Reserves Study 2018 PDF

Evolution of ancillary services needs to
balance the Belgian control area towards 2018
May 2013
This study analyses the needs for ancillary services to balance the Belgian control area in
2018 and the capacity of the existing resources in the Belgian system to meet these needs. It is
performed upon request by the CREG in its decision (B)120621-CDC-1162 on the approval
of the applicable reserve volumes for 2013, issued on the 21th of June 2012. This study does
not address the long-term issues of security of supply and generation adequacy; instead it
focuses on the reserves required for the TSO to perform real-time balancing.
Ancillary services study - horizon 2018
Contents
1 Glossary ......................................................................................5
2 Executive summary .....................................................................7
2.1.
2.2.
Evolution of system reserve needs...................................................... 7

2.1.1. Frequency containment reserves (FCR) .................................... 7
2.1.2. Frequency restoration reserves (FRRa and FRRm) ..................... 7
2.1.3. Replacement reserves (RR)....................................................11
Available reserve resources in 2018 ...................................................12
2.2.1. FCR and FRRa resources........................................................12
2.2.2. Upward manual FRR .............................................................13
2.2.3. Downward manual FRR .........................................................13
3 Introduction and objectives ......................................................15

3.1.
3.2.
3.3.
European network codes ..................................................................15

Needs for different types of reserves..................................................16
Available reserve resources ..............................................................16
4 Context......................................................................................19
4.1.
4.2.
4.3.
Responsibilities of TSO and BRP ........................................................19

Increasing need for system flexibility .................................................20
Game changers for dimensioning of reserves ......................................21
4.3.1. Increase in installed capacity of VRE .......................................21
4.3.2. HVDC interconnector.............................................................22
5 Estimated FCR needs in 2018 ....................................................23

6 Estimated FRRa and FRRm needs in 2018 .................................25
6.1.
6.2.
6.3.
6.4.
6.5.
Methodology ...................................................................................25
6.1.1. Methodology ........................................................................25
6.1.2. Desaturation of FRRa by FRRm...............................................26
Inputs used for FRR dimensioning......................................................27
Scenarios .......................................................................................28
Resulting FRRa and FRRm needs in 2018 ............................................31
FRR dimensioning conclusions ...........................................................33
7 Replacement Reserves ..............................................................35

8 Reserve resources available in the system ................................37
8.1.
8.2.
Flexibility........................................................................................37
Available reserve resources in 2018 ...................................................38
8.2.1. FCR ....................................................................................38
8.2.2. FRRa...................................................................................39
8.2.3. Upward FRRm ......................................................................41
8.2.4. Downward FRRm ..................................................................42
9 Conclusions ...............................................................................45
References ....................................................................................46
Annex 1: Extract from CREG decision ............................................47
Annex 2: FRR dimensioning methodology .....................................48
Annex 3: Imbalance drivers ..........................................................50
Historical imbalances ................................................................................50

HVDC interconnector ................................................................................51
Outages of units and HVDC interconnector ..................................................52
Unit outages ...................................................................................53
HVDC interconnector........................................................................53
2018 estimated residual imbalances due to FOs ..................................53
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PV and wind residual forecast errors ...........................................................54

PV forecast errors ............................................................................54
Wind forecast errors ........................................................................54
PV and wind ramping imbalances.......................................................55
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Glossary
ACE
Area Control Error
ACER
Agency for the Cooperation of Energy Regulators
BRP
Balancing Responsible Party
CCGT
Combined Cycle Gas Turbine
CHP
Combined Heat and Power Generation
CIPU
Contract for the Injection of Power Units
CREG
Commission for the Regulation of Electricity and Gas
DA
Day-ahead
DSM
Demand Side Management
DSO
Distribution System Operator
ENTSOe
European Network of Transmission System Operators for electricity
FCR
Frequency Containment Reserves, currently called primary reserves (R1)
FO
Forced Outage
FRR
Frequency Restoration Reserves
FRR-
Downward Frequency Restoration Reserves
FRR+
Upward Frequency Restoration Reserves
FRRa
Automatic Frequency Restoration Reserves, currently called secondary

reserves (R2)
FRRm
Manual Frequency Restoration Reserves, currently called tertiary reserves

(R3)
GCT
Gate Closure Time
GT
Gas Turbine
GWh
GigaWatthour
HUB
Platform for the exchange of electrical energy within the Belgium control
area.
HVDC
High Voltage Direct Current
ID
Intraday
MW
MegaWatt
N-1
Largest single instantaneous incident in a control block resulting in a system

imbalance considered in the dimensioning of the FRR.
NC LFC&R
Network Code Load Frequency Control and Reserves
NRV
Net Regulation Volume
NWE
North Western-Europe
OCGT
Open Cycle Gas Turbine
Pdef
Deficit probability
PV
PhotoVoltaic production unit
Qh
Quarter hour(ly)
RES
Renewable Energy Sources

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RG CE
Regional Group Continental Europe
RR
Replacement Reserves
RT
Real-time
SI
System imbalance
TJ
Turbojet
TSO
Transmission System Operator
UK
United Kingdom
VRE
Variable Renewable Energy resources
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Executive summary
This study was requested by CREG in its decision on the applicable reserves volumes for
the year 2013 [1]. The objectives of the study are to:
estimate the system reserves needs in 2017/2018;
verify whether sufficient reserve resources are expected to be available in the

power system to cover the reserve needs in 2017/2018.
For the avoidance of doubt, this study is not addressing the issue of security of supply and
generation adequacy. It is strictly looking at the specific reserves to be secured by Elia in
the context of its responsibility to ensure the availability of appropriate ancillary services,
as defined by the Electricity Law, (art. 8 1) and the Federal Grid Code (art. 231 and 232).
2.1. Evolution of system reserve needs

2.1.1.
Frequency containment reserves (FCR)
The dimensioning of FCR (currently called primary reserves) is performed at ENTSOe level.
The contribution of the Belgian control area to these reserves for the Continental Europe
electricity system was historically within a range of about 90 to 106 MW. This need is
expected to remain more or less stable until 2018, although a small increase can be
expected since:
the European TSOs identified that, due to a deterioration of system frequency

quality, the risk of having insufficient FCR available in the system to cover
incidents increased during last years [2, 6];
in the future the FCR share for Belgium is likely to be calculated on the basis of the
sum of net generation and consumption whereas before this was calculated on the
net generation only [2, 6]. This evolution might result in a small increase in FCR
capacity as Belgium is typically a net importer of electricity.
As a result an FCR range of 95 to 110 MW is projected for 2018.
2.1.2.
Frequency restoration reserves (FRRa and FRRm)
Balancing responsible parties (BRPs) are responsible for balancing their perimeter on a 15minute time interval in the Belgian system [4]. BRPs have to nominate a balanced
perimeter in day-ahead and have to perform intraday adjustments according to more
accurate intraday forecasts and actual measurements of production and off-take, as the
uncertainty on the final balancing position of the perimeter decreases towards real-time.
Any residual system imbalance is in last instance resolved by Elia [3, 4] by deploying a
combination of automatic1 and manual2 frequency restoration reserves (resp. FRRa and
FRRm).
As a result, any assessment of the required reserve volumes for FRRa and FRRm crucially
depends on assumptions regarding the behaviour of BRPs.
This study assumes that major additional -compared to the actual situationefforts are performed by BRPs and other market parties in order to minimize the
residual imbalances in the Belgian control area. The resulting reserve needs set
forth in this study are therefore only valid under this strong assumption. A very
high increase in reserve needs and according costs for society is expected in case
of insufficient efforts and investments or in case of status quo.
The massive penetration of variable renewable energy sources (VRE) such as wind and PV,
for which the output is defined by weather conditions and not by system off-take,
increases the need for system flexibility to enable BRPs to balance their perimeter. VRE
can however also offer part of the required flexibility to the grid, subject to availability.
This study assumes that BRPs have access to and make use of- sufficient
flexibility to balance the expected position of their perimeter on a 15-minute time
interval. As a result no structural residual imbalances due to a lack of flexibility
to cover the predicted output of VRE is taken into account in the reserves
dimensioning.
1
2
Currently called secondary reserves

Currently called direct activated tertiary reserves
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It is thus assumed that BRPs balance this variable output within their perimeter by
themselves. Furthermore all BRPs are expected to invest in (and improve) highly accurate
intraday forecasts of VRE production and consumption within their perimeter.
Under this assumption Elia only has to resolve the residual imbalances due to
unpredictable or partially predictable events such as near to real-time forecast errors of
load and production (VRE, conventional,), outages of load and generation units and/or
HVDC interconnectors,...
The main drivers behind the evolutions in system reserve needs towards 20183 are
expected to be:
the massive increase of VRE capacity in the system, resulting in increased forecast
errors and possible increased volatility of the residual system imbalance;
the integration of the 1000 MW HVDC interconnector between UK and Belgium in

the system, called the NEMO project, creating both very large positive and
negative imbalances in case of an outage in respectively export or import mode.
Schedule changes might also result in an increase in volatility of the residual
system imbalance.
Different scenarios for the evolution of the system reserve needs towards 2018 were
simulated. The table below gives an overview of the assumptions taken for each of the
scenarios. As already explained above all of the simulated scenarios assume major
additional efforts and investments by market parties in forecasting, flexibility and market
participation, compared to the actual situation. All simulated scenarios therefore have
identical assumptions for:
Developments in forecasting, metering, profiling
Balancing in day-ahead timeframe
It has to be emphasized that these efforts and investments in forecasting, flexibility and
market participation, will only take place in case efficient and strong incentives are given
to BRPs and market parties in order to minimize residual system imbalances by investing
in and exploiting all- system flexibility and by accessing electricity markets in the dayahead and intraday timeframe to balance their position. These incentives are given by the
imbalance tariffs set by Elia.
It is currently observed however that during some periods the current incentives tend to
be inadequate, which has to be resolved in the near future in order to avoid a significant and very costly- increase in system reserve needs.
Incentives given to market parties have to be adequate in order to ensure the sustainable
integration of VRE in the system without requiring a continuous structural increase in
system reserve needs due to a lack of system flexibility.
In contrast to the above common assumptions, the simulated scenarios differ in:
Balancing in intraday timeframe: the amount of available flexibility in a very

short intraday notice enabling BRPs to adjust the position of their perimeter
according to improved ID forecasts and actual metering;
Intra-hourly balancing: the amount of available flexibility on a 15-minute

timescale enabling BRPs to balance the ramping of VRE and HVDC interconnector
within the hourly timeframe.
The low reserve needs scenario assumes that a high share of intraday and 15-minute
flexibility is available, whereas less of such flexibility is assumed to be available in the high
reserve needs scenario. More detailed information on the different scenarios can be found
in paragraph 6.3 and in Annex 3.
This study takes the assumption that NEMO will be commissioned in 2018.
Page 8 of 56
Assumptions for simulation
Low
reserve
needs
scenario
High
reserve
needs
scenario
Developments in forecasting, metering, profiling
High
High
High
High
High
Low
High
Low
Investments of BRPs in accurate intra-day forecasts of VRE

production and off-take.
Investments in smart metering and load profiling to have a
clear real-time view on the actual off-take, injection and
balancing position of the system and BRP perimeter.
Balancing on day-ahead timeframe
Ability of BRPs to balance the day-ahead expected position
of their perimeter, including the variable output of VRE,
ramping of off-take,
This requires sufficient investments in system flexibility to
incorporate the high shares of future VRE capacity (in
combination with the standard daily ramping of off-take).
Balancing on intraday timeframe
Ability of BRPs to adjust the position of their perimeter in
ID according to more accurate ID forecasts of VRE
production and off-take (smart metering,).
This depends on the amount of ID flexibility within the
perimeter of the BRP (load and generation) and on the
liquidity of ID markets.
Intra-hourly balancing
Ability of BRPs to balance the ramping of VRE (wind, PV,)
and HVDC interconnectors4 within the hour.
This depends on:
the amount of 15-minute flexibility within the BRP

perimeter (load and generation)
the presence of a liquid 15-minutes ID market.
The figures and table below show the 2013 - 2018 interpolated system needs for FRRa and
FRRm, required to resolve residual imbalances for the different scenarios under the above
assumptions. The grey dotted lines show the very high increase in reserve needs in case
the above assumed significant efforts and investments, common for all scenarios, do not
(or only partially) take place, which would result in structural residual imbalances caused
by a lack of system flexibility or insufficient forecasting quality of VRE and system off-take.
Depending on the final market design on the balancing responsibility for the planned BE UK HVDC
interconnector (NEMO).
Page 9 of 56
Scenario
FRRa [MW]
FRRm downward
[MW]
FRRm upward
[MW]
2013 reference
140
695
1120
2018: low reserve

needs scenario
152
1138
1078
2018: high reserve

needs scenario
192
1331
1321
Insufficient efforts
& investments
Up to >300 MW
Up to >1750 MW
Up to >1700 MW
These reserves are not necessarily pre-contracted by the TSO; for instance they can be
offered as non-pre-contracted reserves in the balancing market; also, the reserve needs
represent volumes with an availability of 100%, but equivalent volumes for the case of an
availability less than 100%, taking portfolio effects into account, can be calculated.
It can be concluded that the reserve needs of the system heavily depend on the
BRP behaviour. In order to avoid a very steep increase in future reserve needs
(and according costs for society) as indicated by the grey dotted lines, it is of
crucial importance that:
BRPs invest in best practice ID forecasting of VRE production and off-take;
BRPs make active use of markets on all timescales to balance their

perimeter;
BRPs pro-actively foster the development of flexibility in their portfolio

