholz

2. Agenda
Renewables – The main driver for intraday trading in Germany
Neighbours – Supplying flexibility for (cross-border) intraday trading
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3. Agenda
Renewables – The main driver for intraday trading in Germany
Neighbours – Supplying flexibility for (cross-border) intraday trading
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4. Current status of the most important renewable technologies in
Germany – wind and photovoltaic.
-
Joint installed capacity of wind and photovoltaic in 2012: ~ 64 GW
-
Planned NREAP joint installed capacity of wind and photovoltaic in 2020: ~ 98 GW
-
Peak demand in Germany: ~ 85 GW
Prod = production; Capa = capacity; NREAP = National Renewable Energy Action Plan; data from EUROSTAT and NREAPs
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5. Challenges arising from high shares of fluctuating renewables:
DA production volatility & ID prognosis corrections.
ID prognosis corrections
DA forecast
Relative error
DA production volatility
cloud
tracking
persistence
…
4h
3h
2h
1h
0h
Prognosis horizon
 Basis for capacity markets debate
 The rationale for intraday power markets
DA = day-ahead; ID = intraday; left picture – http://www.agora-energiewende.de/; right picture – inspired by Dr. Kurz (meteocontrol GmbH)
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6. Market design specific reasons for ID trading:
“The Sunrise Quarters”.
Time Resolution:
-
-
DA auction: 1h
(Market coupling
standard)
ID market: 15min
(Balancing power
system)
PV Production Curve
1 Hour
Day-Ahead
or Intraday
Long - Sell:
30-45min
45-60min
Short - Buy:
0-15min
15-30min
4 x 15min
DA = day-ahead; ID = intraday; PV = photovoltaic
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7. Who is trading the ID prognosis corrections and
“The Sunrise Quarters“?
ID prognosis corrections
“The Sunrise Quarters”
German TSOs
Direct marketing
companies
German TSOs
Direct marketing
companies
~ 90 %
~ 10 %
~ 90 %
~ 10 %
~ 20 %
~ 80 %
TSO = transmission system operator; BNetzA = Bundesnetzagentur (German regulatory authority)
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8. Motivations and incentives to participate in the ID market.
Direct marketing companies …
German TSOs …
1) … are obliged by the balancing group
contract to keep their renewable
portfolio balanced. 24/7 and with 15min
resolution – as emphasized by the
BNetzA in a very recent position paper
1) … are forced by law to balance out their
renewable production portfolio in the
intraday market segment of the EPEX
SPOT
2) … reduce their imbalance costs by
trading intraday – intraday balancing
costs < imbalance costs
2) … are intrinsically motivated to trade
prognosis corrections – their primary
objective is grid stability
TSO = transmission system operator; BNetzA = Bundesnetzagentur (German regulatory authority)
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9. Views on the ID market segment of the EPEX SPOT –
# trades, volumes, prices and timing. (1/5)
ID prognosis corrections
“The Sunrise Quarters”
# transaction boxplot of hours
# transaction boxplot of quarters
 PV + Wind = more pot. prognosis errors
 The PV gradient causes this pattern
ID = intraday; PV = photovoltaic; data from EPEX SPOT (single trades for Germany including cross-border transactions from 1.1.2013 – 30.9.2013, outliers excluded)
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10. Views on the ID market segment of the EPEX SPOT –
# trades, volumes, prices and timing. (2/5)
ID prognosis corrections
“The Sunrise Quarters”
Traded volume boxplot of hours
Traded volume boxplot of quarters
 Typical hourly volumes = 0,5 – 4 GWh
 Typical hourly volumes = 0,25 – 1 GWh
ID = intraday; data from EPEX SPOT (single trades for Germany including cross-border transactions from 1.1.2013 – 30.9.2013 , outliers excluded)
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11. Views on the ID market segment of the EPEX SPOT –
# trades, volumes, prices and timing. (3/5)
ID prognosis corrections
“The Sunrise Quarters”
Price boxplot of hours
Price boxplot of quarters
 Similar to DA pattern but higher volatility
 A closer look is needed – see next page
DA = day-ahead; ID = intraday; data from EPEX SPOT (single trades for Germany including cross-border transactions from 1.1.2013 – 30.9.2013 , outliers excluded)
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12. Views on the ID market segment of the EPEX SPOT –
# trades, volumes, prices and timing. (4/5)
“The Sunrise Quarters” – a closer look
Volume weighted average prices for quarters
 “The Sunrise Quarters” causing a systematic daily price pattern
ID = intraday; data from EPEX SPOT (single trades for Germany including cross-border transactions from 1.1.2013 – 30.9.2013)
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13. Views on the ID market segment of the EPEX SPOT –
# trades, volumes, prices and timing. (5/5)
ID prognosis corrections
“The Sunrise Quarters”
Median of hourly products
Median of quarterly products
 Main trading activity close to GC
 Nearly same level in hours of sunshine
ID = intraday; GC = gate closure; data from EPEX SPOT (single trades for Germany including cross border transactions from 1.1.2013 – 30.9.2013)
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14. Agenda
Renewables – The main driver for intraday trading in Germany
Neighbours – Supplying flexibility for (cross-border) intraday trading
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15. Fluctuating renewables require intraday flexibility.
Who can match the demand?
Flexibility in production
Imbalances
Flexibility in consumption
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16. Implicit cross-border trading is a relatively young element of
the EPEX SPOT ID market segment.
1
ID prognosis
corrections
Since 2010
2
ID prognosis
corrections
1
2
“The Sunrise
Quarters”
Since 2013
3
3
“The Sunrise
Quarters”
ID prognosis
corrections
Since 2012
“The Sunrise
Quarters”
EPEX SPOT area; ID = intraday
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17. Around 25% of all traded German hourly volumes in
September 2013 were cross-border trades.
Share of German ID trading – hours
Share [%]
10
DE<FR
DE<AT
5
DE<CH
DE>FR
0
1
DE>AT
DE>CH
2
3
Share [%]
Share of German ID trading – quarters
3
2
DE<CH
1
DE>CH
0
Jun
Jul
Aug
Sep
EPEX SPOT area; ID = intraday; data from EPEX SPOT (single trades for Germany including cross-border transactions from 1.1.2013 – 30.9.2013)
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18. Potentials of direct ID cross-border trading between Germany
and the Nordic countries.
1
DK1 cable
DE>DK1: ~ 950 MW
DE<DK1: ~ 1500 MW
2
DK2 – KONTEK cable
3
1
~ 550 MW
2
3
Baltic cable
~ 600 MW
ID prognosis
corrections
“The Sunrise
Quarters”
ID prognosis
corrections
“The Sunrise
Quarters”
ID prognosis
corrections
“The Sunrise
Quarters”
EPEX SPOT area; Nordpool Spot area; ID = intraday
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19. There is room for improvements to push ID cross-border
trading between Germany and the Nordic countries.
What about implicit cross-border trading via a
common trading platform of Nordpool Spot and
EPEX SPOT?
What about an adaption of the imbalance intervals
in the Nordic countries and Germany?
Do we need additional cable capacity for
ID cross-border trading with the Nordic countries?
EPEX SPOT area; Nordpool Spot area; ID = intraday
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20. Thanks for your attention!
If you have any questions – feel free to contact us.
Felix Buchholz
Portfolio Management CWE
Markedskraft Deutschland GmbH
Kurfürstendamm 72
D-10709 Berlin
Phone:
Mobile:
www.markedskraft.de
www.mkonline.com
+49 (0)30 315 17 19 21
+49 (0)176 63 00 49 10
fbu@markedskraft.com
Info@markedskraft.de
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