27 | 09 | 16 market highlights

NEW UNBALANCING VALORIZATION SCHEME FROM 2017

With Resolution 444/2016/R/EEL the Authority introduced a new mechanism to valorize unbalancing which will directly impact renewable energy plants.

The Resolution provides that from January 1st, 2017, for not-relevant renewable plants (P<10MW), unbalancing will be valorized with a hybrid mechanism: “single pricing” within a band of +/- 7.5% (up to July amounted to 100%) and “dual pricing” beyond this threshold. The latter mechanism is very penalizing for non-programmable sources, in particular medium-scale wind.

It is expected that from 2017 traders will unlikely be able to replicate 2016 quotations (i.e. “zonal plus”), with a negative impact on revenues from energy sales, already downsized by the bearish trend of the power exchange.

Appeals by trade associations and operators are already annunced: unbalancing regulation has been intrinsically “uncertain” over the last 5 years and this is probably not the last chapter, yet. The only thing that seems to be clear is the “direction” of the Authority, oriented to promote greater responsibility for renewable producers in forecasting and managing power flows. Find the Resolution in the following link: http://www.autorita.energia.it/allegati/docs/16/444-16.pdf

REA's prepared a focus report on the new mechanism; please contact us (info@readvisor.eu) to request a free copy.