(load & generation) and bring this flexibility to the markets (day-ahead,
intraday and balancing market);
TSO, DSOs, BRPs and other market parties perform additional efforts to
achieve accurate metering and load profiling (DSO responsibility).
Adequate incentives by the imbalance mechanism are crucial to achieve this:
all imbalance volumes must be exposed to imbalance prices;
real-time market reaction on imbalance prices to support the balance of

the BRP perimeter and the Belgian system must be incentivized;
imbalance prices should be sufficiently high to incentivize investments in

and the actual use of- system flexibility by all market parties. Additional
incentives might be required to achieve this as current incentives tend to
be inadequate during some time periods.
In case insufficient system flexibility is made available to balance the output of VRE, or in
case of insufficient investments are made in accurate (intraday) forecasts, the reserve
needs of the system will increase significantly and are expected to be much higher than in
the simulated low and high reserve needs scenarios.
In addition the simulated scenarios for the estimation of the 2018 reserve needs showed
that:
The need for FRRa will increase towards 2018 due to an expected increase in
volatility of residual imbalances caused by ramping of VRE within the hour,
the ramping of the future HVDC interconnector between Belgium and UK,
forecast errors,...
The extent of increase of FRRa will depend on the amount of quarter hourly flexibility
available in the system. This stresses the importance of
o
sufficient investments in quarter hourly flexibility in the BRP perimeter

(load and generation);
the development of a liquid coupled ID market with a time resolution

of 15 minutes and short gate closure times (GCT)
for the cost-effective integration of high shares of VRE in the system.
Page 10 of 56
All performed simulations assumed a very efficient desaturation of FRRa by

FRRm. This requires very flexible FRRm, being activated very often and almost on
a continuous basis, and a very liquid FRRm balancing market. In addition there is the
need for FRRm to cover rare but large incidents, which allows also less flexible
FRRm (in terms of number of activations,).
The need for upward FRRm shows an increase in the high reserve needs
scenario and even a very slight decrease in the low reserve needs scenario.
This can be explained as follows:
o
The 2012 baseline, used to simulate the 2018 needs, showed a significant
decrease in negative residual system imbalances compared to 2011 (which was
used as baseline to calculate the 2013 reserve needs);
There is a collateralization of the increased needs for upward FRRm due to

additional VRE capacity with the upward FRRm required to cover the large N-1;
High investments in system flexibility, high increase in forecasting quality and

ID flexibility and major additional efforts to minimize residual imbalances in the
low reserve needs scenario compared to the current 2013 situation.
The need for downward FRRm increases significantly due to:

o
the integration of additional VRE (positive and negative forecast errors);
the introduction of a large positive N-1 incident as result of an outage of the

1000 MW HVDC interconnector between Belgium and UK in full export mode;
the 2012 baseline, used to simulate the 2018 needs, showed a significant
increase in positive residual system imbalances compared to 2011 (used as
baseline for the 2013 needs).
Residual positive system imbalances caused by a lack of (activated) downward

flexibility are already observed today in the Belgian electricity system. This shows
again the importance of adequate and strong market incentives to develop such
downward flexibility in the next years.
The very high increase in downward reserve needs indicate the need to develop a
significant amount of downward flexibility in the system. This is elaborated further in
Chapter 8.
Elia will perform efforts in order to avoid a systematic long position of the residual
system imbalances as observed in 2012. This would result in a small reduction of the
increase of the downward FRRm needs and a small increase of the upward FRRm
needs, although the general conclusions of this study remain valid 5.
2.1.3.
Replacement reserves (RR)
Replacement reserves (RR) are the slower manually activated reserves meant to (partially)
replace the FRR after 15 minutes.
In the Belgian system, market parties are authorised and incentivised to restore the
balance of their perimeter even in real-time. Therefore market parties fulfil the
replacement role in the Belgian system. As a result Elia does not contract RR, nor foresees
to contract RR in the future. The future NC LFC&R [2] confirms that RR are optional and
that the market design determines whether or not RR are required.
Provided that this fundamental feature of the Belgian balancing market design is
preserved, contracting of RR is not considered in the Belgian market design.
The average value of the 2012 residual system imbalance was 64 MW (long). The impact of
assuming an average balanced residual system imbalance on the above calculated reserve volumes is
assumed to be less than 50 MW due to probabilistic combinatorial effects in the dimensioning process.
Page 11 of 56
2.2. Available reserve resources in 2018

The second question addressed in this study is whether the reserve resources that will be
most likely available in 2018 are sufficient to cover the 2018 simulated system reserve
needs. The study makes a snapshot of the expected 2018 situation and does not account
for the evolution of the reserve resources between 2013 and 2018.
This study is not addressing the issue of security of supply and generation adequacy. It is
strictly looking at the specific reserves to be secured by Elia in the context of its
responsibility to ensure the availability of appropriate ancillary services, as defined by the
Electricity Law, (art. 8 1) and the Federal Grid Code (art. 231 and 232).
Only reserve resources within the Belgian system are considered, due to the inherent
uncertainty linked with the cross-border procurement of reserves. Elia will however
continue to investigate and develop the cross-border procurement of reserves.
In addition to check whether, from a system capability view, sufficient resources will be
available to cover the system reserve needs, it is also of crucial importance to check
whether the reserves resources will be sufficiently diversified to enable their economic
efficient procurement.
The following sections assume that sufficient additional investments and efforts are
performed to minimize the residual system imbalances. Therefore the considered system
reserve needs are those of the low and high reserve needs scenario.
It is clear that, in case insufficient investments or efforts are performed, that the system
reserve needs will be much higher than considered in this section, resulting in the need for
significant additional investments in reserve resources.
2.2.1.
FCR and FRRa resources
From the point of view of system capability, under the assumptions that at least 3
of the existing CCGT units will still be available in the system in 2018 and that
part of the FCR will still be delivered by demand, for FCR and FRRa it is expected
that the 2018 reserve needs can be covered, for both the low and high reserve
needs scenario.
It has to be emphasized however that, in case of no investments in new FCR and FRRa
capability, the margins for FCR and FRRa will reduce, leading to a non-sustainable
situation, especially for the high reserve needs scenario.
From an economic point of view, as already observed today, the actual FCR and
(especially) FRRa resources do not allow an efficient procurement, as the majority of the
capability is concentrated on CCGT units. Therefore procurement costs for spinning
reserves are fully dependent of the CCGT market conditions, defined by the evolution of
the clean spark spread.
In an efficient reserve market the spinning reserves (FCR, FRRa) should be provided by
running demand facilities or by power plants being selected in the merit order, such as
wind parks, CCGT units, coal units, CHPs, biomass units, depending on the market
situation. Procurement of spinning reserves on power plants that arent selected in the
merit order should be avoided as it leads to very high procurement costs due to the must
run character.
In order to further minimize the procurement costs of FCR and FRRa the most efficient
power plants have to provide downward reserve capacity while the least efficient ones
provide the upward capacity.
It can be concluded that, in order to enable an economically efficient procurement
of FCR and FRRa, the participation of wind, CHP units, biomass units, and where
possible load, to such services must become a reality.
Important pre-conditions for this to happen include:
smart support schemes for RES and CHP units must set an attractive
framework for the participation of these units in the ancillary service
market, which is currently not always the case;
new and refurbished power plants need to have FCR and FRRa capability
in order to ensure the continuity of reserve capability of the Belgian
production park and to ensure that the newest -and therefore often the
most efficient- units are able to provide FCR and FRRa;
Page 12 of 56
new operation strategies for pump storage hydro units to optimize the
economic efficiency of FCR and especially FRRa delivery have to be
investigated further.
2.2.2.
Upward manual FRR
For upward FRRm, from the point of view of system capability, it is expected that
the current reserve resources which are likely to be still available in 2018 will be
insufficient to cover the reserve needs. This is because of the combination of on the
one hand increasing needs for upward FRRm in the high reserve needs scenario and on the
other hand the assumed decommissioning of the turbojets (210 MW upward
FRRm) and some older OCGTs which currently provide upward FRRm.
In the high reserve needs scenario about 360 MW of additional upward FRRm capability
has to be developed.
Moreover, from an economic point of view, a diversification of the upward FRRm resources
is required in order to avoid excessive dependency on OCGT units and therefore on gas
and electricity prices for the procurement of upward FRRm.
It has to be noted that FRRm has two main functions:
continuous de-saturation of the activated FRRa, requiring upward FRRm by:

o
flexible spinning resources (biomass, RES, CHPs, CCGTs/OCGTs, pump

storage units,) or very flexible demand facilities in terms of activation
frequency;
very flexible non-spinning units -in terms of numbers activation frequencysuch as pump storage units,
covering rare but very large imbalances (typically outages of power units), allowing
FRRm by less flexible units in terms of activation frequency such as the
interruption of demand facilities,
The required new upward FRRm capability has to be created by:
participation of new/refurbished OCGTs (converted CCGTs) in the upward

FRRm market;
participation of load in the upward FRRm market;
cross-border procurement of FRRm

neighbouring TSOs for FRRm capacity;
further diversification (biomass, RES, CHPs,) in the FRRm market.
2.2.3.
and
sharing
agreements
with
Downward manual FRR
The Belgian system already encounters difficulties due to a lack of (activated) downward
system flexibility being referred to as situations of incompressibility- during some periods
in summer and even in winter. In addition the massive integration of VRE in the system
and the HVDC interconnector between Belgium and UK are expected to significantly
increase the need for downward flexibility by +/-700 MW in the high reserve needs
scenario.
Downward FRRm should in principle not be pre-contracted, as the need indicates
an excess of generation in the system. A framework in which downward
flexibility is offered by the available generation units or demand facilities
(increase of consumption) at a price reflecting their marginal activation costs for
downward regulation power is more sustainable on the long term and is required to
set proper incentives for investments in downward flexibility. This is in line with the current
framework for offering downward FRRm in accordance with the CIPU contract [8].
The imbalance tariffs then reflect these price signals (single marginal pricing), incentivizing
BRPs and market players to invest in sufficient downward flexibility, to balance their
portfolio on a 15-minute basis and to support the balance of the control area.
In case of absence of sufficient downward flexibility offered by market players additional
incentives in the imbalance tariffs might be needed as an intermediate measure to
incentivize the development and use of- downward flexibility.
It can be concluded that a significant amount of downward manual FRRm flexibility
has to be further developed towards 2018 by:
Page 13 of 56
maximizing the downward flexibility of existing plants (lowering minimum

stable power output,), for instance by converting CCGTs in OCGTs;
requiring new and refurbished generating units to have low minimum

stable power output, to be able to shut down and start quickly and to have
high ramping capabilities;
requiring VRE units to offer downward flexibility (required for the

sustainable integration of a high shares of VRE in the system);
Furthermore the same conclusions as for upward FRRm on its different functions, being desaturating the activated FRRa and covering rare but large incidents, hold for downward
FRRm.
Page 14 of 56
Introduction and objectives
In its decision (B)120621-CDC-1162 on the request for approval of the dimensioning

methodology for, and the determination of, primary, secondary and tertiary control energy
for 2013 [1], submitted by Elia, the CREG requested Elia to perform a study on both the
system reserve needs and the reserve resources that will be most likely available in the
Belgium system on a time horizon of 5 years (2017 - 2018)6.
The objective of the study is to estimate the system reserve needs towards 2017 2018
and to evaluate whether the resources that will be most likely available in the Belgium
system on the same time horizon will be sufficient to cover the needs.
The request from CREG originates from the general concern that some market parties
announced the decommissioning or mothballing of some flexible power plants, currently
providing reserve capacity to the grid, in combination with an expected increase of reserve
needs in the future. Furthermore the issue of system adequacy is currently being assessed
by the government, which may ultimately lead to new investments and therefore new
reserve resources.
The next paragraphs of this chapter give a short introduction to the new reserve
terminology used throughout this study (paragraph 3.1) and to the main questions being
addressed in this study, being the estimation of the future reserve needs (paragraph 3.2)
and the reserve resources likely to be available in the future (paragraph 3.3).
Chapter 4 then elaborates on the Belgian balancing market framework, the increasing
needs for system flexibility due to the integration of high shares of VRE and the game
changers for the dimensioning of reserves in the future.
Chapter 5 deals with the estimated future need for frequency containment reserves. The
future needs for automatic and manual frequency restoration reserves are discussed in
chapter 6, while chapter 7 briefly deals with replacement reserves.
Chapter 8 elaborates on the reserve resources that will be most likely available in the
system in the future. Finally chapter 9 concludes on the most important results of this
study.
3.1. European network codes

The draft of the NC LFC&R submitted for public consultation [2] strives for the panEuropean harmonization of reserves terminology, which has been taken into account in the
elaboration of this paper. The table below gives a mapping of the current and future
terms:
Old term
New term
Purpose
Primary
reserves
Frequency
Containment
Reserves (FCR)
Contain the system frequency after the occurrence of

an incident or imbalance within the Synchronous Area.
Secondary
reserves
Automatic
(FRRa)
FRR
Tertiary
reserves
Manual
(FRRm)
FRR
Reserves with an activation time less than 15 minutes

which are used to restore the ACE of the control block
to zero in case of an imbalance in the block.
Slow
tertiary
reserves
Replacement
Reserves (RR)
Frequency Containment is a joint action of all the TSOs

of the Synchronous Area.
The FRR consists of an automatic and a manual part.

