Session 3 Flashcards
Balancing (operating) reserves
what are they, what for, who’s seller/buyer, how the price are balancing reserves priced?
- generators or storages that are pre-contracted by the TSO
- in order to increase or decrease output very quickly when being activated
- seller: balancing service providers (BSP)
- single buyer: TSO
- dual price: capacity (€/MW) for reservation and (€/MWh) energy for activation
Vicious circle of frequency drop
Lack of generation -> frequency drops -> generators get disconnected (to protect it from physical damages -> further lack of energy -> further frequency drop
What’s a system blackout?
- outage of the transmission system
- transmission lines lose voltage
- all power stations in the region are disconnected and shut down
Difference of system blackout & controlled load shedding
System blackout:
- geographically large outage of the transmission system
- transmission lines without voltage
Controlled load shedding:
- TSOs can disconnect entire distribution grid (cities, regions)
- they do so in emergencies to balance the system (unvoluntary load shedding)
What’s the spinning reserve?
A synchronized generator that produces electricity while holding some capacity back for short-term activation, e.g. for balancing energy.
What are ancillary (=Hilfs-) services?
What are frequency / non-frequency anc. services?
Services necessary for reliable and high-quality electricity supply.
Frequency anc. services: balancing reserve, interruptible load
Non-frequency anc. services: Reactive power/ voltage control, black start capability, redispatch/ congestion management
Actors and their responsibilities in the balancing system
TSO, BRPs, BSPs
TSO: Responsible for maintaining system balance in their balancing area.
1. determine size of balancing reserves
2. procure reserve ahead of time & determine its price
3. Activate balancing reserve in real time
BRPs: provide and keep schedules
1. Provide schedules to the TSO
2. Are financially accountable for deviations from their schedules (via imbalance price)
BSPs: sell balancing services to TSOs (capacity and actual produces bal. energy)
1. Hold capacity available for balancing, receive a capacity payment (€/MW)
2. Supply energy if activated, receive and energy payment (€/MWh)
Synchronous system vs balancing area: Geographical scope, target variable, set point, rationale
Geographical scope:
synchr. system: Entire system (continental Europe)
balancing area: sub-systems (countries)
Target variable:
synchr. system: Frequency
balancing area: Area control error (ACE) -> unscheduled imports/ exports
Set point:
synchr. system: 50 Hz
balancing area: zero
Rationale:
synchr. system: Avoid damages caused by frequency deviation
balancing area: Avoid interconnector overload
Reserve sizing: Ways of doing so
+ static & dynamic reserve sizing
Stochastic reserve sizing:
Set reserve size such that they will suffice with a certain probability (e.g. German frequ. restoration reserve: 99.95%)
Deterministic:
Set reserves according to a certain event, e.g. European frequency containment reserve: two french nuclear reactors don’t deliver -> 3 GW balancing reserve for such case
Static: Static over e.g. one year
Dynamic: Adjusted over time
Three types of balancing reserves
Response time, control variable, activation, suppliers
FCR:
30s response time
Control variable: Frequency
Activation: Local frequency measurement
Suppliers: batteries
aFRR:
5 min response time
Control variable: Frequency, ACE
Activation: Centralized (TSO)
Suppliers: batteries, synchronized generators, stand-by hydro plants
mFRR:
7-22min response time
Control variable: Frequency, ACE
Activation: Centralized (TSO)
Suppliers: Synchronized stand-by generators, large consumers
Two pricing rules in reverse auctions / electricity trading
- Uniform pricing: Same price for all successful bidders, such as the lowest rejected bid (e.g. day-ahead)
- Pay-as-bid pricing: Price any successful bidder receives is their individual bid (e.g. intraday)
At what price should a bidder bid his electricity in uniform pricing?
It’s profit maximizing to bid at your true own marginal cost
What is the German Balancing Paradox?
Despite a ramp-up of VRE:
Reduced imbalances (energy and reserves)
- exogenous improvements (better weather forecasts)
- overall market design improvements (TSOs started cooperating internationally as late as 2012)
- stronger incentives (higher imbalance settlement prices)
Reduced reserve costs
- lowering entry barriers
- increased competition on balancing energy markets, incl. new tech (batteries)
- auction design: lower capacity prices partly compensated by higher energy prices
Bottom line:
- one of the major concerns w.r.t. RE expansion turned out to be irrelevant
- market design and economic incentives are crucial to accompany RE expansion
