WORKSHOP ON ELECTRICITY MARKET
MONITORING IN SOUTH EAST EUROPE
Screen 1: BCE Screen:
Comparison of Base Case Exchange assumptions to Net
Cross-Border Schedules
Presented by: Robert A. Sinclair
Introduction
•Screen 1 is the BCE Screen
Base Case Exchange (BCE) assumptions used in the calculating crossborder transmission capacity (referred to as Net Transfer Capability or
“NTC”).
 Because BCE can impact the level of NTC
–intended to monitor the accuracy NTC values.
•What is a BCE value?
A BCE is an assumption about “exchange programs” between TSOs.
They reflect anticipated cross-border schedules in the computer
simulation used to estimate NTC.
This computer simulation is known as the Network Model.
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Theory -- Purpose of BCE SCreen
Seller
Seller
Seller
Market Monitoring in Bilateral
Markets is focused on:
(1) on transmission access;
(2) Seller Dominance
Seller
Negotiation
Buyer
Buyer
Buyer
Buyer
Buyer
A Bi-Lateral Generation Market
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Purpose of BCE Screen
Seller
Market Monitoring in Bilateral
Markets is focused on:
(1) on transmission access;
(2) Seller Dominance
Seller
Seller
Seller
Supply
Transmission Network
Transmission Limits can
reduce market activity
Constrained
Supply
Buyer
Buyer
Buyer
Via Constraints
Buyer
South East Europe
Via Hoarding
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Buyer
Purpose of BCE Screen
Poor Transmission Access
Dry Run Monitoring Plan
Ensure
Accurate NTC
Values
Anomalies in
Transmission
usage
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Net Transfer Capacity (NTC) Calculations
NTC =
ΔE
+
-
BCE
TRM
What can Reduce
Control
NTC?
Control
Area 2
Area 1
BCE Flows (Screen 1)
ΔE Flows
G
Constraints (Screen 3)
G
Load Forecast (Screen 4)
ΔE
Generation Forecast
(Screen 5)
Control
Area 3
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Organization
• Theoretical Background – BCE Screen Theory and
Measurement
• Results of BCE Screen November 2009-March 2010
• Discussion




Threshold values:
Mitigation measures: what action to take?
Are there clear benefits from screen implementation?
Do regulators agree on the technical correctness of the BCE
Screen?
 Agreement of regulators on collecting requested data as requested
by BCE Screen?
 Agreement on implementing BCE Screen?
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Theory and Measurement
BCE assumptions result in
Base Case Flows between
control areas.
Estimate NTC from Control
Area 2 to Control Area 1
BCE assumptions can affect
NTC Estimates.
Control
Area 2
Control
Area 1
Base Case Flows
Uses up capacity for
simulated exchange between
2 and 1
Control
Area 3
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Monitoring BCE
• BCE values are to be “the best forecast for [cross-border] exchanges
at the time frame considered” (See ENTSO-E).
• Therefore, it is reasonable to expect that the BCE values correspond to
actual cross-border transactions.
• What time frame should be considered in the screen? The monthly
time frame is the most appropriate when examining NTC values
because the monthly NTC market is the most commonly used market
in the region.
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Process for Monitoring
What is the monitoring Process?
(1) Identify data requirements and request data;
(2) Use data to calculate screen;
(3) Identify threshold and compare screen to threshold;
(4) Identify action to be taken when threshold is violated;
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Explanation of Data Requirements
BCE Values. The forecast of cross-border (contract-path) exchanges
between control area used by TSOs in the Network Model;
Net Commercial Schedules. Actual contract-path schedules between
control areas.
Not actual flows;
The Net Values is required to make it comparable to the BCE,
which is a net value;
The Net Commercial Schedules are the net of all commercial
schedules on the cross-border path, i.e., day-ahead, hour-ahead,
etc.
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Calculation of BCE Screen
BCE SCREEN
We use a “percentage error”:
(Forecast-Actual) / Actual
= (BCE – Net Commercial Schedules)/ Net Commercial Schedules
Example:
Let BCE= 250 MW;
Let Net (Peak) Commercial Schedules = 220 MW
Then BCE Screen = (250-220)/220 = 30/220. = 14%
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Calculation of Monitoring Threshold
Calculating the BCE Screen Threshold.
• The BCE Screen is a starting point for monitoring the BCE values.
• We are concerned about the BCE values being “too low” or “too
high”.
 Measures as a percentage “error”, a typical measure of forecast error
(Forecast – Actual)/Actual
 We have proposed a 15% threshold as an initial value; We will
discuss alternatives, below.
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Calculation of Monitoring Threshold
• Violation of the threshold is an indicator of possible Regulator action.
• We do not propose action be taken in a single violation of the threshold;
We propose a two-part test:
(1) the 15 percent threshold is exceeded in the current month, and
(2) The 15-percent threshold was also exceeded in two of the past
three months.
• These requirements ensure that both the difference in BCE and net
commercial schedules is significantly and that it is a sustained
phenomenon.