Optional reserves with an activation lead time
exceeding 15 minutes that have to prepare the FRR for
further imbalances.
See Annex 1 for the detailed request.

Page 15 of 56
3.2. Needs for different types of reserves

Chapters 5, 6 and 7 of this study determine the future reserve needs by projecting the
currently known system evolutions to 2018. The study makes a snapshot of the 2018
situation and does not account for the evolution of reserve needs between 2013 and 2018.
At this stage it is important to stress the high degree of uncertainty regarding the
estimation of reserve needs on a 5 year time horizon because of:
the impact of the decommissioning or mothballing of existing flexible power

plants, the integration of new flexible power plants in the system and the
expected shift towards demand side management on system operation and
residual system imbalances faced by the TSO;
the on-going work in the Network Codes, especially NC LFC&R and NC Balancing,
for which the ultimate goal is a high degree of cooperation between Control Blocks
in balancing and the creation of a single European balancing market; and
the uncertainty on the impact of future changes in the system, such as the
integration of an HVDC interconnector between Belgium and UK, and the massive
increase of VRE in the system, on system operation and residual system
imbalances.
In order to address part of this uncertainty, Elia focused on the Belgian system only,
without considering future cross-border collaborations that might impact the system
reserve needs. Elia will however further investigate cross-border collaborations in the
future, especially as interconnection capacity with neighbouring areas will increase.
It is also important to note that this study assumes that towards 2018 there will be
significant additional efforts and investments in system flexibility, market participation,
production and load forecasting and accurate (smart) metering. The resulting system
reserve needs set forth in this study are only valid under these assumptions. In case these
assumptions are not fulfilled it is expected that the reserve needs will increase dramatically
towards 2018.
Furthermore Elia investigated several scenarios in order to reflect systems in which much
or almost no flexibility is available within the intraday timeframe as explained further on in
the document.
Given the high degree of uncertainty, it is important to note that the results of this study
only show general evolutions in the need for reserves, but that it is crucial for the TSO to
continuously monitor the evolutions and to perform a detailed assessment of the reserve
needs at least every year for the next year. As such the results of this study have only an
indicative character.
3.3. Available reserve resources

Chapter 8 of this study analyses whether the reserve resources that are likely to be still
available in the system in 2018 are sufficient to cover the reserve needs. The study makes
a snapshot of the expected 2018 situation and does not account for the evolution of the
reserve resources between 2013 and 2018.
It has to be noted also that Elia, as TSO, is not responsible for system adequacy, nor for
new investments in flexible power plants in the Belgium system, which is the role of the
government.
In addition to the reserve resources capacity [MW] question from a system capability point
of view, it is important to look also at the diversification of the reserve resources able to
deliver the different types of reserves. This is also addressed in chapter 8.
The creation of a liquid reserves market requires that different types of reserve resources
are able to deliver the same type of reserves. A highly concentrated reserves market, in
which only one specific resource is able to deliver a certain type of reserves, leads to the
risk that procurement costs for reserves are fully coupled to market evolutions (e.g. clean
spark spread in case of procurement of FCR/FRRa on CCGT units) and that insufficient
reserve capacity will be available in case of reduced profitability and according reduced
availability or decommissioning of the reserve resources.
In an economic optimal situation either the available load (demand side management) or
the power plants that are selected in the merit order deliver the spinning reserves (FCR
and FRRa), in which case the power plants operating at lowest cost deliver the downward
part of the reserves and the power plants operating at highest cost deliver the upward part
Page 16 of 56
of the reserves. Tertiary reserves are delivered by load, non-spinning power plants or by
flexible spinning power plants.
The results of this study have to be considered in a context with a high degree of
uncertainty on:
future market evolutions, such as fuel costs, electricity spot prices, which will
impact the available resources in the system;
the amount of demand side management (DSM) available in 2018;
evolution towards smart support schemes for RES and CHP units in order to
facilitate their participation in the reserves market;
technical ability of wind plants or other renewables to provide FCR/FRRa in 2018;
Due to the uncertainty related to the cross-border procurement of reserves, this study only considers
reserve resources available within the Belgian system. Elia will however continue to investigate the
option of cross-border exchange of reserves.
Page 17 of 56
Page 18 of 56
Context
4.1. Responsibilities of TSO and BRP

Article 157 of the Federal Grid Code [4] states that BRPs are responsible to
perimeter on a 15-minute time interval. BRPs have to do so by accessing
system flexibility in consecutive timeframes. As real-time approaches, BRPs
insight on the final balancing position of their perimeter and have to adjust
accordingly in the intraday timeframe.
balance their
the available
get a clearer
their position
The TSO resolves the residual imbalances in the system due to unpredictable or limited
predictable events. These are caused by forecast errors of load, VRE production, still
existing near to real-time and by outages of large loads, production units and HVDC
interconnectors7 that, given their size, cannot be compensated immediately by the BRPs in
question. BRPs are incentivised to balance their perimeter before and even in real-time via
the real time price signals of the imbalance mechanism. This is illustrated in the figure
below:
The imbalance mechanism must give adequate incentives to BRPs and market parties in
order to invest in accurate intraday forecasting of load and VRE production and to invest in
flexibility in their perimeter (by exploiting all flexibility of existing load and generation
assets and by investing in new flexibility resources if required). BRPs need this flexibility to
balance the variable output of VRE, the ramping of system off-take, and forecast errors of
load and production, in their perimeter and to adjust the position of their perimeter in the
intraday timeframe in accordance with more accurate forecasts.
The imbalance mechanism must ensure at all times that BRPs also deploy the required
flexibility to balance their perimeter in order to minimize residual imbalances in the
system. The reserve needs of the system -and according costs for society- are determined
by the amount of residual imbalances.
The imbalance mechanism is therefore an important tool to ensure that sufficient
investments in accurate forecasts and system flexibility are made by BRPs and other
market parties. This ensures the sustainable integration of the planned VRE capacity in the
system and minimizes costs for system reserves that are required to resolve residual
imbalances.
The Belgian market design allows -and incentivizes- the real-time (passive) reaction of
market parties (with a physical position) on imbalance prices, thereby supporting the
system balance and reducing residual system imbalances. This is of key importance to
foster investments in system flexibility by market parties and to minimize residual
imbalances.
The dimensioning of reserves is based on residual imbalances and does not
account for imbalances caused by a structural lack of system flexibility or lack of
qualitative forecasts. The financial incentives given by the imbalance mechanism
must be sufficiently strong to avoid such situations and to make sure that BRPs
exploit all reasonable measures to balance their perimeter. The current
incentives however tend to be inadequate during some time periods.
7
Market arrangements for the outage of the NEMO HVDC interconnector are not defined yet.
Depending on the final framework either Elia or a BRP can be responsible for balancing the cable.
Page 19 of 56
4.2. Increasing need for system flexibility

System flexibility is defined as the combined flexibility of generation to meet the
instantaneous load and of load to meet the instantaneous amount of generation. System
flexibility is also provided by the day ahead and intraday electricity markets by the import
and/or export of electricity, whereas in addition these markets enable the exchange of
system flexibility between market parties in the Belgian system (which is also enabled by
the HUB).
Historically the need for system flexibility was mainly defined by the daily peak and offpeak fluctuations of the system load. In such case the import and export of electricity,
together with the centralized production units were operated in a way to match the load.
The system consisted mainly of baseload units, running all day, and peak units running
only during peak hours.
This situation changed considerably due to the integration of VRE in the system (see
chapter 6). The available production output of these resources is defined by weather
conditions, regardless the instantaneous amount of load. As a result the need for system
flexibility increased, as the rest of the system now needs to be flexible enough to cover the
load minus the invariable RES production, for which the profile is more fluctuating and
more challenging to cover than the historic peak off-peak profile. Following cases give
some examples for the increased need of system flexibility due to the integration of wind
and solar:
Suppose that during the upward ramping of the load in the morning (6 - 8 A.M.)
the amount of wind production decreases significantly. This would mean that the
import, together with the upward ramping of other power plants (or demand side
reaction), now have to cover both the decrease of wind production and increase of
load. This results in an increased need for system flexibility;
In case the VRE production and baseload production exceeds demand, energy has
to be exported or baseload (or VRE) production has to be modulated, which again
indicates the increasing need for system flexibility.
VRE however can and must be incentivized to- also offer some flexibility to the grid
(especially downward reserves), subject to availability. VRE has to provide some of the
required system flexibility to enable its sustainable integration in the system.
The table below gives an idea of the observed and/or forecasted ramping of onshore and
offshore wind production and of photovoltaic production in function of the installed
capacity. It can be concluded that especially offshore wind production has a high
variability, with fluctuations of its output of more than 13% of its installed capacity on a
15-minute basis and more than 30% on a 60-minute basis. This represents a real
challenge for the system when looking at the expected massive increase of VRE, and
especially of offshore wind production in the next years.
Maximum8
ramping
15 minutes
30 minutes
1 hour
Estimated 2012
2018 additional
installed capacity
[GW]9
PV
4,6%
8,7%
16,9%
Onshore wind
4,9%
7,7%
12,2%
0,9
Offshore wind
13,5%
21,3%
31,8%
1,9
[% of installed
capacity]
The ramping of renewables in timescales longer than 1 hour is even much higher, requiring
a very flexible system that is able to deal with this variability. Literature states that the
amount of system flexibility available in the system in a timeframe of 6 to 36 hours [5] this is the capability of the system to alternate between situations with full PV and wind
production to situations without PV and wind production - is the limiting factor for the
integration potential of VRE in the electricity system.
Covering 99-percentile of the historical observed absolute values of the ramps. For PV only daytime
was taken into account in order to give realistic values.
9
Based on current estimations. These values change during time and require close follow-up by Elia.
Page 20 of 56
The figure below gives a qualitative insight in the relationship between output of VRE, the
need for system flexibility deployed by the BRP to cover this variability and the residual
system imbalance which results from the part of the forecast error, still existing near realtime, that is not covered by the BRP.
For illustrative purposes, the figure assumes a constant off-take of the grid and shows the
required flexibility to cover e.g. the decreasing output of VRE output in order to keep the
system balanced. Although constant off-take is assumed, it has to be noted that (part of)
the required flexibility can also be provided by DSM.
It can be concluded that the need for system flexibility for the BRP, to offset the predicted
variable output of VRE, is many times bigger than the residual system imbalance to be
covered by the TSO.
The BRP (and other market parties supporting the balance of the system) are assumed to
offset any forecast error in real-time. The dimensioning of reserves only relates to the
residual system imbalances, while it is assumed that BRPs will deploy sufficient flexibility to
offset the variability of the VRE output and perform best efforts to resolve forecast errors
of VRE and load.
This shows again the importance of adequate and strong price incentives given by the TSO
to BRPs for resolving the residual system imbalances. These incentives ensure that BRPs
will invest in and actually deploy- the required flexibility, thereby leaving only small
residual imbalances in the system to be covered by the reserves of the TSO.
4.3. Game changers for dimensioning of reserves

This paragraph summarizes the most important system evolutions having an impact on the
reserve needs towards 2018. More details on this topic can be found in Annex 3.
4.3.1.
Increase in installed capacity of VRE
It is estimated that the installed wind capacity will increase with +/-2,8 GW between 2012
and 2018 (0,9 GW onshore and 1,9 GW offshore). The PV capacity is expected to increase
with an additional 2 GW between 2012 and 2018. This results in a total predicted amount
of more than 8GW of VRE capacity installed in 2018.
The significant increase in installed capacity of PV and wind production in 2018 will have an
impact on the size and nature of the residual system imbalances, used as input for the
dimensioning of the reserves, due to:
Forecast errors of VRE output:
The actual output of VRE is difficult to predict. The uncertainty on the forecasts
(resulting in forecast errors) decreases towards real-time. The dimensioning of
reserves accounts for residual system imbalances caused by forecast errors of VRE
Page 21 of 56
output still existing near to real-time for which the BRP has only limited possibility
to offset them by its own.
Ramping of VRE output:
It is assumed that BRPs fully compensate the ramping (variability) of VRE on an

hourly timeframe by themselves as sufficient hourly flexibility (1-hour energy
blocks on the spot and intraday market,) is expected to be available. Therefore
ramping of VRE in an hourly timeframe is assumed not to introduce hourly residual
system imbalances.
Depending on the amount of 15-minute flexibility available in the system (e.g. by

having a liquid 15-minute ID markets, flexible spinning units, demand
flexibility,), the ramping of a large amount of VRE inside an hour might introduce
quarter hourly residual system imbalances (see Annex 3 for more details).
In a system where quarter hourly flexibility is scarce, BRPs will only be able to
offset these quarter-hourly imbalances to a limited extent. This increases both the
size and volatility10 of the residual system imbalances.
The observed residual imbalances for recent years showed that, although the size
of the residual imbalances increased during last years, the volatility remained more
or less constant. This is shown in respectively the left and right graph below.
This indicates that the increase of volatility of the residual system imbalance due to
this effect is up to now very limited and negligible. Further follow up of this
effect by the TSO is required.
4.3.2.
HVDC interconnector
A second evolution in the system impacting the need for reserves is the introduction of a
1000 MW HVDC VSC interconnector between Belgium and UK (NEMO project)11. Following
two effects impact the required amount of reserves:
HVDC interconnector outages:
The forced outage of an HVDC interconnector can occur in situations of full import
or export. In case of full import the loss of the HVDC interconnector results in a
deficit of 1000 MW, which is comparable to the loss of a nuclear unit in the current
system. In case of full export, the loss of the cable introduces an excess of 1000
MW, which is completely new for the system.
Ramping of HVDC cable:
The ramping of the planned HVDC cable is expected to increase both the size and
volatility of the residual system imbalances, as explained further in Annex 3.
10
Volatility is measured by the difference between consecutive quarter-hourly residual system

