Transmission System Operators (TSOs)
Transmission System Operator is a natural or legal person responsible for operating, ensuring the maintenance of and, if necessary, developing the transmission system in a given area and, where applicable, its interconnections with other systems, and for ensuring the long-term ability of the system to meet reasonable demands for the transmission of electricity (Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU, Article 2(35).
This definition is left unchanged by the so-called 'Winter Energy Package' proposed by the European Commission in December 2016 - the identical wording was previously used in Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC.
Transmission System Operators are responsible for providing and operating high and extra-high voltage networks for long-distance transmission of electricity as well as for supply of lower-level regional distribution systems and directly connected customers.
Apart from the transmission and supply task it is also the TSOs' responsibility to ensure the system security with a high level of reliability and quality.
Tasks of TSOs regarding system operation are stipulated in greater detail in the Network Code on System Operation (Commission Regulation establishing a guideline on electricity transmission system operation).
Pursuant to these provisions each TSO is responsible for the operational security of its control area and, in particular, it shall:
(a) develop and implement network operation tools that are relevant for its control area related to real-time operation and operational planning;
(b) develop and deploy tools and solutions for the prevention and remedy of disturbances;
(c) use services provided by third parties, through procurement when applicable, such as :
- congestion management services,
- operating reserves and
- other ancillary services;
(d) comply with the incidents classification scale adopted by ENTSO for Electricity in accordance with Article 8(3)(a) of Regulation (EC) No 714/2009 and submit to ENTSO for Electricity the information required to perform the tasks for producing the incidents classification scale; and
(e) monitor on an annual basis the appropriateness of the network operation tools established pursuant to points (a) and (b) required to maintain operational security. Each TSO shall identify any appropriate improvements to those network operation tools, taking into account the annual reports prepared by ENTSO for Electricity based on the incidents classification scale. Any identified enhancement shall be implemented subsequently by the TSO.
TSO can act not only as TSO, but also as:
- operator of capacity trading allocation platform (not being a separate legal entity – e.g. Auction Platform);
- independent system operator (of a different transmission system) – ISO TSO;
- REMIT market participant (gas purchase for technological needs, gas for balancing needs, use of storage capacities);
The risks or disturbances that need to be handled by TSOs in order to maintain the operational security, pursuant to the ENTSO-E Supporting Document for the Network Code on Operational Security of 24 September 2013 2nd Edition Final (p. 35, 36) include the following aspects:
- continued power supply to the demand facilities connected to the transmission system;
- power flow control to avoid congestion;
- frequency stability;
- voltage stability;
- system stability; and
- emergency control and restoration.
Network Code on System Operation underlines the overarching principle that the TSO "should remain responsible for maintaining operational security of its control area".
With regards to the exclusive responsibility of the TSO for operational security and liability for its own actions, TSOs work on the principle that they must have full control over the tools used and a complete overview of the data quality of the in-house and externally-supplied information.
With regards to the task of maintaining the frequency stability, it is important to note that the responsibility of the TSOs includes their own transmission system, as well as the LFC Area as a whole, including thus the underlying network.
The TSO responsibility linked to the task of maintaining the frequency control extends to the entire balancing of the LFC Area at all grid levels, especially since effects leading to the imbalance are generally not caused from within the own transmission system operation but by the behaviour of Significant Grid Users.
Interventions by Distribution System Operators (DSOs) in the operation of Demand Facilities represent an exception to the latter, e.g. regarding the avoidance of congestions in the distribution network. These interventions are complex in terms of their impacts on the transmission system operation and can extend their effect on the system balance and load flows of other LFC Areas.
According to Article 15(1) of the Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing, DSOs, TSOs, balancing service providers (BSPs) and balance responsible parties (BRPs) are required to cooperate in order to ensure efficient and effective electricity balancing.
It is essential that the TSO is informed in an appropriate manner about the current and planned Significant Grid User behaviour and participates in the interventions by DSOs in the whole LFC Area.
Since the TSOs work closely together on a horizontal level, each TSO has to ensure in its LFC Area that effects with negative consequences on operational security do not lead to impacts on other transmission systems due to the high degree of interconnection in Europe.
At the European level TSOs are represented mainly mainly by the association - European Network of Transmission System Operators for Electricity (ENTSO-E) has been formally established under Regulation 714/2009.
The thresholds, which determine whether a system is a transmission system or a distribution system, are established at the national level (Recital 9 of the Demand Connection Code (DCC)).
Transmission tariffs in the EU Member States are not harmonised, divergent policies are also applied.
A few examples can be found in the document “Scoping towards potential harmonisation of electricity transmission tariff structures, Conclusions and next steps, August 2015, Final Report, Cambridge Economic Policy Associates Ltd”.
Pursuant to the said source, some countries place an emphasis on developing a transmission tariff structure considered, in the context of that country, to be cost reflective in the sense of applying forward looking (marginal) costs, which often vary by location.
Other countries apply simpler arrangements, with the objectives of having a tariff structure that is transparent, predictable and cost-reflective in the sense of reflecting the historic costs of the network.
European Member States also apply varying capacity and energy based components through their transmission tariff structures:
- in some countries, transmission use of system tariffs are predominantly capacity based (e.g. Great Britain and Italy); whilst
- in other countries, the tariff structure is predominantly energy based (e.g. Denmark and Finland).
To fully recover efficiently incurred costs, some countries also levy electricity transmission tariffs on both generation and load users of the network, whilst other countries apply tariffs only to load.
Different principles and approaches are also applied with respect to the application of locational and time of use signals through transmission tariffs.