Grid Connection of Power Generating Facilities: Febeg Position Elia WG Belgian Grid' (16.09.2011)

GRID CONNECTION OF POWER
GENERATING FACILITIES
FEBEG POSITION
Elia WG ‘Belgian Grid’
(16.09.2011)
16.09.2011
FEBEG
16.09.2011 2
CONTENT
• Current developments
• General principles
• Integrating new power plants in the grid
• Grid connection procedure
• Firm capacity for injection
• Congestion management
• Derogations
• Conclusions
16.09.2011
CURRENT DEVELOPMENTS
• Proposals Elia (WG Belgian Grid) for new capacity

reservation procedure
• Proposals Elia (WG Belgian Grid) for new connection

procedure
• Proposals in Policy Platforms VREG and CWaPE (REDI)

regarding flexible access (= conditional connection)
16.09.2011
GENERAL PRINCIPLES (1)
• Need for transparent and efficient procedures for non-

discriminatory connection of new power plants to the grid
(art. 23,1 of EU Electricity market directive)
• All new generation capacity should be timely connected to

the grid (art. 23,2):
– connection cannot be refused on the grounds of possible future limitations to
available network capacities current situation in BE is not compliant
– connection cannot be refused on the ground that it will lead to additional costs
linked with necessary capacity increase of system elements
• Power generators need firm commitment and predictable

conditions at the moment of their investment decision
16.09.2011
GENERAL PRINCIPLES (2)
• Grid operators should employ all reasonable means to

timely connect all new generation capacity:
– at a reasonable cost
– at the most appropriate connection point (location, voltage, …)
– without imposing disproportionate or discriminatory technical or
operational constraints to power generators
• Grid operators should proactively invest with a long term
vision in order to reach this objective1
– ensure the long-term ability of the system to meet demands for
transmission of electricity in a secure, reliable and efficient way
– contribute to security of supply through adequate transmission capacity
and system reliability
• Solidarity and coordination between TSO and DSOs
regarding grid investments and choice of most appropriate
connection point for power plants
1 Art. 12 of EU Electricity Market Directive
16.09.2011
INTEGRATING NEW POWER PLANTS IN THE GRID
Power generation development

Investment decision Firm grid capacity available
Strategy Development Specs, Licensing, Engineering

Build First Firing
Project planning Phase RFI, RFP, …
Commitment
Request Request
for firm capacity
Connection Procedure
Connection Agreement
Consultation
Realization (Congestion
Orienting study Detailed study Engineering
Connection Management)
Grid development
Investment Engineering Grid Grid

TYND …
planning Permitting reinforcements reinforcements
16.09.2011
CONNECTION PROCURE
Capacity reservation
• TSO should treat all applications for grid connection on a

transparent and non-discriminatory manner
• At the moment of its investment decision (financial closing)

the applicant needs firm commitment that grid capacity will
be firmly available at the commissioning date
• Objective is to avoid grid capacity hoarding for non realistic

projects and reduce interdependencies and administrative
overhead for Elia and applicant:
– frequent in between checks based on permitting status or confirmations of
requests should be avoided
– ad hoc intervention of Minister in individual procedures is not appropriate
16.09.2011
CONNECTION PROCEDURE
Principles
• Connection procedure should be transparent and efficient

and based on non-discriminatory criteria:
– objective criteria to assess request for connection
– informative orienting study
– formal request for detailed study (leading to connection options, including
conditions, timing and costs)
– formal & mutual acceptance of one option
– signing of the connection agreement
– start realization according to planning and payment scheme
• Signing of the connection agreement:

– firmly allocates the capacity to the applicant
– fixes all terms and conditions between applicant and grid operator,
including arrangements if grid operator is unable to timely realize grid
connection (reinforcement) or if power plant project is delayed or definitely
stopped
16.09.2011
CONNECTION PROCEDURE
Agreement
General
terms and conditions
Specific In case of timely

Payment
terms and conditions realization of connection
Possible compensation
In case of
depending on
withdrawal connection request
phase of realization
In case of untimely
Compensation
realization of connection
In case of untimely
Congestion management
realization grid reinforcements
… …
16.09.2011
FIRM CAPACITY FOR INJECTION
• Flexible connection is unacceptable

– lack of incentives for grid investments
– discourages investments in generation capacity
– discriminatory competition distortion
– additional uncertainty and missed revenues for power generator
• NMA1: ‘flexible connections are discriminatory because they

make a distinction between existing and new connections’
• If grid infrastructure is not sufficient to guarantee firm

connection capacity: market based congestion management
as temporary solution pending urgent grid investments
1 NMA decision of the 20th of May, 2009 (102690/87)
16.09.2011
CONGESTION MANAGEMENT (1)
• Objective criteria to measure/predict actual/future congestion

proactive investment program
• Structural congestion is unacceptable
• Occasional congestion:
– should also be prevented by timely investments
– market based congestion management can offer temporary solution
• Market based congestion management system with fair

compensation ensures:
– grid operators can assess whether they compensate grid users to ramp
up/down or invest in grid reinforcements
– a correct price which reflects scarcity or oversupply of flexibility
– a fair compensation incentivizes market operators to invest in flexible
generation capacity or flexible demand
16.09.2011
CONGESTION MANAGEMENT (2)
• System redispatch with up- and downward regulation can

be implemented according to the Dutch Model:
– clear identification of congested zones on TSO and DSO grid
– voluntary and, if necessary, mandatory bidding
– applicable on all grid users (both generators and end users), including
already connected parties no discrimination
– biddings for different categories of units to prioritize renewables and
cogeneration
– fair and market based compensation
– net cost of congestion management system is socialized in grid fee
16.09.2011
DEROGATIONS
• Derogations of these principles should be avoided:

– except for system security reasons
– existing derogations such as mutually agreed upon grid access
constraints for specific conections during a limited number of hours for the
maintenance of grid components, should not be considered as a
precedent
16.09.2011
CONCLUSIONS
• Grid operators should employ all necessary means to

timely connect all new generation capacity
• Complexity and uncertainty in the connection procedure

and agreement should be reduced
• Grid capacity for injection needs to be firm
• Structural congestion must be avoided by timely

investments
• Occasional congestion should also be prevented by grid

reinforcements or managed with a market based
congestion management system with fair compensation
16.09.2011

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GRID CONNECTION OF POWER

• Proposals Elia (WG Belgian Grid) for new capacity

• Proposals Elia (WG Belgian Grid) for new connection

• Proposals in Policy Platforms VREG and CWaPE (REDI)

• Need for transparent and efficient procedures for non-

• All new generation capacity should be timely connected to

• Power generators need firm commitment and predictable

• Grid operators should employ all reasonable means to

Power generation development

Strategy Development Specs, Licensing, Engineering

Investment Engineering Grid Grid

• TSO should treat all applications for grid connection on a

• At the moment of its investment decision (financial closing)

• Objective is to avoid grid capacity hoarding for non realistic

• Connection procedure should be transparent and efficient

• Signing of the connection agreement:

Specific In case of timely

• Flexible connection is unacceptable

• NMA1: ‘flexible connections are discriminatory because they

• If grid infrastructure is not sufficient to guarantee firm

• Objective criteria to measure/predict actual/future congestion

• Market based congestion management system with fair

• System redispatch with up- and downward regulation can

• Derogations of these principles should be avoided:

• Grid operators should employ all necessary means to

• Complexity and uncertainty in the connection procedure

• Grid capacity for injection needs to be firm

• Structural congestion must be avoided by timely

• Occasional congestion should also be prevented by grid

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