NordREG organized a seminar on DSO tariffs in the Nordic countries from the perspective of regulators, DSOs and customers on November 3^rd 2016. The seminar was held in Copenhagen, with more than 50 participants representing among others distribution system operators, industrial associations and national regulatory authorities. This was a follow-up seminar from a seminar arranged in 2015 about load tariffs in the Nordic countries from the perspective of network users.

Presentations from each of the national regulatory authorities on country specific issues related to DSO tariffs showed that the Nordic countries in varying degree consider tariff changes. One of the main topics regarding changes is related to a transition from energy based tariffs (kWh) to more capacity based tariffs (kW). Capacity based tariffs are already implemented in Denmark and Norway, but in Norway only for customers with a high demand for electricity. For the time being, both Sweden and Norway are discussing ways to implement either capacity based or time differentiated tariffs for all customers.

In addition, there were a presentation of CEER’s work on distribution tariffs providing a European perspective, as well as a presentation of how demand response influenced different customer segments in Sweden. Results from a Norwegian study indicated that prosumers, customers with their own electricity generation, in varying degree were affected by different tariff models. NordREG’s work with the supplier centric model across the Nordic countries illustrated the current state and the ongoing development of a Nordic retail market.

Finally, there were short comments from stakeholders like industrial associations and a Swedish customer organization. The active participants at the seminar raised several interesting questions, and the seminar provided a good opportunity to discuss DSO tariffs from a Nordic perspective.

Documentation

• Capacity and TOU tariffs for prosumers
• CEER work on distribution network tariffs
• Comments from DSO – Danish Energy Association
• Comments from DSO – Energy Norway
• DSO tariffs in Denmark
• DSO tariffs in Finland
• DSO tariffs in Iceland
• DSO tariffs in Norway
• DSO tariffs in Sweden
• Towards a supplier centric model
• What do customers want

In cooperation with NordREG, Nordic Energy Research is commissioning two separate studies related to the topic of demand side flexibility. NordREG will act as steering group for the two studies.

The first study will focus on flexibility from the DSO perspective, while the second study will concentrate on summarizing existing knowledge and recommending possible regulatory improvements. The studies shall be performed in English.

The tender documents are available at the Norwegian Doffin portal. The deadline for submitting offers is 23 January 2017, 12:00.

Links to the tenders:

• www.doffin.no/Notice/Details/2016-615557
• www.doffin.no/Notice/Details/2016-478275

As a response to the increased attention in the topic of demand side flexibility, NordREG has written a status report on regulatory aspects of demand side flexibility. The report aims to give a brief overview on some of the potential regulatory changes both at EU- and national level, accompanied with and overview of some relevant pilot project which may affect the potential development of demand response in the Nordics.

• Status report on regulatory aspects of demand side flexibility

Contact persons in NordREG:

Stian Henriksen, NVE, e-mail: sthe@nve.no
Lena Jaakonantti, Ei, e-mail: lena.jaakonantti@ei.se
Linda Aaberg, DERA, e-mail: laa@energitilsynet.dk
Ville Väre, EV, e-mail: ville.vare@energiavirasto.fi

Material published from NordREG’s workshop ”Methodologies for evaluation of the Nordic forward market for electricity” 7 december 2016, Arlanda, Sweden.

Here you find the presentation by consultants EC Group and Björn Hagman as well as comments to the study presented by stakeholders.

• EC Group
• ELFI
• EnergyNorway
• LOS-TelgeKraft
• NAET
• Statkraft

Here is also the status update on the FCA GL presented by NordREG.

•  NordREG FCA

Save the date: Workshop about Study on methodologies for evaluation of the Nordic forward market for electricity at Arlanda 7th of December 2016.

NordREG invites stakeholders to a workshop at Arlanda (Stockholm, Sweden) the 7th of December 2016, to discuss a study on methodologies for evaluating the Nordic financial electricity market with regards to the Commission Regulation (EU) 2016/1719 of 26 September 2016 establishing a guideline on forward capacity allocation (“FCA GL”).

DATE: 7th of December 2016

TIME: 10:00-15:00. Registration from 9:30.

VENUE: Radisson Blu SKYCITY, Arlanda Airport, Stockholm

AGENDA: draft-agenda-nordreg-ws-fca-7-dec-2016 (The Agenda will also be send by e-mail before the workshop.)

DOCUMENTS: The consultant report to be discussed in the workshop is found here: Methods for evaluation of the nordic forward market for electricity

REGISTRATION: Please do your registration on www.ei.se.
Please register by November 28.

