Future(s) of EU TSOs
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This document summarizes a conceptual framework presented at a luncheon debate on the future of EU transmission system operators. Three conceptual scenarios for the future role and governance of TSOs are outlined: 1) a fully Europeanized system with EU-wide integration of centralized resources and European system operation, 2) a system with national decarbonization and both centralized and decentralized resources operated nationally, and 3) a highly localized system with local resources and distribution system operators taking the lead role. Key uncertainties around meeting decarbonization and cost goals, changing system operations, and reconciling existing and future regulatory frameworks are discussed.
Future(s) of EU TSOs
- 1. “Future(s) of EU TSOs”: a conceptual framework… from Florence School Florence School in Brussels 13 October 2015 Luncheon debate “Future(s) of EU TSOs” Jorge, Vincent & JM > > > (Vasconcelos), (Rious) & (Glachant) @Newes, @Microeconomics & @Florence School
- 2. Europeanisation of power market Low carbon economy Wave of technological innovation Building a conceptual framework..
- 3. NEWES, New Energy Solutions May 22, 2015 CENTRALIZE DEMAND CONTROL CENTRALIZ . FIRM GEN. PASSIVE DISTRIB. GRID VARIABLE DEMAND DECENTRALIZE DEMAND CONTROL DECENTRALIZ. VARIABLE GEN. ACTIVE DISTRIB. GRID FIRM DEMAND Ad-hoc transition solutions New Electricity Market System transition is a complex multivariable process
- 4. and many interactions are at play ... NEWES, New Energy Solutions May 22, 2015 • TSO • DSO • regulators • EC • regulators • academics • market agents • governement • regulators • new comers (ICT) • government • market agents energy mix market system operation regulation
- 5. 1st conceptual scenario: EU, EU Scenario Decarb Integra° Market structure System operation Governance (who in charge of?) Regulation FullyEuropeanised Problematic Morethantoday EU-wide integration of centralised resources European computa° & actions European tools and markets with EU wide (or Reg.) ISO(s) & TO(s) Adapted to an investment wave for transmission + cross-border cost allocation + Eu supervision of Mkt & System operation +Eu Reg. <>NRAs
- 6. Function Entity in charge today In scenario Function scope Entity in charge Connection Operation TSO Adapted to EU centralised (but "flexibilised" RES resources popping?) ISO(s) Rules Mostly TSO Mostly ISO(s) ?DSOs? TRSM Network investment TSO Higher (CrossBorder) investment &use of innovative grid technology Conception: ISOs Implementation: TOs 1st scenario (EU): system changes…
- 7. Scena rio Decar b Integr a° Market structure System operation Governance (who in charge of?) Regulation Fully Europeanis ed Problemati c Morethan today EU-wide ingtegration of centralised resources European computa° and actions European tools and markets with EU wide ISO or TSO Adapted to an investment wave for transmission + cross- border cost allocation Nationaldecarbonisation Achieved Astoday Competing centralised & decentralised resources National & local TSO managing their grids DSO managing their grids + T-D coordination needed for cross-network externality Adapted to an investment wave for MS transmission +T-D interface & smart grids + local market design issue > Coordination system & market 2nd conceptual scenario: MS, MS
- 8. Function Entity in charge today In scenario Function scope Entity in charge Connection Operation TSO Expanding toward Distribution & adapting to new decentralised resources DSOs Rules Mostly TSO + DSOs Mostly TSO + DSOs TRSM Network investment TSO Higher investment & more use of innovative grid technology TSO 2nd scenario (MS): System changes
- 9. Scenario Decarb Integra° Market structure System operation Governance (who in charge of?) Regulation Fully Europeanis ed Problemati c Morethan today EU-wide ingtegration of centralised resources European computa° and actions European tools and markets with EU wide ISO or TSO Adapted to an investment wave for transmission + cross- border cost allocation National decarbonisati on Achieved Astoday Competing centralised & decentralised resources National and local TSO managing their grid DSO managing their grid + T-D coordination needed for cross- network externality Adapted to an investment wave for transmission + generation as main investment driver Localdecarb Achieved Lessthantoday Mostly or only local resources Mostly local DSOs reign? Or Smart Apps?? TSO only for last resort actions (balancing or blackstart) in its national scope *Invest.wave for smart grids, storage-like & smart apps? *Frag. Reg. Frame for local system&market *Mostly T maybe D massive stranded assets 3d conceptual scenario: Local, Local
- 10. Function Entity in charge today In scenario Function scope Entity in charge Connection Operation TSO Shifting from T to D DSO Rules Mostly TSO + DSOs Sharing DSOs / TSO ?? TRSM Network investment TSO Shrinking with only partial renewal TSO? SoS service? 3d scenario (Local): System changes
- 11. • I did look only at hardware functions “investment” & “connection” BUT SOFTWARE IS AS KEY (if not more): • Balancing generation & demand • Managing congestion • Facilitating market trade & exchanges • + Coordinating with all neighbouring TSOs & DSOs TSOs other functions: software
- 12. Coming: Inconsistency & black holes
- 13. • 1- None of 3 scenarii can easily meet Low- Carbon & Low-Cost > ? • 2- Critical system operations for SECURITY (today MS TSOs) starting to involve somebody’else > ? • 3- Exis. Legal & regulatory framework has to move to rebuild system & market arrangements incl. coordination & safeguard tools Concl: (Slow)food for (fast)thought
- 14. • 4- Any hybrid path “mixing 3 scenarii” will require many “new” decisions to be taken> “Energy Union” new path ? • 5- If Exist. 3d Package & Grid Codes keep dominating the scene >> we have serious “governance issues” to be addressed: how to handle interface (MS/EU) & (MS/Local)? (Slow) food for (fast) thought/ Cted
- 15. (6) We face four big governance challenges • How to Regio. & EU. Grid planning; system, security & market operation? Incl. NRAs? • How to restrain MS SoS, Capacity Mec. & Energy Mix from breaking any EU frame? • How to bridge MS “2030 NAPs” with grid planning, system & market operation? • How to host local systems&new local players in Exist. Multilayer MS/EU framework (Slow) food for (fast) thought/ Cted
- 16. • (7) Today enormous part of Exist. EU framework comes from voluntary & informal cooperation between MS & EU players (from Companies & Stakeholders to NRAs & Commission; + ACER, ENTSO-E, etc) >> Will this “club of the willing” move fast enough to deliver the tomorrow’s “missing blocks”? (Slow) food for (fast) thought/ End.
- 17. We wonder about the future(s)… Yes we do…
- 18. www.florence-school.eu Comillas & Florence School opens WORLD full-fledged online • A course directed by Ignacio Pérez-Arriaga (MIT, Comillas & FSR ) • 20 weeks of flexible online training • Exclusive access Pérez-Arriaga’s guidebook “Regulation of the Power Sector” • Direct interaction with a Faculty of leading experts (led by Comillas) • Support from the FSR Online Community • A Certificate of attendance (both Comillas & FSR ) • Price for public bodies (& FSR donnors) 700 Euro; companies 1000 Euro Already 300 people from 40 countries did register for two first editions 1st edition 2 February –5 July 2015 2nd edition September 2015 –January 2016 http://florenceonlineschool.eui.eu/
- 20. www.florence-school.eu 20 Thank you for your attention Email contact: jean-michel.glachant@eui.eu Follow me on Twitter: @JMGlachant already 11 133 tweets Share views TODAY RIGHT NOW on Twitter: #FutureTSOs My web site: http://www.florence-school.eu