130328 introduction to network codes

An Introduction to Network Codes
&
The Links Between Codes

March 2013

What is a network code?

A set of rules applying to one
aspect of the energy sector
Which are developed by
ACER, ENTSO-E & market
participants
And become legally binding
after the Comitology process

Hence they will have the same
status as any other Regulation

Introduction to Network Codes
March 2013

ENTSO-E’s legal role
Under the designation of Regulation 714/2009

Article 4: Article 6: Article 8; Para Article 8:
ENTSO Creating 7: The scope of ENTSO-E‟s
network codes network codes activities
•Charged with
working to •In line with ERGEG •Cross border & •Network codes
complete the framework market integration •Ten-Year Network
internal energy guidelines. issues. Development
market. •Which become •Without prejudice Plans.
binding. to Member States‟ •Generation
•And involve right to establish adequacy reports.
extensive codes. •Winter and
consultation. summer outlooks.
•Work programs
and annual reports.

March 2013

How are network codes developed?
Request to draft a FWGL

EC On a topic identified in art.8 (6) of Regulation EC 714/2009

Development of
Framework Development of the FWGL (6 month period)

Guidelines ACER In consultation with ENTSO-E, stakeholders and Expert Group

(FWGL)
Request for ENTSO-E to draft a network code
EC According to FWGL submitted by ACER

Development of Period in which ENTSO-E can develop a network code (12 month period)
network code ENTSO-E In consultation with stakeholders according to FWGL

Assessment of network code
ACER Recommendation of network code to the European Commission
Assessment, agr
eement & entry
into force Comitology process (where appropriate)
In consultation with all stakeholders resulting in a legally
EC binding network code

… through a collaborative process
March 2013

Intended benefits

Providing
Enabling Creating clear
connection
harmonisation
Creating
markets to
to benefit
renewables rules.
manufacturers.
reduce risks.
Security of supply

Ensuring A coordinated Greater
More flexible
approach to optimisation to
security of system enhance
markets (e.g.
balancing).
supply operations. efficiency.

Sustainability Competitiveness
Promoting
A single market
Enhancing design across
cross border
trade &
Reducing risk
for all market
Europe (in all
competition timescales).
enhancing players
liquidity.

March 2013

Overview of current & future network codes

Grid • Requirements for Generators (RfG)
• Demand Connection Code (DCC)
Connection • HVDC Connection Code (HVDC)
Related Codes • Connection Procedures (CP)

System • Operational Security Network (OS)
• Operational Planning & Scheduling (OPS)
Operation • Load Frequency Control & Reserves (LFCR)
Related Codes • Operational Procedures in an Emergency (EP)

• Capacity Allocation & Congestion Management
Market Related (CACM)
Codes • Forward Capacity Allocation (FCA)
• Balancing Network Code (EB)

March 2013

Order of work
Decided by the EC Through a „Priority List‟ agreed upon through consultation
• Accessed here

Influenced by and ENTSO-E‟s Three- Year Work Plan
informs
• Accessed here

RfG Requirement for Generators

CACM Capacity Allocation and Congestion Management

DCC Demand Connection Code
Therefore
current OS Operational Security
network OPS Operational Planning and Scheduling
codes are
developed in LFCR Load Frequency Control and Reserves
this order FCA Forward Capacity Allocation

EB Electricity Balancing

HVDC High Voltage Direct Current Connection requirements

March 2013

HVDC RfG
The jigsaw that is
network codes
CP DCC

Network
EB
Codes

CACM LFCR OS

FCA OPS EP

Grid connection related network codes

• RfG was developed first
• Followed by DCC
• Soon HVDC will begin & CP
will follow Both linked
to energy
HVDC RfG efficiency
• These codes link into (and directive

are influenced by) several
important policy areas All
Linked to
smart grid
• And are also related to connection
CP DCC initiatives
codes link
existing standards through
to EB
DSR

Some of the more substantial All
All connection
links to others codes are: connection codes
codes link linked to
• Electricity Balancing and to OS existing
• Operational Security standards

System operation related network codes
• Operational Security was first
• Closely followed by Operational
OS links to
Planning & Scheduling all
• Next is Load Frequency Control connection
codes
& Reserves
• They will be followed later by
LFCR
Emergency Procedures closely
linked to LFCR OS
EB
The operational codes have
strong links between themselves
and to other codes: LFCR/OS/
• OS links to all connection codes OPS OPS all
linked
EP
• LFCR is closely tied to EB
• All the operational codes are
linked OPS/OS
• OS and OPS are linked to the link to CC
due to
CC part of CACM (because of CGM
the Common Grid Model).

Market related network codes
• Capacity Allocation and
Congestion Management was the
first market code to be developed

• It contains three main subsections
that were merged at an early
stage:
• Intraday
CACM
DA
CC
ID • Day Ahead
• Capacity Calculation

• This was done to ensure
consistency between these heavily
interrelated areas

• The CACM code is based on the
EU wide “Target Model” for market
design.

