Response to NEMOs consultation on products to be taken into account in SIDC

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Eurelectric’s response to NEMOs consultation on products to be taken into account in SIDC 

Eurelectric would like to thank all NEMOs for giving us the opportunity to express our opinion on the products to be taken into account in the single intraday coupling (SIDC), pursuant to their obligation under Article 53(4) of CACM Regulation. However, we felt that the public consultation was not well advertised and would like to request all NEMOs to do so that it reaches a wider audience in good time. This will avoid last-minute surprises for stakeholders and give them sufficient time to draft a response.

ACER decision No 05/2020 of 30th January 2020 determines the products to be used in the SIDC, following the proposal by all NEMOs in November 2019. It determines mandatory and optional intraday products and in particular, classifies complex products among optional products and not among the mandatory ones. Eurelectric takes notes that all NEMOs are proposing « not to amend the content of the current list of SIDC products. » Eurelectric regrets this proposal for the following reasons.

(1) Regarding the products to be accommodated, as expressed by Eurelectric through previous consultation response, we would like to remind all NEMOs about the need for complex products both in the SIDC continuous trading and intraday auctions, from a market participants’ point of view and in a general objective of efficient price formation. Complex products of duration much greater than 30 minutes allow a more direct valuation of some flexibilities such as demand response with complex/industrial processes or based on time of use/critical peak pricing retail tariffs, or power plants with start-up/shut-down costs. Removing the possibility to offer complex products in intraday auctions can thus be a threat to their valuation, likely to reduce their competitiveness and to generate inefficient dispatch decisions. 

(2) More generally, Eurelectric is concerned in terms of possible step back on the products accommodated by the algorithms. The priority for products accommodation should be to keep an efficient pricing and trading of the products/assets in the European target models available, providing thus an efficient market price formation. In particular, in self-dispatch model widely used in Europe, the optimization under the portfolio-based approach implies the use of complex products as linked and exclusive block products to provide a good representation of the assets.

(3)We acknowledge that accommodating complex products might induce challenges to the algorithm. Therefore, we agree that a a trade-off must be found between the growing complexity to be handled by the algorithms (complex products,, geographical extension, 15 minutes ISP) and the contraints on their performance (limitation of the computational time of the runs) . In this regard, we would welcome a technical assessment of the increase of computational time induced by the different products: e.g. block orders, MTU aggregated orders and complex orders. Such an assessment could prove to be helpful to decide whether some types of products should be prioritized.

(4) As a target, Eurelectric requests that complex block orders (in particular, among those, linked and exclusive block products) would become mandatory in the SIDC.

As an alternative or a complementary measure, Eurelectric supports a general rule for a mandatory accommodation of (both simple and complex) products by the SDAC, continuous trading and ID auctions, when they are traded in a sufficient number of Member States, typically more than three. This provision is in line with the primary objective of the coupling algorithms that should be to accommodate market needs. The minimum number of four is proposed as a trade-off and should be a no regret choice . We have this request notably in the context of the revision of CACM Regulation.

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