imbalances.
11
This study takes the assumption that NEMO will be commissioned in 2018.
Page 22 of 56
Estimated FCR needs in 2018
The required amount of FCR is defined on the level of ENTSOe. Currently the total amount
of FCR within Continental Europe is 3000 MW, covering the instantaneous outage of two of
the largest units within Europe. The share for Elia for the Belgian control area is historically
within a range of about 90 106 MW and is determined by the amount of the net
generation of the Belgian area compared to the net generation of the entire Continental
Europe system. This ratio was more or less constant with only very limited changes.
In the report of the Ad-hoc Team Operational Reserves [6] the impact of deterministic
frequency deviations on the dimensioning of the FCR is identified. Deterministic frequency
deviations are instantaneous frequency deviations occurring during the hourly changes of
the energy schedules. These frequency deviations occur due to the fact that the hourly
energy blocks on the market do not allow load-following and due to insufficient alignment
of simultaneous ramping of different units within the system. These frequency deviations
are deterministic (always occur around the change of the hour) and, due to their specific
nature, disappear automatically as time progresses.
The figure below shows, on the top left, the distribution of the 2010 historical frequency
deviations for RG CE. The red curve shows the frequency deviations at the change of the
hour, the blue curve shows the one within the hour. The image beneath shows a
normalized distribution, which shows that practically all the large frequency deviations in
the Continental Europe system (RG CE) are located around the change of the hour.
The solution for these imbalances lays rather in a re-design of the market rules and a
better alignment of the ramping of units, addressing the main causes of these imbalances,
than in the increase of operational reserves.
These deterministic imbalances are quite big (several hundreds of MWs) and very fast
(phenomena within a few minutes). Therefore they can only be resolved by the fast FCR.
During such frequency deviations 50% up to 70% of the FCR is activated. This results in a
situation in which insufficient FCR is available to cover the outage of the 2 largest units.
The final report on operational reserves by ENTSOe [6] and the current draft of the NC
LFC&R [2] require that the risk of having insufficient FCR is monitored for each
Synchronous Area, in order to be able to increase the FCR in case an allowed risk threshold
is exceeded.
Simulations performed show that, in case the yearly number of minutes where the average
frequency deviation exceeds more than 75 mHz increases from 2360 (2010 value) to 4000
minutes, the required FCR would also increase from 3000 MW to 3070 MW.
In addition the current draft of the NC LFC&R [2] states that the FCR contribution of TSOs
shall be calculated in the future on the basis of the sum of net generation and consumption
of control blocks, which also leads to a small increase for Belgium as importer of electricity.
Therefore a 5 MW increase in FCR is assumed to the historical range of 95105 MW.
Based on this information, the amount of FCR to be provided by Elia in 2018 is
estimated to be within a 95 - 110 MW range.
Page 23 of 56
Page 24 of 56
Estimated FRRa and FRRm needs in 2018
6.1. Methodology
6.1.1.
Methodology
In contrast to FCR, the required amount of FRR (FRRa and FRRm12) is determined on the
level of the TSO. Historically TSOs used deterministic dimensioning criteria to determine
the total amount of FRR. A TSO dimensioned its FRR in order to cover the biggest outage
due to the loss of a single grid element.
Such a deterministic method doesnt take the increasing complexity of system operation
due to the integration of variable and limited predictable VRE into account. Elia changed its
reserves dimensioning methodology from deterministic to probabilistic in 2012. The
reserve volumes for 2013, as calculated in 2012, were based on this probabilistic
methodology. The determination and evaluation of reserves for 2013 on this basis was
approved by the CREG [1].
In the probabilistic methodology, the total required FRR (FRRa and FRRm) is determined as
the amount of FRR that covers the expected residual system imbalance in both directions
during 99,9% of time13. This allows to take imbalances due to forecast errors of load and
VRE into account. The methodology is explained in the figure below. The N-1 principle is
however kept as a strict minimum for the amount of total FRR, as required by ENTSOe.
Some general principles for the dimensioning of the reserves can be found in the ENTSOe
Operation Handbook Policy 1 [7].
The TSO dimensions the FRRa in order to reach a satisfactory balancing quality for its
Control Block. As FRRa is activated on an automated basis and is faster than FRRm, it is a
very important reserve to ensure a satisfying balancing quality on a continuous basis.
Finally the combination of FRRa and FRRm must allow the TSO to respect the ACE quality
targets agreed upon between the TSOs of the Synchronous Area.
The FRRa covers fast components of the residual system imbalance, which are modelled by
the difference between the residual system imbalances of two consecutive quarter hours,
being the volatility of the residual system imbalances. The actual amount of FRRa is
determined as the required volume to cover Y% of the volatility of the residual system
imbalances. This is shown in the figures below. A more detailed explanation of this
methodology can be found in Annex 2.
12
FRRm corresponds to manual activated reserves that can be deployed within 15 minutes such as
non-contracted manual bids according to CIPU, R3 production, interruptible industrial clients,
13
As Elia only procures upward FRRm, the yearly dimensioning only considers the upward FRRm
dimensioning.
Page 25 of 56
6.1.2.
Desaturation of FRRa by FRRm
The dimensioning model for the FRRa is based on a theoretical model in which an efficient
desaturation of FRRa by FRRm is assumed. During recent years Elia performed increased
efforts in order to improve the desaturation of FRRa by FRRm, with satisfying results. An
efficient desaturation of FRRa by FRRm allows to achieve a satisfying balancing quality with
a relatively limited amount of FRRa, which is scarce in Belgium and has a very high
reservation cost (see later).
This is illustrated in the figure below, which shows that, although the amount of system
imbalances nearly doubled last years, Elia managed to keep the ACE quality under control
by performing more activations of FRRm, while the amount of FRRa remained more or less
constant.
The graphs below shows the absolute energy contents [GWh] of the system imbalance, of
the activated FRRa and FRRm volumes and of the ACE for the last 4 years. These graphs
show the importance of FRRm to de-saturate and support the FRRa. Preliminary results of
the Elia participation to iGCC (only 2 months in 2012), also indicate an enhancement of the
ACE quality. Module 1 of iGCC avoids the activation of FRR control power whenever there is
an opposite demand for FRR control power in the different participating control areas.
Page 26 of 56
The above figures show that, despite an increase of the system imbalance of 515 GWh in
2012 compared to 2009 (+54%!), the increase in ACE was kept limited to 100 GWh due to
the increased amount of manual activations.
It is expected that the desaturation of FRRa by FRRm will become more challenging in the
future, given the steep increase in the required amount of manual activations. Elia
therefore continuously investigates efficient ways to de-saturate the FRRa, to increase the
liquidity on the FRRm products being able to de-saturate the FRRa on a nearly continuous
basis and to increase the liquidity of the FRRa market itself to enhance the balancing
quality.
6.2. Inputs used for FRR dimensioning

The figure below gives an overview of the considered imbalance drivers used as input to
simulate the expected residual system imbalances for the year 2018. It also shows the
way these inputs are then combined to determine the expected residual system
imbalances.
The model used for each imbalance driver and the assumptions taken in the different
simulated scenarios (see paragraph 6.3) are further explained in Annex 3. Finally the
distribution of the total expected residual system imbalances is used as input in the
probabilistic dimensioning model for FRR.
The considered imbalance drivers are:
Historical observed system imbalances for 2012 as baseline. As imbalances due to

forced outages are simulated separately, the 2012 quarter hourly time-series is
compensated for periods with observed outages in 2012.
Imbalances caused by incremental installed capacity (compared to 2012) of wind

and PV production units, being:
o
imbalances due to forecast errors remaining near real-time;
quarter hourly imbalances due to ramping of PV and wind within the hourly
timeframe.
Imbalances caused by
interconnector (NEMO).
forced
outages
of
units
and
the
planned
HVDC
Ramping imbalances caused by the introduction of an HVDC interconnector in the

system.
Wind turbines automatically shut down in case the wind speed exceeds their respective
cut-off speeds during a certain period of time. This is especially a risk for offshore wind
parks given the high wind speeds they face. As a result in case of a storm a high amount
of offshore wind production might instantaneously shut down, creating large imbalances in
Page 27 of 56
the system. It has to be noted however that the instantaneous outage of all offshore wind
parks due to the occurrence of a storm is not considered as an N-1 incident as:
storms can be predicted and therefore preventive measures can be taken by BRPs
and/or the TSO to reduce the risk. This will be further investigated by Elia during
2013.
Elia identified different cut-off thresholds for the different offshore wind parks.
Furthermore it is expected that not all wind mills of a wind park simultaneoulsy
shut down.
This is illustrated by the following figure, which shows the forecast and
measurement of the Belgian offshore wind parks on 30/1/2013.
new wind turbine technology exists that avoids the instantaneous shutting down of
wind parks in case wind speed exceeds the cut-off speed. These wind turbines then
gradually reduce their output instead of going down to zero immediately.
The occurrence of a storm, and according forecast errors in case of the shutting down of
wind mills, is however taken into account in the calculation of the expected residual system
imbalance. In the different scenarios, significant improvements are expected for the
offshore production forecasts, which in such case also apply for forecast errors due to the
shutting down of offshore wind parks due to storms.
Elia has only limited experience with the behaviour of offshore wind parks in case of storm
and will further investigate this phenomenon in the future to improve the modelling of the
storm risk in the dimensioning of the reserves and to take appropriate measures.
6.3. Scenarios
The expected residual system imbalances and therefore the required volume of FRRa and
FRRm depend on the assumptions taken for the future system evolutions. Therefore
different scenarios were simulated, covering different possible evolutions.
As already explained above all the simulated scenarios assume significant additional efforts
and investments (compared to the current situation) by BRPs and other market parties in
order to increase the system flexibility and day-ahead and intraday forecasting quality of
load and VRE production. This is required to ensure the sustainable integration of high
shares of VRE in the system and to minimize residual system imbalances.
Therefore none of the scenarios assume residual imbalances as a result of a structural lack
of system flexibility, which is a very strong and optimistic assumption. If residual
imbalances are caused by a structural lack of system flexibility, system reserve needs will
increase dramatically, which is not taken into account in any of the simulated scenarios.
In all of the three simulated scenarios it is assumed that:
BRPs invest in highly accurate intraday forecasts of VRE production and off-take to
minimize residual system imbalances;
BRPs pro-actively foster the development of flexibility in their portfolio (load &
generation) and bring this flexibility to the markets (day-ahead, intraday and
balancing market). This allows the BRPs to balance at least the expected position
of their perimeter in day-ahead. Moreover it is assumed that BRPs actually deploy
all available system flexibility in order to minimize residual system imbalances.
Therefore no structural residual imbalances due to a lack of (day-ahead) flexibility
is taken into account;
Page 28 of 56
TSO, DSOs, BRPs and other market parties perform additional efforts to achieve
accurate metering and load profiling (DSO responsibility) resulting in a better realtime view on the actual off-take and injection within the system and the BRP
perimeter.
Adequate incentives by the imbalance mechanism are crucial to achieve this:
all imbalance volumes must be exposed to imbalance prices;
real-time market reaction on imbalance prices to support the balance of the BRP
perimeter and the Belgian system must be incentivized;
imbalance prices should be sufficiently high to incentivize investments in and the

actual use of- system flexibility by all market parties. Additional incentives might
be required to achieve this as current incentives tend to be inadequate during
some time periods.
Within the above assumptions, three different scenarios were elaborated to estimate the
need for FRRa and FRRm in 2018, reflecting systems in which different amounts of
intraday flexibility and flexibility within the hourly timeframe are available to the BRPs.
The low reserve needs scenario represents a system in which ID flexibility and flexibility
within the hourly timeframe is abundant, thereby fully enabling BRPs to adjust their
perimeter in the ID time scales according to more accurate ID forecasts. The presence of a
liquid 15-minute ID market with short gate closure times (GCT) minimizes the imbalances
caused by the ramping of VRE within the hour and by the ramping of NEMO (see also
Annex 3).
In the high reserve needs scenario the ID system flexibility and flexibility within the hour
timeframe becomes scarce. This affects the ability of BRPs to balance their perimeter in
the intraday timescale, which results in an increase of residual imbalances in the system.
Furthermore this affects the ability of BRPs to offset the ramping of VRE within the hour
and to offset imbalances due to the ramping of NEMO. The medium reserve needs
scenario has to be considered as an intermediate one.
The assumptions for the different scenarios are shown in the table below:
Assumption
Development
profiling
of
forecasting,
metering
Low
reserve
needs
Medium
reserve
needs
High
reserve
needs
High
High
High
High
High
High
High
Medium
Low
and
Investments of BRPs in accurate intra-day forecasts

of VRE production and off-take.
Investments in smart metering and load profiling to
have a clear real-time view on the actual off-take,
injection and (balancing) position of the system and
BRP portfolio.
Balancing on day-ahead timeframe
Ability of BRPs to balance the day-ahead expected
position of their perimeter, including the variable
output of VRE, ramping of off-take
This requires sufficient investments in system
flexibility to incorporate the high shares of future
VRE capacity (in combination with the standard daily
ramping of off-take).
Balancing on intraday timeframe
Ability of BRPs to adjust the position of their
perimeter in ID according to more accurate ID
forecasts of VRE production and off-take (smart
metering,).
This depends on the amount of ID flexibility within
the perimeter of the BRP (load and generation) and
on the liquidity of ID markets.
Page 29 of 56
Intra-hourly balancing.
Ability of BRPs to balance the ramping of VRE (wind,
PV,) and HVDC interconnectors within the hour.
This depends on:
amount of 15-minute flexibility within the