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Results of BCE Screen
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800
700
Albania-to-Greece: G
Albania-to-Serbia: SR
Austria-to-Italy: I - Imports
B&H-to-Croatia: BH
B&H-to-Croatia: HR
B&H-to-Montenegro: BH
B&H-to-Serbia: BH
B&H-to-Serbia: SR
Bulgaria-to-Greece: G
Bulgaria-to-Macedonia: MK
Bulgaria-to-Romania: RO
Bulgaria-to-Serbia: SR
Croatia-to-Hungary: HR
Croatia-to-Serbia: HR
Croatia-to-Serbia: SR
Croatia-to-Slovenia: HR
Croatia-to-Slovenia: SI
Greece-to-Italy: G
Greece-to-Macedonia: G
Greece-to-Macedonia: MK
Hungary-to-Romania: RO
Hungary-to-Serbia: SR
Italy-to-Slovenia: I - Imports
Macedonia-to-Serbia: MK
Macedonia-to-Serbia: SR
Montenegro-to-Serbia: SR
Romania-to-Serbia: RO
Romania-to-Serbia: SR
Romania-to-Ukraine: RO
UNMIK-to-UNMIK: UN
Albania-to-Greece: AL
Albania-to-Montenegro: AL
Albania-to-Serbia: AL
Austria-to-Italy: I - Exports
Italy-to-Slovenia: I - Exports
Average
MW
Monthly Average BCE and Peak Net Schedules
November 2009 to March 2010
900
BCE
Net Peak Schedules
Results for November 2009 – March 2010
600
500
400
300
200
100
0
-100
-200
Average
-300
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Albania-to-Greece: G
Albania-to-Serbia: SR
Austria-to-Italy: I - Imports
B&H-to-Croatia: BH
B&H-to-Croatia: HR
B&H-to-Montenegro: BH
B&H-to-Serbia: BH
B&H-to-Serbia: SR
Bulgaria-to-Greece: G
Bulgaria-to-Macedonia: MK
Bulgaria-to-Romania: RO
Bulgaria-to-Serbia: SR
Croatia-to-Hungary: HR
Croatia-to-Serbia: HR
Croatia-to-Serbia: SR
Croatia-to-Slovenia: HR
Croatia-to-Slovenia: SI
Greece-to-Italy: G
Greece-to-Macedonia: G
Greece-to-Macedonia: MK
Hungary-to-Romania: RO
Hungary-to-Serbia: SR
Italy-to-Slovenia: I - Imports
Macedonia-to-Serbia: MK
Macedonia-to-Serbia: SR
Montenegro-to-Serbia: SR
Romania-to-Serbia: RO
Romania-to-Serbia: SR
Romania-to-Ukraine: RO
UNMIK-to-UNMIK: UN
Albania-to-Greece: AL
Albania-to-Montenegro: AL
Albania-to-Serbia: AL
Austria-to-Italy: I - Exports
Italy-to-Slovenia: I - Exports
Average
We welcome comment that may explain
Chart
of
average MPE
100% The Variability among Interconnections.
Mean Percentage Error
Mean Percentage Error
200%
Greater than 400%
Results for November 2009 – March 2010
150%
50%
0%
-50%
Average (-6%)
-100%
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Results for November 2009 – March 2010
Summary of Results;
On all interconnections in March (except for B&H to Serbia and
Romania to Ukraine) the percentage error was outside of the -15% to
15% range, meaning they all violated the one-month threshold
Moreover, for all of these interconnections, the one-month threshold was
violated in two of the months from December-February.
Hence, the screen as established is being violated in nearly all instances.
This suggests to us that the 15% threshold is too stringent. This is
discussed below.
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Discussion Topics
 Threshold values: should the 15% threshold be changed?
 Mitigation measures: what action to take when the threshold is
violated?
 Benefits from screen implementation?
 Technical correctness of the BCE Screen?
 Agreement of regulators on collecting requested data as requested
by BCE Screen?
 Agreement on implementing BCE Screen?
.
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Discussion Topic Threshold Value
The BCE Screen is:
BCE Screen = (Forecast-Actual)/Actual
=(BCE - Net Commercial Schedules)/Net Commercial Schedules
Threshold value is 15% and be violated in three of four months,
including the current month;
Is the this the proper value?
It is typical in market monitoring regimes to use a “reference”
values based on outcomes under competitive conditions;
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Discussion Topic Threshold (Reference) Value
Reference Value: A concept used in market monitoring to
assess the value of a screen;
Reference Value is what the monitor would expect a “good”
value to be;
–Good Value: Values that occur under competitive conditions
For example, we can assume that in most instances, BCE forecasts
are based on normal conditions and techniques.
Hence, we eliminate the outlying historical values to arrive at a
threshold;
We propose using percentile values to identify a threshold.
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Discussion Topic Threshold (Reference) Value
Percentile threshold:
Step 1: Separate the positive and negative values;
Step 2: Find the 50th percentile of the positive values and the 50th
percentile of the absolute values of the negative values
For the November-March data we get a range of
-42% to 75%
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Discussion Topic – Mitigation Measures
 Mitigation Measure is the action taken when a screen is
violated;
 In general, the first step is to seek additional information, specific to
the screen;
 BCE First results of the screen indicate that the BCE assumptions
does not closely correspond with the actual net exchanges;
 First step is to ask for explanation, method;
 Next Step may be to propose certain methods;
 These steps are based on U.S. experience with market monitoring
in bi-lateral markets.
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Discussion Topics – Benefits From Screen
 Benefits:
 Accurate NTC values, facilitates cross-border trade, development of
competitive electricity market;
 Builds confidence;
 Will monitoring improve BCE accuracy?
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Discussion Topic – Screen Technically Correct
.
 Is BCE important to accurate NTC values?
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Discussion Topics – Agree to Implement Screen
 Agreement of regulators on collecting requested data as requested
by BCE Screen?
 Agreement on implementing BCE Screen?
.
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Support for This Project
This project is made possible through support provided by the
United States Agency for International Development (USAID)
through its Energy and Infrastructure Division of the Bureau of
Europe and Eurasia under the terms of its Contract No. EPP-100-03-00006-00, Task Order 7 with Internaltional Resources
Group (IRG). The opinions expressed herein are those of the
authors and do not necessarily reflect the views of the USAID.
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End
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