Elia Stakeholders' Day 2015

WINTER 2015-16 & 2016-17David Zenner

ELIA STAKEHOLDERS' DAY | FRIDAY, NOVEMBER 20, 20152


AGENDA

1. Context2. Hypotheses, parameters & output3. Conclusion Winter plan 2015-20164. Impact Return D3 & T2

1. CONTEXT


Scope and timeline

The strategic reserves volume is being assessed every year in November.

The assessment is sent to the energy minister to assist him/her in taking a decision on the volume to be contracted for the coming year(s).

Hypotheses are frozen

Input from SPF/FOD

15 OCT. 15 NOV. 15 DEC. 15 JAN.

Elia gives the ministry advice on volume (based on a probabilistic approach)

The ministry advises the energy minister on the volume

Decision on the volume by the energy minister


Volume assessment criteria are defined by law

The strategic reserves volume is being assessed for Belgium, in order to meet the following criteria (required by law):

Average LOLE* < 3 hours LOLE P95* < 20 hours

LOLE = Loss of Load Expectation; expected total duration in hours of unserved energy over the winter.

Average LOLE = average value over the simulated future states.

LOLE P95 = percentile 0.95 (1 out of 20 probability) for simulated future states.


Volume assessment process is iterative

An iterative process is used to find the required additional volume, for the system to be adequate:

Input data Market model

Analysis

Adequacy criteria met?

NOIncrease the volume of reserves


Feedback consultation

• Data Quality‒ More detailed data for surrounding countries (bilateral contacts RTE / Tennet / ENTSO-E) ‒ More time series for climate years (from 13 last year to 40) ‒ Improved load data and data on market response

• Methodology‒ Flow Based included in the volume assessment – import capacity is defined by the flow

based domain ‒ Market response taken into account in the model (cf. Pöyry study)

• Transparency‒ More information on input data and hypotheses in the report ‒ Consultation on volumes

2. HYPOTHESES, PARAMETERS & OUTPUT


Input hypotheses and variables for the simulations

Available sources

Generation• Nuclear and fossil

production• Renewables, CHP• Pump/turbine/

Hydro

Operational reserves

Interconnections

Variables

Climatological variables• Solar production• Wind production• Hydro• Temperature

(demand)

Outage of units

Needs

Economical activity (demand)

• Working day/holiday

• Day/night

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Not only Belgium is modelledData come from different sources

• Belgium and neighboring countries are modelled in detail. Exchanges between countries are determined by the market.

• Strong cooperation with other TSOs is required to assess shortage risk in other countries (can have an impact on Belgian adequacy).

• Data integrated from different sources:- ENTSO-E data (SOAF) for ES, IT, GB, NO, SE, CZ, PL- Pentalateral Energy Forum (PLEF) for AT, CH, FR, DE, NL

and LU- Bilateral contacts with RTE, Tennet, 50Hertz to get latest

hypotheses on generation capacity and load forecast- Alignment with DG Energy for BE- External forecasts (demand growth for Belgium)

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Forecast of installed renewable capacity for winter 2015-2016

Wind capacity

15-16 16-17 17-180

10002000300040005000600070008000

Solar Wind on Wind off

MW

Solar and wind capacity forecast BE

Solar capacity

Run of River hydro

Hydro storage

Pump Storage (Coo, Plate Taille)

Historical production

Reservoir and capacity

Unit with reservoir. Efficiency of pumping/turbining cycle.

ELIA STAKEHOLDERS' DAY | FRIDAY, NOVEMBER 20, 2015 Wind on = wind onshore; Wind off = wind offshore

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Relation between French scarcity and Belgian scarcity will be taken into accountMaximum import for BE = 4.500 MW. This import depends on other countries’ net balance towards CWE. If FR and BE need capacity, the BE imports will be reduced.

Example of a reference domain for winter (taking into account BE and FR balances)

BE can import 4.500 MW if FR can export

BE can import < 4.500 MW because FR needs imports for its own adequacy

Balance of FR in MW

Balance of BEin MW

q


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Wind and solar generation forecastBased on historical load factors and expected installed capacities

15-16 16-17 17-180

10002000300040005000600070008000

Solar Wind on Wind off

MW

Hourly historical data for wind and solar, per

unit

Installed capacities

Time series wind and solar

Wind on = wind onshore; Wind off = wind offshoreELIA STAKEHOLDERS' DAY | FRIDAY, NOVEMBER 20, 2015

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Demand forecastBased on historical temperature and thermosensitivity of demand

Normalized time series for demand

Thermosensitivity Demand time series

Historical temperature data

Normalized demand = average demand on a given day, removing temperature effects. Working days/weekends are included.Increase of demand due to temperature.

Temperature difference between historical and normalised value.


