Source - Elmarknadsrådet Meetings 3 and 4 2024 (Sep-Nov)

Minutes and consolidated presentation materials for the third and fourth Elmarknadsrådet meetings of 2024.

Documents

Meeting 3 — 18 September 2024

Location: Svenska kraftnät, Sundbyberg. 10:00–15:30.

Chair: Malin Stridh (returned as ordförande; Eva Vitell now serving as Division System chief from May 21)

Attendance: Malin Stridh (chair), Linnea Achour (sekreterare), Anna Jäderström (Svk), Mårten Bergman (Svk); Magnus Thorstensson (Energiföretagen Sverige); Cecilia Thorsson (Varberg Energi, balansansvarig); Morgan Andersson (Bixia, producent); Kristian Gustafsson (Vattenfall, producent); Susanne Franzén (Fortum, producent); Daniel Köbi (Jämtkraft elnät, elnätsföretag); Emma Tronarp Trawén (E.ON, balansansvarig); Filip Englund (Holmen, elanvändare); Lars Skoglund (Ntricity, BSP). Per Wikström (Ellevio) and Michelle von Gyllenpalm (Svenskt Näringsliv) absent.

Key claims

Balansansvarsavgift och stamnätstariff 2025 (Malin Stridh):

• Tariff preliminary (formal board decision following week); congestion revenue used to hold effektavgift flat
• Energiavgift increased due to higher risk surcharge (costs of imbalances rising)
• Marginalförlustkoefficient stabilized after years of variation (changing flows in network)
• Balansansvarsavgift raised 25% — lower than recent years (40% and 33%); obalansavgift and veckoavgift unchanged
• Nordic harmonization of balansansvarsavgift: NO/SE/FI harmonized; DK reviewing its model but not aligned with Nordics
• Effektreservsavgift set by GD (not board); covers costs of higher readiness (beredskap); last year of effektreserven
• Filip: important congestion revenues primarily fund network expansion, not tariff smoothing; Malin: usage doesn’t delay expansion

Svk strategy 2025–2030 (Malin Stridh):

• Five “forward movement areas”: (1) improved delivery security (faster return to normal operation; clarify requirements for connected facilities; strengthen TSO-DSO cooperation); (2) network in step with needs (not only build out, but bridge measures — example: pilot in Västra Götaland using new production and flexible resources to enable greater capacity allocation before network built); (3) future electricity market (reduce bidding zone constraints via flowbased and zone review; tariff incentives; long-term investment signals)
• Brief mention of civil preparedness, digitalization, and international collaboration as other areas

BSP/BRP contract changes — September remiss round (Maria Darle, Balansmarknad):

• Remiss period July 1–August 23; Svk assembling remiss responses and preparing remissbemötanden; final contracts published October
• Two-step rollout: Step 1 December 2024 (mFRR EAM go-live): proactive balancing; mFRR activations per quarter; minimum bid 1 MW; settlement per delivery hour until 15-min MTU; increased non-delivery surcharge for FCR
• Step 2 Q1 2025 (15-min MTU intraday): prices and settlement per quarter
• Remiss responses: strong consensus; most comments on mFRR EAM; Svk adjusted availability requirement for direct activations (Q1–Q3: same volume as capacity market commitment; Q4: minimum of current and next-hour capacity commitment)
• Filip asked when independent BSP possible: Maria confirmed Svk responding to Ei föreläggande by October 1; independent BSP details to be communicated at physical aktörsmöte October 4; full role requires EU-based legal and IT implementation

Roadmap (Mårten Bergman / Anna Jäderström):

• EPAD pilot continues; SE-LT methodology proposal to be submitted November
• IDA auctions since June: liquidity initially low partly due to low allocated capacity; improvements planned to release more capacity via updated grid models
• Elområdesöversyn: Svk recommendation (keep or change) due December; accessing results now; actor meetings (European + Nordic/Swedish level) late October/November — recommendation not communicated before December report
• New bidding zones earliest 2027; 18+ months needed from decision to implementation
• MARI/PICASSO: Svk focused on near-term changes (flowbased, mFRR EAM); will provide more detail on PICASSO/MARI after 15-min MTU implemented

Flowbased go-live (Mårten Bergman / Victoria Bjellerup):

• Go-live planned October 2024 (prerequisite for mFRR EAM December, 15-min MTU Q1 2025)
• Intraday capacity: remaining capacity after day-ahead auction converted to ATC; some hours significantly lower capacity to intraday → “relaxation” applied (slightly increased capacity on constraining elements, introducing overload risk and need for remedial action)
• Arbitrage: from go-live, arbitrage from low-price to high-price zones via intraday allowed; TSOs assessed this important for actors to balance; will monitor closely
• HVDC countertrading: routine agreed with Energinet and Fingrid; Svk uses portfolio manager; volumes/timing announced via NUCS; preference for IDA to increase liquidity; dialogue with Ei on market impact and transparency

