Congestion Management between Baltic states - Konkurentsiamet

Memorandum of Capacity
allocation between Baltic TSOs
• Signed on 22nd of April
‣ Starting January 1st 2011 – implicit auctions between
NPS price areas in Baltic's
CONGESTION
MANAGEMENT in Baltics
‣30th of June NPS has to announce the new price areas
opening
‣Estonian experience: political decision (legislation), ITsystems,
Agreements, NPS conditions
‣ Starting January 1st 2011 - cross-border capacity
optimization with 3rd countries, implemented by NPS
(today the method on Estonian – Latvian border)
Ingrid Arus
Manager of Electricity Markets
Department

CM between Estonia-Latvia
New capacity allocation principles:
‣ 01.04.2010 – 31.12.2010
‣Bilateral trade: explicit auction; nomination D-2
‣PEX Trade: capacity optimization method; D-1
‣ Starting 01.01.2011
‣If there are price areas in Latvia and in Lithuania: Implicit
auction: managed by NPS

Estlink 1
• Cable in commercial use until 2013, when it will be bought out by
transmission network operators
NPS Baltic project was launched in November 2007 in order for
Elering and Fingrid to rent or buy a part of or the entire cable for
allocation on NPS
• Aim:
‣ A base for a joint Baltic and Nordic energy market
‣ A price area at the southern end of the Estlink 1 cable
‣ More efficient use of the Estlink 1 cable
‣ A more reliable market price for electricity
THE STATUS TODAY:
Estlink 1 cable rented by Elering and Fingrid:
EE – FI: 262.5 MW
FI – EE: 252.7 MW
Capacity is allocated by NPS.

Capacity Optimization method
Cross-border
capacity limits
for PX Trade
(XB max)
NPS SESAM
Cross-border bids
(NPS)
All cross-border import and export bids
are accepted for spot-price calculation
Bids to PX Trade
Imp < XB max (import)
Exp < XB max (export)
YES
Bid- cutting until
Imp = XB max (import) and
Exp = XB max (export)
Accepted cross-border bids
for spot-price calculation
NO

Explicit auction
• First auction for 21st week: capacities 60 MW from Estonia to Latvia
and 70 MW from Latvia to Estonia
‣ 5 participants
‣ Results: sold both directions: E-L: price 3,10 EUR/MW; L-E: price: 0,15
EUR/MW; bottleneck income: 33 012 EUR
• Participants: have to register in Auction office
‣ Completed and signed Registration Form
• Weekly
‣ Friday: capacity MW
‣ Tuesday:
‣ deadline (12:00 CET) for bids (capacity, price) encrypted, protected
document: explicit@elering.ee
‣ 12:00 – 13:00 (CET) passwords
‣ results: aimed before 14:00 (CET), but in any case before 17:00 (CET)
‣ Nomination: D-2 planning phase

Implicit auction between price areas
managed by NPS (starting 2011)
NPS BEMIP project:
‣ Kick-off meeting 02.2010
‣ Goal:
‣ Expanding the NPS market area
‣ to all Baltic countries
‣ Intra-day market
‣ New price area should be opened when
conditions are ready for market opening.
‣ Decision by local TSO and NPS
Implicit auction between price areas
managed by NPS
‣ NPS Estonia
‣ NPS Latvia
‣ NPS Lithuania
Baltic TSOs among the owners of NPS

Memorandum of Capacity
allocation between Baltic TSOs
• Signed on 22nd of April
‣ Starting January 1st 2011 – implicit auctions between
NPS price areas in Baltic's
‣30th of June NPS has to announce the new price areas
opening
‣Estonian experience: political decision (legislation), ITsystems,
Agreements, NPS conditions
‣ Starting January 1st 2011 - cross-border capacity
optimization with 3rd countries, implemented by NPS
(today the method on Estonian – Latvian border)

Congestion Management
on Latvia – Lithuania border
Until 1 st January, 2011 the capacity optimisation method will be
used if there is congestion between Lithuania and Latvia for
the agreed ATC value. Agreed ATC will be used only for
electricity trade organised by Baltpool (Lithuanian Power
Exchange).
From 1 st January, 2011 Implicit auction: managed by NPS

Congestion Management
on Belarus – Lithuania border
Until 1 st January, 2011 the capacity optimisation method will be
used for ATC agreed between TSOs and performed by Baltpool
(Lithuanian Power Exchange). The methodology for setting
ATC on Lithuania and Belarus border is based on N-1 principle
supported by emergency reserve maintained in Lithuanian
power system.
From 1 st January, 2011 common market based cross border
capacity optimization method for trade with 3rd countries
must be applied and implemented by NPS.

Congestion Management
on Latvia – Lithuania and Lithuania-Belarus border
today
All bids to
sell or to
buy from
customers
SESAM
Cross
border
bids/offers
PX
Im

Conclusions
Congestion Management
in Baltic states from 1 st of January 2011
Market based congestion management method (implicit auction)
must be started between the Baltic price areas and managed by NPS.
Common market based cross border capacity optimization
method for trade with 3rd countries must be applied and implemented
by NPS.

To Do List, Capacity
Rules:
Common NTC and ATC calculations rules
Russian transit Rules (Kaliningrad, Belarus)
Common trade principles with third countries
Common outage planning
Agreements:
General Agreement concerning temporary transmission service
Counter Trade agreement
PEX service agreement and open supply for PEX
Service agreement on congestion income
Data publication agreement