EUROPEAN ENERGY MARKET SUMMIT 30 January 2007 France-UK-Ireland REM – Report on progress David Halldearn – Director, European Affairs EUROPEAN ENERGY MARKET SUMMIT 30 January 2007

Regional Characteristics GB at centre of region - 2GW / 0.5GW interconnections All Ireland market being created (2007) France involved in multiple regions So harmonised border interfaces are essential

First focus is on ‘interfaces’ between the national markets Priorities First focus is on ‘interfaces’ between the national markets Established priority topics in conjunction with stakeholders: Congestion Management – implementation of CM Guidelines Co-ordination of auctions on interconnectors Balancing markets – reciprocal access Wholesale market transparency Transmission tariffs Longer term might include : Further investment in interconnectors Regulatory framework

First public written consultation – closed 19 January Key Achievements Productive regulator and stakeholder meetings ongoing – 7 RCCs, 6 IGs, 3rd SG on 1 February. Reserve prices have been removed on the IFA First public written consultation – closed 19 January Intraday seen as fundamental requirement 3 Workstreams established to tackle priority topics Congestion Management - CRE Balancing – Ofgem Transparency – CER/Ofreg Final proposals expected Spring 2007 Tariffication currently being progressed by the regulators

Workable proposals from all 3 workstreams Challenges to come Workable proposals from all 3 workstreams Firm proposals on intraday are being developed Implementation of proposals e.g. intraday / model for reciprocal access to balancing markets Ensuring these proposals meet regulatory requirements in each country in the region Not placing unnecessary and costly burdens on TSOs and market participants

Keep issues and potential solutions manageable Remarks Keep issues and potential solutions manageable Transparency and openness key Continued participation of all stakeholders essential TSO support has been invaluable All information on this region available at: www.ergeg.org/portal/page/portal/ERGEG_HOME/ERGEG_RI/ERI/UK_Ireland

David Halldearn – Director, European Affairs Thank You David Halldearn – Director, European Affairs