Provisioning of dispatching resources

The reform of the Market for Dispatching Services, which had begun in 2010 in accordance with Italian Law no. 2/2009, with a view to increasing the efficiency of the power market, continued in 2011 with the updating of the rules for dispatching and the introduction of the following news.

  • Introduction of power market sessions on the flow day, to which the reductions refer (the “Infra-day market”).
  • Introduction of new Market for Dispatching Services sessions on the flow day, to verify the meeting of the demand for dispatching services following infra-day market sessions.
  • Elimination of revocations between stages of the Market for Dispatching Services, pursuant to AEEG Resolution no. 165/05, whereby actions prepared by Terna on the Market for Dispatching Services during programming (the “ex-ante Market for Dispatching Services”) and cancelled prior to execution on the Balancing Market (the “MB”), the costs of which were compensated, instead become actions at the expense of the system. The elimination of the revocations has entailed the preparation in protection of the suitability and security of the system at a minimum advance, on the basis of forecasting as closely as possible to implementation and therefore less uncertain.
  • Offer structure on the Market for Dispatching Services that is more cost-reflective of production costs with the introduction of the start-up token remunerating the start-up costs of thermoelectric plants of a type other than open cycle turbogas.

Given the alterations to the energy regulatory framework for 2011, the dispatching process and the methods and instruments in support of it have been modified, also to the benefit of the efficiency of procurement on the Market for Dispatching Services.

In 2011, Terna procured resources on the Market for Dispatching Services, purchasing and selling energy for 8.6 TWh (- 38% yoy) and 17.2 TWh (-25% yoy) respectively for a total net expense amounting to 923 million (-27% yoy).
Volumes and expenses were divided up as follows between the Market for Dispatching Services stages:

  • ex-ante Market for Dispatching Services, purchases and sales for 4.7 TWh and 4.9 TWh with a total net outlay amounting to 761 million;
  • MB, purchases and sales for 3.9 TWh and 12.3 TWh with an outlay amounting to 162 million.

Provisioning

The net expense resulting from the purchases and sales on the Market for Dispatching Services, from the valuation of the imbalances and the balance of other energy items, is billed on a pro-rata basis to users of the dispatching services (withdrawals) with the uplift fee in relation to the procurement of resources on the Market for Dispatching Services, as per Art. 44 of Resolution no. 111/06 as subsequently amended.

Provisioning 2

The uplift fee is calculated considering the following elements: balance of other energy items such as the transmission capacity usage fee (the “CCT”), the contracts hedging the risk of volatility of the fee for the assignment of the rights of use of transmission capacity (the so-called “CCC” and “CCP”), the right of transmission of use of transmission capacity on foreign interconnectors (the “DCT”), the virtual importation service (interconnectors and shippers), and the difference between actual, estimated and billed uplift fees for each quarter.