1. The Regional Initiatives deliver concrete results in the regions but will the regions join up? Ms Asta Sihvonen-Punkka ERGEG’s Electricity Focus Group (EFG) Chair The Regional Initiatives: Europe’s key to energy market integration European Commission/ERGEG Conference, Brussels, 27 February 2008

2. 2 The Regional Initiatives: Europe’s key to energy market integration Conference Brussels, 27 February 2008 The Regional Initiatives deliver concrete results in the regions but will the regions join up?  Electricity Regional Initiative (ERI) - concrete results in the regions, first focus on a few key issues  The single electricity market; ERI convergence and coherence  Gas Regional Initiative (GRI) – priorities, concrete results in the regions  The single gas market; GRI convergence and coherence Structure of presentation

3. 3 The Regional Initiatives: Europe’s key to energy market integration Conference Brussels, 27 February 2008 The Regional Initiatives deliver concrete results in the regions but will the regions join up? ERI – concrete results Baltic REM  Enhancing TSO co-operation  Focus on balancing Northern REM  Transparency implementation  Day-ahead market coupling DK-D scheduled June 2008  Intra-day DK-D first half of 2008

4. 4 The Regional Initiatives: Europe’s key to energy market integration Conference Brussels, 27 February 2008 The Regional Initiatives deliver concrete results in the regions but will the regions join up? ERI – concrete results Central-West REM  Project on flow-based market coupling  Auction rules to be harmonised  Transparency improvement agreed Central-East REM  Transparency improvement agreed  Capacity calculation  towards flow- based method  Explicit auctions  a common auction office to be established

5. 5 The Regional Initiatives: Europe’s key to energy market integration Conference Brussels, 27 February 2008 The Regional Initiatives deliver concrete results in the regions but will the regions join up? ERI – concrete results Central-South REM  Progress with explicit auctions  further improvement and harmonisation sought  Market coupling in focus  Transparency work underway South-West REM  Increasing cross-border transmission capacity key issue  Extensive work on congestion management (capacity calculation, explicit auctions, implicit auctions)

6. 6 The Regional Initiatives: Europe’s key to energy market integration Conference Brussels, 27 February 2008 The Regional Initiatives deliver concrete results in the regions but will the regions join up? ERI – concrete results France-UK-Ireland REM  Congestion management  coordinated allocation of interconnection capacity in autumn 2008  Balancing  cross-border balancing, interim solution autumn 2008, final summer 2009

7. 7 The Regional Initiatives: Europe’s key to energy market integration Conference Brussels, 27 February 2008 The Regional Initiatives deliver concrete results in the regions but will the regions join up? REMCongestion Mgt.TransparencyBalancing Baltic Not relevant Northern Central-South Central-East South-West Central-West FUI Issues currently tackled across the electricity REMs  First focus on a few key issues to deliver results Green = work in progress Red = not tackled currently

8. 8 The Regional Initiatives: Europe’s key to energy market integration Conference Brussels, 27 February 2008 The Regional Initiatives deliver concrete results in the regions but will the regions join up?  Cross-regional coordination to be ensured  Transparency - coherent approaches  Implementation of the target congestion management methods ERI coherence and convergence – the way forward

9. 9 The Regional Initiatives: Europe’s key to energy market integration Conference Brussels, 27 February 2008 The Regional Initiatives deliver concrete results in the regions but will the regions join up? ERI coherence and convergence – target model for congestion management Common transmission model Market coupling model for the day-ahead time frame Single auction platform for long and medium term allocation Implicit intra-day allocation mechanism Cross-border balancing

10. 10 The Regional Initiatives: Europe’s key to energy market integration Conference Brussels, 27 February 2008 The Regional Initiatives deliver concrete results in the regions but will the regions join up? Priority Issues across the Gas REMs  Enhancing the efficient use of existing pipeline capacity and facilitating development of new interconnection capacity  Transparency on capacity and flows needs to be further increased in order to achieve a level playing field  3rd package requirements – anticipate and get ready for them

11. 11 The Regional Initiatives: Europe’s key to energy market integration Conference Brussels, 27 February 2008 The Regional Initiatives deliver concrete results in the regions but will the regions join up? GRI – concrete results  Memorandum of Understanding signed in 2007 to improve regulatory cooperation  Transparency: Guidance on “minus 3-rule” adopted in 2007, transmission transparency project ongoing  Interconnection Point specific progress on broadly common priorities across the regions include  Transparency  Capacity utilisation  Investment: 1st coordinated open season ongoing North-West REM

12. 12 The Regional Initiatives: Europe’s key to energy market integration Conference Brussels, 27 February 2008 The Regional Initiatives deliver concrete results in the regions but will the regions join up? GRI – concrete results  Ongoing development of a one stop shop platform and consideration of a Regional Independent System Operator  Work on removing obstacles to the conclusion of interconnection point agreements South-South East REM

13. 13 The Regional Initiatives: Europe’s key to energy market integration Conference Brussels, 27 February 2008 The Regional Initiatives deliver concrete results in the regions but will the regions join up? GRI – concrete results  Joint investment plan for the Spanish-French interconnection points published in February 2007 by adjacent TSOs  Development of harmonised capacity allocation rules  Agreement on the MIBGAS’ principles South REM

14. 14 The Regional Initiatives: Europe’s key to energy market integration Conference Brussels, 27 February 2008 The Regional Initiatives deliver concrete results in the regions but will the regions join up? GRI coherence and convergence – way forward Within the REMs:  Increase involvement of stakeholders and coordination with MSs  Structure and focus the work  NW gas REM is developing a Roadmap 2008-2012  MoU and Roadmap could be considered in the other REMs Between the REMs: increasing coordination  Consider the roll-out of achievements from one REM to others  Monitoring the coherence and convergence of the REMs and, if needed, taking steps towards it

15. 15 The Regional Initiatives: Europe’s key to energy market integration Conference Brussels, 27 February 2008 The Regional Initiatives deliver concrete results in the regions but will the regions join up? More information on the Regional Initiatives is available at www.energy-regulators.eu www.ergeg.org Become an “Online Subscriber” to automatically receive news from your selected regions Thank You