Flexibility of Swedish wind power — week 32 event (Pontus de Maré / Jesper Nyberg):

• Week 32 (early August 2024): low consumption, high wind; spot prices negative in several hours in Swedish bidding zones
• Wind producers visibly reacted to price — had not sold all available production day-ahead; Svk production forecasts vs actor plans showed gaps up to 3,000 MW in negative-price hours
• At the hour turn from positive to negative price, Svk had pre-reduced ~200 MW to smooth the transition; despite this, wind production dropped 1,200 MW suddenly — frequency fell outside normal operating range
• 1,200 MW is close to the dimensioning fault level of 1,450 MW — raises system stability concern
• BRP contract includes provision that production changes >200 MW should be smoothed from 15 minutes before to 15 minutes after the hour turn — either not followed, or many small parks each under 200 MW threshold
• Morgan: many actors act independently without BRP knowledge when curtailing; “dark number” of non-compliant curtailments likely large
• Pontus: wind flexibility is positive but coordination mechanism needed

mFRR EAM and 15-min MTU (Malin Wester / Linus Claesson / Linnea Achour):

• mFRR EAM go-live December 2024 confirmed; BSP engagement for testing essential
• 15-min MTU intraday: Nordic go-live January 2025 (under discussion); day-ahead: March 2025 — both up for discussion (dependent on flowbased functioning post-go-live)
• Prissättning with EAM: price per hour initially; based on all scheduled + direct activations in the hour; one price per direction (up/down); spotprice as reference; marginal-price can be set by any activated bid in merit order
• Direct activations: national process only; only set price in the control area where activation occurred (even if cross-border capacity available)
• Timeline to MARI: largest changes come with MARI connection — scheduled and direct activations priced separately; spotprice no longer reference; unclear how obalanspris will be calculated from multiple mFRR/aFRR prices; Svk working to harmonize within Nordics
• Standard profile for mFRR delivery: if actor cannot follow standard, at minimum symmetric ramp over quarter transition; no penalty at EAM stage but BRP adjusted for imbalance deviation
• Trilateral mFRR CM (SE+FI+DK; Statnett joins post 15-min MTU): planned Q4 2024
• Industry concerns: shorter activation times (shorter ramp, higher prices); Vattenfall: higher prices and risk of lower mFRR volumes; Bixia: thermal power customers will raise prices; Jämtkraft: batteries can complement existing assets

Kompensationsmodell (Robert Thelander / Peter Petersson / Magnus Brolin):

• Report submitted to Government September 2, 2024
• Assignment scope: demand flexibility only (not production); covers explicit flexibility (market participation)
• New role proposed: Flexibility Service Provider (FSP) — encompasses consumption, production, and energy storage; name intentionally broader than “aggregator” to cover all flexible resources; requires central information system
• Two recommended models:
  1. Flera leveranspunkter (Multiple delivery points): FSP independent of customer’s electricity supplier; applicable to day-ahead, intraday, balancing markets, and local flexibility markets; FSP must cooperate with a BSP for balancing market participation
  2. Korrigerad faktura (Corrected invoice): Svk sends activation data to both FSP and BSP; supplier sees FSP activation and can invoice customer; customer remains central (awareness of costs/revenues increased); roles kept separate
• Compensation price: spotprice recommended (simplest, most transparent; some actors may struggle to find profitable business case)
• Central information system: estimated 4–6 years to implement; during transition, internal networks to open for new delivery points
• Reference profile (counterfactual baseline): separate inquiry recommended due to complexity
• Three-year review of model and compensation price proposed
• Rebound effect not addressed in model (difficult to quantify; different resource types behave differently)
• Compensation must cover costs strictly; not create distortions between actors

Meeting 4 — 20 November 2024

Location: Svenska kraftnät, Sundbyberg. 10:00–15:30.

Attendance: Malin Stridh (chair), Linnea Achour, Anna Jäderström, Mårten Bergman (Svk); Magnus Thorstensson (Energiföretagen); Cecilia Thorsson (Varberg Energi); Morgan Andersson (Bixia); Per Wikström (Ellevio); Kristian Gustafsson (Vattenfall); Susanne Franzén (Fortum); Daniel Köbi (Jämtkraft elnät); Michelle von Gyllenpalm (Svenskt Näringsliv); Filip Englund (Holmen); Lars Skoglund (Ntricity). Emma Tronarp Trawén (E.ON) replaced by ersättare Martin Nyqvist.

