Elia Group SA/NV · EURONEXT:ELI
Elia Group SA/NV — Investor Presentation (December 2022)
115 slides from Elia Group SA/NV's investor presentation, Dec 16, 2022
Slide 1: WG Adequacy #14
WG Adequacy #14 16 December 2022
Slide 2: Agenda
Agenda ➢ Welcome ➢ Minutes of Meeting WG Adequacy #12 & #13 (28.10.2022 & 17.11.2022) ➢ CRM : Calibration Report Elia 27-28 ➢ CRM : Capacity contract planning ➢ CRM/LCT : Changes & Eligibility ➢ Final results for a CO2 threshold trajectory recommendation in the Belgian CRM ➢ Next meetings 2
Slide 3: Minutes of Meetings
—€eia Minutes of Meetings
Slide 4: Minutes of Meeting
Minutes of Meeting • WG Adequacy #12 – 28.10.2022 : To be approved • The MoM were sent on 08.12.2022. No comments were received. • WG Adequacy #13 – 17.11.2022 : To be approved • The MoM were sent on 02.12.2022. No comments were received. 4
Slide 5: CRM: Calibration Report Elia 27-28
CRM : Calibration Report Elia 27-28* *Note that some corrections were applied in order to clarify naming between auction and CRM calibration report
Slide 6: Agenda
Agenda ➢ Introduction ➢ Regulatory Context & Ministerial Decrees ➢ Overview of the TSO’s CRM Calibration Report ▪ Part I : Reference scenario and intermediate values selected by the Minister ▪ Focus on scarcity situations ▪ Part II : Information and input for the establishment of the demand curve ▪
Slide 7: Introduction
Fira Introduction
Slide 8: Introduction
Introduction • The report contains information, calculations and proposals for the Y-4 auction for delivery period 2027- 28, that will take place in October 2023, that will serve as basis for the Minister to choose the parameters that determine the amount of capacity to be auctioned. • The legal & r
Slide 9: Overview of data published
Overview of data published Content of the publication: • TSO’s CRM Calibration Report • Information and data for the demand curve building • Proposals for auction’s parameters (derating factors, IPC, Strike Price) • (NEW) Additional appendix to provide additional insights to stakeholders on the CRM
Slide 10: Next Steps
Next Steps Based on the Royal Decree Methodology, the next steps are the following: • A proposal from CREG on the demand curve and Y-1 reserved volume is expected by 1/02/2023; • An advice from Elia and FPS Economy on CREG’s demand curve proposal is expected by 1/03/2023; • A decision by the Ministe
Slide 11: Regulatory Context & Ministerial Decrees
Regulatory Context & Ministerial Decrees
Slide 12: Regulatory Context
Regulatory Context The TSO’s CRM Calibration Report for the Y-4 auction with Delivery Period 2027-28 is based on Chapter 3 of the Royal Decree Methodology and on the CRM Law. On basis of the reference scenario selected by the Minister, Elia’s report should at least contain : 1. the load duration cur
Slide 13: Overview of the TSO's CRM Calibration Report
Overview of the TSO’s CRM Calibration Report Part I : Reference scenario and intermediate values selected by the Minister
Slide 14: Reference scenario and intermediate values selected by the Minister
Reference scenario and intermediate values selected by the Minister Reference scenario’s Ministerial Decree on proposal from CREG the reference (C)2429 scenario Scenario and sensitivities proposals made by Elia in Public consultation Public consultation collaboration with FPS and on the scenarios, r
Slide 15: Reference scenario selected by the Minister on 09/09
Reference scenario selected by the Minister on 09/09 • Based on ERAA21 • Dataset updated based on the latest information for Belgium and other countries as consulted upon from May to June 2022 • Integrate high prices based on trajectories derived from REPowerEU assessment from European Commission •
Slide 16: Intermediate values selected by the Minister on 09/09
Intermediate values selected by the Minister on 09/09 • A list of technology and a gross-CONE for each technology as presented in the table below • A correction factor X equal to 1,5 • Hurdle Premium in line with Royal Decree on Methodology • WACC = 5,53 % Note that all assumptions and input data ar
Slide 17: Main changes compared to previous TSO's CRM Calibration Report
Main changes compared to previous TSO’s CRM Calibration Report in the Belgian area 1 Lots of changes on the Belgian input data • Total load reduced compared to previous TSO’s CRM Calibration Report (91.5 → 90.9 TWh) but more seasonality due to HP and intraday variations due to EV • More residential
Slide 18: Dataset significantly changed compared to last year
