|Network Code on Requirements for Grid Connection of Generators (NC RfG) - must-read for European electricity producers|
Commission Regulation (EU) 2016/631 of 14 April 2016 establishing a network code on requirements for grid connection of generators (NC RfG), as other network codes implemented under the Third Energy Package, represents, from a juridical point of view, an interesting piece of legislation, which needs, firstly, to be placed in the context of existing national legislative frameworks.
The preliminary observation is that the NC RfG takes the form of the Europe-wide binding regulation adopted by the European Commission. Thus, the requirements established in the NC RfG will prevail over national provisions.
However, if compatible with the provisions in the European network code(s), national codes, standards and regulations which are more detailed or more stringent than the respective European network code(s) will retain their applicability.
Moreover, additional measures remaining within the scope of the network code can, as a matter of principle, be taken at the national level provided that they do not contradict the provisions of the network code.
NC RfG needs to be read in the context of all Connection Network Codes ENTSO-E has developed, in line with the ACER framework guidelines, being, apart from NC RfG, Demand Connection Code (NC DCC) and the High-Voltage Direct-Current and DC-connected Power Park Modules (NC HVDC).
NC RfG was recommended by ACER to the European Commission in 2013 and on 26 June 2015 was unanimously approved by representatives of the EU Member States.
The date of full application, as per the code requirements, is three years after the entry into force.
These three years can be grouped in two main parts: the first two years will be used by the Member States to assimilate the NC RfG in their national provisions, and the last year will be used by the impacted parties to comply with the Network Code requirements.
Impact of the NC RfG on the existing energy market arrangements
The first thing is that NC RfG applies to Power Generating Modules, which are considered significant (as such are defined units on the basis of their impact on the cross-border system performance via influence on the control area's security of supply.
Among other preliminary key issues from the perspective of the impact of the NC RfG on the existing energy market arrangements are:
(1) whether the network code applies to Existing Power Generating Modules,
(2) what is the situation of Existing Power Generating Modules after the entry into force of the RfG,
(3) whether existing derogations still apply after its enforcement or they cease.
ENTSO-E FAQ document of 19 June 2012 contains the following answer to above questions (see answer to the FAQ 9):
Whether a Power Generating Module is defined as an Existing Power Generating Module in the context of the NC RfG depends on the date of its connection or on the finality of binding contracts its owner may have on the purchase of the main plant and which can be confirmed.
As requested by the ACER Framework Guidelines, the network code shall apply to New Power Generating Modules.
It shall apply to Existing Power Generating Modules as well, if this has been proposed by the relevant Transmission System Operator (TSO) on a national level and this proposal has been approved by the National Regulatory Authority.
Depending on the proposal by the relevant TSO (and the regulator’s approval) there can be a variety of application to Existing Power Generating Modules:
- All Existing Power Generating Module shall meet all requirements,
- All Existing Power Generating Modules shall meet selected requirements,
- Selected Existing Power Generating Modules shall meet all requirements,
- Selected Existing Power Generating Modules shall meet selected requirements.
Once approved and applied to a certain Existing Power Generating Module, this unit shall meet those requirements which are covered by this approval without any exemption, regardless whether it possesses a derogation from this requirement, which was issued on a national level before the network code entered in force.
In respect of the network codes, such former derogations are invalid.
Derogations will have to be sought specifically from the requirements of the network code by applying for them according to the procedure for derogation defined in the network code.
However, Existing Power Generating Modules, which are not covered by the network code, shall continue to be bound by such technical requirements that apply to them pursuant to legislation in force in the respective Member States or contractual arrangements in force.
Consequently, existing national/local derogations may remain in force as well, provided that they refer to a requirement not covered by the EU network code.
Although existing derogations are not suitable evidence of derogation from the network code in case of application to Existing Power Generating Modules, such documentation can however provide useful background information when preparing the derogation application regarding the network code.
Given the importance of the above circumstances the generators mustn't neglect them. Why? The problem is linked to financial burden. ENTSO-E answer to the FAQ 13 (Why does the network code not specify who pays for improvements of Existing Power Generating Modules to become compliant with the requirements? Who bears the costs for demonstrating compliance?) clears same ambiguities in that regard.
ENTSO-E observes firstly that cost allocation of improvements is not covered specifically by the framework guidelines on electricity grid connection issued by ACER.
The ACER Framework Guidelines state that “[t]he network code(s) shall always require the system operators to optimise between the highest overall efficiency and lowest total cost for all involved stakeholders. In that respect, NRAs shall ensure, that, whatever the cost-sharing scheme is, the cost split follows the principles of non-discrimination, maximum transparency and assignment to the real originator of the costs.”
Improvements of existing Power Generating Facilities and equipment to achieve compliance with the network code based on TSO proposal can only be mandated after a cost-benefit analysis which is performed on a socio-economic level (see FAQ 11) in line with the framework guidelines.
