CIGRE C5

1
CIGRE C5

• Congestion Management Tutorial
• Prepared by Konrad Purchala
• England Wales Comparison
• Prepared by Lewis Dale

2
Contents

• Basic principles definitions
• Nodal (physical) zonal (market) issues
• ETSO interconnection capacity definitions
• Congestion Management Methods
• Capacity allocation methods
• Congestion alleviation
• England Wales (GB after BETTA) comparison

3
Principles Definitions

• Congestion exists where demand for network
  capacity exceeds physical capacity
• Thermal limits
• Voltage limits
• Stability limits
• Can be at any location in a network
• Important case concerns excess demand for
  interconnection capacity between markets

4
Nodal Zonal Issues

• Market organisation may result in zones of single
  price
• Interzone capacity A-B available to market
  participants is not a sum of physical capacity
  1-5 4-6 but depends strongly on power flow
  patterns

5
Definitions

• Inter-zonal congestion
• visible to market participants (price difference
  between zones)
• Internal (intra zonal) congestion
• invisible to market participants (within single
  price zone)
• Parallel (loop) flows
• Consequence of network physics
• Usually used to refer to unforecast consequences
  of transactions in other parts of the network

6
ETSO Definitions

• Total Transfer Capacity TTC
• Transfer achieved by scaling base scenario until
  limit reached
• Transmission Reliability Margin TRM
• Capacity withdrawn by TSO to cover security
  requirements (loss of generating unit,
  utilisation of frequency response, etc)
• Net Transfer Capacity NTC TTC - TRM
• Already Allocated Capacity AAC
• Sum of all allocated transmission rights
  (capacity rights or exchange programmes,
  depending on the allocation method)
• Available Transmission Capacity ATC NTC - AAC

7
ETSO Congestion Management

• Capacity calculated using same principles in all
  ETSO countries (EU countries Norway
  Switzerland)
• NTCs calculated for each border by each TSO the
  lower value is published
• NTCs calculated twice per year (summer winter)
• ATCs can be significantly different!

8
Capacity Allocation Methods

• Pro-rata rationing
• Priority rules (first come first served)
• Transmission capacity auctions
• Explicit auction
• Implicit auction
• Market splitting / coupling
• Locational Marginal Pricing

9
Explicit Capacity Auctions

• Capacity valued independently from energy
• No standardisation of energy markets required
• Introduces sequential trading requirements (need
  capacity to trade energy but need energy trade to
  justify capacity purchase)
• Single Border Auctions
• Simple
• But may give inefficiencies infeasibilities
  (capacity on parallel paths and sequential flow
  gates)
• Co-ordinated capacity auctions
• Simultaneous treatment of all transaction paths
• Potential for better TSO co-ordination

10
Implicit Capacity Auctions

• Requires compatible organised energy markets
• Requires physical trades to take place at local
  market (?)
• If there is a price difference between regions
  and available transmission capacity then
  arbitrage trades automatically taken
• Market prices equalise if no congestion
• Otherwise, congestion rents -gt TSOs

11
Market Splitting / Coupling

• Market splitting used in Nord Pool (a voluntary
  power exchange)
• All cross-border trades must enter Pool
• If congestion then market splits into pre-defined
  zones
• Market coupling proposed by European Association
  of Power Exchanges (EuroPEX)
• Both use implicit auction principles

12
Locational Marginal Prices

• Implicit auction with one node per zone (hence
  all congestion is inter-zonal)
• LMPs usually calculated (rather than discovered
  in implicit auction) and can include marginal
  effect on losses
• Market participants can hedge nodal price
  uncertainty by purchasing Financial Transmission
  Rights (FTRs)
• Provide holder with right to access remote price
• Theory says sale of FTRs should be efficient
  basis for funding transmission expansion

13
Congestion Alleviation Methods

• Transmission Loading Relief
• Curtailment of transactions contributing to
  congestion (in priority order)
• Re-dispatching (by making payments for upward or
  downward generation movements)
• By one TSO in one area
• By coordinating re-dispatch in several areas
• Counter-trading
• As re-dispatch but (in ETSO) refers to zonal
  trades to resolve interconnector congestion
• Potential for ineffectiveness as actual nodal
  location may not be best

14
England Wales (GB after BETTA)

• Firm access rights conditional upon payment of
  TNUoS
• Locational differentials reflect cost of funding
  incremental network investment
• Residual congestion (after network investment)
  resolved by co-ordinated re-dispatch
• Balancing mechanism bids offers
• Anglo-French interconnector congestion managed by
  explicit auctions

15
Relationship of planning pricing
Required transmission volumes or prices (LMP/FTRs
or auctions)

• At optimum network capacity
• long-run locational price differentials
  incremental investment funding cost

Producer / Consumer chooses location
Network capacity investment decision
Locational prices or available capacity
16
Discover LMP or impose TNUoS?

• Implicit auction
• LMPsFTRs
• FTR invest cost ?
• LMP

• England Wales
• TNUoS
• Inc invest cost
• BM accept price?

• Locational signal
• Long-run signal
• Short-run signal