Key claims

Inledning — Överbelastningsreserv (Malin Stridh):

• Svk procured överbelastningsreserv to provide capabilities needed when existing störningsreserv contracts expire
• Open procurement; both production and consumption resources participated; systemdriftskompensation capability included
• New contracts start January 2025

Civil preparedness — marknadsbaserad drift i kris och krig:

• Internal Svk work on maintaining market-based operations during crisis and war; mapped functions that must work; vulnerabilities identified
• Basis: Svk instruction §4 — responsibility to lead and plan electricity supply in crisis and war
• Dialogue with Vattenfall (only actor able to support frequency regulation in certain modes); broader actor dialogue planned
• Likely topic at future Elmarknadsråd and Driftråd

Roadmap (Anna Jäderström / Mårten Bergman):

• Independent BSP by 2028: new BSP/BRP implementation timeline confirmed (Ei föreläggande response); intermediate steps may be taken before 2028
• Trilateral mFRR Capacity Market launched November 19, 2024 (SE+FI+DK): trading successful; southern Sweden supported via Finland and Denmark, reducing need to reserve capacity on north-south interconnectors
• mFRR EAM new go-live date: March 4, 2025 (postponed from December 2024); 15-min MTU intraday and day-ahead go-live dates unaffected
• Flowbased: live October 29 as planned; good functioning; continuous improvement ongoing
• Bidding zone proposals shared with European reference group (price outcomes shown, not welfare analysis); simulations show: southern SE zone would have prices similar to current SE4 (same marginal plant); eastern zone including Stockholm/Forsmark at lower prices (coupling to low-price Finland); northern zone higher prices if boundary moves south (more load and price-setting units included)
• EPAD pilot: SE-LT methodology proposal submitted; Finland solution in progress; auction calendar for 2025 established
• MARI/PICASSO and Ei tillsynsärende: Ei demands timeline and milestones; response due end of November; Svk cannot pre-anchor timeline with Nordic partners (Nordic timeline coming after year-end); Energinet and Fingrid already in PICASSO; challenges with high prices noted in Denmark
• Intraday gate closure: Nordic/European discussions on moving closer to real-time; EU deadline 2026; TSO recommendation expected soon

Flowbased — first experiences (Linnéa Nyman / Stefan Svensson):

• October 29 first day; process worked per plan; market result on time all days except first (2 minutes late); rollback period ended November 20
• First weeks: period of low uniform prices (high wind, school holiday week); period of higher and more dispersed prices (low wind + cold + SE3 maintenance outage at Kilanda)
• Non-intuitive flows observed: e.g., flow from higher-price to lower-price area — explained by CNEC in SE2 being the binding constraint; increasing SE1 production more than SE2 reduces constraint load while delivering more south; SE3-NO1 flow also against price direction for same reason. With NTC, both Hasle and Kontiskan would have needed capacity restrictions; with flowbased, no pre-restriction needed
• East-west flows (FI-SE3 via Fennoskan, SE3-NO1, SE2-SE3) very large on October 30 (low/flat Nordic prices but high prices in western Norway, Denmark, continent)
• EPAD premiums increased since flowbased go-live — most visible for December SE3 contract; consistent with day-ahead market development
• Intraday volumes since flowbased comparable to immediately before; max volumes not yet reached; capacity somewhat smaller after day-ahead with flowbased
• Snitt 2 and snitt 4 flows ~30% higher since flowbased go-live (both directions) vs the weeks immediately before
• Implicit losses on HVDC: regulatory approvals received; Nordic RCC tests not complete; impact limited so far but important long-term tool for HVDC protection

Driftläge (Andreas Hedström, Operativ driftanalys):

• Flowbased introduced new tools and processes to control room; coincided with major switchyard reconstruction at Kilanda (western SE3) → initially strained situation
• Flowbased enables better use of meshed network (loop flows, parallel paths); with NTC, TSOs had to provide margins for all possible situations; with flowbased, Svk submits a grid model and market determines outcome
• East-west flows still challenging operationally but better toolbox now; loop flows better understood at start of operating hour, reducing need for countertrading
• Implicit losses on Kontiskan approved; Fennoskan tests not complete at go-live
• System state: stable since flowbased introduction; no major disturbances; November 15 start of interruption-free period (planerade avbrott avoided through winter); next months of stable conditions expected

Obalansanalys (Sandra Brenner, Balansmarknad):