Nevertheless, in case of replacement/improvements/modernisation of existing Power Generating Facilities, it is required that the replaced/improved/modernised installations are compliant with the requirements of the network code, unless the Power Generating Facility owner applies for a derogation from this obligation and this derogation is granted by the relevant network operator.
The responsibility on demonstrating compliance with the requirements established in the network code relies on the Power Generating Facility owners. Consequently they shall bear their costs related to compliance tests and simulations. This should be done in alignment with the compliance principle set out in this network code and detailed further at a national level.
Among other fundamental issues impacting nearly all remaining provisions of the NC RfG is the question whether the technology-neutral approach should be adopted in the code.
ACER’s opinion of 13 October 2012 on NC RfG acknowledges the principle of uniform application of the requirements regardless of the generation technology, however, it can be anticipated that there may arise further controversies in that regard.
Pursuant to the ENTSO-E assumptions adopted at present major differences in the capability requirements of Power Generating Facilities do not result from the primary energy source used (wind, solar, gas, coal, nuclear, hydro, etc.) for conversion into electricity, but from the type of generator connected to the network, in particular whether the generator is synchronously connected to the grid (like for the vast majority of conventional thermal Power Generating Modules) or via a power converter installation (like for wind farms or PV installations).
Therefore three categories of requirements are distinguished in the NC RfG:
- general requirements, which apply to all PGMs, regardless of the type of connection, because they are not influenced by it;
- specific requirements for synchronously connected Power Generating Modules (Synchronous Power Generating Modules);
- specific requirements for non-synchronously connected Power Generating Modules (so-called Power Park Modules);
- requirements applicable to AC connected offshore generation.
Exhaustive/non-exhaustive and mandatory/non-mandatory requirements of the NC RfG
Non-exhaustive requirements are those for which the European level network codes do not contain all the information or parameters necessary to apply the requirements immediately and need further national specifications for its entire application in general on national level or as a site-specific choice.
Exhaustive/non-exhaustive requirements of the NC RfG can have either mandatory or non-mandatory character (delineations and interdependencies between these categories are explained in greater detail in Internal Energy Market Network Codes - basic information).
Non-exhaustive requirements of the NC RfG are listed in the ENTSO-E Guidance document for national implementation for network codes on grid connection, Parameters of Non-exhaustive requirements, Draft for consultation 1 July -15 August 2016, 22 June 2016, p. 5 - 12.
The ENTSO-E document of 22 June 2016 (Making non-mandatory requirements at European level mandatory at national level, ENTSO-E Guidance document for national implementation for network codes on grid connection, Draft for consultation 1 July -15 August 2016) refers in that regard to the following examples of provisions having different character in the NC RfG:
- mandatory, non-exhaustive requirement: Article 14(3)(a) - fault-ride-through capability,
- non-mandatory, non-exhaustive requirement: Article 13(1)(a)(ii) - wider frequency ranges,
- mandatory, exhaustive requirement: Article 16(2)(a)(i) - voltage ranges,
- non-mandatory, exhaustive requirement: Article 16(2)(a)(iii) - voltage ranges in Spain.
ENTSO-E non-binding guidance on NC RfG
Under Article 58 of the NC RfG ENTSO-E has the power to issue non-binding guidance on NC RfG (Implementation Guidance Document - IGD).
The main objective of the implementation guidance is to support system operators in the process of determination on national level of non-exhaustive requirements during the national implementation.
Further objectives of the IGDs are:
- to facilitate a common understanding of technical issues specified in the connection network codes, in context of new technologies and new requirements (e.g. synthetic inertia),
- to deliver broader explanations and background information and to illustrate interactions between requirements,
- to recommend coordination/collaboration between network operators (TSO) where either explicitly required by the connection codes or reasonably exercised from a system engineering perspective,
- to give guidance to national specifications for non-exhaustive requirements, and
- to express the need of further harmonisation beyond what is requested by the connection network codes when reasonable from a system engineering perspective (see: Connection Network Codes – Introduction to the public consultation of Implementation Guidance Documents, Introduction, 30 June 2016).
Some IGDs of particular importance for NC RfG applicability are attached below.
Differentiation by type of Power Generating Modules
Differentiation by type of Power Generating Modules implemented by the NC RfG has a broader context and influences on terminology used by other network codes, and, equally, on other classifications of generation sources used in legal documentation.
NC RfG defines the requirements applicable to Power Generating Modules by placing generators into one of four 'types' A-D.
These categories are based on the maximum capacity of the Power Generating Module and its connection voltage level.
NC RfG defines the limit for maximum capacity threshold of types B, C and D for each of the 5 synchronous areas in Europe.
The capacity thresholds are defined as upper limits of the lower threshold leaving the final determination of this threshold to the national level.
The upper limits have been chosen from an estimation of having sufficient generation capacity of each category and the corresponding capabilities available for secure system operation.
Consequently, the breakdown by type of Power Generating Modules defined in the NC RfG is as follows:
A Synchronous Power Generating Module or Power Park Module is of Type A if its Connection Point is below 110 kV and its Maximum Capacity is 0.8 kW or more.
