UCTE Working Group Operational Statistics in co-operation with

NORDEL, UKTSOA, ATSOI

POWER BALANCE
IN THE INTERCONNECTED EUROPEAN POWER MARKETS
FORECAST 2001-2003

March 2001
 1. INTRODUCTION

For decades, power balance forecasts and retrospectives have been an important tool for
utilities to help ensure a reliable supply of electricity. These statistics compare the installed
generating capacity with the observed or forecast load, taking into account unusable capacities,
outages, overhauls and necessary reserves. The result of the analysis is a positive or negative
balance, indicating whether a certain utility or region has capacity it could export without
endangering its own reliability, or whether it needs to import power in order to ensure reliable
supplies. Because of technical and market differences, such analyses are done in the most
detail separately for each utility. Already in the past, the large, synchronously operated regions
within Europe, in particular the UCTE1 and NORDEL2, assembled combined power balances for
their respective regions, based on methodologies developed over the decades in difficult
discussions between their member companies. But with the European Union Electricity Directive
of 1996 now implemented in all Member States, the structural market differences have
decreased, electricity trading has increased further from its already high levels, and the
unbundling of transmission of generation and supply has made it necessary to adjust the power
balance methodologies.

In this context, it is desirable and perhaps for the first time possible for the Transmission System
Operators (TSOs) to assemble a power balance for the entire interconnected European market,
including not only UCTE and NORDEL, but also Great Britain (GB) – covered by the UK TSO
Assocation (UKTSOA) - and Ireland (IRL) – covered by the Association of TSOs in Ireland
(ATSOI). Therefore UCTE has discussed its updated power balance methodology3, based only
on data available to the TSO and without reliance on power plant operator data, with the other
European TSO organisations. The result of these discussions was:
• Although in GB and NORDEL power balances are assembled with significantly more detail
than in UCTE, the TSOs in those regions have access to the data required for the new
UCTE methodology as well (as part of their more extensive data sets). The increasing
harmonisation of market structures following the EU Directive´s unbundling rules appears to
make harmonised power balance methodologies easier.
• A less detailed power balance forecast established in Ireland provides the most important
data for the tables of the UCTE methodology.

Thus it was jointly decided to attempt a common forecast for the years 2001 through 2003 based
on the UCTE methodology. However, since NORDEL and Ireland only do multi-year forecasts
for the annual peak, this common forecasts omits the UCTE July data and concentrates on
January data.

1
The UCTE comprises as members or associate members TSOs from the following countries:
B Belgium GR Greece H Hungary P Portugal
CZ Czech Republic HR Croatia L Luxemburg CH Switzerland
D Germany I Italy NL Netherlands SK Slovak Republic
E Spain JIEL Yugoslavia + A Austria SI Slovenia
F France FYR of Macedonia PL Poland
2
NORDEL comprises TSOs from the following countries:
DK – Denmark, ICE – Iceland, N – Norway, SF – Finland, S - Sweden
3
Methodology of the Power Balance, April 2000, www.ucte.org (publications – exact title: Power Balance of
the UCTE: Scope, Objective and Structure)

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 2. STRUCTURE OF THE POWER BALANCE

The common forecasts are based on the following items :

- National generating power capacity (NGPC)

The national generating power capacity is the net maximum output capacity of energy utilities
and of the power stations of industrial auto-producers of each country. It is divided into hydro
power stations, nuclear power stations, conventional thermal power stations, renewable energy
sources and power sources that cannot be clearly identified. Given are net maximum output
capacities. Independent power producers and autoproducers are classified in the different
categories as a function of their primary energy sources.

- Guaranteed Capacity (GC)

The guaranteed capacity is obtained from the national generating power capacity after deducting
non-usable capacity, overhauls and outages of thermal power stations as well as system
services reserves. This capacity is firmly available to cover the load. Below, some additional
detail is provided on these deducted capacities.

Based on TSO statistics about the injections from different power plants, the TSO can estimate
the part of the generating capacity which is not usable due to various reasons. These reasons
include (forced) outages, (planned) overhauls as well as the so-called non-usable capacity. The
latter can be due to: (seasonal) low water supplies for hydro power stations, heat extraction from
combined heat and power plants, missing authorisations or existing administrative requirements,
lack of fuel, delays in the construction of new plant, reconstruction or retrofitting measures in
power stations in test operation, constraints on the transmission and distribution system,
exceptional conditions regarding the use of stand-by plant, reductions in the output of research
reactors.

Concerning outages, a multi-annual average value (expected value) is used in the forecast. With
regard to above-average outages, adequate operating reserve is scheduled by power plant
operators (not the TSOs).

System services refer to capacities which are indispensable to ensure the short-term functioning
of the electric system. They include frequency control, voltage control, restoration of supply and
system management. System services reserves do not include long-term reserve capacities
which are not under the responsibility of the TSOs but of the power plant operators. The latter
long-term reserves are included in the Remaining Capacity (see below).

