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Pöyry: role of the planned Nordic stakeholder forum 2017

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In a seminar on developing Nordic energy cooperation, Pöyry's Stephen Woodhouse discussed the role of the planned Nordic stakeholder forum. The seminar, organised by Fortum on 31st October 2017, hosted about a hundred participants including government officials, regulators, TSOs, European Commission, power exchanges and energy industry.

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Pöyry: role of the planned Nordic stakeholder forum 2017

  1. 1. ROLE OF THE PLANNED NORDIC STAKEHOLDER FORUM 31 October 2017
  2. 2. COPYRIGHT©PÖYRY 01/11/2017 WOODHOUSE NORDIC ENERGY FORUM 2 EXAMPLE OF NORDIC CO-OPERATION IN MARKET DESIGN Over the past 16 months, Pöyry has been running a Nordic market design forum that seeks to reinforce the philosophy of the energy only market Nordic market design forum Observers  Danish Energy Agency  OED (Norway) September 2017 http://www.poyry.com/news/nordic-market-design-forum- enhancing-the-world-s-first-regional-electricity-market Implementation Balancing and imbalance Intraday Strategic reserve System services
  3. 3. COPYRIGHT©PÖYRY BUILDING BLOCKS OF NORDIC MARKET DESIGN 01/11/2017 WOODHOUSE NORDIC ENERGY FORUM 3 Policy, planning Market operation Forward market Day-ahead Intra-day Balancing and system services • Climate and electricity policy interaction • Trans-national system planning • Trans-national market structure • Harmonised market structure, zones etc. • Sharing congestion rent and redispatch cost • Trans-national system operation • Real trans-national markets • Relevant spread contracts • Option markets • Reduced lag from bidding to operation • Capacity guarantee (”market making”) • Smaller settlement intervals • Balancing requirement • Allocation of capacity between timeframes • Marginal pricing/cost coverage • Removal of price constraints • Balancing resource options • Imbalance settlement rules • Reliability preferences • Green preferences • Nordic market • ”Smart” settlement
  4. 4. COPYRIGHT©PÖYRY 01/11/2017 WOODHOUSE NORDIC ENERGY FORUM 4  Real time price signals that support system operation and market functioning, especially in times of scarcity  Increased transparency, shorter lead times and lower barriers for entry to allow a wider range of resources to support TSOs in system balancing  The objective for market design around non-frequency system services is to move away from the ‘obligation, no payment’ approach which is currently in place for some of these services, and move towards a more market-based approach for all services, as far as this can be made workable  An enhanced intraday market better equipped to facilitate the market functioning  The proposals for the intraday market will give market participants a better platform to trade into balance closer to real time supporting effective intraday markets  Strategic reserve may have a role to minimise the political intervention in the market as a result of poor demand side response participation in scarcity situations  Ensure that the rules governing the activation and pricing of this strategic reserve do not have a distorting effect on energy market prices Balancing and imbalance Intraday Strategic reserve System services COMPONENTS OF THE VISION FOR NORDIC MARKET DESIGN Four market design topic areas support the vision
  5. 5. COPYRIGHT©PÖYRY WHAT COULD A NORDIC ENERGY FORUM LOOK LIKE? 01/11/2017 WOODHOUSE NORDIC ENERGY FORUM 5 Nordic Energy Forum Manages process Defines working topics Balanced composition (countries + stakeholder groups) Co-ordinates with other Nordic initiatives Reports to EMG and council of ministers Tackle biggest Nordic challenges Secretariat to manage practicalities Open and transparent Stakeholder engagement Working groups
  6. 6. COPYRIGHT©PÖYRY THE FIRST YEAR OF THE NORDIC ENERGY FORUM  November 2017 – MoU between Nordic ministries on renewed Nordic collaboration – Decision on steering group composition, secretariat and financing  December 2017/January 2018 – First meeting of Forum – potential agenda: – Identification: Main challenges – Ongoing processes – Elements of Reform – Next steps 01/11/2017 WOODHOUSE NORDIC ENERGY FORUM 6 Start MoU – Nov 2017 KO – Dec/Jan 2017/ 18 3 months Vision for Nordic electricity market 6 months Prioritised list issues to study 12 months Interim report Plan for following year
  7. 7. COPYRIGHT©PÖYRY TOPICS THE NORDIC ENERGY FORUM COULD TACKLE  Nordics face interlinked complex challenges that can only be solved together – Working together to develop new solutions – Working together in the new solutions that will likely require Nordic institutions  Electricity market topics – Enhancing the Nordic electricity market design (see Pöyry market design forum) – Grid development – System operation – Renewables – Carbon  Gas markets – LNG  Potentially also cross border innovation strategy, M+A, transportation topics etc. 01/11/2017 WOODHOUSE NORDIC ENERGY FORUM 7
  8. 8. stephen.woodhouse@poyry.com Tel. +44 7970 572444

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