BRP perimeter (load and generation);
presence of a liquid 15 minutes intra-day

market.
High
Medium
Low
The following paragraphs give a more detailed explanation on the assumptions and the
model parameters for the different assumptions (more details are given in Annex 3).
Assumptions taken for the improvement in the (ID) forecasting quality of VRE:
It is assumed that the incentives given by the imbalance mechanism are

sufficiently strong so that all BRPs, in all scenarios, make use of very accurate ID
forecasts.
The reference forecast used to model the 2018 incremental wind forecast errors is
a day-ahead forecast. Therefore a significant increase in forecasting quality (up to
40%), due to the use of very accurate intra-day forecasts in 2018 is taken into
account.
The reference forecast used to model PV forecast errors is based on an 8 A.M

intraday forecast. A performance increase of 25%, as a result of accuracy
improvements towards 2018, was taken into account.
Ability of BRPs to balance their portfolio on the basis of the DA expected position
of their perimeter:
All three scenarios assume that BRPs have sufficient flexibility available (and
actually make use of it) to balance (at least) the DA predicted position of their
perimeter (ramping of load and VRE,). This means that no structural
(predictable) residual imbalances are introduced in the system due to a lack of
system flexibility.
This represents a significant change from the current situation in which (balancing)
incentives given to the market tend to be insufficient during some periods,
resulting in imbalances due to a lack of (activated) system flexibility by market
parties.
Ability of BRPs to adjust their perimeter according to more accurate ID forecasts:
The ability of BRPs to adjust their perimeter in ID based on more accurate ID

forecasts depends on the amount of ID flexibility available in the system.
ID flexibility refers to flexibility:

o
within the BRP perimeter, such as flexible generation units, demand side
management,; and
provided by intraday markets and the HUB.
The coupling of the NWE intraday market, planned before 2018, might lead to a
significant increase in ID market liquidity.
The three different scenarios represent systems having different amounts of ID

flexibility available. It is assumed that the incentives given by the imbalance
mechanism ensure that BRPs also fully use the available ID flexibility to minimize
any residual system imbalance.
This represents a significant change compared

limited liquidity and use of ID markets by
potential of more accurate ID forecasts is not
in the question whether current price signals
are adequate.
to the current situation in which the

BRPs allows to conclude that the
fully exploited yet. This also results
given by the imbalance mechanism
Ability of BRPs to offset ramping of VRE within the hour and to offset ramping of
NEMO:
Page 30 of 56
It is observed and expected that less flexible power plants (mainly gas plants in
Belgium) are, and will be, available in the system during some time periods. The
running hours of these units are decreasing as a result of the increase of VRE
production.
This results in a reduction of flexibility with a resolution smaller than 1 hour

(current market resolution), which affects the ability of BRPs to offset the ramping
of VRE within the hour. This might eventually lead to an increase in both the size
and volatility of the quarter hourly residual imbalances (although this is currently
not observed). The same holds true for ramping of HVDC interconnectors.
The introduction of a liquid 15-minutes ID market, such as in Germany and/or

investments in 15-minutes flexibility (DSM, VRE,) are important to solve this
issue. The three scenarios represent systems in which different amounts of
flexibility within the hourly timeframe are available.
In all scenarios it is assumed that the incentives given by the imbalance

mechanism are sufficiently strong to incentivize BRPs to make use of all available
15-minute flexibility.
6.4. Resulting FRRa and FRRm needs in 2018

The simulated reserve needs for 2018 represent the reserve needs for the Belgian system
and are independent of the volumes pre-contracted by Elia. The Framework Guidelines on
Electricity Balancing [11], and the final report on Operational Reserves by ENTSOe [6]
confirm that TSOs do not have to pre-contract all required reserves. This is for example
the case for systems in which a liquid balancing market exist in which non pre-contracted
flexibility is offered to the TSO.
This is especially the case for downward FRRm, as in case of the activation of these
reserves, there is already an excess of generation in the system. In such case the correct
market mechanisms should be in place so that the TSO can require that the BRPs lower
their production (or increase the load), at the actual downward regulation cost for the
BRPs. This cost is then reflected in the imbalance tariffs to give adequate incentives.
The system reserve needs stated below assume a 100%-availability. Equivalent reserve
volumes for an availability less than 100%, taking portfolio effects into account, can be
calculated. This is performed by taking the availability of the reserves into account in the
calculation of the deficit probability of the reserves to cover the expected residual system
imbalance (and its volatility).
Scenario
FRRa [MW]
FRRm downward
[MW]
FRRm upward
[MW]
140
695
1120
No ramping
152
1138
107814
With ramping
155
1135
1078
No ramping
159
1231
1131
With ramping
172
1238
1138
No ramping
166
1327
1317
With ramping
192
1331
1321
Up to >1750
MW
Up to >1700
MW
2013 reference
2018:
low
reserve
needs scenario
2018: medium reserve

needs scenario
2018: high reserve

needs scenario
Insufficient efforts &

investments
14
Up to >300
MW
Volume almost equal to N-1 deterministic dimensioning criterion.

Page 31 of 56
The table above shows the amount of required FRRa and FRRm for the three different
scenarios as well as the 2013 reference.
Up to now Elia didnt notice an impact of the increase in VRE capacity in the Belgium
system on the volatility15 of the residual system imbalance. This might however be the
case if a significant amount of additional VRE capacity is introduced in the system.
Therefore two different cases are simulated for each scenario. In the first case the
imbalances due to ramping of VRE and the HVDC interconnector within the hourly
timescale are not taken into account (No ramping), while in the second case (With
ramping) they are.
The figures below show the interpolated ranges for the FRRa and the upward and
downward FRRm system needs for the two extreme scenarios (low reserve needs scenario
without ramping impact and high reserve needs scenario with ramping impact) between
2013 and 2018.
15
The volatility of the system imbalance is calculated as the delta between the average system
imbalance of the actual and the next quarter hour.
Page 32 of 56
In case insufficient system flexibility will be available to balance the variable output of the
planned additional VRE capacity, or in case of insufficient investments are made in
accurate ID forecasts, the reserve needs of the system (and costs for society) will increase
significantly and are expected to be much higher than in the above simulated scenarios.
The reserve needs of the system heavily depend on the BRP behaviour. In order to avoid a
very steep increase in future reserve needs (and costs for society), as indicated by the
grey dotted lines in the figures, it is of crucial importance that:
BRPs invest in best practice (DA and ID) forecasting of VRE production and off-take
in their perimeter;
BRPs make active use of markets on all timescales to balance their perimeter;
BRPs pro-actively foster the development of flexibility in their portfolio (load &
generation) and bring this flexibility to the markets (day-ahead, intraday and
balancing market);
TSO, DSOs, BRPs and other market parties perform additional efforts to achieve
accurate metering and load profiling (DSO responsibility).
Adequate incentives are crucial to achieve this:
all imbalances should be exposed to imbalance prices;
real-time market reaction on imbalance prices to support the balance of the BRP
perimeter and the Belgian system must be accepted and incentivized;
imbalance prices should be sufficiently high to incentivise investments in and the

actual use of- system flexibility by all market parties. Additional incentives might
be required to achieve this;
the price signals given by the imbalance mechanism must be sufficiently strong at
any point in time to incentivize BRPs to make use of all flexibility to balance their
perimeter.
This represents a significant change from the current situation in which it is observed that
the incentives by the imbalance mechanism are not always sufficiently strong to achieve
this.
6.5. FRR dimensioning conclusions
The sustainable integration of the planned capacity of VRE in combination, resulting in

a limited increase in system reserves needs (and according costs for society), requires:
o
additional investments in more accurate forecasts of load and real-time

measurements of load (smart metering) and VRE production, both in dayahead and intraday timescales;
sufficient investments in system flexibility by BRPs and market parties

(maximizing flexibility of current generation and load, investments in new
flexible power plants,) to balance the VRE output.
System reserve needs (and costs) will explode in case no accurate forecasts or
insufficient system flexibility are available (or are not being used) by BRPs to balance
the variable output of PV and wind production within their perimeter.
Gradual strong price signals by the imbalance mechanism, representing the market
cost for deployed balancing energy, in case of residual system imbalances must give
proper incentives to all involved market parties to invest in accurate ID forecasts of
load and VRE and to develop the required system flexibility.
The ability of BRPs to adjust their perimeter according to more accurate ID forecasts
depends strongly on the amount of ID flexibility within the system. In case of the low
reserve needs scenario, ID flexibility is abundant resulting in a rather limited increase
of reserve needs in the system.
The high reserve needs scenario assumes scarcity of ID flexibility in the system,
resulting in a significant increase of reserve needs. This shows again the importance of
adequate incentives by the imbalance mechanism for market parties to develop and
use ID system flexibility.
Page 33 of 56
The need for FRRa will increase towards 2018. This is mainly due to an expected
increase in volatility of residual imbalances because of the ramping of VRE within the
hour and the ramping of the planned HVDC interconnector between Belgium and UK.
The increase of FRRa therefore depends on the amount of quarter hourly flexibility
available in the system. This stresses the importance of
o
sufficient investments in quarter hourly flexibility in the BRP perimeter (load

and generation);
the development of liquid ID markets with a time resolution of 15-minutes and

GCT near real-time
for the cost-effective integration of high shares of VRE and HVDC interconnectors in
the system.
This effect has to be closely followed by the TSO during next years.
All performed simulations assume an efficient desaturation of FRRa by FRRm. This can
only be achieved in case of the presence of a very flexible and liquid balancing market.
This will become more challenging in the future, as Elia already experienced during
recent years.
The reason for this is the high number of FRRm activations required, as a result of the
increase in amplitude and frequency of large residual system imbalances.
As a result two different functions for FRRm are identified:
o
the first function of FRRm is to cover rare but very large imbalances due to
instantaneous incidents or very large (but rare) forecast errors.
the second one being the de-saturation of the activated FRRa on a more or less
continuous basis.
Whereas historically the FRRm was mainly used to fulfil the first function, thereby
acting as a sort of contingency reserve, Elia now seeks additional volumes of the
FRRm fulfilling the second function, by exploiting different possibilities. The FRRm
reserve resources for the different functions may have different characteristics, e.g. in
activation frequency and duration, and may therefore be provided by different types of
resources.
One of the ways explored by Elia to capture additional FRRm able to de-saturate the
activated FRRa is the creation of a bid-ladder to capture more flexibility in the system,
thereby enabling all resources, such as biomass, wind production, CHPs, demand,to
offer this kind of flexibility.
The need for upward FRRm shows an increase in the high reserve needs scenario and
even a very limited decrease in the low reserve needs scenario. This can be explained
by the fact that:
o
decrease in negative residual system imbalances compared to 2011, which was
used as baseline for the calculation of the 2013 needs;
there is a collateralization of the increased needs for upward manual FRR due
to additional VRE capacity and the positive FRR required to cover the N-1;
the major increase in forecasting quality and ID flexibility in the low reserve
needs scenario compared to the 2013 situation.
The need for downward manual FRR increases significantly due to:
o
the integration of additional VRE capacity;
the introduction of a large positive N-1 incident as result of an outage of the

