Ancillary Services Europe Conference Date: 14-15 April 2010 Location: Brussels

Ancillary Services across Europe – Current Reality, Future Visions and Steps in Between Presentations from:

Highlights:

- ENTSO-E - ERGEG - Eurelectric - EFET - Iberdrola Generación - Red Eléctrica de España - DONG Energy - Energinet - Transpower - Statnett - National Grid - RTE - Tractebel Ingeneering/GDF Suez - PVNED BV - K.U.Leuven – ESAT/Electa

- Latest updates from European Regulators and Industry Associations: ENTSO-E, ERGEG, Eurelectric and EFET - An overview of best practices and challenges for Ancillary Services across Europe Case studies presented: Germany, France Scandinavia, Benelux, UK - Renewables - a challenge to Ancillary Services needs and markets Experiences and recommendations from Denmark and Spain - Visions for the future of Ancillary Services markets

DAY 1, APRIL 14TH 9.00-9.10: Introduction by the Chairman Konrad Purchala, Advisor to the Board, Polish TSO PSE Operator

9.10-10.30: Introduction panel: latest

updates from the European regulators and industry associations -

Ancillary Services - concepts and European market development: - Different European concepts for technical design and procurement - Market development and regulatory framework - Cross-border balancing - ENTSO-E perspective and activities Dirk Bierman, convenor of the Working Group Ancillary Services, ENTSO-E

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Open issues with intra-day, balancing and reserve markets: - Examples in current markets - Market preference for some issues in the GGP - Next steps in integration Ruud Otter, Chairman SG Balancing & Intra-day markets, Eurelectric

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Towards an integrated European balancing market - current status, objectives and requirements: - Balancing models in Europe - Intraday market as an implicit and automatic balancing tool - Role of renewables in the balancing market Dirk-Christof Stüdemann, EFET Europe

10.30-11.00: Break

11.00-11.40: Opening the energy

markets for non-utilities - case study Benelux -

Barriers for new entrants on the energy markets and balancing markets How PVNED has tackled these issues in the Netherlands and Belgium Describe the benefits, for the market and for competition in general, resulting from our business model Some suggestions for harmonization in Europe and future regulation that can stimulate liquidity and competition

Jean-Paul Harreman, Manager Marketing, PVNED BV

11.40-12.40: Lunch 12.40-13.40: Overview of different European AS market designs

Overview and comparison of rules and market designs for different AS (balancing, intra-day AS, congestion, voltage power, lost compensation payment, etc.) across European countries. Gaps between ERGEG´s future vision and directions for AS and the current reality. Tahir Kapetanovic, Co-Chairman Electricity Market Task Force, ERGEG

13.40-15.10: Panel discussion:

Renewables - a challenge to AS needs and markets Is the growing number of renewables that are not integrated in the system sustainable in the long-run? Practical experiences with renewables and distributed generation as supplier of AS. The challenges and recommendations on the integration of renewables into AS market. Javier Paradinas Zorrilla, Iberdrola Generación Miguel de la Torre, Engineer in the Control Centre Department, Red Eléctrica de España Klaus Baggesen Hilger, Senior Innovation Manager, Group R&D, Dong Energy Gitte Agersbæk, Senior Engineer, Energinet

Case study - Spain: Spanish experience with integrating renewable energy into electricity market. New AS requirements for a safety system operation and what are the opportunities for generators: - Spanish Market Structure - New ancillary services: Greater provisions of reserves, balancing power, reactive power support, congestion management - The role of generators - The role of renewable producers Case study - Denmark: Energinet: - Need for ancillary services in Denmark - Production portfolio - Flexible resources - Marked based solutions - 2025 Scenario (how do we see the future) DONG Energy: - DONG Energy has the unique challenge in Denmark of integrating a large amount of electricity generated by renewable wind. Key issues addressed: - Integration with central CHP and portfolio balancing - Market integration across Nordic power and energy markets - Mobilization of wind for ancillary services - Future perspectives on the balancing and integration of large amounts of renewables

15.10-15.40: Break 15.40-16.20: Ancillary Services - a business opportunity or a loss for investors?

