Cross-border allocations Intraday allocations at the Dutch-Belgian border: an implicit mechanism based on the continuous trading and the coupling of both markets To meet the need of continuous and near to real-time exchanges, the transmissions system operators Elia and TenneT BV together with the Belgian and Dutch power exchanges (Belpex and APX-Endex) decided to couple their intraday markets. The coupling gives a larger platform where market players’ offers and demands can meet, provided that sufficient cross-border capacity is available at the intercon¬nection. Through this mechanism, a Belgian market participant can directly access the Dutch market. The mechanism increases the market liquidity when available capacity on the interconnection is sufficient to meet the entire demand.
I. Implicit Intraday allocation mechanism on the Dutch-Belgium interconnection After day-ahead activities have closed, an ARP may be faced with unforeseen circumstances or new opportunities, such as a production unit breaking down, a change in the renewables forecast (affecting the level of wind or solar power production), a production unit that was being overhauled returning to service sooner than expected, disruption to a grid user’s consumption (breakdown) and so on. Confronted with modifications of this type, the ARP has a number of ways of managing its balance in real time: • modifying the production units for which it is responsible for (see sheet: "The CIPU contract"); • modifying the offtake of the grid users for which it is responsible; • exchanging energy with other ARPs on an intraday basis (see sheet "The intraday Hub"); • making additional imports or exports across the France-Belgium border (see sheet: "Intraday allocations at the FrenchBelgium border"); • making additional imports or exports across the Belgium-The Netherlands border via intraday market coupling. The intraday allocations on the Interconnection Belgium-Netherlands are organized via an implicit mechanism, based on the continuous trading through the trading platform Elbas. This allows each balance responsible party to adjust its portfolio, and thus its overall balance, to the real time situation.
I.1. Implicit allocations Unlike explicit cross-border transactions (see sheets: "Yearly and Monthly allocations" and "Intraday allocations at the FrenchBelgium border"), the market player should no longer obtain the intraday capacity at the Belgium-Netherlands interconnection before making any transactions of purchase / sale of energy. A buyer or seller of electricity automatically has access to the capacity available and to the other markets by submitting buy/sell orders on one of the two power exchanges, which is why transactions performed via the market coupling mechanism are known as "implicit capacity allocations".
I.2. Trading platform Elbas Elia, TenneT BV, Belpex and APX-Endex have implemented an interim intraday solution where capacity and energy are traded simultaneously using the trading platform Elbas. The cross-border coordination mechanism, implemented in Elbas, is based on separate bidding/market areas which may be connected to each other, subject to capacities being available. The possible amount of transactions concluded between these areas is constrained by the capacity limits on the interconnector. The trading system is therefore used to connect bids regarding the Belgian and Dutch market areas taken into account the intraday capacity available for the Dutch-Belgian border, as calculated by Elia and TenneT. Moreover, the Dutch and Scandinavian intraday markets are connected via the Norned cable between Norway and the Netherlands using the same intraday system (ELBAS). Subject to available intraday capacity in the intraday platform, Belpex market participants can trade in Intraday across a region of 8 countries (Belgium, Netherlands, Denmark, Norway, Sweden, Finland, Estonia and Germany).
II. A continuous intraday process organized by gate II.1. Intraday capacity The available capacities for the opening of the intraday market are calculated by the TSOs taking into account safety criteria and previous nominations process (see sheet: “Nominations: principles and methods”).
The available capacities for the beginning of intraday process are sent by Elia to the Elbas trading platform. Afterwards the available capacities are published on the website of Elia and on the Elbas platform. All cross-border transactions made on Elbas implicitly use the capacity on the Belgium-The Netherlands interconnection. After each transaction the available capacity for the intraday is automatically updated in the Elbas system. Whenever a transaction is validated, the cross-border capacity decreases in the direction of the transaction and increases in the opposite direction. Example: Let’s assume a situation where 100 MW of capacity is available on the interconnector for both directions (BE NL et NL BE). If a participant in The Netherlands buys 20 MW to a Belgian participant then it will generate 20 MW of exports from Belgium to The Netherlands. Consequently the capacity in the direction BE to NL decreases to 80 MW. However, at the same time the capacity in the direction NL to BE increases to 120 MW.
