+ Generation, storage and demand response: Find out how your capacity and/or your energy can be remunerated on market mechanisms

This page:

• introduces the concepts of generation and consumption flexibility;
• gives an overview of the various RTE schemes under which flexibility can be remunerated.
• explains the two possible forms of remuneration: capacity remuneration (for a market participant’s commitment to availability of capacity on a market mechanism) and energy remuneration (for activated energy on a market mechanism).  

Each scheme operated by RTE is described in detail on a dedicated page accessible from the link given on this page or under "See our solutions to access the grid or the electricity markets - Cataliz // Access the electricity market" with a landing page and access to each mechanism. 

Beneficiaries

• Generators
• Consumers
• Market participants seeking remuneration for storage
• Flexibilities providers

Remuneration for your generation and consumption flexibilities under the market mechanisms operated by RTE

The role of RTE is to ensure the reliability of the French power system and thus the balance between generation and consumption in real time. The generation-consumption balance is expressed by the frequency at European level (at equilibrium, the frequency is 50Hz). 

To carry out this mission, RTE uses the flexibilities offered by generation, storage and consumption sites, in an undifferentiated manner, on market mechanisms, known as balancing mechanisms (frequency ancillary services and balancing mechanism).

These flexibilities have the ability to adapt their generation and/or consumption at short notice and for a given period, when requested by RTE. 
Demand response also consists of temporarily reducing all or part of a participant’s consumption, over a given period of time. It may be followed by a shift of all or part of the reduced consumption. Demand response can be remunerated across all mechanisms operated by RTE in the same way as energy generation.

Demand response constitutes an alternative to generation for the power system. France is the first country in Europe to have opened up all its national market structures to all consumers, including those connected to distribution systems. In 2014, RTE opened the possibility of demand response participation on electricity markets (organised market for power trading or OTC market) in the same way as for power generation assets via the Demand Response Block Exchange Notification, known as NEBEF. It thus provides an additional economic opportunity for the balancing mechanism. 

There will be a growing need for demand response capacities in the power system in the coming years, due to the transformation of the current generation capacity and the rise of new electricity uses. France has made the development of demand response one of the priorities of its energy policy to help ensure a successful energy transition. For example, it has set ambitious targets for the development of demand response in the French Multiannual Energy Programme (PPE). In this context, RTE is in charge of organising calls for tenders related to support schemes for the development of demand response for the purpose of contributing to achieving the objectives of the French Multiannual Energy Programme (Article L271.4 of the Energy Code).

The demand response call for tenders is open to all consumption sites able to achieve load reductions, explicit or inextricably linked with supply and subject to compliance with certain conditions.
A load reduction inextricably linked with supply is obtained in the context of a contractual market offer between an end consumer and its electricity supplier. The supply offer must allow the consumption site to carry out load reductions on the sending of a peak hour signal by its supplier. This is referred to as implicit demand response: These load reductions are not made available to RTE to ensure its mission of overall generation-consumption balance in real time (therefore cannot participate in the market mechanisms operated by RTE), but are rather activated by the supplier to reduce energy demand on its perimeter.

Flexibility products which sites can be remunerated for

•  Capacity (MW): you are paid for a power that you commit to making available on a given time slot, activatable on request of RTE or an aggregator. You are remunerated based on a fixed premium (in €/MW). 
• Energy (MWh): you are remunerated following effective activation by RTE or an aggregator (generation or load reduction) for a fixed power and duration (in €/MWh).

Market mechanisms on which flexibility products can be remunerated

The mechanisms presented below may be interdependent: if you participate in a capacity remuneration mechanism, you are under obligation to offer your energy on an energy remuneration mechanism.

Note: All generation capacities (including battery storage) that comply with the CO2 emission limits in accordance with Article L.335-3 of the French Energy Code are obliged to participate in the capacity mechanism by becoming certified. It is not an obligation for demand response capacities to participate in the capacity mechanism but they must  respect CO2 emission limits to be remunerated under this capacity mechanism.

Capacity remuneration mechanisms

Energy remunerations mechanisms

How to participate

To participate in the mechanisms, you can become a market participant (contracting directly with RTE) or go through an aggregator. Agregators may aggregate several flexibility options to offer them on the markets. If you contract with an aggregator, you are paid according to the provisions negotiated in the framework of a private contract with the latter. 

Additional information

• Receive remuneration for your grid energy storage
• Flexibilities : provide your services for network congestion management
• Impact of the MUPPA law on the French Energy Code: an FAQ is available for you

See also the accounting services to access the markets

• Accounting service (service de décompte) - differentiate energy flows to access the market
• Offshore algorithm accounting service - RTE Services Portal (services-rte.com)

Contact

Your sales representative or marketservices@rte-france.com is at your disposal for any additional information on the NEBEF mechanism.