Nord Pool Spotin ajatuksia tehoreservien aktivoinnista - Fingrid

6 October 2010Handling of the peak loadreserves in the spotmarket – NPS positionKarri Mäkelä, Nord Pool Spot ASkm@npspot.com

Background•SvK and and Fingrid had power reserves available forElspot-market since the 19 January 2009•When demand exceeds supply reserves are offered tothe market•Reserves have been used three times last winter, in atotal of eight hours•Reserves are priced as the highest commercial bid in theElspot-market•NordREG has asked after NPS position concerningcurrent scheme2

Principles for further development• Peak load reserves should be organized so that they donot remove volumes or flexibility from the Elspot-market• Handling of the peak load reserve should not increasethe risk for market manipulation• Peak load reserves should be handled so that they donot excessively reduce the incentives to invest in newproduction capacity• Peak load reserves are meant to be a temporarysolution3

Consumption reductions•All consumption reductionsincluded in the peak loadreserves should be offered tothe Elspot-market at all times.•The company offering thevolume to the market should•also be free to set the pricefor this volume on ordinarycommercial terms4

Production resources•It is recommended that the production units included in the peak load reservesare only offered to the market in cases where supply does not meet demand sothat curtailment is avoided.•The units should not be offered to the spot market at ordinary commercial termsas they would typically not have been available for the market if they were notpart of the peak load reserve.•In order to reduce the risk of market manipulation it is important that thereserves in these cases are offered to the market at a price that is independentof ordinary commercial orders placed by other market participants. It is thereforerecommended that the production units included in the peak load reserves areoffered to the market at a price reflecting the costs of making the units availablefor the market.•It is recommended that both the variable costs and the fixed costs are includedwhen calculating the price that the units should be offered to the market at.5

Transparency•Principles for how the resources are offered to the spotmarket, and how the prices are calculated should becommunicated to the market•Total amount of production and consumption reservesshould be public information also in the future6