Remaining vigilant

Europe’s TSOs will remain vigilant over the months to come in order to keep the lights on and the power system secure amid unprecedented falls in demand as well as growing output from renewables. 

Listen to a discussion on digitalisation, accelerating the permitting process and the complicated but necessary task of incorporating decentralised, distributed energy. 

Host: 

• Richard Sverrisson, Editor-in-Chief Europe, Montel, 

Guest: 

• Pascale  Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia. 

Transcript

Anna Siwecka, freelance journalist/podcaster: 0:01

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Richard Sverrisson, Editor-in-Chief Europe, Montel: 0:29

Hello, listeners and welcome to the Montel Weekly podcast, bring You Energy Matters in an informal setting or very much in a virtual setting at the moment. Today's pod is all about wires, the high voltage transmission grid, and the issues facing the operators of such cables in today's energy system in Europe. My name is Richard Sverrisson, and joining me is PascaleFonck, Entso-E Vice Chair of the Board and Chief Officer, external Relations at earlier. A warm welcome to you, Pascale.

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 1:00

Good morning everybody. I am happy to join you for this podcast.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 1:04

We're very happy to have you on board. Pascale, I want to start off by asking how's it going for you in Belgium there with the COVID-19 situation? And maybe for you personally, Pascal, how are you coping?

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 1:15

I am doing fine. Thank you. And I hope that all of you are also doing fine. And what about the activity in Belgium, the activity of the TSO? I think it has been going on. Of course, we have taken measures in order to accommodate, let's say, the guidance given by our government taking care of business continuity of the TSO. And this is also what other TSOs are doing in Europe right now.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 1:43

Absolutely. If we could go into the specifics here, we've seen some quite dramatic falls in, in electricity demand across Europe. Really, the biggest falls were in southern Europe, but certainly Northern Europe experienced them as well. What was the reaction of the TSOs? It's astounding really, that the lights stayed on, really? Or is it surprising?

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 2:02

At European level tTOs have been very committed. To ensure system security and so the main focus was really to ensure business continuity in order to make sure that the system remains secure in these difficult circumstances. What we have seen is really a strong dedication of all TSOs in order to keep this running and to keep the system secure. And indeed, as you have said, we have observed quite a significant decrease in electricity consumption. But everything went well thanks to the role of the TSOs and other market participants as well. We see that now demand is increasing in a progressive way when lockdown measures are being lifted, and we see that. Also generation availability is for the moment stable. So what we can observe is that today in all countries, the electricity market is functioning normally, but of course the situation is new. And so there is still some uncertainty on how it'll evolve. And so we remain, let's say, vigilant to what is happening in the power system right now.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 3:24

Absolutely. Could you tell us a little bit more about the strains on the system? What did the TSOs have to do? Was it people working around the clock to ensure the balance of supply and demand here? Give us some insight into the workings of the TSOs to keep the lights on in such a very strain situation or very new situation.

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 3:43

Yeah, of course. One important task is to keep the balance of the system, and this must happen. 24 hours per day, seven days a week. And so we must have the teams available in the control centers in order to manage the balance of the system, but also to manage the flows in the electricity grids. So one point of attention was. To keep the teams able to work in these difficult circumstances. And so TSOs took special measures in order to make sure that the pandemic would not have a big impact on this activity, but also other works, maintenance works of the electricity grid and also new investments had to be realized. And so TSOs have prepared plans in order not to delay. Too much what is happening on this activity? Not to put at risk further developments in the electricity market,

Richard Sverrisson, Editor-in-Chief Europe, Montel: 4:44

but there has been some delay then to some key new infrastructure or,

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 4:48

What we see today is that, let's say the operational activities have been done quite in a normal way for what concerns new grid development projects. This is about the future. We expect some delay into 2021 and future years, but this has been minimized by the TSOs. Taking into account the measures taken in different countries to fight against the pandemic. What concerns Enso E. What we have done at the level of Enso E is share, experience, and align. TSOs in order to also to minimize the impact on the eu power system. And so that was the specific task of Enso e to gather experience from different TSOs so that we could let's say exchange best. Practices and so on. And also build a overview of what was going on in Europe. And for sure, this experience will be taken up by ministries, TSOs and agencies when we will develop regional scenarios for risk preparedness situations in the future.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 6:02

Absolutely. But was this. Done more on a regional level, or was it more pan-European? This preparedness in these centers of coordination?

