Electricity Regionalisation in Motion
How to enhance security of supply, develop efficient markets, and
create economies of scale in Europe
This paper is ENTSO-E’s response to the study “Options for Future European Electricity System
Operation” conducted by Ecorys, DNV-GL, and ECN for DG ENER of the European
Commission (referred as “the study” in this document). 1
ENTSO-E shares the objectives of the study: increasing efficient regional cooperation in the
power system and finding out the best level of governance to deliver benefits to markets, system
operations, and European citizens. However, the network codes and the ongoing roll-out of
Regional Security Coordination Service Providers, RSCSPs, can achieve the same
objectives faster with lower costs and less risk than the solutions presented in the study.
In short
The study divides the operation of the power system into “before real-time” and “real-time”
activities. It proposes to create brand-new Regional Operation Centres (ROCs) and to give
them a dominant decision-making role. The current National Operation Centres (NOCs) would
only perform functions from “near- to real-time”. For long-term planning, pan-European
processes led by ENTSO-E are proposed, which is in line with existing procedures.
In practice, there is no technical clear line between real-time and non-real-time activities.
This segregation of tasks will be very difficult to define and could endanger the electricity
system operational integrity. It would distort the operational practices necessary to ensure
security and threaten market support and integration. Vast technical, operational, and
regulatory transformations affecting all actors of the system would be necessary and would
likely create unmanageable transitional costs.

Regional Security Coordination Service Providers (RSCSPs) represent a more
realistic and more efficient approach than ROCs to achieve the benefits of
regionalisation: enhanced system security, optimisation of operations, economies of
scale, and market integration.
Regional cooperation does not stop with system operation. Infrastructure development
coordination, market integration services and political coordination of national policies (in
particular capacity remuneration mechanisms and renewable energy support schemes) will also
be developed regionally. When it makes sense technically and financially, for instance for new
cross-border capacity calculators, RSCSPs infrastructures will be used.
Regional coordination must be stepped up. ENTSO-E urges policy-makers to strongly support
the RSCSPs’ implementation rather than to experiment with the balance of national and EU
responsibilities for security of the electricity system and supply.
Regional and national executive centres: a dangerous split of
competences and a difficult coexistence
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December 2015
https://ec.europa.eu/energy/sites/ener/files/documents/153071%20DNV%20GL%20report%20Options%20for%20future%20System%20Operation.pdf
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The study proposes to equip Europe with Regional Operation Centres (ROCs), working in
parallel with the existing national control centres run by TSOs. ROCs would have a dominant
decision-making role for all activities up to “near- to real-time”.
Key points
 A clear-cut competence split between ROCs and TSOs is unrealistic. The ROC set-up
would put secure system operations at risk, make them less transparent and more uncertain,
and lead to a general lack of clear responsibility in operational decision-making.
 Supra-national regions are technically too large to perform some of the tasks proposed in
the study. ROCs would have to divide some of their functions into sub-regional entities,
likely to be very close to national activities, leading to a redundancy of entities.
 Shared executive responsibilities would dramatically increase the need for human and
automatic interactions between ROCs and national TSOs during all time frames. The risks
of human mistakes or IT failures, the operational costs, and the protection needs against
cyber-threats would all rise.
 Shifting (a part of) the security of supply responsibility from member states to regions or
Europe would be a fundamental change in the way that the security and stability of the
system are maintained and guaranteed today. This would have very strong legal
implications, long transition periods, and, above all, dilution of responsibilities.
From time-ahead to real-time, practical difficulties in all time frames
The study fails to capture the complexity of real-life system operation. It presents solutions that
would only work in a theoretical world, where time-ahead operations do not become more
complex as real time approaches, where real-time and medium-term strategies are not closely
interlinked, where no human intervention seems to be required and all processes are fully
automated.
This neither reflects existing practices nor is a realistic target for the future. The tasks currently
executed by TSOs in the medium and short timeframes are time-critical and require in-depth
knowledge of the transmission system. The study correctly acknowledges that this requirement
prevents centralisation of most time activities but fails to understand its importance in longer
time frames.
