Shadow Opinion on Pricing Proposal Analysis
In the shadow opinion on the pricing proposal, various topics are addressed, including structure, clarity, definitions, interpretation, and substantiation of the proposal. The analysis delves into key aspects such as pricing methodologies, terms alignment, effects on incentives, and strategic bidding behavior. Requests are made to clarify pricing principles, deal with price indeterminacy, and align terminology. The opinion seeks explicit explanations on pricing impacts and incentives for market participants, emphasizing the importance of a clear and comprehensive pricing framework.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. Download presentation by click this link. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
E N D
Presentation Transcript
Shadow opinion on the Pricing Proposal
Topics addressed in the shadow opinion Structure and clarity Definitions and interpretation Substantiation Additional remarks
Structure and clarity (1/2) NRAs ask to include a description of what is a marginal price and how this principle is applied to activated balancing energy bids. NRAs ask a general description of the pricing method(s) that serves as the basis of the more detailed pricing methods Application for different standard products Application for different specific products Possibility of application of a different pricing methodology for non-converted specific products (article 26(3)(b) EBGL), if approved at national level
Structure and clarity (2/2) NRAs request TSOs to be explicit on whether and how the pricing methodology leads to one price for both directions or one price per direction During activation of balancing energy bids During deactivation of balancing energy bids NRAs also ask TSOs to include in the proposal how price indeterminacy will be dealt with in each pricing method
Definitions and interpretation NRAs ask TSOs to align the use of terms with those in the EBGL and among other proposals or IFs Requested Activated Selected Delivered Cross zonal capacity Uncongested area Curves price indeterminacy
Substantiation of the current proposal (1/2) For each pricing option, NRAs ask TSOs to substantiate the expected effects on (positive) incentives for BSPs to offer balancing energy bids to the different balancing platforms. the expected effects on (positive) incentives for BRPs to be balanced or for helping the system to be balanced. the expected effects on incentives and possibilities for BSPs to develop strategic bidding behaviour, and to elaborate on possible mitigation measures for each option. how both pricing options (pricing and settlement per 15 min ISP versus pricing and settlement per optimisation cycle) fulfil the concept of marginal pricing (pay as cleared)
Substantiation of the current proposal (2/2) For each pricing option, NRAs ask TSOs to analyse whether they provide incentives to BRPs to be balanced or help balance the system, and avoid distorting incentives on both BSPs and BRPs; How do both pricing options affect: external (administrative) costs related to the implementation, metering, communication, settlement, profiling, etc.? the algorithmic requirements and computational feasibility? the stability of the settlement procedure both in operation and in ex post settlement (i.e. the definition of prices and volumes)? transparency of the settlement procedure for BSPs/BRPs with each option (e.g. on how prices are defined)? which information has to be provided for the BRPs and the BSPs to react following the incentives?
Additional remarks NRAs ask TSOs to specify that the period for which the volume is settled is consistent with the period for which the price is determined; for the purpose to settle the delivered volume of Balancing Energy between TSO and BSP NRAs ask TSOs to clarify what they envisage as an optimisation with activation for system constraint purpose. NRAs therefore invite TSOs for a dialogue on the selection of and pricing method for balancing energy bids activated in the platforms for cross-zonal system constraints.