What are the technical issues related to Ancillary Services for generators? What kind of a business case do Ancillary Services make compared to the energy sales for a generator? Is it possible to make money out of them or are Ancillary Services more of a cost and a burden for the investors? Jacques Deuse, Chief Engineer - Power System Consulting, Tractebel Engineering S.A. /GDF Suez Stéphane Rapoport, Project Manager - Power System Consulting, Tractebel Engineering S.A. /GDF Suez

16.20-16.40: Conclusions of the day by the Chairman

19.00: Networking dinner

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DAY 2, APRIL 15TH 9.00-12.00: Presentations of different

10.00-10.15: Q&A with speakers of the

11.45-12.00: Q&A with speakers of the

ROUND 1:

10.15-10.45: Break

12.00-13.00: Lunch

9.00-9.20: Germany: German internal

ROUND 2:

13.00-15.00: Open issues - discussions

AS practices across European countries

coordinated balancing regime

Since December 2008 three German TSOs have successfully established a close co-operation in provision and use of secondary control reserve by a new technical development of the control concept. International expansion is ongoing. The lecture will describe the idea behind, the technical realisation, the saving potential and it will discuss the compatibility with the ENTSO-E rules.

Round 1

10.45-11.05: France: How to run AS

in a system driven by inflexible power generation/ nuclear power and with renewables entering the market Olivier Lavoine, RTE

11.05-11.25: Exchange of balancing

services between synchronous systems -

Peter Hoffmann, Head of system operation concepts, Transpower

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9.20-9.40: Scandinavia: Latest updates

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The presentation will give an update on Nordic market issues, including status on Load frequency control and primary reserves market, Frequency quality, Gate closure, Quarterly resolution, Reservation of capacity for balancing and ancillary services, Ramping on HVDC.

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on the Nordic balancing practices

Kjell A Barmsnes, Vice President, Grid Operations, Statnett SF

9.40-10.00: Benelux: Potential benefits

of implementing cross-border balancing trade between Belgium and the Netherlands Balancing services in Belgium and the Netherlands are procured and activated locally so far. However, the implementation of cross-border balancing trade between both countries is expected to entail significant benefits. The assessment in this presentation illustrates that the implementation of a cross-border balancing market between Belgium and the Netherlands is a lucrative and achievable goal that does not entail unrealistic or overly expensive preconditions. Significant cost reductions could have occurred with cross-border balancing during the year 2008 – due to netting and cross-border procurement of relatively cheaper services. Restrictions imposed on cross-border balancing due to cross-border capacity constraints would have been rather small. Leen Vandezande, PhD researcher, K.U.Leuven – ESAT/Electa

Case study: Nordic vs Continental Europe Particular issues regarding exchange between synchronous systems Draft of options Availability of interconnection capacity Benefits - model calculations

Gerard Doorman, Professor, Norwegian University of Science and Technology, Trondheim

11.25-11.45: UK: Demand Side

Management: The UK System Operator Experience How does National Grid currently balance the UK electricity system and how, over the next decade, can demand side services help manage a more diverse and complex system. David Wildash, Account Manager, National Grid

Round 2

in small groups

Delegates discuss in smaller groups their own issues of interest connected to Ancillary Services - networking and exchange of experiences among delegates through facilitated process: 1) Formation of groups based on the common interests of participants who suggest and prioritize the issues to be discussed within each group 2) Focused discussions on selected topics within smaller groups 3) Conclusions - each group shares key conclusions and questions with the rest of delegates

15.00-15.40: Future ancillary services markets -

Possible market design evolutions and their implications New kinds of ancillary services New players on the ancillary services markets Challenges for TSO

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

15.40-16.00: Conference conclusions by the Chairman

Speakers – CVs Dirk-Christof Stüdemann, EFET Europe/ Regulatory Affairs Gas and Power Trading, EnBW Trading GmbH

Konrad Purchala, Advisor to the Board, Polish TSO PSE Operator Konrad Purchała 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 crossborder 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 Purchała 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. Dirk Biermann, Convenor of the Working Group Ancillary Services, ENTSO-E/Director Energy Management, 50Hertz Transmission GmbH Dirk Biermann joined 50Hertz Transmission (former Vattenfall Europe Transmission) in 2007 as Director Energy Management. He is responsible for the energy business including Ancillary Services, Renewables and CHP support schemes, balancing group settlement and other market related issues. In addition he is chairman of the board of EMCC (European Market Coupling Company) in Hamburg and supervisory board member of CAO (Central Allocation Office) in Freising. In ENTSO-E Dirk Biermann is member of the Market Committee and convenor of the Working Group Ancillary Services.