Market related network codes
All
connection • Capacity Allocation and
codes link
to EB Congestion Management was the
first market code to be developed
DA/ID link
• Followed by Forward Capacity
to EC Allocation
Governance ID EB
guideline • And Electricity Balancing
• All market related codes tie into
All market
EB closely transparency regulation
codes link to
transparency DA linked to
LFCR
• Day Ahead & Intraday are closely
regulation linked to the EC Governance
Guideline
• FCA has links to MIFID
FCA CC These codes have direct links to
others:
• EB to all connection codes
CC link to
FCA OS/OPS • Also to LFCR operational code
Linked to
due to
MIFID
CGM
• Capacity Calculation links to
both OS and OPS

Both linked
How do all the network HVDC RfG to energy
efficiency
Connection codes directive
codes fit together?
All Linked to
connection smart grid
codes link CP DCC initiatives
through
to EB
DSR

All
All connection
All connection codes
connection codes link linked to
codes link to to OS existing
EB standards
Network
Codes
DA/ID link to All
Governance ID EB connection
codes link
guideline
Operational codes to OS

All market LFCR LFCR
codes link to closely closely
transparency DA linked to linked to LFCR OS
regulation EB EB

FC LFCR/OS/
CC Market codes OPS OPS all EP
A linked

CC link to CC link to
FCA Linked
to MIFID OS/OPS OS/OPS
due to CGM due to CGM

Both
linked to
How do all the network HVDC RfG energy
Connection codes efficiency
codes fit together? directive

All Linked to
to EB through
DSR

All
All connection
All connection codes
connection codes link linked to
codes link to OS existing
to EB
standards
Network
Codes
DA/ID link All
to
Governance ID EB connection
codes link
guideline
Operational codes to OS

All market LFCR LFCR
codes link to closely closely
transparency DA linked to linked to LFCR OS
regulation EB EB

LFCR/OS/
FCA CC Market codes OPS OPS all EP
linked

CC link to CC link to
FCA Linked OS/OPS OS/OPS
to MIFID due to due to
CGM CGM

Of course this is not
exhaustive. Both linked
to energy
HVDC RfG efficiency
There are further extensive directive

links between codes…
All Linked to
to EB through
DSR

All
DA/ID link All connection
to Network connection codes
Governance ID EB codes link linked to
guideline
Codes
to OS existing
standards

All market LFCR
codes link closely LFC
to DA linked to OS
transparency
EB
R
regulation

LFCR/OS/
FCA CC OPS OPS all EP
linked

CC link to
FCA Linked
to MIFID OS/OPS
due to CGM

Network code overview Both
linked to
HVDC RfG energy
efficiency
directive

All Linked to
to EB through
DSR

All
DA/ID link All connection
to Network connection codes
Governance ID EB codes link linked to
Codes
guideline to OS existing
standards
All market
codes link LFCR
closely
to CACM
DA linked to LFCR OS
transparency
regulation EB

LFCR/OS
FCA CC OPS closely EP
linked

CC link to
FCA Linked OS/OPS
to MIFID due to
CGM

Network code overview
HVDC RfG

Click on a code to
see more details….. CP DCC

Network
EB
Codes

CACM LFCR OS

FCA OPS EP

Network Code on: Go back to Network code overview

Requirements for Generators
Code Overview Links to other codes/ areas
Purpose: Provide a set of coherent requirements for
generators (of all sizes) in order to meet the future power • DCC – Balances demand and
system challenges. generation requirements and
uses similar processes..
• HVDC – Reference to part of the
Status: An ACER recommendation to adopt the code was RfG requirements for offshore
made on 27 March 2013. HVDC connected generation.
Coherence in processes.
• OS – Technical requirements to
Contents: strengthen coordination and
• Requirements system security.
• Operational Notification Procedure for Connection • EB – Must ensure RfG
characteristics are reflected in
• Compliance products.
• Derogations

6 Months 12 Months 3 Months > 12 Months
Internal Public Internal
Framework Guidelines Drafting Updating ACER Opinion Comitology Process ….
Approval Consultation Approval
Scoping Development Approval


Capacity Allocation and Congestion Management
Code Overview Links to other codes/areas
Purpose: Translate the vision for a pan European Target
Model into a binding set of rules. • OS/OPS – Build on the CGM in
CACM.
• FCA – Bidding zones and
Status: An ACER recommendation to adopt the code and capacity calculation are common.
proposals for change was made on 14 March 2013. Structure is similar.
• EB – Strong link with intraday
markets and common capacity
Contents: calculation, bidding zones &
• Capacity Calculation structure.
• Bidding Zones • OPS – Schedules are relevant in
day ahead markets.
• Day Ahead Markets • Transparency regulation – Vital
• Intraday Markets to efficient market functioning.
• Remedial Actions
• Firmness rules
• Cost recovery