Dataset significantly changed compared to last year Massive increase of RES generation compared 1 2 Significant increase of the fuel price to previous reference scenario 3,4 PWh 3,5 PWh WG Adequacy #14 - CRM Calibration Report 18
Slide 19: Dataset significantly changed compared to last year
Dataset significantly changed compared to last year 3 Reduced share of thermal units in Germany and additional electrification (Easter Package) 4 Updated sensitivity on French nuclear availability Sensitivity Description Decreased French nuclear availability in line with the reference Selected for t
Slide 20: Focus on scarcity situations
Overview of the TSO’s CRM Calibration Report Focus on scarcity situations
Slide 21: A specific focus on scarcity situations is relevant
A specific focus on scarcity situations is relevant as most of CRM parameters and calculations are derived from these • Simulated scarcity situations are one of the main drivers in the calculation of CRM parameters • Some volume parameters are calculated during these periods : • Average load during
Slide 22: Scarcity situations length increased on average
Scarcity situations length increased on average • In both TSO’s CRM calibration reports, limited amount of scarcity situations with a length higher than 10h. • More scarcity situations in this TSO’s CRM calibration report with a length higher than or equal to 5h. • In general the scarcity situations
Slide 23: More consecutive days in which scarcity situations occur
More consecutive days in which scarcity situations occur with at least 1h of scarcity (2 → 3 or 4) compared to previous TSO’s CRM Calibration Report • Few periods of more than 1 day with scarcity situations • This probability is similar in the last 2 TSO’s CRM Calibration Reports. • However, more sc
Slide 24: Scarcity situations happen during longer periods around the evening peak
Scarcity situations happen during longer periods around the evening peak, explaining the increased length of scarcity situations • Main difference between the last 2 TSO’s CRM calibration reports is the spread of scarcity moments around the evening peak. • In the TSO’s CRM calibration report for Y-4
Slide 25: Most scarcity situations in Belgium happen in January
Most scarcity situations in Belgium happen in January • The distribution of scarcity situations across the year shows that most of those events take place in January. • Scarcity situations happen from November to February included. • The distribution of scarcity moments across the year is similar to
Slide 26: Part II: Information and input for the demand curve
Overview of the TSO’s CRM Calibration Report Part II : Information and input for the establishment of the demand curve
Slide 27: Part II: Establishment of the demand curve
Part II : Information and input for the establishment of the demand curve 3 points (A, B & C) to be determined by CREG → 4 parameters (based on the input data from Elia) price [€/kW] Global auction price cap A = (1+X).net-CONE net-CONE B C capacity [MW] CRM Maximum Volume at global auction price cap
Slide 28: Part II: X parameter fixed to 1,5
Part II : Information and input for the establishment of the demand curve X parameter fixed to 1,5 price [€/kW] Global auction price cap A = 1,5 x net-CONE net-CONE B C capacity [MW] CRM Maximum Volume at global auction price cap CRM Required Volume Reference scenario calibrated at : Reference scena
Slide 29: Part II: Volume parameters
Part II : Information and input for the establishment of the demand curve Volume parameters price [€/kW] Global auction price cap A = 1,5 x net-CONE net-CONE B C capacity [MW] CRM Maximum Volume at global auction price cap CRM Required Volume Reference scenario calibrated at : Reference scenario cal
Slide 30: Volume Parameters
Volume Parameters Determination of the volume parameters according to the Royal Decree Parameters calculated in Elia’s report in order for CREG to establish the volume parameters of the demand curve : • Average load during simulated scarcity hours from the calibrated reference scenario (for points A
Slide 31: Volume Parameters
Volume Parameters Parameters calculated in Elia’s report in order for CREG to establish the volume parameters of the demand curve : • Average load during simulated scarcity hours from the calibrated reference scenario (for points A and B&C) • Average energy not served during simulated scarcity hours
Slide 32: Volume Parameters - Average load in simulated scarcity hours