• Swedish (and Nordic) imbalances have increased significantly over the past ten years
• Primary driver: average hourly wind production up 800% over the period; SE2 shows the largest increase
• Hardest to forecast: wind power at low wind speeds (sharp power curve inflection makes prediction error large)
• Market design factors: balancing window closes 45 minutes before delivery hour; 90% of all electricity trading occurs 12–36 hours before delivery on day-ahead
• Council observations: well-functioning intraday market is central for balancing responsibles to achieve balance close to delivery; near-real-time publication of production and consumption data at bidding zone or network area level could significantly improve BRP forecasts
• Svk to publish more detail on imbalance development in 2025; following Denmark and Finland pilots on near-real-time data publication

Kapacitetsåtgärd (Martin Nilsson, Nätnyttjande):

• New Svk concept to bridge the gap between grid connection demand and network expansion speed
• Problem: Svk cannot accommodate connection requests at requested rate due to network build time; “conditional agreements” (villkorade avtal) are one solution; kapacitetsåtgärd a complementary instrument
• Not a substitute for network expansion (nätåtgärd) — explicitly temporary, until the network is built
• Works via: Svk procuring external flexibility resources to ensure system security in areas with large connection backlogs; procurement similar to countertrading resources (estimated ~9 months); resources must be in place within 2–4 years
• Pilot intention in Västra Götaland; decision on whether to proceed and how around year-end 2025 (after spring internal report + autumn dialogue with ~40 external stakeholders)
• Financing: anslutningsavgift (connection fee); both cost of resource and cost of network measure covered
• Design hypotheses: open to new flexible resources + also existing resources (following stakeholder input); time-limited ~10 years; resources may participate in other markets (intraday, local flexibility markets) when Svk has no need; placement of resource must be assessed jointly with DSO
• Legal basis: ellagen allows alternatives to network expansion
• Daniel Köbi: why doesn’t the network owner do this themselves? Martin: Svk has not analyzed why not, but it is something Svk can do; noted that the DSO’s role is important for assessing requirements at different locations
• Filip: could kapacitetsåtgärd become a long-term solution? Martin: conditional agreements could be long-term; legal barriers to permanent conditional agreements currently exist but may change
• Kristian: important for the market to have clear long-term signals about mFRR resource needs; Anna: report with scenarios and long-term needs coming early next year

Relevance to wiki

• Elmarknadsrådet: 2024 member composition for meetings 3–4; Malin Stridh as chair (Eva Vitell as Division chief); Daniel Köbi/Jämtkraft as DSO rep
• Flow-Based Capacity Calculation: Go-live October 29, 2024; first experiences (non-intuitive flows; CNEC in SE2; snitt 2/4 flows 30% higher; EPAD premiums up); rollback period ended November 20
• Balancing Markets: Trilateral mFRR CM launch November 19 (SE+FI+DK); mFRR EAM postponed to March 4, 2025; obalansanalys findings; REMIT ongoing; wind curtailment event week 32; overbelastningsreserv replaces störningsreserv
• Aggregation: Kompensationsmodell delivered September 2; FSP role; “Korrigerad faktura” model; “Flera leveranspunkter”; spotprice; 4–6 year central system timeline
• BSP and BRP Roles: Independent BSP target 2028 (confirmed November); Ei föreläggande answered October; two-step BSP/BRP contract changes
• Strategisk Reserv: Effektreserven final year; effektreservsavgift covering beredskap costs only; no new information at November meeting
• Demand Response: Kapacitetsåtgärd concept and FSP role as enablers; Demand Response lagstiftning being mapped
• TSO-DSO Coordination — The Central Design Problem: Kapacitetsåtgärd requires joint Svk-DSO assessment of resource placement; DSO role flagged as important; Art. 182 context (BSP-DSO agreements not yet mentioned explicitly in 2024 meetings)
• Regulatory Calendar: Trilateral mFRR CM Nov 19 2024; mFRR EAM March 4 2025; independent BSP 2028; störningsreserv contracts expire → överbelastningsreserv from January 2025

Data gaps

• Svk response to Ei föreläggande on independent BSP (submitted October 1, 2024) — what exactly did Svk propose as the 2028 implementation roadmap?
• Outcome of Svk bidding zone review recommendation (due December 2024) — did Svk recommend keeping or changing zones?
• Kapacitetsåtgärd pilot in Västra Götaland — was the go-ahead decision taken (expected around year-end 2025)?
• Whether Svk published the long-term mFRR resource needs report promised for early 2025
• Final outcome of ACER co-optimisation decision (September 2024) and any binding methodology imposed