Philippe GAY (philippe.gay@smartgridenergy.com)
Quick introduction of SMART GRID ENERGY
Smart Grid Energy is a leading capacity aggregator, mainly focusing on providing ancillary services to the French TSO with dispatchable electric assets connected to the French transmission & distribution grids.
Our asset portfolio represents 1,5 GW of active capacity, of which 15% are dedicated to FCR and aFRR, 40% to mFRR and 55% to RR. We remotely control a combination of generation assets (40%), demand-response assets (50%) and storage assets (10%).
We address FCR market needs with a balance of LER and non-LER.
SMART GRID ENERGY IS NOT IN FAVOR of the D scenario, as proposed by ENTSOE
As stated in our previous contribution in March 2020, our position was to keep 15’ as TminLER, while limiting the LER share, this limit being dynamically fixed in order to minimize the FCR cost, while meeting the system safety requirements.
We also mentioned that, over the long term, the most effective solution to keep the FCR cost under control, would be a market-based solution, allowing a fair competition between non LER and LER 15’.
The possibility of a LER share explicit limitation has been ruled out by TSOs. Such limitation would be infeasible from the legal point of view as well for technical reasons. The introduction of a maximum LER quantity in an auction clearing algorithm would result in the procurement of two separate products (LER and nonLER) with potentially different clearing price. Only a comprehensive market in which both prices and quantities of LER and non LER arise as market results could deal with it (please refer to the
Explanatory note, Section 7.b). The potential introduction of such a market has been assessed by TSOs, but it resulted to be infeasible on the short-medium term. The extremely wide procurement mechanisms currently in place in CE as well as the potential effects on FRP (e.g., on k-factors) make a market-based approach not practicable.
Among the 4 considered scenarios, we believe that option A would be the only long-term acceptable option. Keeping a stable framework is necessary in order to create conditions for a better decision-making process.
TSOs acknowledge your position.
Indeed, as this has been highlighted by a number of participants in the ENTSOE consultation in March 2020, the CBA methodology should be revised - and likely will be in the short future, at least on the LL question, choosing whether the system safety during such events should be supported by FCR or by aFRR and mFRR, the latter being obviously the less expensive solution over the long term.
The TSOs choice has been to base the whole study on the historical frequency trends rather than on assumptions on how the system will perform in the future. This approach is indeed what lies behind the approved methodology itself, based on the use of the past frequency trends. This represents a
conservative approach, since the assumptions on future are clearly characterized by a certain level of uncertainty.
The CBA approved methodology expressly provided for the possibility to re-run the CBA (i.e., to redefine the minimum activation time period) whenever “the assumptions adopted in the CBA would significantly change after entering into force of the Time Period” (Art.9 of the Methodology).
The possibility to re-evaluate the situation is therefore a realistic possibility.
In addition, the current decision process is based on simulation models representing the past & present situation, and thus ignoring the impact of FCR additional properties, especially the implementation of reserve mode for LER. Taking into account reserve mode would have probably led to a different conclusion.
Additional properties for FCR foresee the possibility to introduce the so called “Reserve mode” for LER.
LER switching to the “reserve mode” would request the regulation to counteract only minor,
fast-fluctuating frequency deviation. The bulk regulation is expected to be taken over by FRR in order to avoid the full depletion of LER and to ensure a residual regulation capacity.
The “reserve mode”, as explicitly defined by the approved regulation, shall be ensured “Besides ensuring that the energy reservoir is sufficient to continuously activate FCR in normal state and fully activate FCR in alert state for the time period pursuant to Article 156(9) of the SO Regulation”.
It means that it cannot be considered as an extra energy/time margin in the case of a depletion, but rather as a way to ensure a limited regulating capacity from LER against small frequency fluctuations.
Furthermore, the “reserve mode” (which is applied to units prequalified for the first time after the entry into force of the regulation) relies on a process of shift of the regulating capacity from FCR to FRR.
Whenever a long-lasting frequency deviation occurs, FRP is not working as expected, undermining the possibility of such a bumpless transfer of regulation.
Finally, we are convinced, based on our operational experience of LER and non LER FCR assets, that ENTSOE simulation results are not fully representative because the load conversion factor of LER 15’ into LER 30’ is far too optimistic : 1126 MW of LER 15’ would not end into 796 MW LER 30’, especially over the time, due to ageing of batteries. Hence, opting for a TminLER of 30’ may have much higher consequences on FCR price than expected and predicted by the ENTSOE simulation model.
