The next November 14 will be celebrated third auction for the 2025 Active Demand Response Service (SRAD) allocation. Addressedmostly, to direct consumers in the market and marketersit is a tool that allows the system operator (REE) to reduce power consumption in specific cases -with a maximum duration of three hours a day per supplier and a prior notice of at least 15 minutes- in which it is identified that the system does not have sufficient balance energies to maintain the balance between generation and demand.
They will be able to participate at the auction those facilities that accredit a supply capacity greater than or equal to 1 MW of each of the CUPS (supply points) in the periods of service provision and who have sent their request to register for the auction by October 30.
Under these conditions, all types of generation, consumption and storage technologiesalthough those who are finally appointed will not be able to participate in balance services. Those who still cannot participate in the auction are the demand aggregators.
The supplier qualification period to participate in the auction ends November 4. Those who have been enabled will be able to send their offers to the system operator from November 12 until 2:00 p.m. on November 13. Once the auction is held, REE will publish the provisional results before 11:00 a.m. on November 15. Service providers will have until 1:00 p.m. to submit the corresponding claims andonce resolved, REE will publish theFinal results before 2:00 p.m. that same day.
The service will be provided from January 1 to December 31, 2025. According to REE data, The active demand response requirement is 2,116 MW and the total number of hourly service periods reaches 4,371 hours.. With the information available, It is estimated that around 41 activation orders may be produced throughout the service provision period. (up to 123 time periods).
Greater visibility
One of the doubts that arises since the SRAD was activated in 2022 has to do with its continuity. Let us remember that This balancing service filled the gap left by the interruptibility mechanismwhich was active from 2013 to July 2020, when Brussels decided to ban it for their doubts about the compatibility of the system with the community aid framework.
The Association of Companies with Large Energy Consumption (AEGE) asks for greater visibility. “It cannot be that we go from year to year waiting to know if there are going to be auctions or not. It would be much more effective if they told us how many years the service will be active. It would be very positive to be certain of how long it will last, to better plan our investments and decide if we are interested in investing more to provide more power or be more competitive in the service,” Pedro González, general director of AEGE, tells elEconomista.es. “Every year, at the end of the summer,” adds González, “we ask REE if it is going to activate the SRAD and their response is that they consider it useful, but that the decision is not theirs.”
The general director of AEGE recalls that SRAD is not a standard service. “It does not exist in Europe, but is typical of Spain. In Portugal there is something similar, but not in the rest of Europe. And the European regulator does not like this. What it wants is for everyone to have the same tools, but what the European regulator does not fall into is that Not all countries have the same speed in the decarbonization process“.
“We talk about a massive entry of renewables, which have the advantages that we all know, but which also generate problems in the system“, and what we are seeing is that Red Eléctrica is forced to carry out much more active management of the system to integrate renewables and, at the same time, guarantee supply, even if this means starting thermal plants that pollute,” adds González.
Risk of blackouts
There are three reasons, either together or separately, why REE can activate the SRAD: because there is less renewable than expected, because a thermal, nuclear or any other group that was also not expected fails, or because the interconnection flows change.
So far this year, REE has had to activate this service twice interrupting the electricity supply to large industry in order to balance the system. The first was on May 22, at 9:14 p.m. That day, the system operator had to disconnect 609 MW (maximum SRAD capacity to guarantee supply). The causes were, on the one hand, lower wind production and a lack of hydraulic reserves for its dispatch and, on the other hand, the shutdown of two nuclear power plants. In a few minutes it was possible to lower between 900 and 1,000 MW. The weighted average price at the time of the interruption was €63.29/MWh.
The second occurred on July 10, at 10:01 p.m. The disconnected power was also 609 MW. That day, the operator had to face a drop in wind output of 2,000 MW and an increase in demand of around 1,000 MW. The weighted average price at the time of the interruption was €114.42/MWh. That day, Red Eléctrica prioritized paralyzing the electricity supply of large industry rather than keeping active the natural gas combined cycle plants that were available to meet the system’s demand.
Spain faces a serious risk of blackouts in 2030despite the strong pace of installation of renewables, if the 9,000 MW of combined cycle plants that the electricity companies want to disconnect due to the lack of economic profitability are finally closed and the nuclear plants are dismantled. The situation could worsen from 2027 if storage commissioning rates are not met.
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