Background

FCA GL was published in the Official Journal of the European Union on 27 September. The text foresees its coming into force 20 days after publication (17 October 2016).
The aim of the FCA GL is to establish common rules for Forward Capacity Allocation and providing market participants with sufficient hedging opportunities related to the area price risk. The FCA GL makes clear that the reference tools to allow for cross-border hedging are Long-Term Transmission Rights (LTTRs) auctioned by the TSOs. However, an exemption is possible, if cross-border financial hedging tools on both side of an interconnector exist and have shown their efficiency. In such a case, issuing of LTTRs is not mandatory, as long as the competent regulatory authorities of the bidding zone border have adopted coordinated decisions not to issue LTTRs. The code also provides for alternative products to be offered instead of LTTRs.

According to the FCA GL, the regulators` decision on whether to introduce LTTRs or not, shall be based on an assessment “which shall identify whether the electricity forward market provides sufficient hedging opportunities in the concerned bidding zones”. The assessment shall include at least “a) a consultation with market participants about their needs for cross-zonal risk hedging opportunities on the concerned bidding zone borders” and “b) an evaluation”.

The aim of the evaluation is to “investigate the functioning of wholesale electricity markets […].”

The FCA GL lists minimum criteria/indicators to include in the evaluation. The FCA GL does not exclude the possibility to add other indicators/criteria for the evaluation of the functioning of the market. NordREG finds it crucial that the evaluation covers the most important indicators that are relevant for participants in the Nordic electricity market. NordREG also finds it important to use indicators that are well- founded in economic theory and applicable in light of the specific characteristics of electricity markets. Hence, NordREG has commenced a consultant study that will be related to methodology for evaluating the Nordic financial electricity market.

The study should present a justified suggestion on the specific method/s to be used by the NRAs in the evaluation of the financial electricity markets as required in the FCA GL. NordREG will publish the study by the end of November and a workshop will be held at Arlanda (Stockholm, Sweden) the 7th of December 2016. The workshop will enable the stakeholders to provide their own views and also to have open discussion about the results of the study with the consultants EC Group with partners.

Contact persons in NordREG

Cathrine Holtedahl, NVE, e-mail mailto:cho@nve.no
Kimmie Byriel Laage-Petersen, DERA, e-mail KBLP@energitilsynet.dk
Kaj Forsberg, EI, e-mail: kaj.forsberg@ei.se
Jarno Lamponen, EV, e-mail: jarno.lamponen@energiavirasto.fi

NordREG invites all interested parties to join a seminar on DSO tariffs in the Nordic countries from the perspective of regulators, DSOs and customers.

In November 2015, NordREG organized a seminar on load tariffs in the Nordic countries, from the perspective of network users. Due to the success and interest in the seminar, it was decided to conclude the topic with a follow-up seminar. The follow-up seminar will focus on what the NRAs are doing in the area and how we foresee tariff developments nationally.

Target group: All interested parties.

When: The 3rd of November 2016, 9:30 – 16:00.

Where: Copenhagen, The Danish Energy Regulatory Authority (DERA) premises. The address is Carl Jacobsens Vej 35, 2500 Valby.

Admission: Free.

Registration: Please send an email to KSB@energitilsynet.dk, stating full name, organization and dietary requirements if relevant. The deadline is the 20th of October 2016.

Participation is limited to 70 people and places are assigned on a first come first served basis.

• Program of the day

This consultation concerns a common proposal developed by the Nordic Transmission System Operators regarding arrangements concerning more than one NEMO in a bidding zone in accordance with Article 45 and 57 of the Commission Regulation (EU) No 2015/1222 of 24 July 2015 establishing a Guideline on Capacity Allocation and Congestion Management (CACM).

The approval of the TSOs proposal is a task for each induvial energy regulator. However, as the Nordic TSOs have developed a common proposal and the Nordic energy regulators are working closely on this matter, a NordREG consultation will be held.

NordREG welcomes written input on the proposed arrangements within the 16th of September 2016. Comments (in English) can be sent to registrator@ei.se. Please mark your answers to the consultation with the following reference number 2016-101956.

• Nordic TSOs’ proposal on multiple NEMO arrangements

Contact persons in NordREG

Maria Rydberg, Ei
maria.rydberg@ei.se

Lisbet Vedel Thomsen, DERA
lvt@energitilsynet.dk

Mari Salo, EV
mari.salo@energiavirasto.fi

Helena Lindstad Mellison, NVE
hem@nve.no

As a response to an ongoing European discussion regarding aggregation of demand response, a NordREG working group has written a discussion paper about different arrangements for aggregation of demand response.