Operational Security
Purpose: To set common rules for ensuring the operational
security of the pan- European power system. • OPS – Is an extension of the
OS code prior to real time.
• LFCR – Frequency control
Status: Submitted to ACER on 28 February. operations uses the
coordinated schedules from
OPS.
Contents: • RfG/DCC – Contain technical
• Operational Security Requirements requirements to strengthen
• Testing and Investigation coordination and system
security.
• Data Exchange • CACM – Capacity calculation
• Training uses a common grid model as
does OS.
• Compliance
• Staff Training



Demand Connection
Purpose: To set requirements for new demand users and DSO
connections and to outline demand side response • RfG/ HVDC – Balance between
requirements related to system frequency. demand and generation
requirements and coherence in
processes.
Status: An ACER opinion and recommendation to adopt the • LFCR – Impact of DSR SFC on
code was made on 27 March 2013. system reserve calculations.
• OS – Technical requirements to
Contents: strengthen coordination and
enhance system security.
• Requirements • EB – Demand Response will be
• Operational Notification Procedure an ever more needed building
• Compliance block in balancing products.
• Ecodesign/labelling Directive
• Derogations – Vehicle to develop DSR
requirements.
• Cenelec M490 – Work on-going
to develop DSR standards.



Forward Capacity Allocation
Purpose: To set rules for calculating and buying capacity in
timescales before day ahead and for hedging price risk • CACM – Similar processes and
between bidding zones. consistency with capacity
calculation.
• MIFID – Sets capital and
Status: Under public consultation from 28 March until 28 May
organisational requirements for
investment firms and markets
Contents: operators when dealing with
• Governance financial instruments/impact on
TSOs and joint platforms.
• Capacity Calculation for FCA • Transparency Regulation –
• Bidding Zones Impacts on the information that
• The Forward Capacity Market is published.
• Single Platforms for Allocation and Secondary Trading
• Allocation Rules
• Firmness and Congestion Income Distribution
• Transitional Arrangements



Load Frequency Control and Reserves
Purpose: To set out coordinated and clearly specified load • EB – Specifies how the reserves
frequency control processes and rules regarding the levels and determined under LFC will be
location of reserves (back-up) which TSOs need to hold. procured.
• OS – Frequency quality;
deviation management; improves
Status: Out of public consultation on 2 April – being updated operational security.
• OPS – Frequency control
Contents: operations: uses the coordinated
schedules from the OPS.
• Frequency Quality
• DCC – Impact of DSR SFC on
• Load Frequency Control Structure system reserve calculations.
• Frequency Containment Reserves • CACM – Operational limits: have
an impact on transmission
• Frequency Restoration Reserves capacity available for XB
• Replacement Reserves exchanges.
• Exchange and Sharing of Reserves • HVDC – Impact of loss of power
(e.g. from an offshore wind farm)
• Co-operation with DSOs on system reserves.
• Compliance



Balancing
Purpose: To define rules for the development, implementation
and operation of a pan-European balancing market. • LFCR – Strong link with LFCR
setting rules for the volume of
reserves to be procured & BAL
Status: Initial draft produced and stakeholder discussions
creating rules to procure them.
ongoing.
• CACM – Overlap with capacity
calculation and links to intraday
Contents: markets (which close before
• The Electricity Balancing System balancing opens).
• RfG/DCC – Important that
• Procurement of Balancing Reserves connection rules are reflected in
• Use; Allocation and Reservation of Cross Zonal Capacity products available on balancing
for Balancing Reserves markets.
• Settlement
• Balancing Algorithm Development
• Reporting
• Transitional Arrangements



Operational Planning & Scheduling
Purpose: Sets requirements, ranging from the year ahead
timeframe to real time, for assessing the adequacy and • OS – Extension of OS
operational security of the interconnected power system and requirements prior to real time. .
for planning outages required by TSO‟s and grid users when • CACM – An overlap with
they have cross-border impacts on power flows. schedules in day ahead markets
and the Common Grid Model.
Status: Submitted to ACER on 29 March. • Market Codes – Planning and
scheduling cooperation will
Contents:
unlock transmission capacity in
• Data For Operational Security Analysis in Operational the forward, DA, ID and –
Planning indirectly – balancing.
• Operational Security Analysis in Operational Planning • LFCR – Frequency control
• Outage Planning operations: uses the coordinated
schedules from the OPS.
• Adequacy
• Ancillary Services
• Scheduling
• ENTSO-E Operational Planning Data Environment



HVDC Connection
Purpose: Sets requirements for HVDC connections and • RfG – Reference to part of the
offshore DC connected generation. RfG requirements for offshore
HVDC connected generation.
Coherence in processes.
Status: Initial drafting and stakeholder engagement. • OS – Technical requirements
supporting frequency and
voltage stability, system stability
Contents: Under discussion, scoping document under robustness and system security.
development. • LFCR – Impact of loss of power
(e.g. from an offshore wind farm)
on system reserves.
• EB – Ensure balancing
capabilities for reserve
transactions across cross-border
HVDC links where relevant.
• DCC – Coherence in processes
(operational
notification, derogations, …)


Thank you for your attention

Please address any questions to:

Mark.Copley@entsoe.eu

130328 introduction to network codes

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