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 6:09

Both. It has been done at the level of regions, but also at the level of NOE for what concerns the pan EU dimension.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 6:17

Could you tell us a little bit more about what happens in the post COVID-19 when we're outta this situation? Once. We get back to some level of normality anyway. It's hard to see it now, but I'm sure there is a light at the end of the tunnel. What are TSOs doing? You mentioned some of the regional centers and the coordination centers that will work, that we'll see TSOs working together. Could you tell us anything more about the post COVID Ovid 19 situation?

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 6:41

TSOs were. Already working on the implementation of EU Energy policies and preparing themselves to the implementation of the Green Deal, and we believe that this is more than ever important to work on this subject. So we are really ready to support the EU Green Recovery along with the ID taken in the Green deal. Posed by the commission. What we'll do concretely is, for instance, we'll release a new strategy on research development and innovation, and we'll bring some innovation. Topics that TSOs would like to further elaborate on. This includes the smart sector integration, but also the developments of solutions to deal with more volatility in the EU system, the long distance transport of electricity, and also the integration of large offshore wind generation. So these are. Topics where we wanna work on in order to facilitate the recovery after the crisis.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 7:58

And I think, it, it's clear that the coming years we'll see an increased expansion of renewables and with it, as you mentioned, brings much more volatility. What's the role of digitalization here and how far have the tso's taken that on board?

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 8:11

So we believe that digitalization will indeed have a very important source. On one hand we have the physical layer, the, let's say the transmission grid, which we are building and maintaining, but also we need to operate this system, and for this digitalization is really important. To complement what we need to do, we need. Let's say link the different part of the systems. And so we want to develop a system of interconnected systems that will integrate different sectors, but also different geographies and functional roles. So as example of digital projects that we have on our table. We invest in some digitalization projects such as the common grid model, which is one grid model, which will be used by all TSOs in Europe in order to link the market operations, and it'll be the basis in order to develop. Other digital tools in order to coordinate system operations. So this is one example of very concrete digital tool that will be used by TSOs, but we also see the development of market platforms, for example, for intraday markets or for balancing markets. And also we are developing over time what we call the transparency platform, which is a digital tool in order to provide. A lot of information on the power system to several market participants so that market participants have all the same view on what is happening on the power system.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 10:00

Can you tell us a little bit more about that product? Would that be often on the end? So e side, and is it then real time, what's happening in the system across Europe or

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 10:07

the transparency platform is already available? It can be used. And it collects information on all timeframes from the long term timeframes until close, let's say to real time for what concerns the common grid model is. The idea is of course, that all TSOs have the same basis of information in order to conduct the analysis and to.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 10:35

The transparency platform is very impressive. The amount of data there is quite phenomenal. But I'd like to move the topic of discussion a bit to a bit broader maybe. Now Pascal European agencies and policy makers have set a 70% target for cross border trading of electricity in Europe. What's the answer e view of this? Is this an arbitrary figure or is it realistic? Is it set too high, too low? What are your views here?

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 11:00

This provision has been foreseen in the Clean energy package. So I think we have to make the best usage of it. Huh? And so TSOs are aware that there are requests from market participants in order to get commercial transmission capacity. That would be as high as possible. Of course, our concern is to be able to do that. Ensuring system security, and this is where the issue is becoming quite complex, but TSOs are working on the implementation of this provision right at this point in time. So we are preparing the tools and the data in order to be able to comply with this new regulation. You know that at some places, some ations and action plans have been established. And so this has been part of the work of the TSOs, indeed, at the start of the implementation of the package. So TSOs are working on this. On their side, regulators and Aser are working on, let's say, the monitoring of these measures and make sure that compliance is enforced on these provisions. So I would say that the work is really on track with intensive action of the TSOs in order to make it work and to find the right balance between what the request to get. High capacities and at the same time, the maintenance of system security, which is important of course for the functioning of the eu. Our system,

Richard Sverrisson, Editor-in-Chief Europe, Montel: 12:41

again, I think it's quite very impressive that despite this extraordinary situation that we found ourselves in three months, that, the lights stayed on across Europe, and I think that's a testament to the work done by you guys. But is that 70% target. Challenging for TSOs.

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 12:56

Of course, it is challenging because we need to reconcile both objectives. It's a challenging target. That is why some ations and action plans have been activated in order to make it realist. To be achieve in a given timeline. And this is still a really a big part of the ongoing work in order to make it happen.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 13:20

And another issue here is bidding zones. As a bidding zone review. There's talk of, making larger, smaller, what's your view here? What's. I think there's a lot of talk of whether you should pull liquidity in markets or whether, you should ease congestion and ease bottlenecks. What's the view from Enzo him?