1000 MW HVDC interconnector between Belgium and UK in full export mode;
increase in positive residual system imbalances compared to 2011 (used as
baseline for the 2013 needs).
The development of sufficient downward flexibility in the system represents a major

challenge for the next years.
Page 34 of 56
Elia already observes residual positive system imbalances caused by insufficient

downward flexibility. This shows again the importance of adequate market incentives
to develop additional downward flexibility.
The increase in downward flexibility has to be achieved by reducing the minimum
stable power of existing power plants (e.g. transformation of CCGT to OCGT), by
requiring RES units to offer downward flexibility, by new investments in downward
flexibility,... This is elaborated further in Chapter 8.
Elia will perform efforts in order to avoid a systematic long position of the residual
system imbalances as observed in 2012. This would result in a small reduction of the
increase of the downward FRRm needs and a small increase of the upward FRRm
needs, although the general conclusions of this study remain valid 5.
Replacement Reserves
Replacement Reserves (RR) are the slower manually activated reserves meant to
(partially) replace the activated FRR after 15 minutes.
As authorised in the future NC LFC&R [2], Elia does not currently contract RR. Indeed, in
the Belgian system, market parties are authorised and incentivised to restore the balance
of their perimeter up to real-time. Therefore market parties fulfil the replacement role in
the Belgian system.
Provided this fundamental feature of the Belgian balancing market design is preserved, the
contracting of RR is not considered in the Belgian market design.
Page 35 of 56
Page 36 of 56
Reserve resources available in the system
This chapter analyses whether the reserve resources that are reasonably expected to be
available in the system in 2018 are sufficient to cover the 2018 reserve needs for the
different simulated scenarios.
In addition some qualitative insights are given in required evolutions to enable the
economic efficient procurement of the required reserves in 2018. In this perspective it is
investigated whether the reserves portfolio will be sufficiently diversified to avoid excessive
exposure to specific market conditions for the procurement of reserves.
This study only considers reserve resources available in the Belgian system. Cross-border
reserve resources are not taken into account given the uncertainty of cross-border
exchange of reserves and the relatively long time horizon until 2018.
The development of cross-border exchange of reserves will however become very
important in the future and will be considered by Elia. The planned increase in
interconnection capacity might also increase the potential for cross-border exchange of
reserves.
As already mentioned in paragraph 3.3 there is a high degree of uncertainty regarding the
current reserve resources that will still be available in 2018. This depends e.g. on the
evolution of economic parameters such as fuel and electricity prices, for power plants, on
profitability of industrial demand facilities, This is shown e.g. by the current declared
intentions of decommissioning or mothballing of some gas fired plants in Belgium due to
reduced profitability. Furthermore there is a link with possible new investments required to
ensure system adequacy in the future.
The results in this section are based on an extrapolation of the current trends and
evolutions, but can change significantly in function of the evolution of economic
parameters.
8.1. Flexibility
High system flexibility is the key requisite for the integration of large shares of VRE in the
system. The results of this study point out the high ramping capabilities of wind and PV,
which have to be covered by flexible resources together with flexibility on the DA and ID
electricity markets.
A lack of (activated) system flexibility generally results in structural and very large residual
imbalances. Although these imbalances can be predicted, they are not resolved by the
BRPs. The reserve dimensioning however only accounts for residual imbalances due to
unpredictable or partially predictable events.
The creation of a highly flexible system requires following continued efforts:
new units must have high ramping capabilities, very low minimum stable power
and the ability to start and stop quickly and frequently. Furthermore new units with
low marginal production costs must be able to provide spinning flexibility to the
system;
development of DSM system flexibility;
the right incentives must be in place in order to require RES units themselves to
provide system flexibility;
set incentives for BRPs to offer (and actually use) flexibility by giving adequate
price signals for imbalances;
Maximize the flexibility of the existing centralized production assets and demand
facilities; and
Set the framework for the creation of a coupled, liquid ID market with GCT near
real-time and a 15-minute resolution.
The results of the study show that the reserve needs of the system are highly dependent
of the system flexibility and on the incentives for BRPs to balance their portfolio on a 15Page 37 of 56
minute level. The results of the study performed here are only valid for a system without
structural flexibility issues.
8.2. Available reserve resources in 2018

The question whether sufficient reserves resources will be available in the system in 2018
goes further than having sufficient reserve capacity [in MW], from a system capability
point of view, available on generating units and demand facilities within the grid.
A diversified reserve portfolio for each reserve type is crucial for the creation of a liquid
and sustainable reserves market and to ensure their economically efficient procurement.
In an efficient reserve market the spinning reserves are provided either by demand
facilities and/or by power plants that are selected in the merit order. These can be
renewables, CCGT units, coal units, CHPs, biomass units, depending on the actual market
conditions. The most efficient power plants provide downward reserve capacity while the
least efficient ones provide upward reserve capacity.
Diversification of the reserves portfolio can be achieved by:
Creating the attractive framework for RES to provide reserves (smart support
schemes, reserve products,);
Activating demand side management to provide reserves;
Attracting new players and new reserve resources in the systems; and
Requiring new/refurbished power plants to have FCR, FRRa and FRRm capability.
Elia currently observes a highly concentrated, illiquid market for both FCR and FRRa, as
these reserves (especially FRRa) are almost only offered by CCGT units for which running
hours are decreasing under current market conditions. The procurement of FCR and FRRa
on CCGT units therefore introduces high must run costs in the system as costs fully depend
on the evolution of the clean spark spread.
Even though many changes were already introduced in the market to facilitate
diversification of reserve resources and that the technical possibility for several resources
to offer reserves already exists (no R&D required), a continued increased effort of all
parties is required to diversify the reserve resources and to ensure a well-functioning,
liquid reserves market.
8.2.1.
FCR
The estimated range for FCR in 2018 is [95 110 MW]. The following resources actually
provide FCR and are expected to be still available in the system in 2018:
FCR resource
CCGT units
Resources still available in 2018
The issue of adequacy and whether additional support for

flexible capacity is required- is currently being addressed by
the Belgian Government. It is assumed that at least 3
existing CCGT units will be still available in the system in
2018, despite their current observed reduced profitability
and transformation of some CCGT units towards OCGT peak
plants.
It has to be emphasized that the above assumption does not

imply that 3 CCGT units are sufficient to ensure system
adequacy. It is however considered that the probability of
having at least 3 CCGT units in the system is very high.
Nuclear
The planned decommissioning of part of the nuclear capacity

towards 2018 is considered to have a negligible impact on
the FCR providing capability of the remaining nuclear
production park.
Load
Successful pilot project of delivery of FCR by demand

facilities was launched in 2013.
Pump-storage
hydro plants
Still available in the system in 2018 and capable of

delivering a significant amount of FCR, however only in
turbine mode and subject to energy constraints.
Page 38 of 56
For 2013 Elia procures part of its FCR in France. The cross-border procurement of FCR is
less complex than for other reserves given the full harmonization of the product on
European level. As already stated before this study however does not consider crossborder resources given the related uncertainty.
From the point of view of system capability for FCR it is expected that the current reserve
resources, which are expected to be still available in 2018, will allow to cover the 2018
reserve needs.
In the above table it is assumed that the current providers of R1 load mainly big
industries- will still be operational within the Belgian control area in 2018, which also
depends from external factors (economy,).
From an economic point of view though, as already observed today, these reserve
resources do not allow an efficient procurement of the reserves, as a large share of the
capability is concentrated on CCGT units. Therefore procurement costs for FCR (spinning
reserves) are highly dependent of the CCGT market conditions. These market conditions
are mainly determined by the evolution of the clean spark spread.
Spinning reserves such as FCR have to be provided by units that are selected in the merit
order, or by demand facilities, to avoid high must run costs. These units can be wind
parks, CCGT units, coal units, CHPs, biomass units depending on the market situation.
The most efficient power plants provide downward reserve capacity while the least efficient
ones provide the upward capacity.
This is the main reason why procurement costs for FCR significantly increased during
recent years as market conditions for CCGT unit worsened. Therefore it is of key
importance that some of the following FCR resources are developed in the future:
FCR resource
To be developed towards 2018
CHPs
CHP units have a competitive advantage compared to gas

units given the additional value for the underlying (heat)
process. Therefore FCR provision by CHPs decreases must
run costs compared to CCGT units.
New production
capacity &
refurbished
units
New centralized production units, required to ensure system

adequacy, must have FCR capability in order to further
diversify the FCR market and to ensure continuity in the FCR
capability of the Belgian production park.
Refurbished power plants need to have FCR capability where

technically possible.
Load
The participation of load in the FCR market has to be

developed further as this might avoid high must run costs to
be paid to conventional generation units to provide FCR.
RES units
During periods of high RES infeed, less (or none)

conventional spinning units will be available in the system to
provide FCR. FCR then has to be delivered by RES units
(biomass, wind,) or load in order to avoid high must run
costs.
Smart support schemes are required to foster participation

of RES units (biomass, PV, wind units) in reserves markets,
which is not always the case for the current support
schemes.
It is important that BRPs and market parties are incentivized to develop these new reserve
resources. Smart support schemes for RES and CHP units must enable the efficient
participation of RES in the ancillary services market.
8.2.2.
FRRa
The estimated range for FRRa in 2018 is [152 192 MW]. The following resources actually
provide FRRa and are expected to be still available in the system in 2018:
Page 39 of 56
FRRa resource
CCGT units
The issue of adequacy and whether additional support for

flexible capacity is required- is currently being addressed by
the Government. It is assumed that at least 3 existing CCGT
units (~200 MW of FRRa capacity) will be still available in
the system in 2018, despite their current observed reduced
profitability and transformation of some CCGT units towards
OCGT peak plants.
It has to be emphasized that the above assumption does not

imply that 3 CCGT units are sufficient to ensure system
adequacy. It is however considered that the probability of
having at least 3 CCGT units in the system is very high.
Pump storage
units
The current pump-storage units are able to deliver all the

required FRRa, however only in turbine mode and subject to
energy constraints.
CHP units
Currently only accounts for a marginal participation in the

FRRa market.
The cross-border procurement of FRRa is very complex given the variety of FRRa products
and market designs across Europe. Furthermore the cross-border procurement of FRRa
requires cross-border transmission capacity to be continuously available. This study
therefore doesnt consider the cross-border procurement FRRa.
From the point of view of system capability for FRRa it is expected that the current reserve
resources, which are expected to be still available in 2018, will allow to cover the 2018
reserve needs for both the low and high reserve needs scenario (resp. 152 and 192 MW).
It has to be emphasized however that, in case no further FRRa resources are developed
towards 2018, the presence of 3 CCGT units for the delivery of FRRa in the high reserve
needs scenario results in very limited margins. The unavailability of one or more CCGT
units will then affect the ability of the TSO to procure the required FRRa volumes.
Also from an economic point of view, as already observed today, these reserve resources
do not allow an efficient procurement of the reserves, as a large share of the capability is
concentrated on CCGT units. Therefore procurement costs for FRRa are fully dependent of
the CCGT market conditions, related to the evolution of the clean spark spread.
FRRa has to be provided by units that are selected in the merit order, or by demand
facilities, to avoid high must run costs. These units can be wind parks, CCGT units, coal
units, CHPs, biomass units, pump storage depending on the market situation. The most
efficient power plants provide downward reserve capacity while the least efficient ones
provide the upward capacity. Procurement of spinning reserves on units that arent
selected in the merit order leads to high must run costs and must be avoided.
The procurement costs for FRRa therefore depend on the evolution of the clean spark
spread. Therefore it is of key importance that some of the following FRRa resources are
developed in the future:
FRRa resource
CHPs
CHP units have a competitive advantage compared to gas

units given their value for the underlying (heat) process.
Therefore FRRa provision by CHPs results in less must run
costs compared to CCGT units.
New production
capacity and
refurbished
units
New investments required to ensure system adequacy must

have FRRa capability in order to further diversify the FRRa
market and to ensure continuity in the FRRa capability of the
Belgian production park.
Refurbished units need to have FRRa capability where

technically possible.
Further investigation of operating modes for pump storage

units to enable an economic more efficient delivery of FRRa.
Pump storage
units
Page 40 of 56
Load
The participation of demand side in the FRRa market should

be investigated, knowing however that it is likely to be more
difficult than for FRRm or FCR.
RES units
During periods of high RES infeed, no (or few) conventional

spinning units will be available in the system to provide
FRRa. FRRa then has to be delivered by RES units (biomass,
wind,) or load in order to avoid high must run costs.
Smart support schemes are required to foster participation

of RES units (biomass, PV, wind units) in reserves markets,
which is not the case for the current support schemes.
8.2.3.
Upward FRRm
The estimated range for upward manual FRR in 2018 is [1078 1321 MW]. Currently
following resources in the Belgian control area are providing the majority of the upward
FRRm:
Turbojets;
Gas turbines;
Interruptible industrial clients (single and aggregated units) connected to the TSO
grid.
At the end of 2012 about 850 MW of power plants (gas turbines and turbojets) was
qualified to deliver FRRm (400 MW contracted), while about 350 MW of FRRm was offered
by interruptible industrial clients (261 MW contracted for balancing purposes).
The following resources actually provide upward FRRm and are expected to be still
available in the system in 2018:
Upward manual
FRR resource
R3
production
units
Interruptible
industrial clients
640 MW mainly on OCGT units under the assumptions that:

o
turbojets (210 MW) will be decommissioned;
loss of FRRm capability due to the decommissioning

of some older GTs will be offset by the
transformation of CCGTs to OCGTs.
350 MW manual upward FRRm capability is assumed to

remain available in the system.
Elia relies also on non-contracted incremental bids in the framework of the CIPU contract16
[8] and on mutual support contracts with neighbouring TSOs. In 2013 Elia launched a pilot
project to gather experience in the participation of aggregated DSO connected load in the
FRRm market. A bid ladder project for FRRm was started to attract more FRRm bids
compared to the current CIPU framework.
From the point of view of system capability, for upward FRRm it is expected that the
current reserve resources which are expected to be still available in 2018, will be
insufficient to cover the reserves in both the low and high reserve needs scenarios. This is
because of the combination of increasing needs for upward FRRm, in the high reserve
needs scenario, and the assumed decommissioning of the turbojets (210 MW upward
FRRm). Depending on the scenario there is a need to develop up to 360 MW of additional
upward FRRm capability.
In the above table it is assumed that the interruptible industrial clients mainly big
industries- will still be operational within the Belgian control area in 2018, which also
depends from external factors (economy,). In addition, from an economic point of view, a
diversification of the resources is required in order to avoid excessive dependency on
OCGT units and therefore on gas and electricity prices for the procurement of upward
FRRm.
16
All power plants exceeding 75 MW are obliged to offer the remaining flexibility margins to Elia.
Page 41 of 56
The table below gives an overview of the different options for the development of 360 MW
of upward FRRm and for the further diversification of upward FRRm resources towards
2018:
Upward manual
FRR resources
Gas turbines
Conversion of CCGT units to OCGT units (in addition to the

already assumed conversions to offset the loss of upward
FRRm capability due to the decommissioning of some older
OCGTs).
Load
Upward FRRm can be delivered relatively easy by demand

facilities (reduction of offtake)
Cross-border
cooperation
Sharing17 of up to
neighbouring TSOs.
New production
capacity &
refurbished
units
New centralized production units must have upward FRRm

capability in order to:
RES units
300
MW
of
upward
FRRm
with
diversify the FRRm market;
ensure continuity in the FRRm capability of the