Volume Parameters - Average load in simulated scarcity hours • Calculated based on the simulation’s output for the calibrated reference scenario • It is equal to the average load during each scarcity situation identified in the Monte-Carlo simulation • This consumption corresponds to the consumption
Slide 33: Comparison of average load in simulated scarcity hours
Comparison of the average load in simulated scarcity hours between last 2 TSO’s CRM Calibration Reports • Volume at point B decreases by 18 MW compared to last TSO’s CRM Calibration Report. • This difference can be explained by several elements : • Reduction of the yearly electricity consumption (91
Slide 34: Volume Parameters
Volume Parameters Parameters calculated in Elia’s report in order for CREG to establish the volume parameters of the demand curve : • Average load during simulated scarcity hours from the calibrated reference scenario (for points A and B&C) • Average energy not served during simulated scarcity hours
Slide 35: Volume Parameters - Average energy not served
Volume Parameters - Average energy not served in simulated scarcity hours • Calculated based on the simulation’s output of the calibrated reference scenario • It is equal to the average energy not served during each scarcity situation identified in the Monte -Carlo simulation • The methodology to ca
Slide 36: Comparison of average energy not served
Comparison of the average energy not served in simulated scarcity hours between last 2 TSO’s CRM Calibration Reports • The average energy not served during simulated scarcity situations doesn’t change significantly between the last 2 TSO’s CRM Calibration Report. • The average energy not served at p
Slide 37: Distribution of energy not served at points A and B
The distribution of energy not served during simulated scarcity hours doesn’t change significantly between points A and B Distribution of energy not served at points A & B • Figure presents the distribution of energy not served during simulated scarcity situations. • It should be noted that more sca
Slide 38: Volume Parameters
Volume Parameters Parameters calculated in Elia’s report in order for CREG to establish the volume parameters of the demand curve : • Average load during simulated scarcity hours from the calibrated reference scenario (for points A and B&C) • Average energy not served during simulated scarcity hours
Slide 39: Volume Parameters – Upward balancing need
Volume Parameters – Upward balancing need • Upward balancing need is part of the Ministerial Decree on reference scenario for 2023 auction. • It has been established in the framework of the public consultation on the scenarios, sensitivities and data for the CRM parameter calculation for the Y-4 Auc
Slide 40: Volume Parameters
Volume Parameters Parameters calculated in Elia’s report in order for CREG to establish the volume parameters of the demand curve : • Average load during simulated scarcity hours from the calibrated reference scenario (for points A and B&C) • Average energy not served during simulated scarcity hours
Slide 41: Volume Parameters – Derated non-eligible capacity
Volume Parameters – Derated non-eligible capacity • Elia’s responsibility is to provide the information it owns regarding the non-eligible capacity. • The eligibility criteria are introduced in article 4 of the CRM Law and developed in the Royal Decree related to « l’établissement des critères et mo
Slide 42: Derated non-eligible capacity: RES
Volume Parameters – Derated non-eligible capacity Criteria 1 : RES Capacities that already receive subsidies Assumptions : • All the RES capacity (solar, onshore wind, offshore wind, hydro run-of-river) is considered as already receiving subsidies • RES capacity is assumed to be equal to both existi
Slide 43: Derated non-eligible capacity: thermal
Volume Parameters – Derated non-eligible capacity Criteria 2 : Thermal capacities that already receive subsidies Assumptions : • The installed profiled thermal capacity is equal to the categories modelled through thermal profiles as selected in the Ministerial Decree. All this capacity is considered
Slide 44: Volume Parameters
Volume Parameters Parameters calculated in Elia’s report in order for CREG to establish the volume parameters of the demand curve : • Average load during simulated scarcity hours from the calibrated reference scenario (for points A and B&C) • Average energy not served during simulated scarcity hours
Slide 45: Max entry capacity for indirect cross-border participation
