Markets are tools for optimising the power system


RTE works around the clock, seven days a week, directing electricity flows over its lines to ensure that generation and consumption are always balanced at the least possible cost to society. This balance is achieved through a series of decisions aimed at optimising the power system, from the long term down to real time. These decisions are taken by private actors, whose actions are coordinated thanks to the market mechanisms through which their activities are rewarded.

Increasing the flexibility of the power system is also clearly identified as key to a successful energy transition, notably given the intermittent nature of renewable energy sources. RTE’s market rules are well-suited to the participation of new, flexible capacities, as they allow all operators to be rewarded for their capacity and energy via markets (demand response, storage, renewable energy sources, etc.).

 

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Activities of the balance responsible parties


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The balance responsible party system allows consumers, producers, suppliers and traders to conduct all types of commercial transactions in electricity markets, on timeframes ranging from several years ahead to almost real time. Thanks to the flexibility this system provides, market participants can respond to a wide variety of contingencies and uncertainties. Each balance responsible party creates an activity portfolio and agrees to settle the costs resulting from imbalances between generation and consumption within that portfolio, as recorded after the fact. The parties have a financial incentive to maintain a balance within their portfolios and thus contribute to the balance of the French power system.

As of 31 December 2018, there were 176 balance responsible parties with valid contracts. Of these, 147 were active during the year and 43 made significant injections or withdrawals.

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Transactions between balance responsible parties increased relative to 2017, notably on the EPEX Spot France exchange, where trading volumes were up by nearly 8%.

Intraday transactions rose further, ending the year about 9% higher. These mechanisms give balance responsible parties flexibility to operate as close as possible to real time. Their need for flexibility is notably increasing in line with growth in the share of renewable energies in the mix, as generation from these sources is more difficult to forecast.

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Record ARENH purchase volumes


In 2018, ARENH purchases totalled 87.1 TWh (excluding losses), an all-time record (the ceiling is set at 100 TWh). The fixed ARENH price of €42/MWh (including capacity certificates) was competitive throughout the year relative to market prices, which were already high in the latter months of 2017 and rose further in 2018. A total of 85.4 TWh were requested during the first gate of December 2017, and then another 1.8 TWh during the second gate in June.

 

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