Remedial action in the context of the European Union Electricity Internal Market is any measure applied by a Transmission System Operator (TSO) or several TSOs, manually or automatically, in order to maintain operational securityas well as to relieve physical congestion on their networks.

         
          
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8 December 2020

 

ACER Decision 34/2020 on the Methodology for Regional Operational Security Coordination for the South-East Europe Capacity Calculation Region

ACER Decision 34/2020 on SEE ROSC - Annex I

ACER Decision 34/2020 on SEE ROSC - Annex Ia

 

ACER Decision 33/2020 on the Methodology for Regional Operational Security Coordination for the Core Capacity Calculation Region

ACER Decision 33/2020 on Core ROSC - Annex I

ACER Decision 33/2020 on Core ROSC - Annex Ia

ACER Decision 33/2020 on Core ROSC - Annex II

 

The methodologies set out by the Decisions 33/2020 and 34/2020 provide rules for an efficient and effective coordination of remedial actions on a cross-border level in the SEE and Core CCRs, therefore safeguarding the electricity network.


 

Remedial actions serve, in particular, to fulfil the (N-1)-Criterion and to maintain operational security limits.

 

“Remedial action” is defined in Article 2(13) of CACM Regulation as “any measure applied by a TSO or several TSOs, manually or automatically, in order to maintain operational security.”

 

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.


Remedial actions may include, but are not limited to the following:


- re-dispatching;

 

- countertrading;

 

- Demand Side Response,

 

- increase/decrease energy storage;


- topology changes in the network;


- adjusting flows by phase shifters and other flow controlling devices;


- use of reactive power devices (tap-changers, reactors, capacitor banks, SVC, etc.);


- request (or control if available) additional voltage/reactive support from power plants;


- HVDC Systems active and reactive power control; and


- system protection schemes actions.

 

Remedial actions are prepared and activated by the TSOs where the level of reactive power ancillary services is not sufficient for maintaining operational security (Article 109(3) of the Network Code on System Operation). In such a case the TSO informs the neighbouring TSOs.

 

In some EU countries, the balancing energy bid products are used not only for balancing but also for remedial actions.

 

In other countries, there is a strict separation between balancing energy products (including but not limited to remuneration) and flexibility activated for remedial actions (Explanatory document to all TSOs’ proposal to further specify and harmonise activation purposes from common merit order lists in accordance with Article 29 (3) of Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing, p. 4).

 

The detailed EU regulatory framework for remedial actions is laid down in Articles 20 - 23 of the Network Code on System Operation (see box below). 

 

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).

 

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, the Core TSOs define these categories in the following way:


- a preventive remedial action is the result of an operational planning process and needs to be activated prior to the investigated timeframe for compliance with the (N-1) criterion;


- a curative remedial action is the result of an operational planning process and is activated straight subsequent to the occurrence of the respective contingency for compliance with the (N-1) criterion, taking into account transitory admissible overloads and their accepted duration.

 

Another way remedial actions can be categorised 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:


- re-dispatching or counter trade actions;


- topology changes in the network;


- adjusting flows by phase shifters and other flow controlling devices;


- manual switching of reactive power devices (tap-changers, reactors, capacitor banks, SVC, etc.) or changing the set-point level of their controllers;


- request (or control if available) additional voltage/reactive support from power plants;


- enabling available system protection schemes.

 

 

Corrective (curative) 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:


- re-dispatching or counter trade actions including activation of TSO reserves;


- control of reactive power devices (tap-changers, reactors, capacitor banks, SVC, etc.);


- activation of additional voltage/reactive support from power plants;


- emergency power control of HVDC links of other power controlling devices;


- system protection schemes actions e.g. change of network topology, trip of production or trip load depending on protection specification.

 

 

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.

 

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).

 

According to the ACER/CEER Annual Report of 22 October 2018 on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2017 (Electricity Wholesale Markets Volume, p. 9) during the 2015–2017 period, the highest remedial actions costs were recorded in Spain, Germany, Portugal and Great Britain, with annual averages of 2.3, 1.7, 1.7 and 1.2 euros per MWh of demand, respectively. 

 

The said ACER/CEER Annual Report of 22 October 2018 further observed that:

- compared to 2016, the overall costs of remedial actions increased in 2017 by 29%, mainly due to increases in Austria (192%), Germany (93%, accounting for more than half of European costs) and Great Britain (24%),

- such costs dramatically increased in France (from less than a million euros to 8.6 million euros),

- in Portugal and Spain, they decreased by 61% and 27%, respectively, but still accounted for over 400 million euros,

- when normalized per unit demand, costs of remedial actions were greater than or equal to 1.0 euro/MWh in Germany, Spain, Austria, Great Britain and Portugal, in most other countries, such costs were below 0.2 euros/MWh.

 

Finally, energy regulators observed in the aforementioned Report of 22 October 2018 that “there is still insufficient transparency concerning the costs associated with remedial actions (in particular, on internal redispatching costs), let alone concerning the technical and economic analyses justifying their use”.

 

 

Limitations of the volume of interconnection capacity to solve congestion inside the TSO’s control area

 

 

The so-called 'Winter Energy Package' envisions the rule that the TSOs 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. 


 

The aforementioned ACER/CEER Annual Report of 22 October 2018 assesses that:

- there are grounds to suspect that, due to the lack of correct and adequate incentives for TSOs, the latter often prefer to limit ex-ante cross-zonal capacities in order to limit the costs of remedial actions,
- the application of remedial actions used to preserve or increase cross-zonal capacity is residual in Europe (e.g. the associated costs are reported as zero or almost zero in 13 countries),
- the largest share of remedial actions (hence the largest share of their related costs) aimed at dealing with congestion affecting intra-zonal exchanges, in particular, in 2017, 97% of the cost of all remedial actions was dedicated to ensure that intra-zonal exchanges materialise, rather than to preserve or increase cross-zonal capacity.

 

Nevertheless, the respective rule has been finally included in Article of 16(8) of the Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity (recast) with minor modifications only.