Volume Parameters – Max entry capacity for indirect cross-border participation • This total volume is to be reserved for the Y-1 auction. • The max entry capacity is equal to the average contribution of each neighboring European Member State to Belgian adequacy during simulated scarcity hours. • The
Slide 46: Total cross-border contribution significantly decreases
Total cross-border contribution significantly decreases compared to the previous TSO’s CRM Calibration Report • The max-entry capacity for cross-border participation is strongly correlated to the assumptions taken at European level: • Germany: Contribution decreases significantly (Higher demand, mor
Slide 47: Almost all scarcity situations are correlated with scarcity in Germany
Almost all scarcity situations are correlated with scarcity in Germany • 99% of scarcity situations in Belgium are correlated with scarcity situations in Germany. • Indirectly, this leads to less simultaneous scarcity situations with other countries than in previous TSO’s CRM Calibration Report. • S
Slide 48: Volume Parameters
Volume Parameters Parameters calculated in Elia’s report in order for CREG to establish the volume parameters of the demand curve : • Average load during simulated scarcity hours from the calibrated reference scenario (for points A and B&C) • Average energy not served during simulated scarcity hours
Slide 49: Volume Parameters – Load Duration Curve
Volume Parameters – Load Duration Curve • Elia’s responsibility is to provide the “load duration curve” required in order for the CREG to calculate the 200h reserved capacity for Y-1 auction • This curve is based on the electricity consumptions profiles integrated in the Monte-Carlo simulation. • Th
Slide 50: Part II: Price Parameters
Part II : Information and input for the establishment of the demand curve Price Parameters price [€/kW] Global auction price cap A = 1,5 x net-CONE net-CONE B C capacity [MW] CRM Maximum Volume at global auction price cap CRM Required Volume Reference scenario calibrated at : Reference scenario cali
Slide 51: Price parameters - Determination of the missing money
Price Parameters Price parameters - Determination of the missing money Yearly Ancillary Services Revenue price [€/kW] Yearly Energy Market Revenue Yearly Fixed Costs Annualized Investments Cost Gross CONE Revenues Missing Money Net-CONE = missing money of the technology with the lowest missing money
Slide 52: Price Parameters
Price Parameters • In the framework of the intermediate values selected by the Minister, a set of parameters has been determined. This includes among others : • the short-list of technologies for which the missing money should be calculated for net-CONE purposes ➢ CCGT ➢ OCGT ➢ IC Gas Engine ➢ CHP ➢
Slide 53: Price Parameters – Energy Market Revenues
Price Parameters – Energy Market Revenues • Market revenues have to be determined on the whole economic lifetime of the technologies • For delivery period 2027-28, market revenues are calculated based on the calibrated reference scenario • For delivery periods afterwards, the following studies have
Slide 54: Price Parameters – Electricity Market Revenues
Price Parameters – Electricity Market Revenues • Revenues are significantly higher for Delivery Period 2027-28, explained by the assumptions chosen in the reference scenario • Revenues decrease for later periods, based on results from previous AdFlex 21 study. • Fuel cost parameters were not that hi
Slide 55: Revenues significantly increase compared to previous report
Revenues significantly increase compared to previous TSO’s CRM Calibration Report • Due to the higher prices compared to the previous reference scenario for Delivery Year 2026 -27, revenues are significantly higher than in previous TSO’s CRM Calibration Report. WG Adequacy #14 - CRM Calibration Repo
Slide 56: Price Parameters – net ancillary services revenues
Price Parameters – net ancillary services revenues • The estimation of the net revenues must be provided for the technologies listed earlier • They are calculated in accordance with the Royal Decree Methodology : based on the net revenues arising from the reservation of frequency-related balancing s
Slide 57: Net ancillary services revenues: comparison
Price Parameters – net ancillary services revenues Overview and comparison to previous TSO’s CRM Calibration Report • For most technologies, net revenues increase slightly compared to last year’s calibration due to recent rising price levels • DSR is the only technology with decreasing revenues, ref
