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European Power Logistics - The next step in reducing operational risk
Markets are moving inexorably towards continuous
implicit allocation with capacity pricing based on grid
congestion, and with cross-border capacity reservation
and nomination performed automatically by the clearing
house. These continuous intraday markets allow for
trading closer to real-time where an increasing volume
of trading is performed automatically using robots. Here
too, many challenges remain including,
• The coordination, synchronization and harmoniza-
tion of operational procedures and communication
protocols,
• Interconnection capacity calculations and gate clo-
sure times,
• Establishment of a fair and transparent capacity allo-
cation mechanism through the exchanges, amongst
others.
A ComTechAdvisory Whitepaper
Other changes taking place that are critical components
in developing the European-wide market include
moving to a flow-based capacity calculation that better
reflects the actual situation on the grid and maximizes
the available capacity. Indeed, in May 2015, the Central-
Western European Region implemented such a flow-
based capacity calculation for the first time in Europe.
At the same time, the coupling initiatives continue and
in recent years the cross-border Intraday Market was
extended via EPEX Spot and the XBID (European
Cross-border Intraday Markets) was launched, the first
step is planned to be several future waves of deployment.
Also, the five Nordic TSOs agreed to follow a common
roadmap for implementation of the new balancing
concept and common balancing markets, with first
step being the procurement of automatic Frequency
Restoration Reserve (mFRR) in 2019.
IMPACT ON EUROPEAN LOGISTICS
SOLUTIONS
For those participating in trading electric power in Europe, all of these changes and trends
not only impact their business and its processes but also their systems, particularly ETRM and
logistics. Keeping these solutions up to date and anticipating future needs is a considerable
challenge that should not be underestimated.
From a logistics standpoint, there are several overarching
needs,
1. To support the increase in cross-border trading,
a logistics solution needs to be pan-European,
supporting all or most European markets for power,
not limited to a couple of national or subnational
markets,
2. As trading moves closer to real-time, the logistics
solution needs to be high-performing - able to
manage transactions and communications much
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