Belgian production park.
Refurbished units need to have upward FRRm capability

where technically possible.
Not considered to offer upward FRRm flexibility due to

environmental aspects and low marginal production costs
(high de-rating costs).
The upward FRRm has two functions:
The continuous de-saturation of the activated FRRa, requiring upward FRRm by:
o
Flexible spinning resources (biomass, RES, CHPs, CCGTs/OCGTs, pump

storage units,) or very flexible demand in terms of activation frequency;
Very flexible non-spinning units, in terms of activation frequency, such as

pump storage units,
Cover rare but very large imbalances (typically outages of power units), requiring
FRRm by less flexible units in terms of activation frequency such as the
interruption of demand facilities (in case of a limited number of activations per
year),
The required new upward FRRm capability has to be created by:
participation of load and new OCGTs (transformed CCGTs) in the upward FRRm
market;
cross-border procurement of FRRm and sharing agreements with neighbouring

TSOs for FRRm capacity;
participation of other units (biomass, RES, CHPs,) in the FRRm market.
8.2.4.
Downward FRRm
The estimated range for downward FRRm in 2018 is [1138 - 1348 MW], representing a
significant increase of +/- 700 MW compared to 2013. During recent years Elia noticed a
significant increase in the need for downward reserves, driven by the increase of VRE in
the system in combination with a lack of downward system flexibility and/or insufficient
incentives for BRPs to access the available downward flexibility.
Downward FRRm should in principle not be pre-contracted, as the need indicates an excess
of generation in the system. A framework in which downward flexibility is offered by the
available generation units at a price reflecting their marginal (activation) costs for
downward regulation power, or by demand for increasing consumption, is more sustainable
on the long term and is required to set proper incentives for investments in downward
17
Concept introduced in [2] and [6] allowing TSOs to share part of their FRRm.
Page 42 of 56
flexibility. This is in line with the actual framework for offering downward FRRm in
accordance with the CIPU contract.
The imbalance tariffs then reflect these price signals (single marginal pricing), incentivizing
BRPs and market players to invest in sufficient downward flexibility, to balance their
portfolio on a 15-minute basis and to support the balance of the control area.
In case of absence of sufficient downward flexibility offered by market players, additional
incentives in the imbalance tariffs might be needed as an intermediate measure to
incentivize the development and use of- downward flexibility.
Downward manual FRRm flexibility has to be further developed towards 2018. The
following table gives an overview of the different resources to be developed:
Downward
FRRm resources
New production
capacity and
refurbished
units
New centralized production units must have very low stable

minimum power, high ramping capabilities and have the
capability to start and stop quickly and frequently in order to
be able to offer sufficient downward flexibility.
Refurbished units need to have downward FRRm capability

where technically possible.
Existing power
plants
Increased efforts to reduce the minimum stable power of the

units are required.
RES units
Participation of RES in downward FRRm is required to

incorporate the massive increase of RES in the system.
Smart support schemes are required to foster the

participation of RES units (biomass, PV, wind units) in
downward FRRm.
Cross-border
cooperation
Sharing agreements17 of downward FRRm in order to

compensate
the
instantaneous
loss
of
an
HVDC
interconnector in full export have to be envisaged (300 MW
max).
Load
The potential for load is uncertain as this would require an

increase in off-take, which is, at first sight, less
straightforward than the reduction of off-take as to deliver
upward FRRm.
The sustainable integration of increasing shares of VRE in the system is only possible in
case sufficient downward flexibility is available in the system. Currently Elia observes
insufficient (activated) available downward flexibility in the system during some periods.
Therefore it is very important to give adequate price signals to BRPs and market players
reflecting the actual cost of and need for downward flexibility.
Furthermore the same conclusions as for upward FRRm on its different functions, being desaturating the activated FRRa and covering large incidents, hold for downward FRRm.
Page 43 of 56
Page 44 of 56
Conclusions
This study is not addressing the issue of security of supply and generation adequacy. It is
strictly looking at the specific reserves to be secured by Elia in the context of its
responsibility to ensure the availability of appropriate ancillary services, as defined by the
Electricity Law, (art. 8 1) and the Federal Grid Code (art. 231 and 232).
Elia resolves residual system imbalances in the system while BRPs are responsible for
balancing their perimeter on a 15-minute interval up to real-time and are incentivised to
do so. The Belgian market design allows for and incentivizes- real-time reaction of market
parties (with physical position) on the imbalance prices, thereby reducing residual system
imbalances. This market design is of crucial importance to enable the sustainable
integration of high shares of VRE in the system and to foster the required investments in
system flexibility and accurate intraday forecasting of load (smart metering) and VRE
production by all actors.
The system reserve needs depend on the amount of residual system imbalances and are
therefore highly dependent on the BRP behaviour to balance their perimeter on a 15minute basis. This study takes a strong assumption that BRPs and other market parties will
perform significant additional efforts and investments to increase the system flexibility,
thereby enabling them to balance the increasing shares of VRE in their perimeter, in
addition to significant investments in highly accurate intraday forecasts of VRE production
and system off-take. As such residual system imbalances are minimized and no residual
system imbalances due to a structural lack of system flexibility are therefore considered in
this study.
Adequate and efficient incentives for BRPs to be balanced on a 15-minute basis are of
crucial importance to achieve such a situation, which means that quarter-hourly imbalance
prices must be carefully monitored and their calculation further tuned in the future.
Furthermore it is important that all imbalances are exposed to the imbalance mechanism.
In case such required efforts and investment by market parties in terms of forecasting,
flexibility and market participation are not made (for instance due to lack of incentives),
system reserve needs (and according costs) will rise dramatically as residual system
imbalance will increase. This falls beyond the scope of this study and is therefore not
considered.
The study shows that a high amount of intraday flexibility and of system flexibility on a 15minutes timescale is very important to minimize the increase in system reserve needs.
Whereas there is only a slight increase expected for FCR, depending on the scenario the
needs for FRRa, upward and downward FRRm increase significantly towards 2018.
Especially the increase in downward FRRm is very high, in all simulated scenarios, due to
the introduction of a large positive dimensioning incident, being the outage of the planned
1000 MW HVDC interconnector between Belgium and UK (NEMO) in export mode, and due
to increased forecast errors of VRE.
The study assumes a very efficient de-saturation of FRRa by FRRm. This will require very
flexible FRRm that can be activated on an almost continuous basis. In addition there is a
need for FRRm required to cover rare, but very large, residual imbalances caused by
outages, which can be less flexible.
Under the assumption that at least 3 of the existing CCGT units will still be available in the
system in 2018, existing FCR and FRRa resources will probably allow to cover the FCR and
FRRa needs in all scenarios, although margins are decreasing and become very narrow.
Significant investments in both upward and especially downward FRRm are required
towards 2018 to cover the simulated reserve needs.
The currently high concentration of FCR, FRRa (and in lesser extent FRRm) resources on a
single technology (CCGTs, OCGTs) hinders the economically efficient procurement of
reserves. Therefore a further diversification of reserve resources towards participation of
existing and new power plants, RES (wind, biomass, CHPs) and load is of key importance
to facilitate the market and to enable a more efficient procurement of reserves. This
requires not only investments in the technical capability, but also might require changes in
the regulatory framework, such as smart support schemes for RES and CHP units to
participate in the ancillary services market, and changes in the FCR, FRRa and FRRm
market design.
Page 45 of 56
References
[1]
CREG decision (B)120621-CDC-1162 issued on the 21th of June 2012:

www.creg.be
[2]
Draft of NC LFC&R published by ENTSOe on 1/2/2013 for public consultation:

https://www.entsoe.eu/major-projects/network-code-development/load-frequencycontrol-reserves/
[3]
Further information on the Elia balancing mechanism is available on:

http://www.elia.be/en/products-and-services/product-sheets#balance
[4]
Belgian Federal Grid Code:

http://www.ejustice.just.fgov.be/cgi_loi/loi_a.pl?language=nl&caller=list&cn=2002
121942&la=n&fromtab=wet&sql=dt='koninklijk%20besluit'&tri=dd+as+rank&rech
=1&numero=1
[5]
Harnessing Variable Renewables A guide to the balancing challenge by IEA,

2011, 228 pg
[6]
ENTSOe Final Report on Operational Reserves:

https://www.entsoe.eu/major-projects/network-code-development/load-frequencycontrol-reserves/
[7]
ENTSOe Operational Handbook Policy 1 on Load-Frequency Control:

https://www.entsoe.eu/publications/system-operations-reports/operationhandbook/
[8]
CIPU contract:
http://www.elia.be/en/products-and-services/~/media/files/Elia/Products-andservices/ProductSheets/S-Ondersteuning-net/S5_F_CIPU_08_07.pdf
[9]
Based on publically available operational data of BritNed cable:

http://energieinfo.tennet.org/Connection/NominatedCapacityTSO.aspx
[10]
Based on publically available PV operational data of Amprion:

http://www.amprion.de
[11]
Final Framework Guidelines on Electricity Balancing, issued by ACER on the 20 th of

September 2012:
http://www.acer.europa.eu/Electricity/FG_and_network_codes/Pages/Balancing.as
px
Page 46 of 56
Annex 1: Extract from CREG decision

CREG formulated following request in the decision on the proposal of Elia for the reserve
volumes for the year 2013 [1], which was introduced by CREG on the basis of Article 233
of the Federal Grid Code.
40. La dtermination des volumes ncessaires ELIA se heurte de plus en plus un
manque de ressources disponibles sur le territoire belge. Cette constatation se conjugue
avec le souci des producteurs de valoriser leurs units de production, ce qui peut mener
dans certains cas des dcisions de fermeture de certaines dentre elles si leur maintien
en activit nest plus rentable. Au-del de la scurit dapprovisionnement vue sous langle
de ladquation, la Belgique se dirige donc vraisemblablement vers des besoins importants
en nouveaux moyens de rglage et la couverture de ces besoins ne peut se baser sur des
dcisions court terme. Dans une perspective danticipation des problmes lis au dficit
en moyens de rglage, il parat donc ncessaire dtudier lvolution moyen terme des
besoins de rglage. Dans cette mesure, la CREG demande ELIA de raliser avant la fin de
2012 une tude dvaluation des besoins en moyens de rglage un terme de cinq ans (fin
2017-dbut 2018), et de dtermination, pour chaque type de rserve, du volume des
ressources que lon peut ds prsent raisonnablement prvoir comme disponibles ce
terme pour couvrir les besoins de la zone belge. Elle demande galement ELIA de publier
sur son site les rsultats de cette tude avant la fin de lanne 2012.
Elia and CREG informally agreed to postpone this study to Q1 of 2013.
Page 47 of 56
Annex 2: FRR dimensioning methodology

This section gives a high level explanation of the methodology for the dimensioning of the
reserves. The methodology used is in line with the one used for the determination of the
reserves volumes for 2012 and 2013, which was approved by CREG resp. in its decisions
(B)110519-CDC-1056 and (B)120621-CDC-1162.
The dimensioning of the total combined amount of FRRa and FRRm is performed on the
basis of the expected future residual system imbalance. The first step therefore is to
determine the expected amount of residual system imbalances in 2018. This is performed
by combining all the expected residual system imbalance drivers for 2018, which are
described in detail in Annex 3. Different assumptions are taken for the evolution of these
imbalance drivers towards 2018 for each of the simulated scenarios.
The FRR dimensioning methodology is based on the following operational aspects:
the combination of FRRa and FRRm is used to cover the quarter hourly expected
residual system imbalances;
the FRRa is used to cover the fast imbalances, which in this model are simulated
by the delta between consecutive quarter hourly expected imbalances (volatility of
the residual system imbalance); and
the FRRm de-saturates the FRRa to prepare the FRRa for further imbalances and
supports the FRRa in case of large imbalances.
The total required amount of upward (downward) FRR i.e. the combined volume of FRRa
together with FRRm - is defined as the amount required to cover the expected future
quarter hourly negative (positive) residual imbalances during 99,9% of time, thereby
allowing a deficit probability of 0,1% (8,7 hours/year) for both positive and negative
residual imbalances. The figure below shows this for an arbitrary case. As required by
ENTSOe the N-1 incident acts as a strict minimum for the FRR dimensioning.
The required amount of FRRa is determined as the amount of FRRa that is required to
cover X% of the fast imbalances. These fast imbalances are modelled by the delta between
consecutive quarter hourly expected residual imbalances. This delta is also called the
quarter hourly volatility of the residual system imbalance. This is shown in the picture
below:
Page 48 of 56
The value of X%, being the deficit probability, is chosen based on historical observed
deficit probabilities for FRRa to cover the delta between the residual system imbalances of
consecutive quarter hours together with the observed ACE quality.
Based on historical observations, Elia defines the deficit probability in order to have a
satisfactory ACE quality, according to ENTSOe prescriptions. The monotonous diagram of
the volatility of the residual system imbalances allows to determine the required amount of
FRRa.
In a last stage the amount of FRRm is defined as the difference between the total required
amount of FRR and the amount of FRRa, as shown in the picture below.
Due to the uncertainty on the specifications and availability of the future reserve products
no link is made between the availability of the reserves products and the deficit probability
of covering the imbalances. This means that the resulting volumes are expected to be
available during 100% of the time. In the annual calculation of the required reserve
volumes, Elia is able to calculate equivalent reserve volumes with an availability of less
than 100% of time [1].
Page 49 of 56
Annex 3: Imbalance drivers