Slide 58: Part III: Proposals for the other auction parameters
Overview of the TSO’s CRM Calibration Report Part III : Proposals for the other auction parameters
Slide 59: Part III: Proposals for the other auction parameters
Part III : Proposals for the other auction parameters • In addition to the inputs for the determination of the demand curve, it is up to Elia to provide concrete proposals for several other parameters for the auction, according to article 6, §2° of the draft amendment to the Royal Decree Methodology
Slide 60: Purpose of the derating factors
Purpose of the derating factors CRM Law « facteur de réduction: le facteur de pondération d'une capacité considérée, déterminant sa contribution à la sécurité d'approvisionnement afin de fixer le volume éligible à participer à la mise aux enchères » “reductiefactor: de wegingsfactor van een bepaalde
Slide 61: Each technology doesn't contribute the same way to adequacy
Each technology doesn’t contribute the same way to adequacy Illustrative Analysis of the output of the simulation example Capacity [MW] WG Adequacy #14 - CRM Calibration Report 61
Slide 62: Each technology doesn't contribute the same way to adequacy
Each technology doesn’t contribute the same way to adequacy Illustrative Analysis of the output of the simulation example 3 critical hours = simulated scarcity hours Capacity [MW] WG Adequacy #14 - CRM Calibration Report 62
Slide 63: Each technology doesn't contribute the same way to adequacy
Each technology doesn’t contribute the same way to adequacy Illustrative Analysis of the output of the simulation example Contribution of pump-storage plant to the Belgian security of supply Capacity [MW] WG Adequacy #14 - CRM Calibration Report 63
Slide 64: Derating Factors: Categorization
Derating Factors : Categorization • Derating factors categories in line with the Royal Decree Methodology: Thermal technologies Energy-limited Weather-dependent Thermal technologies SLA (Service Level with daily schedule technologies with daily technologies without daily schedule Agreement) schedule
Slide 65: Derating Factors: Calculation methodology
Derating Factors : Calculation methodology • Derating factors are determined based the methodology set in the Royal Decree Methodology. Catégories Calculation methodology Catégories Calculation methodology Average contribution of Thermal technologies with each category of 100 – FOR technology during
Slide 66: Derating Factors - Thermal technologies with daily schedule
Derating Factors - Thermal technologies with daily schedule • Thermal technologies with daily schedules are determined based on the forced outage rate. • The forced outage rate are in line with the values provided in the Ministerial Decree. Category II : Thermal technologies with daily schedule Sub-
Slide 67: Derating Factors – SLA & energy-limited technologies
Derating Factors – SLA & energy-limited technologies • Derating Factors for SLA & energy-limited technologies with daily schedule categories are calculated based on the average contribution of each category of technology during simulated scarcity situations based on a fictive unit of 1 MW. • Units o
Slide 68: Contribution of energy-limited technologies depends on scarcity length
The contribution to adequacy of energy-limited technologies is dependent of the scarcity situations length • Figure shows the cumulative distribution of scarcity situations. • The distribution of scarcity situations length is multiplied by the length of the scarcity situations. • This analysis shows
Slide 69: Derating factors for energy-limited technologies are lower
Derating factors for energy-limited technologies are lower than in previous TSO’s CRM Calibration Report • Derating factors for SLAs are lower than in previous TSO’s CRM Calibration Report for availability lower than 8h. WG Adequacy #14 - CRM Calibration Report 69
Slide 70: Derating Factors – Weather-dependent technologies
Derating Factors – Weather-dependent technologies • Weather-dependent technologies categories are calculated based on the average contribution of each sub-category during simulated scarcity situations from the Monte-Carlo simulation’s output of the calibrated reference scenario. • Weather-dependent
Slide 71: Derating Factors – Thermal DSO- or CDS-connected technologies
Derating Factors – Thermal DSO- or CDS-connected technologies • Derating factors for thermal technologies without daily schedule are calculated based on the maximum contribution of each sub-category during simulated scarcity situations from the Monte-Carlo simulation’s output of the calibrated refer
