Background Information

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Background Information

• Convergence towards a single European market is a
  key objective for the ERGEG Electricity Regional
  Initiative
• First assessment of ERI priority issues in the
  different regions in terms of Congestion
  Management Guidelines, balancing market
  integration and transparency
• In order to receive Stakeholders views ERGEG
  launched a Public Consultation on those issues
• The following presentation contains a preliminary
  assessment of responses it is however no ERGEG
  position paper !

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Public Consultation

• Timeframe for Public Consultation 20th July
  14th October 2007 (extended for 1 month)
• 16 Responses received (www.ergeg.org)
• 6 European Associations
• 3 TSOs
• 1 Regional Association
• 1 National Association
• 1 Power Exchange
• 4 Industry companies
• ERGEG assessment is presently under evaluation

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Topics Addressed

• Capacity calculation methods
• Capacity allocation
• Long and medium term
• Day ahead
• Intra-day
• Balancing
• Transparency
• Governance issues, regulatory and legal framework

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Capacity Calculation

• ERGEGs assessment - in most regions, approach
  towards flow based calculations
• CEE see separate agenda point
• CWE dedicated workstream for maximizing firm
  cross border capacities with common capacity
  calculation method
• Common grid models not used yet, but under
  development
• Responding Stakeholders
• Considering flow based calculation as a step
  forward, but difficult to implement, follow up
  and monitor
• Supporting development of common network model
  and at least regional TSO coordination
• Asking for improvements in TSO data exchange
• Requesting transparency in capacity calculation

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Long Term Capacity Allocation

• ERGEGs assessment mainly dealing with explicit
  auctions
• Coexistence of explicit auctions across regions -
  Harmonization of auction rules
• Definition and harmonization of products
  (firmness, timeframes )
• Governance, e.g. in relation to Auction Office
• Responding Stakeholders
• Recognizing mainly a need for long term
  allocations
• Supporting harmonized products and platforms at
  least per region
• Requesting one-stop-shop solutions

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Day Ahead Capacity Allocations

• ERGEGs assessment mainly dealing with implicit
  auctions
• Importance of market design issues (e.g. gate
  closure times)
• Various possibilities of Market Coupling (price
  vs. volume coupling)
• Governance of Auction Offices and Power Exchanges
• Responding Stakeholders
• Supporting the development towards implicit
  auctions
• See competition between Power Exchanges as a
  beneficial situation
• See the need for harmonization of vital issues in
  market design

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Intraday

• ERGEGs assessment
• Intraday is on the agenda in most regions
• Certain development towards continuous trading
• No specific assessment regarding convergence
  possible at the beginning of the Public
  Consultation
• Responding Stakeholders
• Not always considered as an issue of topmost
  priority
• Do not have a uniform view regarding exclusive
  vs. non-exclusive platforms

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Balancing

• ERGEGs assessment
• Several bilateral initiatives existing
• Relationship to Intraday markets existing
• Responding Stakeholders
• See an enhanced need for harmonization of various
  aspects (e.g. of remuneration schemes)
• Technically challenging and should not delay work
  on other issues (e.g. day ahead Congestion
  Management)
• Point to the situation with congested
  interconnections

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Transparency

• ERGEGs assessment
• Very important issue for creating a level playing
  field
• Addressed in similar ways in several regions
• Responding Stakeholders
• Agree with importance of transparency and ask for
  harmonization across the Regions
• Refer to positive attempts regarding common
  information platforms (ETSOVISTA)
• Ask partly for binding rules

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Other Issues

• ERI process in general support by Member States
• Grid investments use of congestion revenues
• Retail issues as regulated end-user prices
• Composition of regions
• Distribution for auction revenues