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Transmission Expansion in the Competitive Environment: the Italian Case

Transmission Expansion in the Competitive Environment: the Italian Case. Ettore Bompard (Politecnico di Torino) Angelo Invernizzi (ex Cesi) Roberto Napoli (Politecnico di Torino). The Italian Market Structure (start: 1999). Generation

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Transmission Expansion in the Competitive Environment: the Italian Case

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  1. Transmission Expansion in the Competitive Environment: the Italian Case Ettore Bompard (Politecnico di Torino) Angelo Invernizzi (ex Cesi) Roberto Napoli (Politecnico di Torino)

  2. The Italian Market Structure (start: 1999) Generation several GenCos, with an incumbent producer, former monopolist, owning 50 % of the total capacity Transmission ISO: GRTN (Gestore della Rete Nazionale) PX: GME (Gestore Mercato Elettrico) GridCo: TERNA + others Regulator AEGG (Autorità Energia Elettrica Gas) AU (Single Buyer)

  3. Some figures on the Italian Market (2003) Generation Total Production320 TWh Mix: 69.5 % thermal 13.2 % hydro 1.5 % geothermal 0.4 % renewable 0.0 % nuclear 15.4 % from abroad Peak Power53 GW Bilateral contracts 70 % Power Exchange 30 % Load increase 3 % /year

  4. 1000 20,0 18,0 800 16,0 600 14,0 400 12,0 200 10,0 0 8,0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 -200 6,0 -400 4,0 -600 2,0 -800 0,0 Trend in the Evolution of the Transmission Network km of equivalent 380 kV utilization index Start of the liberalization 1999

  5. Market zonal prices [€/MWh]1° Semester 2004Price gap: 20-30 €/Mwh

  6. Critical zones and connections

  7. After the 2003 blackouts ….. Clear needs: Relevant increase in new generation plants re-opening discussions on the best mix (time to realize: 3-4 years) Urgent expansion of the grid expand the cross border connections (time to realize: 7-10 years)

  8. Restructuring the organization structure…. Previous model: ISO- Gridco separation between property (TERNA, …) and operation (GRTN) New model: Transco from October 2005 ..and the financing Regulated investment : update the existing grid and build new lines Merchant investment: to attract private investors

  9. UE rules (1228 / June 2003) for cross border exchanges • avoid dominant position in the market (limit on the maximum capacity assigned to one trader); • ensure the full availability of the interconnections capacity for the market • reassign capacity not used to the market in open, transparent and non-discriminatory manner • allow exclusion of third party access for DC (and expectionally AC) connections in particular cases (high investment risks). Details of the exclusions (how much, how long, …) shall be agreed by the national regulatory authorities

  10. priority right up to 80% of the transmission capacity for the financed project; maximum capacity for a single investor ≤ 800 MW; ten years priority right (from the start o operation) operation under the economical and technical control control of the GRTN (ISO) investors must present an Expression of Interest EoI to be approved by the GRTN The Italian model for cross border exchanges

  11. huge amount of interest (up to 14 GW) anomalous solutions, with line ampacity over-rated w.r.t. the input and output capacity danger of uncontrolled balance between the national and foreign producers, damaging the development of national generation As a consequence: delayed decisions Results of the call for EoI

  12. Key points for the expansion The relative importance is changed: ↑ System vulnerability against internal faults and malitious external attacks ↑ Social acceptances no use in forcing consensus ↓ Adequate resources from the tariffs from the market

  13. Vulnerability This is a very hot and critical topic. In addition to the complications derived from the liberalization process, the negative evolution of the social and international relations do allow several negative worries on the system vulnerability

  14. Societal consensus • Criticalities: • problems in finding spaces with acceptable • impact on land and people • inefficiency of the preventive authorization process • generalized social opposition (NIMB)

  15. Societal opposition …. • Generalized strong negative feelings for: • Fields dangers • Visual and touristic losses • Land and buildings depreciation • Constraints on the land use • Variations in the habitat

  16. Try to gain consensus …. • Strategic Environment Evaluation (SEE) • keywords: • Information • Partecipation • Consultation • Define preventively a set of technical corridors with proper accepted classification and priority at the various levels of the state, regional and local organizations.

  17. Encouraging results of SEE…. • Shift from a negative attitude to cohoperation • Common use of the land databases • Share of the programs and times • Committment to prevent large popular refusal

  18. Reshaping the grid Tecnology • New conductors • Multiple lines • Voltage increase (220 to 380 kV) • allowing higher temperatures • more lines on the same poles • requiring higher poles Increasing ampacity Reducing environment impact • New poles • Underground cables • artistic design • when no other solution is accepted • Temperature control • Configuration control • Real time temperature measurement • Automatic reconfiguration Optimizing use

  19. New international connections (on work or under authorization) Lienz (A) Robbia (CH) Okroglo(SLO) Udine S. Fiorano Treviso Italy - Switzerland CH 2005 Italy – Osterreich A auth. Italy – Slovenia SLO auth.

  20. Udine Ovest - Okroglo Redipuglia - Udine Ovest Trino - Lacchiarella Area Venezia - Area Treviso Fano-Abbadia** Colunga – Calenzano* Foggia - Benevento Interconnessione Sardegna - Continente Montecorvino - Benevento Chiaramonte - Ciminna Sorgente - Rizziconi * Riclassamento a 380KV ** Nuovo intervento di sviluppo New expansion plan 2006-2010

  21. The investment side Analysis of the past has made quite clear that in the next years money will come mainly from public investment (tariffs). Market-driven investments have been successfull at the proposal stage, but difficult to implement in the most important part (cross borders links, with different scenarios at the ends) New proposals can speed up the transmission expansion, in some way sterilizing the interaction effects on the grid

  22. Some proposals To simplify the interactions, in some cases we can transform a transmission expansion problem into an equivalent generation expansion problem: long feeder concept: let the Genco decide the connection point, regardleess of the distance between the generators and the injection point virtual generating line: let consider a controlled line as a combination of a GenCo and a connected Demand, partecipating to the market with the constraint of producing and absorbing the same power at the opposite end of the line

  23. Conclusion New ideas and are required to attract more easily private market driven investments and speed up the realization process New tools are required for a more meaningful decision process, that takes into account the true key points

  24. Thanks ! Благодарность ! Prof. R. Napoli Politecnico di Torino, Italy Проф. РОБЕРТО НАПОЛИ Политехнический Турин, Италия

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