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 13:37

Enzo E is mainly focused on the technical dimension of this issue, eh? So this is to say we need. To have a clear view on where the congestions are in the grid and see if any different configuration of bidding zones might help to solve the issue and to go to a better functioning of the market. But the specific role that Enso E has in this respect is the establishment of a methodology in order to conduct what is called a bidding zone review. And our experience shows that it's quite difficult to establish a methodology that would work exactly in the same way in all regions of Europe. And so we believe that there is, let's say, added value in having a methodology established at EU level. But at the same time, we should try to keep flexibility. In order to take into account regional specificities and local specificities, and we are really convinced of that point. And so we have proposed a methodology and it's not always easy to find the right balance between this point of view. That we defend. And on the other side the expectations of a, regarding the details to be in the methodology. So we trying find the right balance between these two different expectations. We believe that the methodology that we have proposed is the right balance between the two. It's now being considered by national regulators, and so on the basis of this methodology, TSOs will have to conduct a bidding zone, let's say, review or study at regional level. What we intend to do at European level is to continue our cooperation on this subject. In order to create a common final report and ensure that there is consistency between different studies done at regional level. So this is where we are in the work on Biddings own review.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 15:59

Could you give us an insight as into how these meetings are conducted? Pascal, I'm interested, is there often very heated debate between, the regulators, the national regulators, the trading body and the TSOs? Or is everyone friends and is it that conducted in a friendly, constructive manner?

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 16:15

Everybody has, let's say, quite strong points of view, I would say on this subject, and we cannot ignore that. The question of the bidding his own configurations. Has some dimension, which is a political one, and this is where TSOs are saying we are not here in order to tackle these political issues. We wanna focus on the technical dimension of the issue, but of course, we know that there are concerns on the way these biding zones might be shaped in the future.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 16:50

You mentioned the green deal, Pascal, is there anything here. In the details that you very much welcome, but also on the other side you're a little bit concerned about.

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 16:59

I think that in general, and so E and TSOs welcome the IDs under the Green deal. We think that TSOs have an important role in making this happening. And so we are really committed to develop our infrastructures, but also develop the tools in order to make the market work and to go in this direction. And we are willing to really take our role and to make everything that we can do in order to make this happen. But of course we know that the objectives written in the Green Deal are quite ambitious. And so one important point will be to have the support of all involved stakeholders in order to make it happen, including political authorities at national level. And when we have a look at what is expected from the TSOs, of course the development of the infrastructure is a very important point in order to make it happen. What we see today is that there are some, let's say. Difficult points to be tackled for the development of these infrastructure, one of them being the public acceptance of these infrastructure. And this is where we think that it'll be a big challenge to overcome this. And so we need really the support of all authorities and all stakeholders in order to make it happen in new time. Construction of these infrastructure is not really the concern, but getting the permits, getting these infrastructure accepted at the level of the public is really a challenge.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 18:51

Just a final question, Pascal. The years to come. Most of a lot of the renewable, probably the majority will be decentralized. Distributed energy will be renewable. What challenges does that pose for the TSOs and in terms of TSO and DSO cooperation?

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 19:09

I think that the main challenge that we can cite is the need for visibility on what is happening at. All levels in the power system. So for example, so there is of course more and more decentralization in the power system. So decentralized generation is becoming more and more important. It's important, especially when we think about the task of TSO, to keep the balance. Generation and consumption. It is important to get visibility on that. But of course, DSOs do not have today a direct link with, let's say, consumers connected to lower voltage levels. And this is where the cooperation between TSOs and DSOs is really important in order to make it happen and to get this visibility on what is happening. Important to keep in mind that the task of keeping the balance between production and consumption in one control area is not split at local level. It needs to have a complete view on what is happening in this control area.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 20:26

Pascal, thank you very much for joining the Monte Weekly podcast this week.

Pascale Fonck, Vice Chair of the Board, Entso-E and Chief Officer External Relations, Elia: 20:30

Thank you.

Richard Sverrisson, Editor-in-Chief Europe, Montel: 20:34

Listeners, please remember to keep up to date with all our stories on Monte News. Follow us on Twitter, LinkedIn, subscribe on Apple Podcasts, and Spotify, or wherever you get your podcast from. Thank you and goodbye.