TSOs acknowledge your point. The presented figures have been however defined by means of a survey performed amongst TSOs.
SMART GRID ENERGY is willing to point out the long-term consequences of the D option
Due to the undergoing decarbonation process of the European electricity sector, TSOs have to face huge technical and structural challenges, in order to maintain the system safety with a completely different set of generation resources and highly volatile electricity usages, with less electro-intensive industry.
In order to support this transition process, grid ancillary services have also to move toward the next step, and quite obviously, LER will be the leading cost-effective and low-carbon technology for FCR.
For this reason, it is important that LER developers receive clear and stable signals for maintaining their willingness to invest in LER.
As stated above, we are convinced, that updating the CBA and the ENTSOE simulation model would lead to a different optimum situation, most likely with higher FCR needs, due to more short-term instability brought by renewable generation assets.
Moving TminLER to 30’ without being able to exclude the fact that over the next years TminLER of 15’ will be the right option, as it has been recently evidenced in Germany, will create major instability, and potential competition issues.
ENTSOE points out the fact that implementing TminLER 30’ will require a transition period for existing qualified resources with a TminLER 15’.
Based on our discussions with LER developers, this process means:
• a significant time and of course significant costs as well as technical challenges to retrofit installations
• a significant revenue loss for the developer, as sometimes retrofit is not technically possible.
This leads us to point out that this transition process for LER may end at a point in time where evidence of the necessity to move back to TminLER at 15’ will be made.
A future need for transition towards 15’ minutes is possible since the CBA methodology explicitly provides for a re-run of the study whenever its main assumptions change. Such a reduction from 30 to 15 depends however on several factors which are at the moment not fully foreseeable. The main impacting factors at the current state are the long-lasting frequency events. While it’s true that TSOs are working to identify, contain and resolve these conditions, the evolution of the power system is highly uncertain precisely because of the mentioned completely different set of generation resources and highly volatile electricity usages, with less electro-intensive industry.
The choice of adopting 30 minutes is indeed to ensure the safety of the system in the next years in face of the rapid change in the power system will experience.
TSOs are aware however of all the issues which the adoption of a 30 minutes requirement will cause. The definition of the exempting interim period is indeed aimed at mitigating them. As a general approach, LER currently prequalified for 15 minutes could theoretically fulfill a longer requirement either increasing their reservoir capacity or – more easily – reducing the prequalified FCR under the same reservoir. The latter approach would entail a financial penalization for LER but could drastically reduce the mentioned technical burdens (e.g., retrofit).
In any case, the presence of the interim period with the exemption for all LER prequalified before its end ensure a zero impact on existing and underway LER business cases.
For all the above reasons, we strongly recommend:
1. to select option A, in order not to move in a wrong direction, with the risk of having to roll back on the short term to the TminLER current situation at 15’
2. to run as soon as possible a new CBA, in order to include all the acquired experience and knowledge of LER developers and operators, as well as updated assumptions on electricity generation & usages.
TotalEnergies Renewables International Maximilien Pary (maximilien.pary@totalenergies.com)
"Object: ENTSO-E Consultation – TotalEnergies views
As part of the European strategy for the development of renewable electric energies in order to gradually replace the carbon sources of the energy mixes of the member countries of the European Union, TotalEnergies, in line with this policy, is developing, in various geographies, solar projects, wind turbines and energy storage.
As part of a pioneering approach in the development of utility-scale battery projects in Europe,
TotalEnergies was awarded 103 MW of capacity by the French TSO RTE in 2020 in the context of the long-term Call for Tender, with the condition of valorizing these projects on ancillary services for 7 years in a row. Two lots were awarded, starting in 2021 or 2022 respectively.
TotalEnergies, as a key developer in the market, wants to underline the importance of keeping a positive signal and a clear and transparent regulatory dynamic in order to encourage the development of the sector.
For this, regulatory stability is essential, and the protection of pioneer investors is a condition required to support the market.
We welcome the need for a permanent watch and a continuous analysis of the infrastructure of the European network as well as its stability, considering the rapid changes in the current market to ensure its long-term security.
After an in-depth study of the documents submitted by ENTSO-E for public consultation, TotalEnergies wants to share its conclusions, considering that the methodology has been validated in previous workshops by the various TSOs involved.
1. ENTSO-E study: