The Realtime Interface (RTI) is an instrument used by Dutch DSOs to maintain grid stability and manage congestion in real-time. When activated, the RTI requires certain energy-producing assets – wind turbines, solar farms, or batteries – to reduce or fully curtail energy production. This curtailment, while necessary for grid management, results in lost production for asset owners, raising the critical question:

How are asset owners compensated for these losses?

In this article, we will explain the RTI remuneration scheme, providing clarity on how asset owners are reimbursed when the RTI is activated.

Participants in the Realtime Interface Scheme

To understand the remuneration scheme, it’s essential to first identify the key stakeholders:

• Distribution System Operator (DSO): Activates the RTI.

• Asset owner: Owns the energy-producing asset (e.g., wind farms, solar parks, or batteries) curtailed by the RTI. They are typically associated with a Balance Responsible Party (BRP).

• Balance Responsible Party (BRP): Responsible for balancing electricity supply and consumption for specific assets or regions.

Impact of RTI activation on Asset Owners

The RTI is a measure of last resort. It is activated by the DSO when other mechanisms have failed. Upon activation, asset owners are instructed to reduce or cease energy production. This leads to the following financial impacts:

• Imbalance costs: The BRP associated with the asset incurs imbalance costs due to discrepancies between between the actual production and the production as sold (nominated). Depending on contractual terms, either the asset owner or the BRP bears these costs.

• Lost subsidies: Many renewable energy producers receive subsidies (e.g., SDE+ in the Netherlands) based on their production levels. Curtailment leads to a loss of these subsidies.

• Lost Guarantees of Origin (GoO) revenues: GoOs are certificates representing the environmental attributes of renewable energy production. Curtailment results in fewer certificates and thus, less revenue from selling them.

The RTI remuneration scheme

The remuneration scheme compensates asset owners for losses caused by RTI activation, aligning with the European Redispatch Regulation rules (Article 13.7). Compensation includes the following components:

1) Imbalance costs:

• Calculation:
  
  • For upward regulation states (1 or 2):
    Lost production (MWh) * Imbalance price for upward regulation (€/MWh)
    
  • For downward regulation state (-1):
    Lost production (MWh) * Imbalance price for downward regulation (€/MWh)

• Explanation:
  Imbalance costs represent financial impacts caused by discrepancies between scheduled and actual production. The applicable compensation depends on the regulation state.
  

2) Lost subsidies (e.g., SDE+):

• Calculation:
  Lost production (MWh) * subsidy rate (€/MWh)

• Explanation:
  The subsidy rate varies based on the specific subsidy program and agreements. Asset owners should provide the exact rate applicable to their situation.
  

3) Lost Guarantees of Origin (GoO) revenues:

• Calculation:
  Lost production (MWh) * GoO price (€/MWh)

• Explanation:
  GoO prices fluctuate based on market conditions. Asset owners should use current market prices for accurate calculations.

Total compensation formula

Example calculation

Consider the following scenario:

• Lost production: 1 MWh
• Imbalance price for upward regulation: €60/MWh
• Imbalance price for downward regulation: €40/MWh
• Subsidy rate (SDE+): €40/MWh
• GoO Price: €7/MWh
• Regulation state: 1 (Upward regulation)

Step-by-step calculations:

Total compensation:

• €60 (Imbalance) + €40 (Subsidy) + €7 (GoO) = €107

In this scenario, the asset owner should be compensated €107 for the lost production of 1 MWh due to RTI activation.

Additional considerations

• Imbalance risk and responsibility:
  The BRP is responsible for balancing supply and demand for the asset. When RTI is activated, the BRP may incur imbalance costs due to the deviation from the scheduled production. In some cases, the asset owner may need to reimburse the BRP for the imbalance costs. Alternatively, the DSO could compensate the BRP directly, but this depends on contractual agreements.

• Complexity with ancillary services: If the asset is also providing ancillary services like automatic Frequency Restoration Reserve (aFRR), the compensation calculations become more complex due to overlapping obligations and revenues.

• Administrative fee: An administrative fee may also be applicable, though the specific details are still under consideration.

Conclusion

The RTI remuneration scheme ensures that asset owners are fairly compensated for losses incurred due to redispatching activities. The compensation covers lost revenues from imbalance costs, lost subsidies, and lost GoO revenues. Calculating the total compensation requires careful consideration of various factors, including market prices, subsidy rates, and regulation states. Clear contractual agreements between the asset owner, BRP, and DSO are essential to manage the financial flows and responsibilities effectively.

By gaining a thorough understanding of the RTI process and its remuneration components, asset owners can ensure they receive appropriate compensation. In turn, DSOs can deploy the RTI mechanism to maintain grid stability without causing undue financial strain on renewable energy producers.

How the Teleport RTI endpoint helps asset owners

As a certified RTI endpoint, the Teleport Gateway registers in real-time when the RTI is activated by the DSO. Combined with production estimates (if the RTI had not been activated), it provides precise data for calculating compensation. This ensures asset owners can receive accurate reimbursements while maintaining transparency in the process.