MSD Volumes

After a first look at prices distribution, now the focus is on trade volumes on MSD (ex-ante only, without MB). Analyzing trade volumes allows to identify possible trends throughout the years, finding whether or not using energy storage systems could improve the current situation and lower system’s costs. Given the scarce relevance of SUD, SICI, CNOR and SARD for the case study of Chapter 4, only NORD and CSUD are extensively discussed here. The analysis of volumes on MSD is conducted by comparing 2019 and 2018 traded quantity, from Excel files with hourly detail described in 3.2. The focus is on 2019, while 2018 is used as a comparison. Two MATLAB scripts, one per year, are created for this purpose. 2018 script starts and loads Excel files for the chosen zone. At first data are filtered by the script according to the purpose of the search, either for BID or OFF. Since the target is finding volumes of accepted offers, the script further filters Excel data and considers only ACC offers and the AWARDED_QUANTITY_NO column, since no analysis is conducted over the adjustment process that an offer goes through. At this point, the program separates different products with accepted offers on MSD, AS and GR³⁸, and calculates:

i. monthly accepted quantities for every product;

ii. total monthly accepted quantity on MSD.

Results are saved in a MATLAB array and converted in an Excel file for easier reading. The same process is operated for 2019 and results are eventually plotted in a single chart, for comparison. Total yearly quantities of every product and the cumulated volume are reported for each year. The algorithm automatically iterates for every zone and for both upward and downward services. NORD is the market zone with the highest volumes and even if the price differentials are lower than in other zones, the industrial network, the presence of metropolitan cities and the population density make NORD an interesting benchmark for business cases.

CSUD’s volumes are lower than NORD ones, but the high RES presence, still on an increasing trend, and the critical grid’s structure, offer now a big chance for thinking about innovative solutions and digitalization enhancement. For trade volumes values, specific tables are presented, figures instead aim to characterize the volume trend. For this reason scales vary a lot among different products.

38 GR1, GR2, GR3 are considered as a single product since they are distinguished only due to the operators’ possibility of dividing available capacity. In addition, data do not provide more accurate information circa the actual service GR offers are used for, making it useless considering them as three different products.

NORD

Downward overall MSD volume grew in 2019 to 5143 GWh while it was 4884 GWh in 2018. In detail, in 2019, AS passed from 347 to 417 GWh and GR went from 4537 to 4726 GWh. The difference is relatively more relevant for AS with an increase of 20%

compared to the 4% of GR. At a first glance, total trends seem to be very different between 2019 and 2018. The reality is that 2018 shows a seasonal behavior well defined, with spring and summer months requiring more downward power, due to the seasonal RES predominance. The same is for 2019 but with an unexpected high spike in June and a low one in July. With product differentiation it is possible getting to the same considerations.

For upward product there was a demand inflexion going from 4124 GWh in 2018 to 3755 GWh in 2019. AS went from 2730 to 2314 with a 15% decrease while GR slightly

grew by 1% from1394 to 1414 GWh. From monthly analysis some analogies are found with downward products. 2018 trend reflects predictable demand behavior, with more power required during fall due to the reduced renewable energy supply. In this aspect the two datasets are similar, except for the aforementioned June spike that is present also here.

Different products follow the general trend. The presence of a general trend and possible singularities is an opportunity for storage systems. Indeed, an ESS could help facing these events without the need for high prices and overall cost increase for the TSO. Moreover, a relevant power is required for AS upward services. This means that traditional plants offer to move from their resulting position on energy market, under the technical minimum, to the technical minimum. It is true that this is an opportunity for flexible thermal plants to stay on the market but the stress on machineries forced to work at partial load and low efficiency is high. Assessing the economic feasibility of storage systems would drive future investments in the direction of limiting the operating range of flexible thermal plants to the maximum efficiency load. These plants could charge the storage system during partial load periods and use the energy to provide ancillary services and therefore to avoid frequent starts and stops.

Actually, this could represent a possibility also for efficient coal plants at least for the transition period. The column ‘similar trend?’ reports the result of the qualitative comparison between 2018 and 2019 trends that can be done by referring to the charts presented in the next page.

Table 3.1 NORD MSD volumes resuming table.

Downward Volumes [GWh] Upward Volumes [GWh]

2018 2019 Variation

MARKET DATA ANALYSIS CHAPTER 3

Figure 3.7 2018 and 2019 NORD MSD downward monthly volumes of GRs and AS.

Figure 3.8 2018 and 2019 NORD MSD upward monthly volumes of GRs and AS.

Figure 3.9 2018 and 2019 NORD MSD total downward (left) and upward (right) monthly volumes.

CSUD

Starting from downward volumes, CSUD meets a sensible increase in 2019, from 212.9 to 350.9 GWh. The relative growth is even more significant, with a 94% increase from 11.6 to 22.5 GWh for AS and a 63% increase from 201.3 to 328.4 GWh for GR. The general trend is a higher demand during summer because of the RES action, but in 2019 a general demand uplift during off peak periods happened. The idea is that the raising competitiveness of RES technologies is leading to a year-long use.

Upwards services demand grew from 1190 to 2286 GWh. AS demand more than doubled;

with a 103% increase it passed from 1087 to 2209 GWh. On GR there was a limited inflexion in absolute terms, from 103 to 77 GWh. Except for GR trend, which is held on limited volumes and therefore highly volatile, other trends are perfectly aligned. Fall and winter peaks are followed by a smooth decrease in the central months, with RES full exploitation.

CSUD is the clear example of how increasing RES production can create new problems to the grid. If on the one hand the continuative production is necessary to achieve CEP targets, on the other hand it is necessary being able to handle any arising issue. From CSUD’s volumes analysis, the increase of ancillary services demand is relevant throughout the year.

The need for upward services, for instance, increases hand in hand with the penetration of renewable power. Possibilities for storage systems here can be found by following the same logic stated for NORD. The main difference here is the wider presence of renewable sources hence more interesting price differentials. If paired with cost effective ESS, renewable generation could grow even faster than it is doing now, accompanied by traditional plants equipped with ESS to limit load shifts during the transition.

Table 3.2 CSUD MSD volumes resuming table.

Downward Volumes [GWh] Upward Volumes [GWh]

2018 2019 Variation

[%] Similar

trend? 2018 2019 Variation

[%] Similar trend?

GR 201.3 328.4 +63 Y 103 77 -21 Y

AS 11.6 22.5 +94 Y 1087 2209 +103 Y

MARKET DATA ANALYSIS CHAPTER 3

Figure 3.10 2018 and 2019 CSUD MSD downward monthly volumes of GRs and AS.

Figure 3.11 2018 and 2019 CSUD MSD upward monthly volumes of GRs and AS.

Figure 3.12 2018 and 2019 CSUD MSD total downward (left) and upward (right) monthly volumes.