1 XVI Madrid Forum, 29 May 2009 XVI Madrid Forum Jose Sierra Madrid, 29 May 2009 Chair, RIG ERGEG Gas Regional Initiative Update & Progress

2 XVI Madrid Forum, 29 May 2009 Regional Initiatives 1.The Regional Initiatives Group (RIG) 2.Progress report based on topic by topic 1.Why RIG –Ensuring consistency between regions and the EU SEM and –Finding the role of the ERGEG RIs in the new context of the Third Package

3 XVI Madrid Forum, 29 May 2009 –Are third energy package and Regional Initiatives (RIs) complementary? –Regional Initiatives are bottom up approach to achieving a single market –Third package contains top-down tools (e.g. Network codes) RIs may have disadvantages – hard to co-ordinate and risk regional, not European, results –Criticism often made is that RIs may ’diverge‘ Regional Initiatives: Future Role?

4 XVI Madrid Forum, 29 May 2009 Regional Initiatives - Essential? RIs are important to enable us to make progress –Achieving a single market is extremely complex –We have a step by step approach where the RIs have a big role; –Enabling ideas to be tested before wide European application (low risk) But for these benefits to be achieved the risks of the regional approach must be actively managed RIG has been created by ERGEG to better manage convergence of regions through greater co-ordination and improved communication.

5 XVI Madrid Forum, 29 May 2009 RIG: Work Plan RIG will: –Ensure convergence of Regional Initiatives towards the SEM. –Facilitate cross region, and cross sectoral sharing of experience. –Publish a single annual progress report to be resented at the November RIs Conference –Publish a paper to provide clarity on the role of the RIs in the context of the third package. –Cooperate with the EC regarding its study on RIs

6 XVI Madrid Forum, 29 May 2009 Regional Initiatives 1.The Regional Initiatives Group (RIG) 2.Progress report based on topic by topic −Investment −CAM −Transparency −Harmonisation −SoS

7 XVI Madrid Forum, 29 May 2009 Progress report Investments Market integration requires developing interconnection capacity. After a successful open season between Belgium & France, the experience shows that high-level coordination is required. Open seasons for France/Spain interconnections to be launched by summer 2009, including capacity inside France (SW region) Virtual investment test case (NW region) Initial steps towards a Regional Investment Plan (supply disruption scenarios) and, in particular, identification & assessment of investments to enable reverse flows (SSE region)

8 XVI Madrid Forum, 29 May 2009 Improving the use of existing interconnection points. Legal constrains at national level hamper regional harmonization. Simplification of projects leading to 3 projects – Short term capacity, secondary capacity markets and bundled interruptible capacity (NW region) TSO survey on contractual, legal, and/or regulatory barriers that hamper harmonization of nomination and renomination lead times (SSE region) Progress report Capacity allocation Successful OSP between France & Spain. Also in the next 2009 OS with 4 balancing & 4 TSOs (SW region)

9 XVI Madrid Forum, 29 May 2009 Implementation of EU standards and sometimes going beyond with concrete results 1 st phase of transparency project on transmission completed successfully with target above EU standards agreed by stakeholders. 2 nd phase under discussion. 90% of TSOs now publish capacity and flows data, compared to 50% at the start of the project. (NW region) Publication of new interconnection capacities building status; updated every 6 months. (SW region) Regulators have analysed transparency results of GGPLNG monitoring. The exercise shows good level of transparency. (SW region) Progress report Transparency

10 XVI Madrid Forum, 29 May 2009 Some progress but a long distance still to go Modification of national legislation to harmonized capacity allocation mechanisms at the borders (SW region) Progress towards entry/exit structures (NW region) Baumgarten as regional hub; conclusion of Interconnection Point Agreement (SSE Region) Progress report harmonization and interoperability

11 XVI Madrid Forum, 29 May 2009 A new challenge for the GRI (in cooperation with the GWG) after the last gas crisis. RIG action plan: Experience in enhancing Gas SoS at regional and cross-regional level. Ad hoc concern: “Lessons learnt” from the gas crisis, identifying short term measures to increase emergency preparedness (SSE region) Progress report Security of Supply

12 XVI Madrid Forum, 29 May 2009 Thank you for your attention! Mark your diary for the World Forum on Energy Regulation IV October 18-21, 2009 Athens, Greece