ENTSO-E FAQ document of 19 June 2012 explains, Type A requirements are the basic level requirements, necessary to ensure capability of generation over operational ranges with limited automated response and minimal system operator control of generation. They ensure there is no wide scale loss of generation over system operational ranges, thereby minimising critical events, and requirements necessary for wide spread intervention during system critical events.
Only essential requirements are included for Type A, limited to those aspects with potential system wide implications. For new installations, there is normally little or no additional cost in complying with these requirements once introduced as part of the standard product. See more on Type A Power Generating Modules
A Synchronous Power Generating Module or Power Park Module is of Type B if its Connection Point is below 110 kV and its maximum capacity is at or above a threshold defined by the relevant TSO and approved by the competent regulatory authority. This threshold must not be above the threshold for Type B Power Generating Modules according to the table below.
Type B requirements provide a wider level of automated dynamic response (generally with settings by the relevant network operator) with higher resilience to more specific operational events to ensure use of this higher dynamic response and a higher level system operator control and information to utilise these capabilities. They ensure automated response to alleviate and maximise dynamic generation response to system events, greater generator resilience of these events to ensure this dynamic response and better communication and control to leverage these capabilities. See more on Type B Power Generating Modules
A Synchronous Power Generating Module or Power Park Module is of Type C if its Connection Point is below 110 kV and its maximum capacity is at or above a threshold defined by the relevant TSO and approved by the competent regulatory authority. This threshold must not be above the threshold for Type C Power Generating Modules according to the table below.
Type C requirements provide refined, stable and highly controllable (real time) dynamic response to provide principle balancing services to ensure security of supply. These requirements cover all operational network states with consequential detailed specification of interactions of requirements, functions, control and information to utilise these capabilities. They ensure real time system response necessary to avoid, manage and respond to system events. These requirements provide sufficient generation functionality to respond to both intact and system disturbed situations, and the need for information and control necessary to utilise this generation over this diversity of situations. See more on Type C Power Generating Modules
A Synchronous Power Generating Module or Power Park Module is of Type D if its Connection Point is at 110 kV or above; a Synchronous Power Generating Module or Power Park Module is of Type D as well if its Connection Point is below 110 kV and its maximum capacity is at or above a threshold defined by the relevant TSO and approved by the competent regulatory authority. This threshold must not be above the threshold for Type D Power Generating Modules according to the table below.
Type D requirements cover a wide area of control and range of operation. They ensure specific needs for higher voltage (equal to or greater than 110kV) networks and their operation and stability over wide areas, allowing the use of ancillary services from generation Europe wide. For this reason the requirements apply also for large generation connected at a lower voltage, but above a given capacity threshold. See more on Type D Power Generating Modules
Limits for thresholds for type B, C and D Power Generating Modules
Article 5 of the NC RfG defines the application of the thresholds contained in Table 1 of that Article based on the capacity of Power Generating Modules.
As ENTSO-E guidance document for national implementation for network codes on grid connection, Selecting national MW boundaries, Draft for consultation 1 July -15 August 2016, 30 June 2016, underlines, as part of the national implementation of NC RfG, the relevant TSO of each Member State needs to set banding thresholds within these maximum values – and so have a choice between applying the maximum MW boundaries as defined in the above Table or, where it is reasonable (e.g. to maintain for new generators capabilities which currently already apply to existing generators for reasons of system security), choosing lower values.
Periodical review of thresholds
In order to take into consideration of the evolution of power supply systems and the corresponding change of system characteristics and performance, NC RfG allows to review periodically the threshold points between the types of generators.
The thresholds may change based on the evolution of the system due to different reasons like increasing penetration of renewable energy sources usually combined with a change from bulk generation by synchronous generators at transmission level towards embedded generation at distribution level often connected through power electronics, or increased cross border reliance.
The code sets out that the thresholds cannot be changed more frequently than every three years after the previous proposal.
When such a change is made it will apply by default to new generators going forwards and the date of application to new generators has also to be determined at national level, taking account of the process applied when the code has been introduced.
Changes can also apply retrospectively but only where the process for retrospective application (Article 4(3) of RfG) is followed.
In this case only, and in accordance with Article 4(3), a cost-benefit analysis (CBA) is required, but only to apply any revised requirements to existing generators.
RfG vs. ancillary services
Among key considerations is whether in the NC RfG can be found some important requirements influencing potential generators' revenues from ancillary services. In that regard ENTSO-E answer to FAQ 12 clarifies as follows:
"It needs to be well distinguished between mandatory requirements of capabilities and the provision of ancillary services based on these capabilities. ENTSO-E agrees with stakeholders, that the provision of ancillary services is basically a market-related issue which needs to be appropriately remunerated. However, the introduction of remuneration provisions shall be subject to other network codes or arrangements."
|Last Updated on Tuesday, 29 November 2016 23:06|