II.2. An intraday market coupled via Elbas If there is sufficient intraday capacity available on the interconnection between The Netherlands and Belgium, then market participants of both markets can view all offers / requests of both markets. In such a situation there is in fact a single intraday market. If the interconnection capacity decreases, the number of bids / requests visible to users in each market decreases too. In case the interconnection capacity is zero, only national bids will be visible to market participants and at this point the intraday market is separated into two markets (a Belgian market and a Dutch market)
II.3. Intraday cross-border nominations As all cross-border trades made on Elbas implicitly use cross-border capacity, it was decided that, as for the Day-Ahead market coupling (see sheet: "Market coupling"), the nominations will be executed by the power exchanges’ shipping agents. Concerning the transactions made on Elbas, Market participants must only report intraday hub nominations to the transmission system operator, with as counter-party the local power exchange (see sheet: "The intraday Hub"). After the trading in the Elbas system, cross-borders nominations must be sent to both TSOs. First a consolidation step is executed in the power exchanges systems which nets all cross-border transactions before the end of the nomination period. The nominations are sent respecting the deadline of intraday gate system at TSO side. Each intraday gate follows a strict procedure at the TSO side and only the remaining hours of the day are treated. There are currently 12 intraday gates: Gate (Hours)
Deadline for the receiving of cross-border Nominations (Shipping Agent)
Deadline for cross-border trading in ELBAS
Delivery period on day D
21:00 (on D-1)
22:00 (on D-1)
21:30 (on D-1)
00:00 – 24:00
23:00 (on D-1)
24:00 (on D-1)
23:30 (on D-1)
01:00 – 24:00
02:00
01:30
03:00 – 24:00
01:00 03:00
04:00
03:30
05:00 – 24:00
05:00
06:00
05:30
07:00 – 24:00
07:00
08:00
07:30
09:00 – 24:00
09:00
10:00
09:30
11:00 – 24:00
11:00
12:00
11:30
13:00 – 24:00
13:00
14:00
13:30
15:00 – 24:00
15:00
16:00
15:30
17:00 – 24:00
17:00
18:00
17:30
19:00 – 24:00
19:00
20:00
19:30
21:00 – 24:00
The control of cross-borders nominations is carried out by Elia and TenneT at each gate.
II.4. Trading period The intraday trading system allows local and cross-border transactions. The end of a trading period depends on the type of transaction (local or cross-border) and the chosen HUB (Belgian or Dutch). Local transactions on the Belpex power exchange end 5 minutes before the delivery period and local transactions on the APXEndex power exchange finish 1:30 before the delivery period. Cross-border transactions are possible continuously in the Elbas platform. Nevertheless, we must consider a neutralization time of 1:30 or 2:30 before the start of the delivery period. The neutralization time is related to intraday gates at the TSOs. Indeed, it is required to receive cross-border nominations from the shipping agent before the start of the delivery period (see table above). The period between the deadline of cross-border trading in ELBAS and the start of the delivery period is defined as the "neutralization time".
Example for the gate number 05: If a participant wants to conclude a transaction for delivery periods "7:00 to 8:00" and "8:00 to 9:00," the cross-border nominations have to be sent to the system operators at the latest at the gate number 05. In practice, the nominations will be sent by shipping agent at 5:30 for processing reasons. Consequently, a transaction for delivery periods "7:00 to 8:00" and "8:00 to 9:00" must be introduced into Elbas before 5:30 (that is to say 1:30 and 2:30 before delivery period).
II.5. Local Intraday HUB nominations For the intraday Belgian HUB, see sheet: "The intraday Hub". For intraday Hub in The Netherlands, market players must send their nominations to TenneT BV at the latest by 10 a.m. on day D+1.
III. Benefits of the allocation mechanism The intraday allocation mechanism set up on the Dutch-Belgium interconnection provides the balance responsible parties with extra ways of managing their balance close to real time. It gives among others the following advantages: • an ARP can find a solution in the event of unforeseen circumstances, or to take advantage of new opportunities: a production unit or an industrial process breaking down, an unexpected fluctuation in consumption, a production unit that was being overhauled returning to service sooner than expected, a change in the wind or solar forecast and so on; • buyers and sellers that are active in the market coupling mechanism may carry out cross-border exchanges with¬out having to acquire transmission capacity rights. The cross-border nomination is executed by power exchanges as in the Day-Ahead Market Coupling; • market players in the coupling area do not necessarily need to have sites in both countries in order to perform cross-border transactions. Instead, all that a market player has to do is submit an order via its country’s power exchange in order to respond to purchase/sales bids from the other country.
IV. Contractual basis To be authorized to participate in the intraday allocation process on the Dutch-Belgium interconnection, market participants must meet the following requirements depending on the chosen market: For the Belgian Market: • have concluded an ARP contract with Elia in order to nominate the local HUB nominations at the side of Elia • to be a participant at Belpex For the Dutch Market: • have concluded a PV contract with TenneT in order to nominate the local HUB nominations at the side of TenneT • to be a participant at APX-Endex
V. Future developments The transmission system operators for Northern Western Europe (NWE) have launched a project to harmonize the intraday capacity allocation mechanisms on the different interconnections in their region. This means that the intraday allocation mechanism set up on the Belgium-The Netherlands interconnection will evolve in connection with this project.
The intraday allocation mechanism on the Dutch-Belgium interconnection in 5 key points • Together, Elia and the transmission system operator of The Netherlands (TenneT), in association with the Belgian and Dutch power exchanges Belpex ans APX-Endex, have set up an implicit capacity allocation mechanism for intraday capacity through the coupling of their intraday markets.with the use of the Elbas trading platform. • Energy transfers via the intraday market coupling mechanism are carried out in a single operation: there is no need for prior reservation of cross-border capacity (implicit allocations) • Market parties have only to send local intraday HUB nominations to Elia or TenneT. • A buyer or seller of electricity automatically has access to the capacity available and to the other markets by submitting buy/sell orders on one of the power exchanges
C5-E-11.04.2012 / Non-contractual document / Editor: J. Vandermeiren, Bd de l’Empereur 20, 1000 Brussels
• The market coupling mechanism helps to improve market liquidity and to optimize manage¬ment of the capacity available at the borders