SG meeting FR/UK/IR region 14 June 2007 Congestion management Marcel Cailliau (Electrabel) User comments supported by EFET and Eurelectric on IFA congestion management proposals from NG and RTE (based on work stream conference 17.04.2007)

Content Purpose of this presentation: summary of 17 April workstream meeting EFET key principles for capacity rights UIoSI and intraday for IFA TSO proposal View of users Firmness of capacity rights IFA Firmness ITL

Repartition allocated transmission rights Indicative % ! Source : EFET position paper : Key principles Transmission Rights (June 2006)

EFET vision linkage LT/secondary market/short term transmission rights Source : EFET position paper : Key principles Transmission Rights (June 2006)

Context – CM Guidelines Congestion Management Guidelines came into force in December 2006 These Guidelines are annexed to 2003/1228 Regulation and have a compulsory status IFA is not fully compliant with these Guidelines. Evolutions are required on: Reserve Price - done UIOLI/UIOSI Intraday allocation mechanism Firmness of capacity The current IFA process is as follows:

Current Process D-n D-1 DJ Secondary Market Periodical (LT) Auction CAR Notice Declaration LT + D-1 Nomination IntraDay Re-nominations D-n D-1 DJ Current UIOLI LT + D-1 ICEs Source : IFA user workshop 28 03 2007 RTE-NG, London

Proposed Interim Process D-n Proposed Interim Process Secondary Trading (Reassignment) 05:15 Periodical (LT) Auction 24h blocs 06:45 LT Firm Declaration Hourly blocs 07:45 D-1 Auction 24h blocs PAY as CLEARED D-1 Nomination Hourly blocs 13:00 Intraday Redeclarations Hourly blocs ICE Min(ICE) Max(MCN) UIOSI MCN LT ICEs 06:15 D-1 ICEs Source : IFA user workshop 28 03 2007 RTE-NG, London

Proposed Interim Process : comment D-n Proposed Interim Process : comment Secondary Trading (Reassignment) 05:15 Whenever at 1 hour all LT capacity is used, there isn’t any UIoSI 24h bloc Periodical (LT) Auction 24h blocs 06:45 LT Firm Declaration Hourly blocs UIOSI ? ICE Min(ICE) Max(MCN) MCN 07:45 LT ICEs 06:15 Source : IFA user workshop 28 03 2007 RTE-NG, London

Requested Interim Process (17 04 07) Source : EFET position paper : Cross-Border Intraday D-1 D D-n Requested Interim Process (17 04 07) Secondary Trading (Reassignment) 05:15 Could be D-2 16:00 (ph 1) Periodical (LT) Auction 24h blocs 06:45 LT Firm Declaration Hourly blocs D-1 Nomination Hourly blocs + UIoLI (if intraday pro rata or ELBAS) OR + UIoSI (if intraday auction) 13:00 Intraday Redeclarations Hourly blocs ICE 07:45 D-1 Auction Hourly Offered PAY AS CLEARED Min(ICE) Max(MCN) UIOSI MCN D-1 Auction of 24h blocs PAY AS CLEARED Intraday Allocation of Hourly blocs LT ICEs 06:15 LT ICEs : not necessary if firm rights D-1 ICEs NETTING LT!

Requested Interim Process (final) (17 04 07) D-n Requested Interim Process (final) (17 04 07) Secondary Trading (Reassignment) 05:15 Periodical (LT) Auction 24h blocs 06:45 LT Firm Declaration Hourly blocs D-1 Nomination Hourly blocs + UIoLI OR +UIoSI 13:00 07:45 D-1 Auction Hourly Offered PAY AS CLEARED UIOSI Intraday Allocation of Hourly blocs LT ICEs : not necessary if firm rights D-1 ICEs NETTING LT!

National Grid/RTE proposal In order to ensure full compliance with CM Guidelines, National Grid and RTE jointly propose the following action plan: September 2007 creation of a LT gate-closure and implementation of a UIOSI on 24hrs bands of capacity Mid 2008 implementation of an intraday interim allocation and nomination mechanism (possibly auctions) End 2008 improvement of the LT/D-1 mechanism (target mechanism, auction platform, hourly process) In 2009 implementation of an advanced intraday continuous allocation and nomination mechanism (intraday capacity platform), if its opportunity and feasibility are confirmed.

Proposal market players Market players see the following project steps January 2008 : UIoSI on hourly basis Day ahead auctioning for 24 hours separate products For a fast implementation, users give preference to ARIBA platform CWE (pentalateral forum): common auction office under preparation by 2009 Concurrently, intraday model based on the current implementation on other French borders (improved pro rata on BE,GE,CH border or explicit auctions on ES border) Secondary market model in line with other FR borders, to be further improved in a later phase As soon as possible, launch of an “ELBAS” look alike intraday model Do not re-invent the wheel! Harmonise! Consider also ongoing harmonisation work by ETSO (ECAN)

Conclusions 17 April workshop TSO menu of options expected within 3 weeks: Costs, resources needed,.. Benefits Implementation schedule 1 week stakeholder consultation process Status on 14 June 2007?

Firmness/ITL EDFT evaluation (2006): ITL loss of market value: 17.75M€ Lost market value due to target availability: 14.6M€ CRE analysis (12.05.2007) FR/SP border : congestion income of 52 M€, curtailments paid at full market spread (PX) = 3 M€. User point of view: Transparency ITL needed Reimbursement of any curtailment at market spread Regulator point of view: Offering of different products (firm, less-firm (?)) at different prices Transparency ITL calculation needed (and not compliant CM guidelines!)