- Load (L)

The load of each country (including transmission losses), also called reference load, is recorded
at the reference time, i.e. the 3rd Wednesday in January at 11 a.m., without taking into account
power exports. Normal climatic conditions, e.g. outdoor temperatures corresponding to the multi-
annual average, and normal development of economic activities are assumed in these forecasts.

Basing the power balance on such a common time is preferable to basing it on each TSO´s peak
load, since the peaks occur at different times and their summation systematically over-estimates
the common peak load of the larger system.

The methodology used by NORDEL presented consistency difficulties regarding the loads,
because the usually establish power balances for the peak load, not a simultaneous reference
load. Therefore the NORDEL reference load data and margins had to be estimated separately,

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while the peak load data (and the remaining capacity based on peak load data) were forecast by
NORDEL along with the other parts of its power balance.

- Margin to peak load (MPL)

When interpreting the load forecast one needs to consider that the reference moment (3rd
Wednesday, 11 a.m.) frequently does not correspond to the monthly peak load recorded in the
different control areas. To help quantify this influence, the margin to the monthly peak load is
given as an additional information for the reader. However, it is not taken into account for the
calculation of the remaining capacity. The margin for a set of countries is calculated as the sum
of the margins of the individual countries, although this leads to an overestimate of this margin.

- Remaining capacity at reference load (RCRL)

The remaining capacity at the reference load is obtained from the guaranteed capacity minus the
reference load.

A positive remaining capacity constitutes an export potential. But it also includes power plant
operator reserves intended to cover longer-term power plant failures.

As explained, the reference load does not represent the peak load. This is an additional reason
why the remaining capacity must not be interpreted as a surplus capacity.

- Remaining capacity at peak load (RCPL)

The remaining capacity at the peak load is obtained from the remaining capacity against
reference load minus the margin to peak load.

It is intended to give a more realistic estimate of the guaranteed export potential; recall,
however, that the peak load for a set of countries is overestimated (due to addition of individual
margins), and that on the other hand the remaining capacity includes reserves for power
operations (which some countries have estimated at around 5% of installed capacities - NGPC).

- Transfer capacities

When establishing a statistic for such a large area as the interconnected European market, one
is clearly not only interested in the overall sums of installed capacity, load and remaining
capacity, but also in the balances within large sub-systems. Such sub-systems can most easily
be defined along the boundaries of the synchronously operated areas, i.e. UCTE, NORDEL, GB
and Ireland. But also within UCTE additional sub-systems can be defined along the boundaries
of relatively weak interconnections or congested interfaces or different market organisations.

The sub-systems chosen for this report are : NORDEL, England and Wales, Scotland, Ireland,
Portugal and Spain (1), JIEL and Greece (2), Italy (3), CENTREL: CZ, H, PL, SK (4), UCTE
without (1), (2), (3) and (4).

Since the TSOs do not have access to reliable forecasts of the exchanges between different
control areas or countries, these do not enter into the power balance. However, in order to help
the reader judge for himself the possible effect of such exchanges on the reliable supply within
each sub-system, the net transfer capacities (NTCs) between the sub-systems are provided, as
calculated twice a year by ETSO (www.etso-net.org). These NTCs may vary significantly from
year to year and between seasons; the values used in Figure 1 are therefore subject to change.

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 3. MAIN RESULTS AND EVALUATION

Table 1 as well as Figure 1 summarise the results of this combined power balance forecast for
the 3rd Wednesdays in January of the years 2001 through 2003, based on data collected mostly
in the summer 2000.

For interpreting the results provided in the tables, one can for example focus on the ratio of
remaining capacity over installed capacity. Some UCTE members have indicated that they
consider a ratio of about 5% sufficient for the power plant operator reserve requirements that
form a part of the remaining capacity and are needed for a reliable supply. However, in hydro-
dominated areas like NORDEL, a lesser remaining capacity may well be sufficient. In sum,
Europe still has sufficient capacities to meet its peak loads. In some regions, however, the ratios
of remaining capacity over installed capacity appear low. This is especially the case for JIEL +
Greece, NORDEL and Ireland if the yearly peak loads instead of the reference loads are
considered (which may in fact be the more appropriate basis for isolated systems since the
diversity of peak loads with the rest of the system cannot be exploited).

The results show most importantly that it is indeed possible to assemble a harmonised power
balance forecast for the synchronously or asynchronously interconnected European power
market.

The results of this first common forecast already provide useful insight into the security margins
in Europe´s power supply.

Even more importantly, this first forecast provides a baseline against which the future
development of the Remaining Capacity in the different regions can be compared and judged.

