Directorate General for Energy and Transport1 Ana Arana Antelo Head of Unit Electricty & Gas – European Commission/DG TREN GIE Annual Conference, , Madrid Third Package How will it tackle infrastructure investment?

Directorate General for Energy and Transport2 3rd package – background  Starting point  Benchmarking reports and Green Paper  Progress report, Sector Inquiry and Strategic Review of 10 January 2007  Conclusion: Urgent need to strengthen competition and complete internal energy market  Main shortcomings  Vertical integration of companies and high degree of market concentration  Lack of market integration at EU level: lack of TSO cooperation – regulatory gap – lack of interconnection  Lack of transparency  Different powers and competences of national regulators

Directorate General for Energy and Transport3 3rd package: main measures Main areas  Unbundling of networks  Cooperation of network operators  National regulators  EU Agency for Regulatory Cooperation  Transparency  Solidarity cooperation  Consumer protection

Directorate General for Energy and Transport4 3rd package – focus investments (1) HOW DOES THE 3rd PACKAGE TACKLE INVESTMENTS? 1.Transmission – ownership unbundling  Supply interests of integrated companies are in conflict of interest with provision of sufficient transport capacities  3rd package: ownership unbundling to ensure independence of network operators; alternatively ISO having a say on investment decision 2.3rd country investments  Without prejudice to the international obligations, transmission systems or TSOs shall not be controlled by persons from 3rd countries  Reversal of proof for ownership unbundling  Create a level playing field for EU and non EU investors

Directorate General for Energy and Transport5 3rd package – focus investments (1) HOW DOES THE 3rd PACKAGE TACKLE INVESTMENTS? 3.TSO cooperation on EU level  Responsible for coordinate the planning of network investments  monitor the development of transmission network capacities 4.National regulators  Current varying policy objectives and responsibilities of regulators  especially problematic in the field of new investments  3rd package: enhancing statutory duties and powers  review investment plans of national TSOs

Directorate General for Energy and Transport6 3rd package – focus investments (1) HOW DOES THE 3rd PACKAGE TACKLE INVESTMENTS? 5.Agency  complement the regulatory tasks performed at the national level European – close “regulatory gap”  decision making powers for specific cross-border issues  eg "Article 22" exemption requests for infrastructure projects involving more than one Member State

Directorate General for Energy and Transport7 3rd package – focus investments (1) HOW DOES THE 3rd PACKAGE TACKLE INVESTMENTS? 6.Storage  Currently suppliers have to contact their competitors to contract their storage need  does not enhance market confidence, serious barrier for new entrants  3rd package: legal and functional unbundling of storage system operators to enhance effective access to storage  ERGEG monitoring report on compliance with Guidelines of Good Practice for Storage (Dec 2006) showed that the level of storage capacity available to TPA is unclear  3rd package: Member States define and make public criteria when and how third party access to storage applies

Directorate General for Energy and Transport8 Summary

Directorate General for Energy and Transport9 TEN-E policy  TEN-E policy has gained importance  Still little money available, but:  Focus on important and mature projects instead of a long "wish-list"  Co-ordinators nominated for key projects (Nabucco)  Obligations for MS to report on progress and to coordinate  Future of TEN-E policy?  Tackling the difficulties to get permits for the projects through the Regional Initiatives  Close link with the European investment planning by TSOs  More money

Directorate General for Energy and Transport10 Conclusions  Third package has very important elements regarding invesments  Ownership unbundling  TSO-cooperation  National regulators’ and agency’s role regarding investments  Third package will support TEN-E policy and vice-versa