Evolution of cross-border exchange mechanisms
  • RTE is supporting the evolution of cross-border exchange mechanisms

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    RTE is supporting the evolution of cross-border exchange mechanisms

    From the beginning, RTE has been working with market actors, in accordance with the principles set forth in European network codes, to develop mechanisms that encourage the opening of the French electricity market and its integration within Europe:

    • The minimum threshold of 70% of network capacity that must be made available for cross-zonal trade, per the Clean Energy Package adopted in 2019, took effect on 1st January 2020. The goal is to increase the share of interconnections made available to market actors in order to boost cross-zonal trade.
      In 2020, French Energy Regulatory Commission CRE granted RTE exemptions for the calculation of interconnection capacity with the CORE-Central Western Europe, Northern Italian Borders and South West Europe. The results were highly satisfactory in all regions France is part of, confirming that the French network’s dimensioning is adequate to support high levels of cross-zonal trading. RTE requested that one exemption be renewed for 2021, for the South West Europe region, with a higher obligation than in 2020. The reason is that regional and local tools used to verify if this threshold is achievable are still being developed, and coordination practices are more recent in the region so TSOs only have a year of experience with coordinated calculations.
    • A new capacity calculation process is expected to be introduced in the last quarter of 2021 for intraday trading in the SWE region. It will provide a better overview of constraints in close to real time. Two capacity re-evaluations are planned, following the same steps as for day-ahead trading: the first toward the end of the day preceding the intraday allocation (D-1), and the second during the day.
    • The physical nature of the interconnected network is such that there are inevitably differences between trading programmes and physical flows. These differences have until now been settled “in kind”, i.e. with energy. Articles 50-3 and 51-1 of the Electricity Balancing Guide Line (EBGL) require financial compensation for these differences. All TSOs in Continental Europe must have a corresponding mechanism in place within a year of the methodologies being validated by regulators. The go-live for this project (Fskar) is anticipated on 1st June 2021, with settlement prices initially based on day-ahead market prices.
    • To comply with the EBGL regulation on power system balancing, RTE plans, in the fourth quarter of 2021, to implement the automatic activation of frequency restoration reserves (aFRR – automatic Frequency Restoration Reserve) based on the merit order principle, and connection to the PICASSO platform for coordinated aFRR at a European scale starting at the end of the third quarter of 2021. Moreover, starting in October 2021, RTE plans to open to competition the market for aFRR capacity by organising tenders on D-1, rather than ordering obligated parties to provide it. RTE’s goal is to attract new actors and new types of capacity to the market.

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