Slide 72: Derating factors for weather-dependent and profiled thermal in line
Derating Factors for weather-dependent technologies and profiled thermal are in line with values from previous TSO’s CRM Calibration Report WG Adequacy #14 - CRM Calibration Report 72
Slide 73: Intermediate Price Cap
Intermediate Price Cap • In accordance with article 16 of the Royal Decree, the intermediate price cap (in €/MW/year) is equal to the estimated “missing-money” of the technology with the highest “missing-money” included in the shortlist of existing technologies targeted in the Royal Decree Methodolo
Slide 74: Intermediate Price Cap: Shortlist of existing technologies
Intermediate Price Cap: Shortlist of existing technologies • The assessment on the technologies to be considered for the shortlist of this calibration was identical to the previous TSO’s CRM Calibration Report : ➢ Combined Cycle Gas Turbine (CCGT); ➢ Open Cycle Gas Turbine (OCGT); ➢ Turbojet; ➢ Pump
Slide 75: Intermediate Price Cap: cost estimations (1/3)
Intermediate Price Cap: cost estimations (1/3) • The estimated costs considered for the Fixed operation and maintenance (FOM) costs come from the update of the Afry study: FOM costs [€/kW/year] Technology (incl. non-yearly maintenance costs such as major overhauls) Low Mid High CCGT 36 37 51 Low → l
Slide 76: Intermediate Price Cap: cost estimations (2/3)
Intermediate Price Cap: cost estimations (2/3) • Revenues in the context of the IPC must be complemented by the addition of a risk premium to take investors’ risk aversion into account. • These risk premia have been defined per technology in the Royal Decree Methodology for the IPC derogation proces
Slide 77: Intermediate Price Cap: cost estimations (3/3)
Intermediate Price Cap: cost estimations (3/3) • Total costs considered for the IPC calibration based on elements raised previously : FOM costs [€/kW/year] Total costs (in €/kW/y) : FOM costs multiplied by (1+ (incl. non-yearly maintenance Total risk premia (in % ) risk premium) costs such as major
Slide 78: Intermediate Price Cap: revenue estimations
Intermediate Price Cap: revenue estimations • Consisting of an estimation of inframarginal rents earned on the energy market and net revenues from the provision of frequency-related balancing services: Net revenues from the provision of Average inframarginal rents earned on frequency-related balanci
Slide 79: Intermediate Price Cap: Missing-money estimations
Intermediate Price Cap: Missing-money estimations • Bringing together the cost and revenue estimations in the formula to calculate “missing-money” “Missing-money” divided by Derating factor [€/kW-derated/year] Derating Level 1 – Level 2 – Level 3 – Level 4 – Level 5 – Level 6 – Technology factor [%
Slide 80: Reference price
Reference price • As a reminder, the reference price is defined in the Electricity Act as “the price reflecting the price that is supposed to be obtained by the capacity provider on the electricity market”. • The aspects related to this reference price are further detailed in article 23 of the Royal
Slide 81: Strike price calibration (step 1)
Strike price calibration (step 1) : determination of the calibration curve and of the strike price range • To construct the calibration curve used for the calibration of the strike price, E-CUBE analyzed the data of EPEX and Nord Pool Spot for the peak hours of the winter weekdays for the 3 previous
Slide 82: Strike price calibration (step 2) (1/3)
Strike price calibration (step 2) : application of the criteria of the Royal Decree Methodology (art. 27§2) (1/3) • The second step of the strike price calibration takes places by applying in a similar way as last year the 5 criteria listed in the Royal Decree on Methodology to the price window (270
Slide 83: Strike price calibration (step 2) (2/3)
Strike price calibration (step 2) : application of the criteria of the Royal Decree Methodology (art. 27§2) (2/3) 2) The strike price must consider the shape of the calibration curve : • Contrary to previous calibration exercises, the curve of winter 2021-22 presents an extra elbow • As a result the
Slide 84: Strike price calibration (step 2) (3/3)
Strike price calibration (step 2) : application of the criteria of the Royal Decree Methodology (art. 27§2) (3/3) 3) The calibration of the strike price must take the evolution of the energy market into account : • Recent geopolitical events have pushed the values of the calibration window significa
