Głowacki Law Firm

Countertrading
European Union Electricity Market Glossary

 

 

 

The term 'countertrading' means a cross zonal exchange initiated by system operators between two bidding zones to relieve physical congestion (Article 2(13) of the Regulation on submission and publication of data in electricity markets). 

 

According to the Core CCR TSOs’ proposal for the methodology for coordinated redispatching and countertrading in accordance with Article 35.1 of Commission Regulation (EU) 2015/1222 of 24 July 2015, “Core RD and CT Methodology” of 5 September 2018 countertrading means “a measure performed by one or several Transmission System Operators (TSOs) in one or several bidding zones in order to relieve physical congestions where the location of activated resources are not known within the bidding zone”.

 

Explanatory document to the above proposal explains, moreover, that in the case that upregulating and downregulating measures are countertrading, they are considered as a measure between at least two bidding zones with the objective to relieve physical congestions, where the precise generation or load pattern alteration is not pre-defined.

 

This measure is a market based-solution, where the cheapest bid is selected independently of the geographical location within the bidding zone.

 

By using countertrading resources, the relieving effect on the congestion must be ensured.

 

The EU Network Code on System Operation (System Operation Guideline - SOGL) in Article 55(c) lists countertrading among services provided by third parties, through procurement when applicable, that each TSO uses for ensuring the operational security of its control area.

 

Countertrading in the European Union Internal Electricity Market is part of the broader scope of remedial actions (see Article 22(1)(f) of the SOGL).

 

Countertrading can be prepared in different processes and in different timeframes, i.e. day-ahead, intraday and real-time (Explanatory document of 5 September 2018 to the proposal for the coordinated redispatching and countertrading methodology for Capacity Calculation Region Core in accordance with Article 35 of the Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a Guideline on Capacity Allocation and Congestion Management, p. 7).

 

The most prominent EU country when it comes to the volumes for 2015 for the internal and cross-border countertrading was Germany.

 

The respective numbers for this EU Member State according to the ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity Markets in 2015, September 2016 (p. 27) were:

 

- volume (in GWh): internal 1,914, cross-border 412,

 

- overall cost (in thousand euros) - 26,316.

 

According to the Report of the Core TSOs of 13 December 2018 assessing the progressive coordination and harmonisation of mechanisms and agreements for redispatching and countertrading (in accordance with EU Regulation 1222/2015 article 35(3), Version for Public Consultation, p. 3) in the Core region, the impact of countertrading is not the same everywhere.

 

Some TSOs apply countertrading already for a long-time, whilst others only apply it occasionally or have developed non-costly remedial actions to solve their congestions.

 

Generally, the agreements and mechanisms used for countertrading are national, and they are often quite different due to historical reasons.

 

The Core TSOs consider the implementation of the requirements set out in the CACM Regulation (Regulation establishing a Guideline on Capacity Allocation and Congestion Management) as the next step.

 

Article 35 of the said CACM Regulation provides for some coordinated measures on countertrading.

 

According to the said provisions, within 16 months after the regulatory approval on Capacity Calculation Regions (CCRs), all TSOs in each CCR are required to develop a proposal for a common methodology for coordinated countertrading.

 

As the provisions stipulate, the said methodology "shall include actions of cross-border relevance and shall enable all TSOs in each capacity calculation region to effectively relieve physical congestion irrespective of whether the reasons for the physical congestion fall mainly outside their control area or not".

 

Each TSO must, moreover, abstain from unilateral or uncoordinated countertrading measures of cross-border relevance.

 

In accordance with Article 21(1)(b)(ii) of the CACM, the proposal for the common capacity calculation methodologies should include rules for avoiding undue discrimination between internal and cross-zonal exchanges to ensure compliance with point 1.7 of Annex I to Regulation (EC) No 714/2009.

 

According to Article 74(6) of the CACM, the common methodologies for the sharing of countertrading costs between TSOs must:


- ensure a fair distribution of costs and benefits between the TSOs involved,


- facilitate adherence to the general principles of congestion management under Article 16 of Regulation (EC) No 714/2009, and


- comply with the principles of transparency and non-discrimination.