Today, in the medium timeframe, RSCSPs and TSOs develop together operational strategies
involving remedial actions and, in some cases, commercial contracts to deal with a range of
potential scenarios of system evolution (including consumption, production, and grid
availability assumptions). These strategies are regularly updated and refined until real time to
reflect the changes in the anticipated system conditions. They are handed over to the TSOs,
which implement them in real time (except in rare cases where their own system security
constraints contradict the RSCSP recommendation).
Effectively splitting this operational planning from real-time functions, such as maintaining the
frequency of the system (the overall balance between production and consumption), would
cause great difficulties and break synergies. Operation planning is closely linked with real-time
activities, both on the market and for the coordinated procurement of power reserves,
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The study also proposes to divide intraday tasks at gate closure between ROCs and national
control centres. During intraday, system and market conditions change. ROCs will have to
revise the operating plan in response before handing it over to the affected TSOs at the next
relevant gate closure. This implies that the ROC would be undertaking numerous handovers
per day across multiple ROC-national interfaces.
Whereas the RSCSPs are also a substantial (evolutionary) change to the past and present
operational practices in Europe, the (revolutionary) change that the ROCs concept induces
would not just change system operation but also make it ambiguous in terms of decision making
and practically infeasible in emergency and critical situations2.
High transition costs
Key technical elements and potentially escalating transition and operation costs have been
largely omitted by the study. Besides costs related to building new control centres, the study
also omits other direct costs such as staffing, training, new real-time IT systems, property,
procurement, installation, and testing. The growing threats in cyber-security linked to complex
IT development needs would complicate ROCs’ integration into the system even further.
RSCSPs, in contrast, are already on their way. They have not been created to perform all system
operation tasks and would not easily be turned into ROCs. A large part of the significant
investments already made by TSOs (and therefore indirectly by Europeans) would be lost.
From European treaties to network codes: the need to focus on implementation
The study recognises the extensive regulatory changes that the implementation of ROCs would
require. These changes could range from adopting new treaties to new network codes (which
are only about to enter into force and are not compatible with ROCs). Such a number of
regulatory changes would be unprecedented, would create risks and uncertainty, could
endanger the progress made towards European market integration, and would be expensive.
More importantly, it would require a strong commitment from European and national policymakers, regulators, grid operators, and all stakeholders, instead of focussing on the
implementation of the third package.
The risks and costs of such regulatory changes seem far from being proportional to their
doubtful benefits.
It is unclear whether ROCs would be feasible under the current EU treaties. Enacting legislation
that mandates the transfer of TSO competences goes beyond what is necessary to achieve the
goals of Article 194 of the Lisbon Treaty, on which all European energy policies are based (the
proportionality principle).
Likewise, national security remains the sole responsibility of each member state and is
impacted by some system operation decisions. Therefore, a transfer of competences to a ROC,
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For example, if the current fundamental operational principle of resolving congestions and security problems first
within their own control areas by TSOs is abandoned and a regional/global approach prevails, this could force a TSO
to implement a remedial action endangering the TSOs’ own customers ‘security. This cannot work in Europe (or
elsewhere, either – it should not be mixed with the cooperative TSO-DSO relationship, which has clearly defined
responsibilities for security in each operator’s area of responsibility).
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if mandated by an act of the EU, could be in violation of the principle of conferral, which limits
the competences of the EU.
Diluted liability
In most European countries, strict liability applies to TSOs. TSOs remain liable for the
operation of their grids even if tasks are delegated to other entities. As mentioned before, no
clear-cut division of tasks can be made in system operations. Therefore, to respect their legal
obligation, TSOs would have no choice but to duplicate most of the work of ROCs.
In real system operations, it is not always easy to identify where a particular issue occurred
(more specifically, whether the TSO or ROC would be responsible). Besides legal risks, this
dilution of responsibilities will represent in the long run a threat to the European security of
supply.
ENTSO-E’s alternative:
Implementing the RSCSPs, developing grid planning and markets in
regions, and looking beyond
At the forefront of the energy transition, ENTSO-E and its members are engaged in regional
integration. The main vehicle for this engagement are Regional Security Coordination Service
Providers (RSCSPs).
Regional cooperation is not limited to system operation. Regional cooperation for grid
planning, market integration (possibly using the RSCSPs infrastructures), and the coordination
of national energy policies (in particular capacity remuneration mechanisms and renewable
energy support schemes) should also be further developed.