• NordREG – Discussion of different arrangements for aggregation of demand response in the Nordic market

In the paper, NordREG discusses the consequences for the settlement of Balance Responsible Parties (BRPs) in relation to several market setups for aggregation of demand response, including market setups for so-called “independent aggregators”, an aggregator which is independent from the customer’s supplier and BRP.

NordREG identifies some inherent practical challenges and potential negative consequences of a market setup with “independent aggregators”, since such a model would most likely imply the need for several BRPs per connection point.

Further, NordREG concludes that the current Nordic market setup, with a competitive and well-functioning retail market, should be able to bring demand response as a choice for all consumers, through one BRP. Such solutions could e.g. be developed by suppliers offering services for aggregation of demand response, or if suppliers and aggregators cooperates in offering such services.

NordREG recognise that other measures may be relevant for less competitive markets throughout Europe, though we generally believe that the priority should be to first improve market functioning.

Last but not least, NordREG stress the need for the competent national authorities to have freedom to conduct thorough impact assessments before any changes to the market setup are introduced, based on the national market situation.

Contact persons in NordREG:

Stian Henriksen, NVE, e-mail: sthe@nve.no
Lena Jaakonantti, Ei, e-mail: lena.jaakonantti@ei.se
Peter Christian Olsen, DERA, e-mail: pco@energitilsynet.dk
Ville Väre, EV, e-mail: ville.vare@energiavirasto.fi

NordREG launches a market consultation on the report:

• “Measures to support the functioning of the Nordic financial electricity market” by THEMA Consulting Group and Hagman Energy”.

The report was commissioned by NordREG in light of the recent development of the Guideline on Forward Capacity Allocation (FCA). The report describes potential measures to consider in cases where insufficient hedging opportunities have been identified in certain bidding areas. The consultants were asked to describe and analyse different models for TSO involvement in the forward electricity market in order to facilitate improved hedging possibilities.

NordREG welcomes written input and comments to the report within the 31st of March 2016. Comments (in English) can be sent to: NordREGFCAstudy@energiavirasto.fi

Further, NordREG is planning a workshop with market participants and TSOs during the first half of 2016, to discuss the input from the consultation and to identify next steps. More information will follow.

Contact persons in NordREG:

Cathrine Holtedahl, NVE, e-mail cho@nve.no
Kimmie Byriel Laage-Petersen, DERA, e-mail KBLP@energitilsynet.dk
Kaj Forsberg, EI, e-mail: kaj.forsberg@ei.se
Jarno Lamponen, EV, e-mail: jarno.lamponen@energiavirasto.fi

In light of the recent development with the Guideline on Forward Capacity Allocation (FCA) (see Background), the Nordic energy regulators are in the process of paving the way forward for the Nordic electricity market. The Nordic NRAs` starting point is to maintain and improve the current Nordic market design, relying on financial products for price hedging, while improving the market participant`s ability to hedge their price risk.

Hence, NordREG has commissioned a study on potential measures to consider in cases where insufficient hedging possibilities have been identified in certain bidding areas. The consultants were asked to describe and analyse different models for TSO involvement in the forward electricity market in order to facilitate improved hedging possibilities.

THEMA Consulting Group and Hagman Energy AB have now delivered their report “Measures to support the functioning of the Nordic financial electricity market” to NordREG. (Link to the report)

The Nordic NRAs will organise a hearing of the findings in the report in the beginning of 2016, where all market participants will be invited to give their written input. More information on this will follow. The goal is to have a close cooperation with market participants in the Nordic electricity market at an early stage, which will be a good starting point for the process required when the FCA GL enters into force.

Background

On the 30th October 2015, the EU Member States gave a favourable opinion on the Draft Regulation establishing a Guideline on Forward Capacity Allocation (FCA). One of the main objectives with the FCA GL is to provide cross-border hedging opportunities for market participants. The reference tools for cross-border hedging are long-term transmission rights (LTTRs). However, the competent national regulatory authorities (NRAs) of a bidding zone border can issue coordinated decisions that TSOs shall not issue LTTRs. Such decisions shall be based on an assessment, which shall identify whether the electricity forward market provides sufficient hedging opportunities in the concerned bidding zones. In case the assessment shows insufficient hedging opportunities, the NRAs shall request to the TSOs to implement adequate measures; either to issue LTTRs on the concerned bidding zone border, or to make sure that other long-term cross-zonal hedging products are made available to support the functioning of wholesale electricity markets.

Disclaimer

The study is carried out by THEMA Consulting Group and Hagman Energy AB, and the content does not necessarily reflect the views of the NRAs in NordREG.

• TE-2015-35 Measures to support the functioning of the Nordic financial electricity market