|European Union Electricity Market Glossary|
Remedial Action is any measure applied by a Transmission System Operator (TSO) or several TSOs, manually or automatically, in order to maintain operational security, as well as to relieve physical congestion on their networks.
ENTSO-E underlines (Supporting Document for the Network Code on Emergency and Restoration, ENTSO-E, 25 March 2015, p. 23) Remedial Actions are being mainly dedicated to Normal State and Alert State whereas System Defence Plan measures are to be used specifically in Emergency State when (N-1)-Criterion and Operational Security Limits are already violated.
- increase/decrease energy storage;
Pursuant to the ENTSO-E Supporting Document for the Network Code on Operational Security of 24 September 2013 2nd Edition Final (p. 72) Remedial Actions can be categorised as the pre-fault (i.e. preventive) or post-fault (i.e. corrective or curative).
Another way Remedial Actions can be divided is whether they are applied within one TSO area or between interconnected TSOs.
Preventive Remedial Actions
Preventive Remedial Actions are used normally in Operational Planning or Scheduling stage to maintain system in Normal State in the coming operational situation and to prevent propagation of disturbance outside the TSO ́s Responsibility Area. Preventive Remedial Actions may include, but are not limited to the following:
Corrective Remedial Actions
Corrective Remedial Actions are actions, which will be implemented immediately or relatively soon after an occurrence of a Contingency, which leads to a state differing from Normal State. With the corrective Remedial Action the system will be returned back to Normal State. Corrective Remedial Actions may include, but are not limited to the following:
Remedial Actions' costs
Some Remedial Actions do not result in significant costs (e.g. changing grid topology), while others (e.g. re-dispatching, counter-trading and curtailment of allocated capacities) come at a cost to the system or to TSOs.
The costs of Remedial Actions are recovered by TSOs either via network tariffs, or, in a few cases such as Austria and Portugal, via congestion rents.
In both cases, costs are socialised and directly or indirectly affect the incontestable part of the end-consumers' bill and therefore limit the scope for competition in the wholesale and retail markets (ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity Markets in 2015, September 2016, p. 26).
The Remedial Actions costs for 2015 for individual EU Member States have been set out in the said Report (p. 27) in the tabular form (including the breakdown for the type of the Remedial Action).
When redispatching and countertrading to restore system security are not available, TSOs may curtail allocated capacities and owners of the transmission rights (TRs) have to be compensated.
In the event of force majeure after the day-ahead firmness deadline, market participants are entitled to the reimbursement of the price paid for the capacities during the explicit allocation process.
In an emergency situation, market participants are entitled to compensation equal to the market price difference, in the relevant time-frame, between the bidding zones concerned (with the exception of SK-PL border, where special conditions apply).
When Long-Term Transmission Rights (LTTRs) are curtailed prior to the day-ahead firmness deadline, the Network Code on Forward Capacity Allocation (FCA) envisages that the holders should be compensated by the relevant TSOs with the day-ahead market price spread of relevant markets.
However, the TSOs on a bidding zone border are allowed to cap the total compensation to be paid in a period to the total amount of congestion income collected on the relevant bidding zone border in the same period (i.e. on a yearly basis or on a monthly basis in the case of HVDC interconnectors).
The cost of curtailments is usually divided between the TSOs according to the same sharing key that is used to split the congestion rent.
ACER Recommendation No 2/2016 of 14.11.2016 on the common capacity calculation and redispatching and countertrading cost sharing methodologies observes (p. 7) the activation of remedial actions is often not coordinated, thus not optimised. Coordinated remedial actions are still an exception rather than the rule. The costs of remedial actions are most often paid by the TSOs facing congestion problems (i.e. requester-pays principle), rather than the ones causing them (i.e. polluter-pays principle).
Remedial Actions in the Winter Energy Package
The so-called 'Winter Energy Package' envisions the rule that the transmission system operators must not limit the volume of interconnection capacity to be made available to other market participants in order to solve congestion inside their own control area or as a means of managing flows on a border between two control areas observed even without any transaction, i.e. flows over control areas caused by origin and destination within one control area.
Derogation from this principle may be granted in exceptional circumstances only (Article 14(7) of the Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast), 30.11.2016, COM(2016) 861 final 2016/0379 (COD)).
Referring to these proposals, ENTSO-E in the policy statement of 15 March 2017 "Key Recommendations for the Clean Energy Package" heavily criticised the European Commission's propositions, in particular, ENTSO-E said: "the requirements on TSOs capacity calculation to ignore internal congestions and loop flows and instead use costly remedial actions to increase cross-border capacity would lead to outcomes not reflecting the physical reality of European grids and significantly increase congestion management costs to be paid by end-consumers via transmission tariffs (Art. 14)."
In the document Clean Energy Package: Promising market proposals, but some issues to be solved of 15 March 2017, ENTSO-E expressed reservations regarding the fact that the European Commission's proposals in the said draft Regulation require no consideration of internal congestions nor loop flows within the capacity calculation process, and, in addition, they impose an obligation on TSOs to use preventive re-dispatch and countertrading to maximise available cross-border capacity.
"These provisions would oblige TSOs to ignore the physical flows that are an inherent part of the effective capacity calculation, increase the differences between the system reality on one side and the commercial exchanges on the other," ENTSO-E said.
According to the ENTSO-E the said draft provisions would lead to higher re-dispatch costs and risks related to possible unavailability or inexistence of necessary Remedial Actions to cope with congestions.
|Last Updated on Friday, 07 April 2017 00:53|