Dirk-Christof Stüdemann is an advisor in regulatory affairs for gas and power trading at EnBW Trading GmbH in Karlsruhe, Germany. Having graduated with an M.A. in Political Science and Communication at the University of Mainz, he joined the company´s Power Desk in 2007. In addition to market coupling, market design and cross-border power trading issues, Mr. Stüdemann got involved in the market development of EnBW´s gas trading business in 2008. Since February 2009 he chairs the EFET Deutschland German Task Force Gas. Jean-Paul Harreman, Manager Marketing, PVNED BV Jean-Paul Harreman spent 4 years in an Energy Trading environment before moving to PVNED in 2008. Using his background in trading, risk, banking, accounting and ETRMsystems, he has been involved in defining the new (Ancillary) Services that PVNED has successfully implemented in the Benelux markets. Today he is responsible for business development, analysis and product development. Dr. Tahir Kapetanovic, Co-Chairman Electricity Market Task Force, ERGEG/Director Electricity, E- Control GmbH Dr. Tahir Kapetanovic is Director Electricity at the Austrian Energy Regulatory Authority Energie-Control GmbH. He joined the Au¬thority at its establishment in spring 2001. He is also the Co-Chairman of the ERGEG Electricity Market Task Force and the CEER Electricity Security of Supply. In the EU Technology Platform SmartGrids he is the Chairman of the Network Operations Work¬ing Group and the member of the Advisory Council. From 1988 to 2001 he was on dif¬ferent assignments in the industry and has spent several years of academic research in power systems in Zagreb, at Imperial College of London and at Vienna University. Miguel de la Torre Rodríguez, Engineer in the Control Centre Department, Red Eléctrica de España Miguel is a senior engineer in Red Eléctrica’s Control Center Department in the support area of the National Electrical Control Center (CECOEL) where he has been working for the past 5 years. He has been actively involved in the development and commissioning of the Control Center for Renewable Energies (CECRE). At present he supervises and executes the day to day work of the CECRE integrating new facilities. He received a Master’s degree in Industrial Engineering by the Universidad Politécnica de Madrid (Spain) and a Master’s degree in Electrical Engineering by the Technical University of Darmstadt (Germany). Klaus Baggesen Hilger, Senior Innovation Manager, Group R&D, Dong Energy

Ruud Otter, Chairman SG Balancing & Intra-day markets, Eurelectric Ruud works as a manager for market affairs at EnergieNed, the Dutch association of Energy producers, traders and retailers. He is also Chairman of the Eurelectric Sub Group Balancing & Intra-day markets. Prior to EnergieNed he has been working for KEMA Consulting where he was active in the market and regulation projects.

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M.Sc. Eng., Ph.D., PhD in applied statistics and optimization Visiting scholar at Stanford and Oxford University More than 7 years of experience in business development and R&D. Currently responsible for strategies and development projects on integration of wind power and flexible customer solutions.

Gitte Agersbæk, Senior engineer, Energinet -

Graduated 1992 from Technical University of Denmark 1993 – now: Employed at Energinet (former ELSAM, ELTRA) as an engineer in Operation, Planning and Marked departments. 2005 - 2008: Convenor of ETSO’s Renewable group 2006-2009: Part of the EWIS study