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Climate effects have impact on renewable production and demand• Climate uncertainty modelled using 13 historical years. Correlation is kept between wind, solar and

demand.• For neighboring countries that have a lot of hydro, 3 historical years are used: wet, dry and normal

conditions.

13 series

3 series

For the new calculations this year, 40 time series will be used for all climate effects taken into account

X


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Thermal and nuclear units are modelled individuallyWith an outage rate based on historical analysis

Normalised time serie for

load

Thermosensitivity

• Each type of unit has an outage rate based on a historical analysis (2006-2014)• The outage rate expresses the probability of the unit to be out a given day• The model generates for each unit an availability curve for each future state

Total availability of the thermal park for a given countryExample of an hourly time series

Nov Dec Jan Feb Mar



Putting together the variables allows us to simulate a large amount of future states

A number of future states are taken into account, using different profiles of renewable production, demand and outages of units.

260* future states

Correlated renewable production & demand Unit outages

Convergence of results is checked

* 260 is the amount of future states modeled last year. This number depends on the convergence of the adequacy parameters.

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Output includes dispatch of all units, as well as market exchanges between countries

We only look at periods of scarcity when generation does not meet the demand.

Energy Not Served

3. CONCLUSION WINTER PLAN 2015-2016


Assumptions Winter plan 2015-2016before decision

17/11 D3T2Combination of a number of measures taken by the government authorities, market parties and system operators (even in the case without Doel 3 and Tihange 2):

• Extension of the service life of Doel 1 and Doel 2 (discussions ongoing) – 866 MW

• Return to the market of around 900 MW of centralised generation and cogeneration

• Contracting of the strategic reserve offers for 804 MW (+ 750 MW contracted in 2014) • Strategic Generation Reserves: 446 MW + 750 MW• Strategic Demand Reserves: 358 MW

• Review of expected peak consumption of around 600 MW

• Reinforce the Northern border with a fourth PST in Zandvliet

• Timetable for all maintenance work to prevent downtime during winter as much as possible

As a result of these actions, security of supply for 2015-2016 expected to comply with legal requirements.

4. IMPACT RETURN D3 & T2


• Impact return Doel 3 & Tihange 2: ‒ has definitely a positive impact on the adequacy situation for upcoming winters 2015-2016

and 2016-2017‒ has been taken into consideration – as one of the sensitivity analysis – in the report Elia

submitted to the minister of energy related to the volume to be contracted for winter 2016-2017

• Nevertheless even with the return of Doel 3 & Tihange 2:‒ Import remains necessary for system adequacy ‒ Flexible gas plant necessary for system control and integration of renewables‒ mothballing of gas plant may cause new needs for strategic reserves

Impact Return Doel 3 & Tihange 2

ELIA INFRASTRUCTURE PROJECTSMark Berger


AGENDA

1. Key drivers of the ongoing Energy Transition2. Expected evolution of renewables3. The investment program 2015 – 2019 to support the transition4. Top Projects Elia5. Raising public acceptance as a guideline


1. KEY DRIVERS OF THE ONGOING ENERGY TRANSITION

Key drivers of the Ongoing Energy Transition


Societal-Political Market-

Technologies

More renewables and decentralized production

New actors ‘prosumers’+ ‘off-grid solutions’

New infrastructure needed Fragmentation of the energy landscape

Evolution of the business models

Acceptance of grid projects

No Nuclear Power Plantsafter 2025

New technologies (HVDC) + storage

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2. EXPECTED EVOLUTION OF RENEWABLES

( MW installed capacity)

Expected evolution of renewables ( MW installed capacity)


2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2,772 4,255 5,194 5,860 6,232 6,540 6,947 7,471 8,095 9,851 10,550

Forecasts in line with ENTSO-E scenario EU2020

Installed capacity/year (MW):

2010 2011 2012 2013 2014 2015 2016 2017 2018 20190

500

1000

1500

2000

2500

3000

3500

4000

4500

BiomassSolarWind onshoreWind offshoreHydro

3. THE INVESTMENT PROGRAM 2015 – 2019 TO SUPPORT THE TRANSITION

The investment program 2015 – 2019 to support the transition


2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

114130

150

254

203

Future

* Belgian part of the project

• €2.3 billion total investments

• Timeline & budget per project: BRABO (€180 million / 2015-2022) ALEGRO (€250 million / 2016-2019/2020)* STEVIN (€340 million / 2014-2019) NEMO (€360 million / 2015-2019)*

Investments are stepped up for the execution of the large infrastructure projects

Grid Expansion Projects Belgium


19%

3%

29%

Elia€ 254.2

M

7%

42%26%

2% 24%

Elia€ 366.9

M

13%

35%

Investments 2014 Prospects 2015

Replacements Internal consumption InterconnectionsIntegrating renewables Non electrical investments

In Belgium, Elia is investing circa 3.7 billion EUR over the next decade. Investments are maily driven by replacements and the internal consumption.

