Electricity Regional Initiative Central Eastern European Region Convergence & Coherence Sven Kaiser E-Control CEE Stakeholder Group Meeting 7 th November 2007

2 ERI Central Eastern Europe CEE Stakeholder Group Meeting, 7th November 2007 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 !

3 ERI Central Eastern Europe CEE Stakeholder Group Meeting, 7th November 2007 Public Consultation -Timeframe for Public Consultation: 20th July – 14th October 2007 (extended for 1 month) -16 Responses received ( -6 European Associations -3 TSOs -1 Regional Association -1 National Association -1 Power Exchange -4 Industry companies -ERGEG assessment is presently under evaluation

4 ERI Central Eastern Europe CEE Stakeholder Group Meeting, 7th November 2007 Topics Addressed -Capacity calculation methods -Capacity allocation -Long and medium term -Day ahead -Intra-day -Balancing -Transparency -Governance issues, regulatory and legal framework

5 ERI Central Eastern Europe CEE Stakeholder Group Meeting, 7th November 2007 Capacity Calculation -ERGEG’s 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

6 ERI Central Eastern Europe CEE Stakeholder Group Meeting, 7th November 2007 Long Term Capacity Allocation -ERGEG’s 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

7 ERI Central Eastern Europe CEE Stakeholder Group Meeting, 7th November 2007 Day Ahead Capacity Allocations -ERGEG’s 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

8 ERI Central Eastern Europe CEE Stakeholder Group Meeting, 7th November 2007 Intraday -ERGEG’s 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

9 ERI Central Eastern Europe CEE Stakeholder Group Meeting, 7th November 2007 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

10 ERI Central Eastern Europe CEE Stakeholder Group Meeting, 7th November 2007 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

11 ERI Central Eastern Europe CEE Stakeholder Group Meeting, 7th November 2007 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