Energiföretagen NC DR National Conditions Webinar (2024)

Presented by: Jonna Söderberg (Sweco, konsult kraftsystem), Erik Lejerskog (Energiföretagen, ansvarig kraftsystem) — per the slide text and the erik.lejerskog@energiforetagen.se feedback address; an earlier version swapped the affiliations Title: “EU-förordningen Demand Response och elnätsföretagens nya roll”

Industry webinar explaining the forthcoming NC DR and proposing a governance model for Swedish national conditions (nationella villkor). Organized by Energiföretagen through Eldistributionsrådet and AG Flex Elnät. Invited all Swedish distribution network companies. Deadline for responses: May 15, 2024.

Context

As of April 2024, the NC DR was expected to enter into force “beginning of 2025” (the maintainer notes this estimate has since proved optimistic; not from the raw). Energiföretagen used the webinar to:

1. Explain what the regulation requires and why
2. Propose how Sweden should organize the development of national conditions

Key claims

NC DR Title VII is the central chapter for DSOs

The regulation’s Title VII — TSO/DSO Coordination is described as the core chapter that shapes the DSO’s operational role. National conditions must be developed for Articles 70–76, Article 18 (confidentiality) and 77 (the raw’s list runs (a)–(i)):

New national conditions obligation — timeline and structure

Under the NC DR draft:

• Within 3 months of regulation entry into force: all distribution network companies and Svk must jointly submit a proposal for a national process for developing national conditions to Ei
• Ei then has 2 months to approve the process proposal

The national conditions themselves cover:

• Market design and business models
• Coordination between markets
• Coordination between grid levels / grid companies
• Aggregation models and imbalance correction for all market actors
• Prequalification processes for resources and service validation
• National flexibility register for resources in balancing and flexibility markets
• Procurement rules for congestion management services (incl. batteries)
• Local market operator rules
• Data exchange and communication protocols

Once adopted, national conditions have the same legal status as national föreskrifter.

The national conditions process is not a one-time exercise — the NC DR requires periodic review and updates, and European harmonization requirements will increase over time.

Swedish governance challenge

Sweden has many distribution network companies (the raw gives no count — an earlier “approximately 170” figure was not from this source). This creates several structural challenges absent in most EU countries:

• Not all DSOs are members of Energiföretagen (“många, men inte alla”) — yet the obligation to develop national conditions applies to all DSOs
• Svk is not a member of Energiföretagen
• No existing organisation represents all DSOs, or all DSOs plus Svk
• This is the first time DSOs in Sweden have had a statutory role in developing sector regulation

For comparison, for other EU regulations such as RfG, Svk was tasked with drafting proposals for föreskrifter that Ei later approves (national implementation, not development of the code itself) — not the DSOs.

Energiföretagen’s proposed governance model (hybrid solution)

Eldistributionsrådet and AG Flex Elnät proposed a hybrid solution:

• Energiföretagen provides the organizational infrastructure
• A formal decision process is established that is open to all DSOs, including non-members of Energiföretagen
• Resembles the EU-level network-code process (“påminner om processen på EU-nivå”); a “Drafting Committee”-style stakeholder committee appears in the slides only as a question for the Svk-complement idea

Required elements:

• All Swedish DSOs represented (e.g. fullmäktige with all DSOs, board and working groups — an example in the slides, not a requirement)
• Governance board (styrelse) and working groups
• Formal process for DSOs to take independent decisions and positions
• Formal joint decision process with Svk
• Transparent stakeholder dialogue (not limited to Energiföretagen members)
• Earmarked financing (“öronmärkt”) for the organizing function as a “myndighetsuppgift”

Working hypothesis: Energiföretagen hosts the process with formalized participation rights for non-members; Svk participates via a separate joint process.

Ei R2023:18 — national DSO organization study

Ei and Svk jointly recommended in report Ei R2023:18 (written by Ei, Svk and Swedac) that the government study whether Sweden needs a nationally legislated organization for distribution and transmission network companies to fulfill NC DR obligations. (The comparison to the EU DSO Entity is not in the raw.)

System operation states as the technical backbone

The NC DR Title VII framework is grounded in the SO GL system operation states:

• Normaldrift — all parameters within limits; N-1 maintained
• Skärpt drift — some parameters at limits; not all N-1 failures manageable
• Nöddrift — some parameter outside limits; emergency actions
• Nätsammanbrott — blackout; ≥50% consumption disconnected
• Återuppbyggnad — restoration

The N-1 security criterion and contingency lists (felfallslistor) form the operational basis for TSO-DSO coordination and the corrective/preventive actions framework.

Key principle: system cannot be operated in an “icke analyserat tillstånd” (unanalysed state; the presenters’ “Grundidé”, not attributed to SO GL/NC DR)

A central design principle attributed to SO GL / NC DR: scenarios for all foreseeable problems (congestion, balancing) must be analysed and handled in a coordinated way — in advance. The system must be proactively managed, not reactively patched (“not trial and error”).

Responsibility framework

Translated from the slide (“Felfall i eget nät får inte ge oacceptabla konsekvenser i egna nätet eller för andras nät”) — applies to TSO-TSO, TSO-DSO, DSO-DSO (“ömsesidigt ansvarstagande! – gap? Nivå?” — the slide leaves gap and level questions open); the slide is headed “best practice (fritt från olika standarder)”, not the NC DR framework. The polluter-pays principle applies to cost allocation, but resources must be used with a systems perspective.

Relevance to wiki

• Network Code on Demand Response: Adds detail on the Swedish national conditions governance challenge (many DSOs + Svk) and Energiföretagen’s proposed hybrid model. Also clarifies the 3+2 month statutory timeline for the national process proposal.
• Energiföretagen Sverige: Documents Energiföretagen’s specific organizational proposal (Eldistributionsrådet, AG Flex Elnät) and the hybrid decision-process model.
• Ei: Ei’s role as approver (2-month window) of the national conditions process proposal is defined here.
• Svenska kraftnät: Svk’s joint role in drafting national conditions alongside DSOs; separate formal joint process needed.
• Distribution System Operator: Clarifies why the NC DR is structurally unprecedented for Swedish DSOs — first time they have a formal role in developing binding sector regulation.
• Congestion Management: System operation states and N-1 framework as technical backbone of Title VII national conditions.

Data gaps

• How has the Energiföretagen hybrid model proposal evolved since April 2024? (Ei R2023:18 recommendation on a legislated national organization — government response?)