General
Q: If an NTC approach is chosen, what will be the target date for evolving to the target model, ie flow-based?
A: The target date for the German-Austrian split is 1st of October 2018. All project parties are highly committed to apply the flow based approach. (published 29/05/2018)
Q: Our understanding is that, on the DE-AT border, after the split (1st of October 18) the cap of 4.9 GW will be granted and sold via LT auctions. In the market, the perception is that the cap will be simply capped at 4.9 GW, but we understood that instead we could see higher extra volumes put into the domain of the PTDF and therefore in the Day-Ahead market. Is this correct?
A: Indeed, the 4.9 GW are intended to be allocated in long-term allocations, but this is still subject to some considerations whether small parts of that could be used for balancing purposes (TSO consultation was conducted). Due to so called “LTA-Inclusion”, the volumes of relevant LTTRs are included in the day-ahead flow based domain as the minimal trading capacity at that border. If the day-ahead capacity calculation exceeds the long-term volumes, those capacities are given to the market in addition. You should expect a cut at 4.9 GW in hours when the physical transmission capacities are exhausted based on the network conditions and related to the CWE market situation.
Q: How certain is the 4,9 GW given the implementation timeframe? Is there a possibility that it will be changed or lower?
A: In a bilateral agreement BNetzA and E-Control have agreed on allocating 4.9 GW as long-term allocation rights starting in October 2018. This is a significant reduction from the commercial flows which are currently observed and are predicted to increase further in the following years. According to our calculations this amount of capacity is technically feasible and this is in addition secured by redispatch capacity in Austria.
Within the capacity calculation under preparation in the Core Region a common long-term and short-term capacity calculation method will be determined and applied on all borders. Consequently the capacity at the German-Austrian border will be examined and possibly adjusted in compliance with the CACM and FCA Guideline.
Q: There seems to be a information gap between the project and the public. As the German Market Access Rules will be updated, does a consultation need to be held?
A: The project partners would not confirm the perceived information gap between project and stakeholders. We are aware of the projects attention and impact especially for MPs. Available information is made available for the public as soon as possible. At the current project state not all decisions are made and whenever elements become clear they are published.
Within approval time, a consultation for the Market Access Rules will be mandatory; the approval covers the method not the congestion management itself.
Q: Bidding zone review: what happens if the review is against expectations?
A: The project partners have no indication to believe that the Bidding zone review will suggest stopping the DE-AT BZB project. In that case the DE-AT split needs to be evaluated further. The project partners confirm that the implementation date 1. October 2018 is firm.
Q: If NRAs cannot come to an agreement whether FB or NTC approach will be implemented, will it jeopardize the starting date of October 1st, 2018?
A: The starting date of 1st of October 2018 is firm and all parties are committed to work towards integrating the border in the CWE flow-based approach. Fallback options based on NTC approach are under investigation to keep the starting point in any case. (published 29/05/2018)
Approval process
Q: At the MP Conference on 24th Nov, we were told that a meeting would be held on the 21st of December 2017 between NRAs, NEMOs and TSOs, and that a decision would be made regarding the choice between Flow Based and ATC for the day ahead market. Could you please provide an update on this decision?
A: DE-AT BZB project parties would like to inform Market Participants that the decision has been made to continue with the implementation of the target model of FB MC on the DE-AT border in the CWE region. Considering the disadvantages of an NTC solution on the CWE FB Market coupling, CWE TSOs recommended to CWE NRAs to integrate the DE-AT border split in the CWE Flow-Based Market Coupling.
In January, CWE NRAs reached an agreement for FB MC subject to final approval according to the national approval processes and formal decision to be taken by the Board for some of the NRAs.
All parties are therefore working on implementing the FB capacity calculation method for the 1st of October 2018.
Q: When will be the deadline for decision on FB vs NTC?
A: The NRAs would like to have a decision by the end of the year. The target model is to implement FB MC in the CWE region. Since the CWE NRAs need to approve the FB MC, the deadline is depending on their approval. We hope that a final decision can be made within the next weeks. If it is not possible to reach an agreement for FB MC, it is necessary to develop a NTC model. Latest by the end of January a definite decision is required in order to start implementing the capacity calculation method.
Q: Will there be a NRA approval by the end of the year or just a TSO decision?
A: The discourse within CWE aiming for a common NRA agreement is still ongoing. There is no concrete, official NRA decision yet, but a CWE NRA agreement for FB MC is necessary. Certain approvals by BNetzA and other CWE NRAs are required, but these a due shortly before the start of the DE-AT BZB. Market partners will be informed as soon as a decision is made.