 

The said issues are the subject of the ACER Recommendation No 2/2016 of 11.11.2016 on the common capacity calculation and redispatching and countertrading cost sharing methodologies.

 

When it comes to the Core CCR the TSOs submitted the above proposal on 5 September 2018 (Core CCR TSOs’ proposal for the methodology for coordinated redispatching and countertrading in accordance with Article 35.1 of Commission Regulation (EU) 2015/1222 of 24 July 2015, “Core RD and CT Methodology” - see link in the documentation section).

 

 

 

Regulation establishing a Guideline on Capacity Allocation and Congestion Management (CACM - Regulation on market coupling)

 

 

Recital 10

 

TSOs should use a common set of remedial actions such as countertrading or redispatching to deal with both internal and cross-zonal congestion. In order to facilitate more efficient capacity allocation and to avoid unnecessary curtailments of cross-border capacities, TSOs should coordinate the use of remedial actions in capacity calculation.

 

Recital 12


TSOs should implement coordinated redispatching of cross-border relevance or countertrading at regional level or above regional level. Redispatching of cross-border relevance or countertrading should be coordinated with redispatching or countertrading internal to the control area.

 

Article 35

Coordinated redispatching and countertrading

 

1. Within 16 months after the regulatory approval on capacity calculation regions referred to in Article 15, all the TSOs in each capacity calculation region shall develop a proposal for a common methodology for coordinated redispatching and countertrading. The proposal shall be subject to consultation in accordance with Article 12.

 

2. The methodology for coordinated redispatching and countertrading shall include actions of cross-border relevance and shall enable all TSOs in each capacity calculation region to effectively relieve physical congestion irrespective of whether the reasons for the physical congestion fall mainly outside their control area or not. The methodology for coordinated redispatching and countertrading shall address the fact that its application may significantly influence flows outside the TSO's control area.

 

3. Each TSO may redispatch all available generation units and loads in accordance with the appropriate mechanisms and agreements applicable to its control area, including interconnectors. By 26 months after the regulatory approval of capacity calculation regions, all TSOs in each capacity calculation region shall develop a report, subject to consultation in accordance with Article 12, assessing the progressive coordination and harmonisation of those mechanisms and agreements and including proposals. The report shall be submitted to their respective regulatory authorities for their assessment. The proposals in the report shall prevent these mechanisms and agreements from distorting the market.

 

4. Each TSO shall abstain from unilateral or uncoordinated redispatching and countertrading measures of cross-border relevance. Each TSO shall coordinate the use of redispatching and countertrading resources taking into account their impact on operational security and economic efficiency.

 

5. The relevant generation units and loads shall give TSOs the prices of redispatching and countertrading before redispatching and countertrading resources are committed.
Pricing of redispatching and countertrading shall be based on:
(a) prices in the relevant electricity markets for the relevant time-frame; or
(b) the cost of redispatching and countertrading resources calculated transparently on the basis of incurred costs.

 

6. Generation units and loads shall ex-ante provide all information necessary for calculating the redispatching and countertrading cost to the relevant TSOs. This information shall be shared between the relevant TSOs for redispatching and countertrading purposes only.

 

 

 

 

 

 

 

IMG 0744

    Documentation    

 

 

 

Network Code on System Operation, Article 55(c)

 

Regulation on submission and publication of data in electricity markets, Article 2(13)

 

Regulation establishing a Guideline on Capacity Allocation and Congestion Management (CACM - Regulation on market coupling), Article 35, Article 74(6), Recital 10, 12

 

ACER Recommendation No 2/2016 of 11.11.2016 on the common capacity calculation and redispatching and countertrading cost sharing methodologies

 

ACER/CEERAnnual Report on the Results of Monitoring the Internal Electricity Markets in 2015, September 2016, p. 27

 

 

 

 

 

clip2

    Links    

 

 

 

 

Redispatching

 

 

 

 

 

 

 

 

 

Last Updated on Tuesday, 25 December 2018 14:44
 

Search

TwitterFacebookLinkedin
Copyright © 2009 - 2019 Michal Glowacki. All rights reserved.
The materials contained on this website are for general information purposes only and are subject to the disclaimer