4. TOP ELIA PROJECTS

Top Elia Projects


1North Sea InitiativePlug at sea for offshore wind

2StevinIntegrate offshore wind & benefit from cross-border trading with UK on land

3Nemo LinkSubsea HVDC-interconnection with UK

5ALEGrOIncrease cross-border capacity with Germany with the first HVDC on land6

UK

4BraboReinforce the Port of Antwerp & increase cross-border capacity with NL

6 Boucle de l’EstReinforce the grid to integrate renewable production

All over the country Build connections with industrials to support economic growth.

Nemo Link


Nemo link

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Nemo Link


Nemo link

37

➔ HVDC connection between Herdersbrug (BE) and Richborough (UK)

➔ Increasing security of supply, more market efficiency and integration of renewables

➔ 140 km of undersea & underground cables

➔ Electricity transport capacity of approx. 1000 MW

➔ Timing objective: 2019

Stevin


Stevin


➔ Grid reinforcement project 380 kV in Belgium’s coastal region

➔ Essential for further economic development, for integration and transportation of offshore wind energy and exchanging energy with UK

➔ 37 km lines & 10 km cables➔ Timing objective: end 2017

Brabo


Phase 2Rechteroever: Zandvliet - Lillo Liefkenshoek End horizon 2018 - 2019

Phase 3Linkeroever: Liefkenshoek – Mercator End horizon 2023

Phase 1Zandvliet - Doel and Zandvliet 2nd

Phase Shifter End 2016

Brabo


Phase 2Rechteroever: Zandvliet - Lillo Liefkenshoek End horizon 2018 - 2019

Phase 3Linkeroever: Liefkenshoek – Mercator End horizon 2023

Phase 1Zandvliet - Doel and Zandvliet 2nd

Phase Shifter End 2016 ➔ Grid reinforcement project in and

for the Port of Antwerp area

➔ Essential for further economic growth & connection of new production plants

➔ Increases cross border exchange possibilities with the Netherlands

ALEGrO


ALEGrO


➔ First HVDC-interconnection between BE (Elia) and GE (Amprion)

➔ European priority project➔ 100 km underground cable

between Lixhe (BE) and Oberzier (GE)

➔ Transmission capacity of approx. 1000 MW

➔ Timing objective : horizon 2019-2020

5. RAISING PUBLIC ACCEPTANCEAS A GUIDELINE

Raising public acceptance as a guideline


Bundling of infrastructures

Undergrounding

Ecological corridor management

Communication and collaboration with stakeholders1

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5Use of existing powerlines3

The Elia desires to create a better understanding of grid development needs through:

Elia strives to achieve an overall net positive impact on people, nature and landscape

CWE FLOW-BASED MARKET COUPLINGFrank Vandenberghe(Introduction to the panel discussion)


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Developing the EU market is about …

Integration ofthe European Electricity Market

Flow based market coupling NWE and CEE regionsCooperation with Power Exchanges

Developing methods, tools and market processes

Capacity allocation and congestion management Developing network codesMarket

Products and Platforms

Developing new market products Auction platforms for ancillary services

05/02/2023

Developing the EU market

49 05/02/2023

2010CWE

2014NWE

2015

MRCMulti-Regional Coupling

Central-West Europe: Belgium, France,

Germany, Netherlands, Luxembourg

North-West Europe:NWE + UK, Scandinavia

SWESouth-West Europe:

Spain, Portugal

CSECentral-South Europe:

Italy

2015: Flow-based

50 05/02/2023

Flow-based: how are exchange capacities currently determined?

Exchange capacities can then be calculated(taking into account the N-1 principle and available remedial actions)

With the recent flow-based methodology, the available capacity for each grid element canbe defined (= no longer per border)

24 common grid models each day

Every TSO builds its best forecasts for Day+2:

• Topology• Consumption • Distribution of generation• Solar and wind generation

Day-Ahead Market Coupling

51 02/05/2023

Daily process to optimise the market results for the next day

By TSOsvia Coreso

CapacitiesBy market parties(via exchanges)

Order books

By exchangesOptimisation by Euphemia at

international level

Algorithm

per hub / per hour

Net Positionsper hub / per hour

Prices

52 05/02/2023

Flow-based market coupling & impact on energy prices

(based on 19164 representative hours between 01/01/2013 and 19/05/2015)

Price decrease of € 3.1 in Belgium

100% optimum ( = purely hypothetical) Price with flow-based Price with previous mechanism

Business

Elia Stakeholders' Day 2015