Slide 85: Strike price calibration: conclusion and proposal
Strike price calibration : conclusion and proposal • The 5 criteria from the Royal Decree Methodology were applied in a similar way compared to the last calibration process and are considered together to propose a calibrated strike price : 1) The 1st criterion leads to a strike price of 417 €/MWh, a
Slide 86: CRM: Capacity contract planning
CRM : Capacity contract planning
Slide 87: CRM 2023 Capacity Contract timeline
CRM 2023 Capacity Contract timeline Context: • Analysis of the impact of the updated Functioning Rules V3 on the Capacity Contract for the 2023 Auction right after the public consultation on the FR (until 04/01/2023). 2023 * Incl. possible updates resulting from CREG modifications on FR. Capacity Co
Slide 88: CRM/LCT: Changes & Eligibility
CRM/LCT : Changes & Eligibility
Slide 89: Timeline for the public consultation LCT Functioning Rules
Timeline for the public consultation LCT Functioning Rules 2022 2023 Oct Nov Dec Jan Feb Mar 25/10 10/11 25/11 04/01 01/02 CRM Public Consultation CRM FR CREG: review CRM FR (5,5 wk) 04/11 13/01 10/02 01/03 Public Consultation LCT LCT PC LCT FR + Public consultation CREG: review LCT Design note repo
Slide 90: In service definition
Fira In service definition
Slide 91: The "in service" definition should be clarified further
The “in service” definition from the design note should be clarified further “Additional – New Build” capacities are eligible to participate in the LCT. New build capacities are defined as not in service at the moment of the Auction.” "In Service“ = "Participation in the energy markets“ (at asset le
Slide 92: DSR eligibility
Fira DSR eligibility
Slide 93: LCT Eligibility design as presented in the Functioning Rules
LCT Eligibility design as presented in the Functioning Rules 1 | Full Exclusion → Partial Exclusion Non-eligible only for the existing DSR that has been identified during the Prequalification step, enabling new DSM under a certain DP. Impact on other aspects besides Prequalification. 2 | Definition
Slide 94: Example cases in which full exclusion could exclude legitimate capacities
Example cases in which full exclusion could exclude legitimate capacities Max offtake Max offtake old new Existing DSR Additional DSR for LCT Relatively safe concept with regards to UM double counting but would a priori exclude a lot of potential capacities. → Rethink concept of full exclusion and m
Slide 95: Impact of "Partial Exclusion" on Eligible Volume and Obligated Capacity
Impact of “Partial Exclusion” on Eligible Volume and Obligated Capacity Example: additional flexibility under the same DP (without changing the max offtake) Max offtake Availability monitoring: 𝑫𝑺𝑹𝒆𝒙𝒊𝒔𝒕𝒊𝒏𝒈 + 𝑫𝑺𝑴𝒄𝒐𝒏𝒕𝒓𝒂𝒄𝒕𝒆𝒅 Existing DSR Obligated capacity to be provided during…
Slide 96: Impact of "Higher Obligated Capacity" on Availability Monitoring
Impact of “Higher Obligated Capacity” on Availability Monitoring 𝑊𝑒𝑖𝑔ℎ𝑡𝑒𝑑 𝐶𝑜𝑛𝑡𝑟𝑎𝑐𝑡 𝑉𝑎𝑙𝑢𝑒 𝐶𝑀𝑈 , 𝑡 𝑁 Availability Obligation & Penalties: = (𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑅𝑒𝑚𝑢𝑛𝑒𝑟𝑎𝑡𝑖𝑜𝑛 𝑖 ∗ 𝐶𝑜𝑛𝑡𝑟𝑎𝑐𝑡𝑒𝑑 𝐶𝑎𝑝𝑎𝑐𝑖𝑡 𝑦𝑖 )) Penalty 𝑖 =1 𝑁 / 𝐶𝑜𝑛𝑡𝑟𝑎𝑐𝑡𝑒𝑑…
Slide 97: Impact of "Higher Obligated Capacity" on Payback Obligation
Impact of “Higher Obligated Capacity” on Payback Obligation Payback Obligation: Availability Ratio Based on both Contracted Capacity and Availability Ratio 100% - Contracted Capacity is unchanged and is the capacity bid in to the LCT - Availability Ratio determines how much of the total Payback Obli
Slide 98: Impact of "Higher Obligated Capacity" on Secondary Market
Impact of “Higher Obligated Capacity” on Secondary Market General Modalities for Secondary Market → Trading of “Contracted Capacity” between CMUs → Each CMU then has an obligated capacity as the sum of their Existing DSR and their Contracted Capacities. → If no Contracted Capacity is left, they don’
Slide 99: Process for Existing DSR determination
Process for Existing DSR determination 1. Quantitative Analysis by Elia Based on determined methodology (NRP determination in PQ for DSM in the CRM) Input from Market Parties possible in-line with that methodology (additional rules under review) 2. Qualitative Analysis by third party Performed by re
Slide 100: Final results for a CO2 threshold trajectory recommendation in the Belgian CRM
Final results for a CO2 threshold trajectory recommendation in the Belgian CRM
Slide 101: Study of CO2 emission reduction trajectories in the Belgian CRM