Jacques Deuse, Chief Engineer – Power System Consulting, Tractebel Engineering S.A. Jacques Deuse is electrical & mechanical engineer from the University of Liège, Belgium (1972) and has a Ph. D. in electrical engineering from the same University (1976). He began working in the Belgian electric supply industry in 1977 for developing software programs and methodologies for special studies. He is expert in dynamic behaviour of electrical power systems; he participated to the development of EUROSTAG® software. Since 1989 he is working with Tractebel Engineering – Suez as power system expert. He is Chief Engineer in the “Power System Consulting” Service of the “Energy & Industrial Solutions” Department. He participated to a large number of studies: large international interconnection projects, security of supply of auxiliaries of nuclear power plants, development of defence plans, analyses of blackouts, set up of restoration plans, etc. He has been Technical Director of the European Project EU-DEEP about decentralised generation. EU-DEEP is an Integrated Project of the Sixth Framework Programme for Research and Technological Development, funded by European Commission under grant SES6-CT-2003-503516. Stéphane Rapoport, Project Manager – Power System Consulting, Tractebel Engineering S.A. Stéphane Rapoport is Project Manager within Power System Consulting – Tractebel Engineering. He is currently project manager of the Gas and Electricity Master plan of Libya and is involved as economic expert in the tariff study of CEM (Macao). Stéphane Rapoport graduated as an electro-mechanical engineer at the ULB (University of Brussels) where he achieved the highest grade. Participating in an exchange program, he also studied at McGill University, Montréal where he researched in generator unit commitment that accounts for unit reliability. Stéphane Rapoport started his career as Project Engineer within Power System Consulting. He was involved in software development dealing with generation planning or probabilistic power system analysis, power system studies and economic studies. He took part in several projects on power system assessment of Saudi Arabia (SEC-SOA, SEC-WOA). He also worked on a probabilistic approach to evaluate the needs of network investment for ELIA, the Belgian grid operator. Since then, he is mainly involved in planning studies of power systems. His recent achievements include the analysis of grid related risks (congestion management) for generation investment decisions and the economic study of the electrical interconnection feasibility study between Saudi Arabia and Egypt and of the electrical interconnection feasibility study between Dubai and Iran.

Peter Hoffmann, Head of system operation concepts, Transpower Dr. Peter Hoffmann has more than 20 years of experience in the energy sector. He has worked for several institutions in Central Europe, among them E.ON-Energie AG and EuroBayernwerk GmbH. He has worked as assistant to the board of the Southwest Hungarian regional distribution company DÉDÁSZ, as the country manager for Czech Republic at Bayernwerk AG and as the head of sales at E.ON Bohemia in Prague. He is currently the head of system operation concepts and deputy head of system operation at Transpower Stromübertragungs gmbh. He is also a member of ENTSO-E RG CE and the chairman of FNN PG Systemverantwortung. Kjell A Barmsnes, Vice President, Grid Operations, Statnett SF Kjell Barmsnes is working for Statnett SF, the Norwegian TSO, where he is managing the System Operator Services department. His main responsibilities are strategic system operations - development and implementation of new solutions and mechanisms for system operations, industry requirements, and international coordination. He has been involved in the design and development of the trading solutions over the NorNed cable between Norway and the Netherlands, and has participated in several European market development projects. He is also engaged in ancillary services development work within ENTSO-E. Leen Vandezande, PhD researcher, K.U.Leuven – ESAT/Electa Leen Vandezande received the M.S. degree in commercial engineering in 2005 from the K.U.Leuven. She is a member of the K.U.Leuven Energy Institute and of the Electric Energy research group ELECTA of the department of Electrical Engineering of the K.U.Leuven, where she is finalising a Ph.D. on balancing market design. Gerard Doorman, Professor, Norwegian University of Science and Technology, Trondheim Gerard Doorman is a professor at the Department of Electric Power Engineering at the Norwegian University of Science and Technology in Trondheim. His research interests include market design, investment in generation capacity, including renewables, demand elasticity, power system balancing and the use of optimization techniques in power systems. He is strongly involved in the project “Balance Management in International Power Markets”, a cooperation between NTNU and TU Delft. David Wildash, Account Manager, National Grid David joined the electricity industry six years ago after graduating in Economics from Edinburgh University. He joined National Grid on the graduate scheme. Subsequently he has undertaken several different roles including: - Power trading in the UK markets and on the UK-France Interconnector - Forecasting the annual constraint (congestion) management costs for England and Wales - Leading on the development of demand side service provision in the UK market

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