Key points
 ENTSO-E’s 2015 Vision Package presents an efficient and realistic set of concepts, built
on physical constraints and expertise in grid development and operations. This plan is
already in motion and has the potential to evolve.
 RSCSPs already provide support services to TSOs serving nearly 80% of Europe’s
population, following an ambitious expansion plan.
 ENTSO-E is already engaged in a transformation of its Ten Year Network Development
Plan (TYNDP) processes to address the concerns expressed in the study, including new
collaborative scenario building and increased common planning studies by ENTSO-E.
 Finally, ENTSO-E is continuously analysing how RSCSPs will enhance their positive
role in the regionalisation of electricity market services.
RSCSPs: the appropriate formula for Europe
The first RSCSPs were initiated through the so-called initiatives (RSCIs) almost 10 years ago.
Because of their success, they have already become tools for implementing the 3rd Energy
Package, described in the (currently draft) regulation establishing the System Operation
Guideline and thus soon to become legally anchored in the European legal framework.
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Today, RSCSPs focus mainly on operational planning at the regional level. While they play an
increasingly important support role for operators in the TSOs’ control centres, the full decisionmaking responsibility remains with the TSOs.
The RSCSPs do not need to become control centres. They provide services efficiently to the
TSOs. Besides the costs avoided already mentioned, this also prevents the loss of the synergies
developed inside TSOs, particularly co-optimising transmission planning, maintenance, and
operation.
In the future, RSCSPs will have room to evolve and build on their experience to provide more
services to the TSOs if needed. ENTSO-E and TSOs will in due course analyse the possible
benefits of bringing more functions to the regional level as RSCSPs reach sufficient maturity.
The driving criteria for such a transition will be that the benefits for the power system,
customers, and market participants must clearly outweigh the transition and
coordination costs and risks.
European TSOs and ENTSO-E signed a multilateral agreement on RSCIs on 10 December
2015. It requires ENTSO-E members to participate in RSCIs or to contract five essential
services from them, in line with the new legal provisions of Part III of the SO GL. The
agreement also ensures that RSCSPs develop in a harmonised, interoperable, and standardised
way through ENTSO-E’s coordination, management support, and tools, standards, and
methodologies.
Regionalisation of market functions
ENTSO-E agrees with some of the study’s proposals on market function regionalisation. In
fact, many of them– such as capacity calculation ‘– are already foreseen some of them building
on existing and future RSCSPs.
For instance, the study proposes centralising the imbalanced netting function and application
of reserves, tasks already covered by the Draft Electricity Balancing Guideline. A Coordinated
Balancing Area for Imbalance Netting remains a clear recommendation.
With regard to other market activities once sufficiently defined and tested through pilot
projects, assigning coordination services to the RSCSPs also seems like a natural way forward.
Conclusion and the way forward
ENTSO-E plays a central role in the ambitious integrated European energy market, and its
expertise on European and cross-border governance of power systems keeps growing as new
progress is made. We regret that the study chose not to use this European expertise and did not
organise interviews with ENTSO-E.
Although some of the study’s recommendations for high-level assignments of tasks and
objectives at the European, regional, and national levels are sensible and in line with what the
network codes and guidelines prescribe, several proposals insufficiently reflect the constraints
of secure system operation.
Scheduling and balancing, for instance, should only be carried out by the same entities because
balancing can only be executed in real time when the actual load and generation is known. The
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topological know-how and constant human expertise and intervention required to plan and
implement system operations measures are also critically underestimated.
The authors of the study estimate a time span of three years for regulatory harmonisation and
one year for the harmonisation of operational procedures. This is, in our view, underestimated.
Finally, the study does not provide an evidence-based evaluation of differences in cost savings,
system security, and market benefits between the proposed ROC concept and the concept of
RSCSP.
ENTSO-E will move forward with the regional calculation services as to support system
operational decisions in each TSO, based on interoperable software. ENTSO-E will equally
investigate additional calculation services to be provided by the RSCSPs.
ENTSO-E is convinced that the RSCSPs deliver the benefits the study seeks to achieve at a
lower cost and in a simpler, less risky way.
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