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Aleksander Mervar: ELES Enters Its Most Challenging Investment Cycle to Date

In 2019 ELES is starting a three-year investment cycle, worth around EUR 340 million.

It will be incomparable in size, value and the complexity of the equipment installed in the transmission system to any investment made in the Slovenian electric power grid so far, said the CEO of ELES, Aleksander Mervar.

Let us begin with ELES’ performance in 2018. Are you satisfied with the results and which were the key projects implemented by ELES last year?
I am satisfied with the performance in 2018. The company has managed to carry out in time all the tasks arising from the implementation of the comprehensive body of EU legislation on electricity network operation. A large scope of public procurement processes was completed, enabling the company to start the investments for the period 2019-2021. In 2018, all contracts for the provision of ancillary services in 2019 were awarded, and savings of EUR 20 million were made as international agreements on joint provision of a portion of ancillary services had previously been signed. A lot of time and money was spent on research and development projects. ELES applied for a EUR 50 million grant from the Connecting Europe Facility (CEF), and in January we were told our application was successful. The company’s 2018 net profit will be slightly below the 2017 level, but still the second-best result since ELES has assumed the role of the TSO

In accordance with the provisions of the Commission Regulation (EU) 2017/2195, ELES has developed a proposal that will enable, in the first stage, market-based selection of providers of balancing capacity and energy services in the Slovenian market and, at later stages, integration into the EU-wide system of product exchange in the balancing market. What does this mean for ELES specifically? How important is it?
The Commission Regulation (EU) 2017/2195 stipulates the implementation of joint European balancing platforms for manual frequency restoration reserve – mFRR (MARI) and automatic frequency restoration reserve – aFRR (PICASSO). Active participation in both projects in important for ELES; on the one hand it is a chance to increase competition in the local ancillary services market, on the other hand we consider participation in these projects to be an opportunity for Slovenian providers of ancillary services. For the participation and integration in the projects to be successful, ELES will need, to some extent, to modernise the processes of providing ancillary services and upgrade the existing technical solutions, while the balancing service providers will have to adapt accordingly.

In line with this, ELES is introducing a purpose-built platform for aFRR and mFRR auctions. In addition to auctions, the platform enables and will be used for submitting balancing energy bids and making merit order lists, activating balancing energy bids (mFRR), communication and announcement of results, reporting, etc.

The Rules on and conditions for balancing service providers in the ELES balancing market (TSO Terms and Conditions), prepared by ELES in the spirit of the integration of national balancing markets and the subsequent inclusion in joint European balancing platforms (MARI, PICASSO), play a key role in the transition.

For aFRR and mFRR services, the TSO Terms and Conditions define and introduce standard balancing energy products as this has been done by all European TSOs in accordance with the provisions of the Commission Regulation (EU) 2017/2195, newly regulate the issue of penalties for non-provision of balancing services, clearly set eligibility criteria and the requirements for technical connectivity, etc. We expect this will improve the efficiency of system balancing at national level, and this is of paramount importance for a small electric power system with relatively large units and a limited scope of ancillary service providers, especially in turbulent situations. The harmonisation process itself is expected to have positive implications for the quality of balancing at EU level, where TSOs have just recently been facing quite serious problems precisely with regard to balancing.

When will the national platform for submitting bids and providing balancing services be launched? Who will be eligible to participate?
Right now, the auction platform is under development and undergoing internal tests at ELES. Its launch is envisaged for October 2019 in line with the timeframe of actions arising from the TSO Terms and Conditions. All the balancing service providers who pass the technical capability test and thus meet the conditions to participate in auctions for aFRR and mFRR services, will be eligible to use the platform.

The whole interview is available at Energetika.NET.

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