Easier management of cross-control area portfolios

Trade more economically with iTrade until shortly before delivery
Tuesday, 27. April 2021 27.04.2021 von Dr. Jochen Tackenberg 0 Comment

In order to be even better positioned for the Single Delivery Area Trading Phase, SDAT phase for short, there is a new SOPTIM iTrade module: This makes the management of cross-control area portfolios during the SDAT phase even easier and more economical - after all, it enables portfolio books consisting of different control areas. How does the SDAT phase work and how can SOPTIM iTrade support it? Here are the answers.
In SOPTIM iTrade there are book and portfolio structures to enable price-independent netting of opposing positions on different books of a portfolio. These positions can and could be traded with SOPTIM iTrade up to five minutes before delivery. For the optimal management of a Germany-wide renewable portfolio, a netted position should be traded for as long as possible. The positions should only be managed with control area focus when all options for control area balancing have been exhausted.

Background

On EPEX SPOT, the four German control areas can be traded across control areas up to 30 minutes before delivery. This means that an order entered in the Amprion control area is also displayed in the order books of TenneT, TransnetBW and 50 Hertz - up to 60 minutes before delivery via Single Intraday Coupling (SIDC, formerly XBID) even Europe-wide. Thirty minutes before delivery, SDAT begins at EPEX. Here, the order books of the four German TSOs are decoupled and trading is only possible within one control area. This separation has a strong impact on liquidity, because only a fraction of the original orders are displayed. The orders are also not distributed evenly across the different control areas; for example, significantly fewer market players are active in TransnetBW than in Amprion or TenneT, in line with the distribution of generation capacities.

The different trading phases and the linking of these to the lead time result in different points in time for the five relevant contracts of an hour (the hourly contract and four quarter-hourly contracts) at which the trading activity changes. This results in a multitude of different constellations. (See the chart below the text: Trading phases of the contracts of delivery hour 13-14 on EPEX).

Most players on the intraday market with renewable portfolios (e.g. direct marketers and larger municipal utilities) have their generation plants in several German control areas. On the one hand, the balancing group contract requires that balancing group management is carried out on a control area-specific basis and that the forecasts must therefore also be prepared and processed on a control area-specific basis. On the other hand, an attempt is made to avoid opposing trades (cross trades) within a market area through netting and thus to save costs. In order to reduce the trading volume and lower the costs of procurement, it is particularly important in marketing that opposing positions within a market area are balanced with each other and that opposing trades (counter trades) are avoided.

In order to meet both requirements, the netted quantities can be shifted to the appropriate control areas via the schedule management. However, control area transitions can only be registered with the TSO up to 15 minutes before delivery or must be confirmed by the TSO up to 15 minutes before delivery. Therefore, in practice, the control area transition via the schedule management is only practised up to approx. 20 minutes before delivery. After that, the risks increase that the schedules are no longer confirmed in time.

It follows from this: After the last cross-control area schedule, the further forecast updates of renewables can no longer be traded in total, but must be traded in their respective control area - if the liquidity of the market still allows it.

Solution

With version 2021.2, SOPTIM iTrade additionally provides a special SDAT module for the management of cross-control area portfolios. This is tailored to the special conditions of the SDAT market and allows the creation of portfolios with books in different control areas. In this way, positions can be geneticised for as long as possible and traded via the AutoTrader, but the last forecasts can still be smoothed out in a rule-zone-specific manner. This makes management until shortly before delivery even easier and more economical.

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