This annex provides a detailed overview of the different imbalance drives that were used
as input to define the required amount of FRRa and FRRm for 2018 as indicated in Annex
2- along with the different assumptions that were taken in the different simulated
scenarios.
In order to simulate future expected imbalances, TSOs typically use historical imbalances
of the previous year, to which all additional expected imbalances due to future system
evolutions, such as the increase in VRE capacity or the integration of an HVDC
interconnector, are added.
The figure below gives an overview of the different imbalance drivers and shows the way
they are combined to become the estimated residual system imbalance for 2018. All
imbalance drivers except the forced outages - are modelled on the basis of known timeseries for 2012, in which case they are combined by summing the time-series as to
preserve the effects of mutual correlation.
The sum of these imbalance drivers is then transformed to a probability distribution, which
is convoluted with the probability distribution of expected imbalances due to forced
outages of units and the planned BE UK HVDC interconnector (NEMO). A convolution
doesnt account for any correlation between the distributions, which is justified in this case
as the occurrence of forced outages and the occurrence of other imbalance drivers is
uncorrelated.
Historical imbalances
The model uses the observed system imbalances of 2012 as a baseline, to which additional
imbalances due to:
incremental (compared to 2012) installed capacity of wind or PV production;
future HVDC Interconnectors;
forced outages of units;
Page 50 of 56
are added in order to obtain the expected residual system imbalance for 2018.
Periods during which forced outages occurred in 2012 were deleted from the quarter
hourly time-series of the 2012 residual system imbalance, as a separate statistical model
to simulate imbalances caused by outages is incorporated to estimate the required amount
of reserves. This is required as outages only occur rarely, so that the events gathered in
one year do not necessarily represent all possible combinations of outages. The figure
below gives the distribution of the 2012 quarter hourly residual system imbalances
(without forced outages):
The residual system imbalances (absolute) energy slightly decreased in 2012 for the first
time in four years compared to the 2011 case. This is assumed to be the result of better
incentives given by the new imbalance mechanism, as well as due to increased efforts in
monitoring and communication to BRPs. It has to be noted however that in 2012 much
more positive than negative system imbalances occurred. This evolution towards positive
imbalances is observed since a few years and is caused by the increase of RES units in the
system.
Continued efforts of BRPs to improve their forecasting quality of load, VRE and better price
incentives by the new imbalance mechanisms might eventually even reduce the baseline
residual system imbalances. This is taken into account by a correction factor for each
scenario that is simulated.
In the low reserve needs scenario it is expected that, due to better incentives and
increased forecast quality of both load, and the VRE already present in the residual system
imbalance of 2012, the baseline will decrease further in the future. The quarter hourly
time-serie of the residual system imbalances of the baseline is therefore reduced by 5%.
In the high scenario it is expected that, although balancing incentives and forecasting
quality improves, the baseline will remain constant as insufficient system flexibility is
expected to be available to realize the potential of increased forecasting quality.
The following table summarizes the assumptions for the baseline in the different scenarios:
Scenario
Assumed change quarter hourly residual

system imbalances of the baseline
Low
-5%
Medium
-3%
High
0%
HVDC interconnector
The planned 1000 MW HVDC interconnector between Elia Belgium and National Grid UK is
expected to be commissioned in 2017 2018. The integration of such an interconnector in
the system will introduce some additional residual imbalances into the system because of:
Outages: in contrast to the loss of a line or cable within a synchronous system,

which has no direct impact on the system operation due to the N-1 security, the
Page 51 of 56
loss of an HVDC interconnector between synchronous areas introduces a physical

imbalance in the affected areas. The imbalance can be either positive, in case of
the loss of the cable in export conditions, or negative in case of the loss of the
cable in importing conditions. These imbalances are treated in the probabilistic
model for outages, as explained further in this annex.
Ramping: in most cases the interconnected TSOs agree on a maximum ramping

rate for the HVDC cable. A ramping rate constraint of 100 MW/min is a commonly
used value. The ramping is concentrated symmetrically on the change of the
quarter hour. It is expected that the ramping of the HVDC interconnector will
introduce additional imbalances into the system.
The figure below shows the origin of imbalance caused by ramping in case hourly energy
blocks are exchanged over the HVDC cable. This is illustrated by the blue line, which shows
the ramping in case of an hourly schedule change from 500 MW import to 300 MW export.
The simultaneous upward or downward ramping of resources within the control area will
partly offset these ramping effects. In order to simulate this behaviour, 2012 hourly
operational data of an interconnector between UK and RG CE was used [9]. The
imbalances were calculated as the quarter hourly difference between the scheduled energy
block and the realized flow due to ramping. Different assumptions are taken for each of the
different scenarios for the size imbalances that actually would occur.
Scenario
Size of residual imbalances due to HVDC ramping

[as % of theoretical ramping imbalances]
Low
10%
Medium
30%
High
50%
The market design for the HVDC interconnector plays an important role on the system
operation. Situations in which a BRP compensates the ramping on an quarter-hourly
energy basis might lead to an overshoot (or undershoot) just before or after the ramping
period itself (shown by the red line in the figure above).
Outages of units and HVDC interconnector

The residual imbalances due to outages of large units and HVDC interconnectors are
simulated separately because of:
their low probability of occurrence: the baseline of 2012 doesnt take all possible
combinations of outages into account; and
imbalances due to new planned units or HVDC interconnectors (towards 2018)

must be added, while those of power plants that will be decommissioned have to
be removed.
The dimensioning of reserves is based on residual system imbalances. The imbalance

mechanism based on single marginal pricing (since 1/1/2012) incentivises BRPs to restore
the balance of their perimeter as soon as possible. This has an impact on the expected
residual imbalances due to outages of power plants as shown below.
Page 52 of 56
Unit outages
The model for the unit outages is a Monte-Carlo time-series simulation. The following
probabilities for the outages of the 2018 production park are taken into account:
Power plant type
Estimated outages/year
Nuclear units
1,5
Other power plants
For the low and medium reserve needs scenario, due to the expected increase in intraday
market liquidity towards 2018, it is assumed that the full imbalance due to the outage will
persist for 3 hours in the system, after which the BRP restores 15% of the outage per
hour. After 8 hours it is assumed that the full imbalance is dealt with by the BRP, as shown
in the figure below.
Due to the limited assumed intraday flexibility however in the high reserve needs scenario,
it is assumed that in this scenario the full imbalance due to an outage of a unit persists up
to 8 hours in the system.
HVDC interconnector
For the future HVDC interconnector between Belgium and UK, the assumption is made
that, in case of an outage, the full imbalance persists for 8 hours in the system. Afterwards
the imbalances is covered by intraday market deals or by a third BRP party, depending on
the market arrangements to be made18.
The model assumes 2,15 outages of NEMO per year, half of which occur in a situation of
full import (loss of 1000 MW) and half of them which occur in case of full export (excess of
1000 MW).
2018 estimated residual imbalances due to FOs

The figure below shows the estimated residual imbalances due to forced outages of power
plants and NEMO for the low and medium reserve needs scenario. Due to the limited
amount of ID flexibility available, the imbalances due to FOs are assumed to be larger in
the high reserve needs scenario.
18
These assumptions have a high uncertainty, as the future market arrangements for the NEMO
interconnector are still unclear.
Page 53 of 56
FO NEMO (import)
FO power plant
FO NEMO (export)
PV and wind residual forecast errors

The 2018 estimated imbalances due to incremental installed capacity of PV and wind,
compared to the 2012 baseline, are modelled by extrapolating the 2012 forecast error
which is calculated on the basis of existing 2012 quarter hourly forecasts and measured infeed of wind and PV.
Furthermore it is assumed that the forecasting quality will improve in the future, and that,
depending on the scenario, BRPs are able to adjust their position accordingly on the
intraday market or by accessing the flexibility within their perimeter.
PV forecast errors
In 2012 Elia started publishing a DA aggregated forecast for the installed PV production
output in the Belgian control area. Since the end of March 2013, Elia started also to publish
the real-time up-scaled measurement for the actual PV production output as well as an ID
solar forecast.
For the purpose of this study, the estimated residual forecast error for the PV production is
modelled on operational data of a nearby control area [10], for which a high correlation
exists for the solar forecast error with the Belgian control area. This reference forecast is
an intraday forecast at 8 AM.
Following assumptions on the improvement of solar forecasts and the ability of BRPs to
adjust their position accordingly in the intraday timeframe were made for the different
scenarios.
Scenario
Improvement of
forecast quality
Ability to adjust
position
accordingly in ID
Total estimated
reduction of
forecast error
Low
25%
70%
-18%
Medium
25%
40%
-10%
High
25%
10%
-3%
Wind forecast errors

The onshore wind forecasts error is modelled on the basis of the Elia day-ahead onshore
wind forecast for 2012. Following assumptions were taken for the different scenarios:
Page 54 of 56
Scenario
Improvement of (ID)
forecast quality
Ability to adjust
position
accordingly in ID
Total estimated
reduction of
forecast error
Low
40%
70%
-28%
Medium
40%
40%
-16%
High
40%
10%
-4%
The offshore wind forecast error is modelled by combining the day-ahead forecast errors of
Elia and the existing offshore wind parks. Following assumptions were taken for the
different scenarios.
Scenario
Improvement of (ID)
forecast quality
Ability to adjust
position
accordingly in ID
Total estimated
reduction of
forecast error
Low
40%
70%
-28%
Medium
40%
40%
-16%
High
40%
10%
-4%
By doing so it is assumed that the imbalances caused by the cutting-off of offshore wind
parks due to storms are reduced accordingly. This is justified by the fact that such events
are predictable, in which case preventive measures can be taken. Elia will investigate this
further in 2013.
PV and wind ramping imbalances

The impact of the ramping of VRE within the hour is modelled by taking the difference
between the hourly average output and the quarter hourly output. This is shown in the
figure below:
Whether this effect will create residual quarter hourly imbalances in the system depends of
the actual amount of available system flexibility within the hourly timeframe. Currently
day-ahead an intraday markets exchange hourly energy blocks, meaning that the flexibility
within the hour has to be provided by flexible units or demand side management within the
system. Part of these imbalances are also offset by the simultaneous upward/downward
ramping of other units and/or load.
Page 55 of 56
Due to the massive integration of RES it is expected that the current flexible power plants,
able to provide flexibility within the hour timeframe, will be pushed out of the market more
often. Given the hourly resolution of the DA and ID market, flexibility will have to be
provided by the RES units themselves, by demand side management and by the remaining
flexible power plants in the grid.
The following assumptions were taken for the amount of imbalances due to ramping of
wind and PV within the hour for all the different scenarios:
Scenario
Size of residual imbalances due to PV and wind

ramping within the hour [as % of theoretical
ramping imbalances]
Low
10%
Medium
40%
High
70%
In case a liquid 15-minutes intraday market will be available in 2018, it is expected that
this effect will not introduce significant quarter hourly imbalances in the system.
Page 56 of 56

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Evolution of ancillary services needs to

balance the Belgian control area towards 2018

Ancillary services study - horizon 2018

Evolution of system reserve needs...................................................... 7

3 Introduction and objectives ......................................................15

European network codes ..................................................................15

Responsibilities of TSO and BRP ........................................................19

5 Estimated FCR needs in 2018 ....................................................23

7 Replacement Reserves ..............................................................35

Historical imbalances ................................................................................50

Ancillary services study - horizon 2018

PV and wind residual forecast errors ...........................................................54

Ancillary services study - horizon 2018

Area Control Error

Agency for the Cooperation of Energy Regulators

Balancing Responsible Party

Combined Cycle Gas Turbine

Combined Heat and Power Generation

Contract for the Injection of Power Units

Commission for the Regulation of Electricity and Gas

Demand Side Management

Distribution System Operator

European Network of Transmission System Operators for electricity

Frequency Containment Reserves, currently called primary reserves (R1)

Frequency Restoration Reserves

Downward Frequency Restoration Reserves

Upward Frequency Restoration Reserves

Automatic Frequency Restoration Reserves, currently called secondary

Manual Frequency Restoration Reserves, currently called tertiary reserves

Gate Closure Time

High Voltage Direct Current

Largest single instantaneous incident in a control block resulting in a system

Network Code Load Frequency Control and Reserves

Net Regulation Volume

Open Cycle Gas Turbine

PhotoVoltaic production unit

Renewable Energy Sources

Ancillary services study - horizon 2018

Regional Group Continental Europe

Transmission System Operator

Variable Renewable Energy resources

Ancillary services study - horizon 2018

estimate the system reserves needs in 2017/2018;

verify whether sufficient reserve resources are expected to be available in the

2.1. Evolution of system reserve needs

Frequency containment reserves (FCR)

the European TSOs identified that, due to a deterioration of system frequency

As a result an FCR range of 95 to 110 MW is projected for 2018.

Frequency restoration reserves (FRRa and FRRm)

Currently called secondary reserves

Ancillary services study - horizon 2018

the integration of the 1000 MW HVDC interconnector between UK and Belgium in

Developments in forecasting, metering, profiling

Balancing in day-ahead timeframe

Balancing in intraday timeframe: the amount of available flexibility in a very

Intra-hourly balancing: the amount of available flexibility on a 15-minute

Ancillary services study - horizon 2018

Assumptions for simulation

Developments in forecasting, metering, profiling

Investments of BRPs in accurate intra-day forecasts of VRE

the amount of 15-minute flexibility within the BRP

the presence of a liquid 15-minutes ID market.