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 Table 1

European power balance, forecast 2001 – 2003 : Global results (in GW)

January forecast
NORDEL ENGLAND & SCOTLAND IRELAND SPAIN + JIEL + ITALY UCTE except CENTREL
WALES (without N.I. !) PORTUGAL (1) GREECE (3) (1), (2), (3) and (3)
(2) (4)
National generating power capacity – 2001 86,9 63 10,3 4,8 58,9 20,1 74,6 294,6 64,3
NGPC
Inländische Kraftwerksleistung 2002 88,1 66 10,3 4,8 60,9 21,0 76,6 297,4 64,4

Puissance de production intérieure 2003 88,1 71 10,4 5,6 63,8 22,3 80,8 301,7 65,5

Guaranteed capacity – GC 2001 71,6 55 8,8 3,9 44,6 16,0 50,5 224,5 49,9

Gesicherte Leistung 2002 71,7 58 8,8 4,0 45,9 16,7 51,9 226,8 50,4

Puissance garantie 2003 71,8 63 8,9 4,7 48,0 17,6 54,7 230,6 50,6

Reference load at 11 a.m. - L 2001 65,6 (est.) 47 5,7 3,3 37,5 14,1 44,5 199,0 38,6

Last um 11 Uhr 2002 65,9 (est.) 47 5,7 3,4 38,8 14,5 45,7 202,4 39,4

Charge à 11 heures 2003 66,6 (est.) 48 5,7 3,5 40,1 14,9 48,1 205,8 39,8

Margin to peak load - MPL 2001 5 (estimate) 6 0,8 0,7 4,7 1,5 1,8 14,5 3,1

Marge zur Monats-Höchstlast 2002 5 (estimate) 6 0,8 0,7 5,3 1,9 1,9 15,4 3,0

Marge par rapport à la pointe 2003 5 (estimate) 6 0,8 0,7 5,4 2,3 2,0 16,1 3,0

Remaining capacity at reference load – 2001 6 (estimate) 8 3,1 0,7 7,1 1,9 6,0 25,5 11,3
RCRL
Verbleibende Leistung zur Referenzlast 2002 5,8 (estimate) 11 3,1 0,6 7,1 2,2 6,2 24,1 11,0

Puissance restante à la charge à 11 h 2003 5,2 (estimate) 15 3,1 1,2 7,8 2,7 6,6 24,9 10,8

Remaining capacity at peak load - 2001 1 2 2,3 0,0 2,4 0,4 4,2 11,0 8,2
RCPL
Verbleibende Leistung zur Höchstlast 2002 0,8 5 2,3 -0,1 1,8 -0,3 4,3 8,7 8,0

Puissance restante à la pointe 2003 0,2 9 2,3 0,5 2,4 0,4 4,6 8,8 7,8

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 Legend
NGPC National Generating Power Capacity (MW)
FIGURE 1 GC Guaranteed capacity (MW)
Data for January 2001 (without DC links Italy-Greece and Northern Ireland-Scotland) RL Reference Load (MW)
RCRL Remaining capacity at reference load (MW)
SCOTLAND RCPL Remaining capacity at peak load (MW)

NGPC 10.300 MW RCRL / NGPC (%)

200 200 GC 8.800 MW RCPL / NGPC (%)
RL 5.700 MW xx Net transfer capacity between regions (MW)
IRELAND RCRL 3.100 MW
RCRL/NGPC 30 %
RCPL/NGPC 22 % NORDEL
NGPC 4.800 MW
GC 3.900 MW
RL 3.300 MW NGPC 86.900 MW
RCRL 700 MW 1000 1000 GC 71.600 MW 1000 MW
RCRL/NGPC 14 % RL 65.600 MW
RCPL/NGPC 0% RCRL 6.000 MW
ENGLAND & WALES
RCRL/NGPC 7%
NGPC 63.000 MW
RCPL/NGPC 1%
GC 55.000 MW
RL 47.000 MW 600 600
RCRL 8.000 MW
RCRL/NGPC 13 % 2210 2400
RCPL/NGPC 3% 1720 CENTREL (3)
2000 2000 NGPC 64.300 MW
4200 GC 49.900 MW
UCTE except (1) & (2) & (3) & (4) RL 38.600 MW 1800
SPAIN + PORTUGAL (1) RCRL 11.300 MW
NGPC 294.600 MW RCRL/NGPC 18 %
NGPC 58.900 MW 1000 GC 224.500 MW 4650 RCPL/NGPC 13 %
GC 44.600 MW RL 199.000 MW
RL 37.500 MW RCRL 25.500 MW 250 800
RCRL 7.100 MW RCRL/NGPC 9%
JIEL + GREECE (2)
RCRL/NGPC 12 % RCPL/NGPC 4%
RCPL/NGPC 4% NGPC 20.100 MW
1100 GC 16.000 MW
ITALY (4) RL 14.100 MW
RCRL 2.000 MW
350 300 5400 NGPC 74.600 MW RCRL/NGPC 10 %
GC 50.500 MW 900
RCPL/NGPC 2%
RL 44.500 MW
RCRL 6.000 MW
- 7 - RCRL/NGPC 8%
RCPL/NGPC 6 %