1. Deputy Executive Director/IT Expert
Implementation of
FCA Network Code in SEE
Dijana Martinčić
Deputy Executive Director/IT Expert

2. Summary Introduction Coordinated Auction Office in South East Europe
Forward Capacity Allocation Network Code
Forward Capacity Allocation in South East Europe?
Concusions
SEE CAO
FCA
FCA SEE
establishing an allocation office in the region of South East Europe has been facilitated by adoption of the Regulation (EU) 714/2009 on conditions for access to the network for cross-border exchanges in electricity in the EnC acquis communitaire.
Which led to implementtaion of 714/2009 in non-EU countries, which is a proof of convergence of Balkan countries with the European Union and its legislative framework

3. Introduction Coordinated auctions 
Regulation (EC) 714/2009, Third energy package
EnC acquis (2011)
Implementation in SEE TSOs through SEE CAO
Forward Capacity Allocation FCA 
Regulation (EC) 2016/1719
Early implementation through HAR (Harmonised Allocation Rules) by EU TSOs
Implementation through SEE CAO by SEE TSOs
establishing an allocation office in the region of South East Europe has been facilitated by adoption of the Regulation (EU) 714/2009 on conditions for access to the network for cross-border exchanges in electricity in the EnC acquis communitaire.
Which led to implementtaion of 714/2009 in non-EU countries, which is a proof of convergence of Balkan countries with the European Union and its legislative framework

4. SEE CAO
FCA
FCA SEE
establishing an allocation office in the region of South East Europe has been facilitated by adoption of the Regulation (EU) 714/2009 on conditions for access to the network for cross-border exchanges in electricity in the EnC acquis communitaire.
Which led to implementtaion of 714/2009 in non-EU countries, which is a proof of convergence of Balkan countries with the European Union and its legislative framework

5. SEE CAO shareholders Shareholding TSOs: Croatia HOPS BiH NOS BIH
Montenegro CGES
Kosovo KOSTT
Albania OST
Greece IPTO
Turkey TEIAS
FYROM MEPSO
It would not be humble to say that SEE CAO is first successfull..
Presents an emenrgence of a joint venture of 7...
Politically sensitive region this success is a rare phenomenon and achievemnt as a sign of tentative convergence of separate countries and nations

6. SEE CAO organisation Coordinated Auction Office in South East Europe
July 2012 – Project Team Company SEE CAO
April 2014 – SEE CAO
Go – Live (first auctions): November 2014
Podgorica, Montenegro
Service providing company
Organisation:
Board of Directors - representatives of SEE TSOs
Executive Director - Mr Aleksandar Mijušković
7 employees
It would not be humble to say that SEE CAO is first successfull..
Presents an emenrgence of a joint venture of 7...
Politically sensitive region this success is a rare phenomenon and achievemnt as a sign of tentative convergence of separate countries and nations

7. SEE CAO services Auctions of cross-border capacity rights:
Explicit allocation
NTC based method
Marginal price algorithm
Long term - Yearly, Monthly
Day ahead - Daily auctions
borders between SEE TSOs
Collecting auction revenue from the Auction participants
Distributing auction revenue to TSOs
Providing data to ENTSO-E Transparency platform
REMIT reporting as Registered Reporting Mechanism
It would not be humble to say that SEE CAO is first successfull..
Presents an emenrgence of a joint venture of 7...
Politically sensitive region this success is a rare phenomenon and achievemnt as a sign of tentative convergence of separate countries and nations

8. Auction Process Daily Auction Yearly Auction Monthly Auction
Resale
Monthly Auction
Transfer Y, M
Long Term Capacity Rights
Nominations, UIOSI
Daily Auction
Use of PTR

9. SEE CAO’s accomplishments
Coordinated auctions
Common Auction Rules
Synchronised auction timing
New products
Efficient utilisation of capacities
Transparency (EMFIP, REMIT)
SEE CAO acts as a complusory point for energy trading in SEE

10. Annex I of Regulation (EC) 714/2009
SEE CAO Step forward
unilateral/bilateral auctions performed by each TSO  coordinated auctions performed solely by SEE CAO
Annex I of Regulation (EC) 714/2009
establishing an allocation office in the region of South East Europe has been facilitated by adoption of the Regulation (EU) 714/2009 on conditions for access to the network for cross-border exchanges in electricity in the EnC acquis communitaire.
Which led to implementtaion of 714/2009 in non-EU countries, which is a proof of convergence of Balkan countries with the European Union and its legislative framework

11. 100% Efficiency Maximum possible scope of borders
Complete success in auctions
Successful ongoing auctions
Succesful commence with Yearly auctions
No contestation
Good cooperation with stakeholders

12. Auction participants 111 energy trading companies 17countries
Positive feedback, good cooperation
We have already earned trust of 100 registered traders from 16 countries.
From all of them we have received positive reactions to our services.
All auctions went smoothly and their results were published promptly.
We have not received any contestation from the traders on the results.
Unusual for this region, all payments were received in due time and there was no need for using risk management instruments.