Q: We have concerns about CWE NRAs comfort regarding the decision made. How can DE-AT BZB project ensure CWE NRAs' support?
A: The project partners are convinced that the DE-AT BZB project will in total have positive effects in the CWE region. Thus we have good reasons to be optimistic that the CWE FB will work. If a common approval is not reached within the deadline, the fallback NTC option needs to be examined further.
Q: Regarding the timing, you say that there is a 100% probability that the split will occur in 2018. However potential blocking points are visible (CWE NRA approval, Complaints filed from APG/AT NRA to EU Court of Justice, experimentations not yet done): how can you be so sure?
A: The timing for the DE-AT BZB project is firm, open questions only remain on how the implementation will be preceded. At the moment we have no indication when complaints will be handled and decided. The experimentation process between NEMOs and TSOs will be part of the external SPAIC and external parallel run. The MPs will be involved and informed about the results. Market parties are encouraged to provide high-quality data for the external parallel run.
Balancing
Q: Will Balancing capacities be deducted or on top of the 4,9 GW?
A: The implemented and prepared balancing market integration projects between Germany and Austria prove to be a good step in the direction of the forthcoming implementation of Guideline on Electricity Balancing. Thus they should be continued. How this will be handled in relation to cross-border capacities is under discussion and not yet fully clear.
FTR/PTR
Q: Regarding long-term transmission rights, we would like to point out that the CORE TSOs’ proposal or any CORE NRAs’ decision on this proposal does not overrule BNetzA/E-Control’s decision to implement PTRs as of October 1st, 2018. Therefore it should be clarified that – as it was expressed by TSOs/NRAs at the stakeholders’ conference on 24 November 2017 – PTRs will be implemented as of October 1st, 2018.
A: The decision on PTRs or FTRs will be taken according to FCA Regulation, Art. 31. Therefore, the final determination is dependent on processes in the Core region. Core TSOs have decided by majority voting on FTR Options. Thus, Core TSOs have submitted this proposal to NRAs, NRAs have 6 months to approve this proposal or request amendments (24th May 2018). (published 29/05/2018).
Market Impact
Q: Can it be excluded that the 4,9 GW long-term transmission capacity will be reduced in the next months/years?
A: The 4.9 GW are agreed and technically feasible, however within the capacity calculation under preparation in the Core Region a common long-term and short-term capacity calculation method will be determined and applied on all borders. Consequently the capacity at the German-Austrian border will be examined and possibly adjusted in compliance with the CACM and FCA Guideline.
Q: How probable is it that developments such as network investments would require an increase of capacities?
A: A change of capacities would be subject to the coordinated methodologies under elaboration for the CORE Region. It is difficult to predict how factors such as network investments would influence that, but they should in general have an impact.
Q: Under which conditions could the 4,9 GW transmission capacity be curtailed and by whom?
A: Capacities on the German-Austrian border can be curtailed for the same reasons as on all other borders.
Q: Is it possible that the market area splitting is only temporary and will be removed again if the implementation of capacity allocation on the DE-AT bidding zone border is no longer required? (due to expansion of the grid, etc)
A: If a bidding zone review and the following decision would in the future again lead to a common market area encompassing Germany and Austria, this would be possible.
Q: Could you give an update on FTR vs PTR, LTCR nomination process, effectively usable long term capacity (4900 vs. 4620 MW) and FBMC volumes for DE-AT?
A: FTRs will be implemented on the DE-AT border, subject to final CORE decision, as of 01/10/2018. The effectively usable long term capacity depends still on whether some capacities will be assigned for balancing purposes but will be minumum 4620 MW as explained during the Market Parties Conference in Berlin. Cross-zonal capacity not needed for the balancing market will be given to the Day-ahead market. The process described on slide 86 of the meeting material of the Market Parties Conference is subject to a final NRA decision, which is expected by the beginning of October 2018.
Q: Has a decision to implement FTRs at the DE-AT border already been taken?
A: Yes, FTRs will be implemented on the DE-AT border, subject to final CORE decision, as of 01/10/2018.
Q: Has a decision on the actual quantity for Balancing capacities been made?
A: No, not yet.
Q: The reduction of loop flows in the Czech Republic and Poland were the main drivers for the BZB split. Has there been any contact with Eastern TSOs in this respect?
A: Discussions with Eastern Countries on the decision to split the DE-AT BZ took place. From practical perspective, a relieve for Eastern countries is expected. Moreover the CORE project of TSOs will develop a joint method and submit it to NRAs, including trial runs taking into account the split in order to provide a full picture of capacities in the entire region.