Ancillary Services Europe
14-15 April 2010, Brussels

 

Conference Chairman


Image

Konrad Purchala, Advisor to the Board, Polish TSO PSE Operator

Konrad Purchala is an Adviser to the Board of the Polish transmissions system operator PSE Operator. Previously he was with Power System Consulting of Tractebel Engineering from the GdF-SUEZ group, where he was an expert in techno-economic studies, active in projects ranging from cross-border electricity markets, support of generation investment decisions, to research on wind energy integration and business models related to distributed generation. 

His main interest are the interactions between the technicalities of the power system and the economics of electricity markets, which translates into techno-economic implications of market design choices, congestion management schemes, and policy decisions. He was involved in studies of capacity auctioning and market coupling algorithms for the TLC market coupling between Belgium, Netherlands and France, studies for DG TREN on the integration of European balancing markets and inter-TSO transit compensation schemes. He also took an active role in large research projects on distributed generation, wind energy integration and institutional support for tackling the future R&D challenges of the European TSOs. 

Konrad Purchala received a M.S. degree in electrical engineering in 1999 from Warsaw University of Technology, and a Ph.D. degree from University of Leuven (K.U.Leuven) in Belgium for his work on management of congestion in liberalized electricity markets in 2005. He authored and co-authored over 30 international papers. He is an active member of various CIGRE working groups.


 

 

Interview with the Chairman


What are in your opinion currently the key challenges in the European Ancillary Services Markets?

I see two main challenges. First is related to the increased costs of internal congestion, and is the price we pay for the “copper plate”. Increasing variability of generation dispatch caused by significant in-feed of intermittent generation and extensive arbitrage between interconnected European power markets stresses the transmission lines up to their limits. Market conditions, legislation changes and new generation additions (largely small renewable projects, but there is many of them) come quicker than transmission grid reinforcements, and hence there is increasingly higher probability of congestion, and consequently the costs of solving it (re-dispatching measures).

Another challenge is the integration of cross-border intra-day and balancing markets. This also stems from increasing variability of generation conditions. Cross-border intra-day markets allow trading the surplus/shortage of energy between different national markets. Cross-border balancing markets on the other hand allow decreasing the costs of balancing by optimizing the use of flexible generation. The tricky thing is that the gate closure gets really close to real-time, putting increasing pressure on the transmission grid that was not build for shipping large quantities of energy across large distances.

How do you see the challenge of integrating renewable energy in the Ancillary Services Markets? Is the growing number of renewables that are not integrated in the system sustainable in the long-run?

The power system as we know it works because all participants (power stations) are obliged to support it. Power system needs reactive power, reserves, etc. Only active power is not enough in the AC world.

Renewables that do not participate in any ancillary services provision can be considered as a negative demand. It can work like that but only up to a certain level. You can compare it to a bike with multiple cyclists on it (multicycle). When all, say 10, cyclists work together, the multicycle speeds forward. When 2 out of 10 are resting, the other 8 need to work harder. When 5 out of 10 takes a break, the remaining 5 will collapse. It is the same power systems!  

Hence, renewables must contribute to ancillary services. In the long run, one should expect that they will be able to offer primary regulation, voltage support, and some degree of dispatch ability (at least a TSO control centre level). Some of these features are already possible, i.e. voltage support is quite common. However, it is difficult to expect that renewables (non-hydro) will be able to offer secondary and tertiary reserves. Emergence of smart grids, electric vehicles (distributed storage) might change that, but it will not happen tomorrow.

How do you think the market design for Ancillary Services will evolve in the future and what kind of new Ancillary Services will develop?

I think that a lot of new services might come from the bottom of the grid, i.e. from distributed energy resources DER, thanks to smart grids. Currently ancillary services come from large units. However, if DER breaks through (via small scale and micro-cogeneration, solar power) one might expect that the operators of these resources will try to enter into the market traditionally reserved for large units via aggregators and start competing. Note that DER includes also demand response – a sleeping giant. Who knows how the customers will react when they see their energy costs in real time? I am sure that the suppliers will find a way to make business on that – when it comes to making money sky is the limit to human invention.

However, not only TSO might be interested. Think of a DSO which sees the limits of their low voltage feeder. It might start digging to lay new underground cables, or it might incentivize DER to be put along that feeder, make a deal with its owners for generating during peak conditions, etc.