13. Benefits for traders One-stop-shop Full transparency
Synchronised auction and LT nomination timing
Multiple bidding
Better utilisation of capacities - UIOSI
Efficient portfolio management

14. Regulations concerned
EMFIP (REGULATION (EU) No 543/2013) on submission and publication of data in electricity markets
REMIT (Regulation (EU) No 1227/2011) on wholesale energy market integrity and transparency
TBD
FCA (Regulation (EU) 2016/1719) on establishing a guideline on forward capacity allocation
Registered reporting mechanism – testing in progress
Also report Secondary rights time series in relation to the transportation of electricity for HOPS and IPTO borders
Although Network Codes on Forward Capacity Allocation is not yet legally binding, because Commission Regulation (EU) establishing a guideline on forward capacity allocation (FCA) has not come into force in EU - it is expected to happen in 2016.
For its acceptance in EnC acquis communitaire more time will be needed due to different legal mechanisms for non-EU countries.
Nevertheless its (early) implementation should be one of the main future steps for SEE CAO. First step for SEE CAO should be complete taking-over and implementation of Harmonised Auction Rules, which is not foreseen for auctions for SEE CAO should start applying HAR as of 2018.
Its scope of explicit daily allocations will gradually be reduced depending on the pace of the (early) implementation of Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (CACM) in the SEE region.. One of main preconditions for (early) implementation of CACM is existence of power exchanges as main tool for day-ahead market coupling. With introduction of such implicit allocations SEE CAO will remain focused on long-term (forward) auctions for the period depending on the time and way how FCA stipulations regarding Single Allocation Platform will be addressed by EnC acquis communitaire. Therefore SEE CAO has a minimum of few next years to continue its operation as Regional Allocation Platform for SEE.

15. SEE CAO
FCA
FCA SEE
establishing an allocation office in the region of South East Europe has been facilitated by adoption of the Regulation (EU) 714/2009 on conditions for access to the network for cross-border exchanges in electricity in the EnC acquis communitaire.
Which led to implementtaion of 714/2009 in non-EU countries, which is a proof of convergence of Balkan countries with the European Union and its legislative framework

16. Network Codes Third enegry package determines:
establishment of ACER and ENTSO-E
creation of Network Codes (NC)
ACER drafts Framework Guidelines for NC
ENTSO-E develops NC
Adopted by European Comission through comitology procedure (legally binding for EU Member States)

17. Network Codes specific tools for implementation of a
single energy market in the EU
CACM Capacity Allocation and Congestion Management
FCA Forward Capacity Allocation
EB Balancing
CACM Capacity Allocation and Congestion Management
FCA Forward Capacity Allocation
EB Balancing
Grid connection
System operation
Market rules

18. FCA Network Code Rules on cross-zonal capacity allocation:
Forward markets
PTR or FTR (option/obligation)
Explicit auctions, marginal price
Creation of HAR by TSOs
No daily allocation – subject of CACM
Flow-based – if justified by increase in economnic efficiency, interconnection highly dependable

19. Harmonised Allocation Rules
Long term explicit allocation (Y,M)
Created by ENTSO-E
Early implementation - HAR 2016
Further alignment with FCA - HAR 2017
Implemented in JAO from 2016
Border specific annexes
Daily allocation rules (explicit)

20. COMMISSION REGULATION (EU) 2016/1719
FCA Network Code
COMMISSION REGULATION (EU) 2016/1719
of 26 September 2016 on establishing a guideline on forward capacity allocation
Binding for EU Member States from October 2016
Early implementation by TSOs with Harmonised Auction Rules (HAR) from January 2016
Non-binding for non-EU countries
Once adopted in Energy Community acqui binding for EnC CPs

21. capacity allocation and congestion management
CACM Network Code
COMMISSION REGULATION (EU) 2015/1222
of 24 July 2015 establishing a guideline on
capacity allocation and congestion management
Day Ahead and Intraday markets
Implicit allocation
Capacity calucation regions
Bidding zones
Prerequisite for the full implementation of FCA
CACM Capacity Allocation and Congestion Management
FCA Forward Capacity Allocation
EB Balancing

22. SEE CAO
FCA
FCA SEE
establishing an allocation office in the region of South East Europe has been facilitated by adoption of the Regulation (EU) 714/2009 on conditions for access to the network for cross-border exchanges in electricity in the EnC acquis communitaire.
Which led to implementtaion of 714/2009 in non-EU countries, which is a proof of convergence of Balkan countries with the European Union and its legislative framework

23. HAR in SEE CAO Early implementation: Decision of SEE CAO BoD
Establishment of working group by SEE TSOs and SEE CAO
Approval of HAR by SEE NRAs
Allocation system setup

24. HAR in SEE CAO Main HAR document full transposition
Border specific annexes
to be prepared by TSOs
Daily auction rules:
special document
current application of explicit daily auctions

25. Conclusion Adoption of FCA in EnC acqui Appliance of HAR in SEE CAO
SEE CAO has shown its expertise and pivotal role in South East Europe electricity market

27. Thank you for your attention!
Dijana Martinčić, dipl.ing.el.
Deputy Executive Director/IT Expert
Coordinated Auction Office in South East Europe
Moskovska 39, Podgorica, Montenegro    
At the end, I want to remind you that we had very successful year, with:
Successfully performed auctions (including yearly auctions for 2016)
And good cooperation with stakeholders
SEE CAO has proven its role in opening of South East European electricity market and we can do even more, we are already prepared to welcome more borders, we would like them to experience the benefits of our work and products.