Study of CO2 emission reduction trajectories in the Belgian CRM WG adequacy presentation Dmitri Perekhodtsev, Nicolas Hary 16 December 2022 CONFIDENTIEL compasslexecon.com
Slide 102: Disclaimer
Disclaimer ▪ This presentation was prepared by FTI France SAS under the name of Compass Lexecon ("Compass Lexecon") for the Federal Public Service Economy, SMEs, Self-employed and Energy ("the Client") in accordance with the terms of the Client's letter of engagement (the "Contract") . ▪ This presen
Slide 103: Context of the study - different CO2 trajectories proposed by SPF Energie
Context of the study - different CO2 trajectories proposed by SPF Energie that could have a strong impact on the Belgian mix CO2 evolution trajectories proposed by FPS Energy Emission factor of the thermal fleet in Belgium in 2026 (excluding CHP) ▪ FPS Economy has considered introducing stricter eli
Slide 104: Objectives of the mission entrusted to Compass Lexecon
Objectives of the mission entrusted to Compass Lexecon Following this summer's consultation, FPS Economy entrusted Compass Lexecon with this mission with the following objectives ▪ Analyse similar initiatives in European countries to accelerate the greening of electricity production ▪ Review the ava
Slide 105: Review of European initiatives to accelerate the greening of electricity production
Review of European initiatives to accelerate the greening of electricity production Eligibility thresholds for capacity mechanisms in European regulation ▪ The European Electricity Regulation 2019 sets out the eligibility rules for capacity to receive revenue in CRMs based on CO2 emissions ▪ In part
Slide 106: Review of the availability and competitiveness of technologies for greening
Review of the availability and competitiveness of different technologies for greening electricity production Approximate availability of different technologies to green the electricity mix Synthetic gas Carbon capture Hydrogen + Biomethane H2 (limited quantity) Batteries Deletions 2020 2030 2040 205
Slide 107: Methodology used in the impact assessment
Methodology used in the impact assessment ▪ Our impact assessment compares the results of the European dispatch between the base case in which the CO2 thresholds for CRM eligibility in Belgium are maintained at the current level (550gCO2/kWh and no annual limit for existing capacity) and trajectorie
Slide 108: The main results of the impact assessment
The main results of the impact assessment ▪ CO2 emissions are expected to decrease in the absence of CO2 trajectories CO2 emissions (thousand tonnes) - Belgium both in Belgium and in Europe due to national RES plans, expected CO2 7000 Scen 1 Path 1 allowance prices and the planned phase-out of therm
Slide 109: Our recommendations for CO2 trajectories in Belgium
Our recommendations for CO2 trajectories in Belgium Specific CO2 emission limits should be considered separately for new and existing capacity New capabilities Existing capacity Eligibility criteria in the CRM for existing capacity • Strict eligibility criteria that are incompatible with technical f
Slide 110: Specific emission thresholds for the new thermal capacity
Specific emission thresholds for the new heat capacity ▪ The upper bound of trajectory 2 proposed by FPS Economy could Specific emission thresholds for new capacity be proposed for the new capacity for the duration of the current 800 CRM and as an indication for future CRMs. 700 ▪ This would reasona
Slide 111: CO2 emission threshold considerations for existing capacity
CO2 emission threshold considerations for existing capacity Reinstatement of annual CO2 thresholds for electricity regulation (350kgCO2/kW/year for capacity that emits more than 550gCO2/kWh) ▪ These annual thresholds for existing capacity are part of the European Regulation and allow existing peak c
Slide 112: EMEA Locations
EMEA Locations Berlin Helsinki Paris Kurfürstendamm 217 Unioninkatu 30 22 Place de la Madeleine Berlin, 10719 Helsinki, 00100 Paris, 75008 Brussels London Tel Aviv 23 Square de Meeûs 5 Aldermanbury Square Yigal Alon Street 114 Brussels, 1000 London, EC2V 7HR Toha Building Tel Aviv, 6744320 Copenhage
Slide 113: Next meetings
—€eia Next meetings
Slide 114: Foreseen timeslots for next meetings
Foreseen timeslots for next meetings • Friday 27th January 2023 am • Friday 17th February 2023 am • NEW Thursday 23th March 2023 am • NEW Friday 14th April 2023 am • NEW Tuesday 23th May 2023 am • NEW Friday 16th June 2023 am 114
Slide 115: Thank you !
—€eia Thank you !