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Topic - Cumulative Imbalance Deviation

Topic - Cumulative Imbalance Deviation. Transmission Workstream – 9 th November 2010. Outline. Introduction Review Group 291 & considerations Strawman – Cumulative Imbalance Deviation Examples Next steps. Introduction.

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Topic - Cumulative Imbalance Deviation

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  1. Topic - Cumulative Imbalance Deviation Transmission Workstream – 9th November 2010

  2. Outline • Introduction • Review Group 291 & considerations • Strawman – Cumulative Imbalance Deviation • Examples • Next steps

  3. Introduction • C27 Licence obligation to consult and if appropriate, introduce a Linepack Product; • Cashout “Default System Marginal Prices (SMPs)” can be a proxy for User’s access to end-of-day NTS Linepack • System Operator (SO) Incentive to keep daily NTS Linepack change within 2.8 mcm – this restriction might be deemed an inefficient use of Linepack

  4. Review Group 291 & considerations • RG291 has discussed operational and commercial issues with the potential removal of the Linepack Incentive (2.8mcm target) • National Grid supportive of greater NTS Linepack utilisation but mindful it has to balance the system within safe operational pressures in order to meet varying supply/demand patterns • Users may utilise NTS Linepack as a balancing tool leading to potentially greater swings and/or volatility in NTS Linepack usage • Key question is how to afford Users with the opportunity to utilise end-of-day NTS Linepack; • without compromising the safe, economic and efficient management of the system; • Targeting costs to Users

  5. Strawman – Cumulative Imbalance Deviation • National Grid NTS continues to manage LP within set boundaries (calculated daily based on competing LP uses) • Users remain incentivised as required to balance - dailyimbalances to be cashed-out at SAP • Introduce Users’ cumulative imbalance deviation (CiD): • Cleardown of Users’ cumulative imbalance by either rolling [5] Day period or, on a day when National Grid NTS takes a Market Balancing Action in either direction • New additional cashout charge based on: • CiD qty * fixed diff value or, • CiD * highest price in the event a Market Balancing Action is taken

  6. Examples - CiD calculation • Notes: • Users’ rolling CiD imbalance ‘charged’ and reset to zero every [5] days or when National Grid NTS takes a Market Balancing Action • Receipts into Balancing Neutrality • Please see separate examples

  7. Pros and cons • Pros • Afford Users with further opportunity to manage energy imbalances over several days; • CiD is not retrospective (does not change SAP or SMP prices) but does consider how the Users have utilised, and National Grid managed, the system over a rolling period • Regime change, not dependent on new ‘release’ mechanisms • CiD standalone or implemented with Linepack Product • Cons • Will require IS (UK Link) system changes to implement • Not based on an ‘auction’ mechanism

  8. Next Steps • National Grid (through Joint Office) to facilitate additional Workshops to discuss / develop and agree business rules? • Raise development proposal?

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