Core CG meeting 3rd of April 10:00-16:00 NH Hotel, Vienna Airport.

Core CG meeting 3rd of April 10:00-16:00 NH Hotel, Vienna Airport

1. Welcome, agenda and minutes
PMO List of participants PARTICIPANTS PARTY Katrin TREPPER (STK WG convener) AMPRION Mike RUBEN (Market WG convener) 50HERTZ George VISAN (Core SG chairman) TRANSELECTRICA Milan VUKASOVIC (RD&CT convener) APG Gertjan MEUTGEERT (FB PT convener) MAGNUS RED Steve Van Campenhout (FB PT / STK WG member) ELIA Raluca CORDUN - IONITA MAGNUS (PMO) Thomas BATAVIER ACM Hrvoje MILICIC HERA <to be confirmed> CRE Željka KÖSSLDORFER E-Control PARTICIPANTS PARTY

1. Welcome, agenda and minutes
PMO List of participants PARTICIPANTS REPRESENTING COUNTRY Market Parties H. ROBAYE Co-chair Core MPs (Engie) Belgium M. VAN BOSSUYT Febeliec J. Le PAGE EFET EU O. BUGAYOVA CEZ Czech Republic Y. PHULPIN EDF Trading FR A. GUILLOU MPP G. MAES Engie K. KEYSERLINGK RWE DE E.WAGNER Energieallianz Austria F. JUDEX J. GUZIKOWSKI PGE Poland P. GIESBERTZ Statkraft Netherlands R. OTTER Energie Nederland M. HAHN ENERGIE AG A. GRUBER Oesterreichs Energie M.WATSCHER TIWAG A.TUPAC BKW Energie AG Switzerland F.MADER W.E.B. Windenergie AG S. KITZLER APCS M. SCHAUERHUBER VTR L. JAZBEC (by phone) GEN-I Slovenia PARTICIPANTS REPRESENTING COUNTRY Core TSOs K. TREPPER Co-chair Core TSOs (Amprion) Germany M. VUKASOVIC Core RD&CT PT convener (APG) Austria F. HEUS Core LTCC PT convener (Tennet) Netherlands M. RUBEN Core Market WG (50Hertz) G. MEUTGEERT FB PT Convener (Magnus Red) H. HATZ FB & LTCC expert (APG) S. van CAMPENHOUT FB expert (Elia) Belgium M. JANOWSKI LTCC expert (PSE) Poland ACER T. QUERRIOUX EU Core NRAs Z. KOESSLDORFER E-Control (Lead Core NRA) J. de SAINT PIERRE CRE France H. MILICIC HERA Croatia T. BATAVIER ACM R.TUETMANN (by phone) BNetzA D. ALLMANN (by phone) NEMOs G. ION (by phone) OPCOM Romania PMO R.IONITA Magnus RED

1. Welcome and introduction
K.TREPPER Agenda SUBJECT WHO TIMING 1 Welcome and introduction Overview of Core CCR obligations G. VISAN / K.TREPPER 10.00 – 10.30 2 ACER decision on Core DA & ID CCMs Presentation by ACER Presentation by TSOs Impact for Core TSO project Planning for the DA external parallel run Transparency ACER G.MEUTGEERT 10.30 – 11:30 3 RD&CT Status update and RD&CT roadmap RD & CT Experimentation M. VUKASOVIC 11:30 – 12:00 4 LTCC Methodology Status update and LTCC roadmap Overview of the LTCC framework F.HEUS 13:30 – 14:00 5 Long Term splitting rules M.RUBEN 14:00 – 15:15 6 AOB & closure Outcomes from Market Parties survey K.TREPPER 15:30 – 16:00 Lunch

K.TREPPER Status Core CCR program

K.TREPPER Update developments in Core CCR Network Code/Guideline Art. CCR Obligation* Current status ENTSO-E Website Link CACM Day ahead 20ff Common Capacity Calculation Methodology for Day ahead NRAs referred to ACER for the decision ACER published their final decision (21/02/2019), available here ACER decision Latest version of the methodology available on ACER website here 27.2 Setting up Coordinated Capacity Calculator In preparation by Core TSOs. Intraday Common Capacity Calculation Methodology for Intraday SO GL Regional Security Coordination 76.1 Proposal for common provisions for regional operational security coordination Methodology under development by Core TSOs More information can be found on Core CCR webpage: Work in progress Work not started Work approved

K.TREPPER Update developments in Core CCR Network Code/Guideline Art. CCR Obligation* Current status ENTSO-E Website Link CACM Redispatch & Counter-trading Intraday 35.1 Proposal for a coordinated RD & CT Submission of methodology to NRAs on 22/02/2019. Latest version of the Methodology available here 74.1 Proposal for RD&CT cost sharing 74.7 Further harmonize redispatching and countertrading cost sharing methodologies with other CCRs Not started due to ongoing drafting of CACM art. 74.1 35.3 Report assessing the harmonization of coordinated RD&CT Harmonization report and consultation report submitted to NRAs on 17/01/2019. Core Report Harmonization available here. General 44 Fallback procedures for Day ahead Flow Based Market Coupling NRAs referred to ACER for the decision on the approval of Fallback Procedures ACER published their final decision (27/09/2018), available here More information can be found on Core CCR webpage: Work in progress Work not started Work approved

K.TREPPER Update developments in Core CCR Network Code/Guideline Art. CCR Obligation* Current status ENTSO-E Website Link FCA Long Term 31.1 Regional design of Long Term Transmission Rights (LTRs) in CCRs where LTRs exist 1st amendment: NRAs’ approval received (06/18) 2nd amendment: PC closed (held 07/02 – 07/03/2019) Latest version of the methodology available here 10.1 Common Capacity Calculation Methodology for Long Term capacities Methodology under development by Core TSOs. 16.1 Methodology for splitting Long Term capacities 21.1 Operational rules for merging the individual grid models Under development by all TSOs within ENTSO-E. 21.2 Operational rules for coordinated capacity calculators 52 Regional requirements of the harmonised allocation rules (Annex) Request for Amendment received from Core NRAs (09/18) Amended proposal submitted to NRAs on 16/01. Latest version of the methodology available here CERF informed Core TSOs about the approval on 21/03, the corresponding national approvals are ongoing More information can be found on Core CCR webpage: Work in progress Work not started Work approved

2. ACER decision on Core DA & ID CCMs
Presentation by ACER Presentation of ACER decision on Core DA and ID CCMs (see next slides)

Agency Decision on the CORE Capacity Calculation Methodology
Thomas QUERRIOUX, ACER Core CG, Vienna, 29 August 2019

*****Disclaimer*****
The opinions expressed in this presentation are those of the author and do not necessarily represent the official views of the Agency for the Cooperation of Energy Regulators unless explicitly stated otherwise. The presentation is intended to help interested parties understand the Agency’s functions and facilitate the accomplishment of the Agency’s mission. The presentation describes the draft decision submitted for BoR opinion, without prejudice to the final opinion.

Decision Process On 21 August 2018, the Core TSOs’ Amended Proposal was referred to the Agency by the Core NRAs, mainly due to disagreements on the following topics: Undue discrimination of cross-zonal exchanges Transparency and data publication requirements The Agency’s six month decision process included: 20 meetings with NRAs and TSOs (Core IG, AEWG, dedicated teleconferences, workshops), but also with other stakeholders (EFET, Eurelectric…) One public consultation with answers from 26 stakeholders from 11 countries More than 10 drafts versions commented aiming to fulfil the requirements set by over 15 articles from European Legislation (including CACM, SO and Transparency) Board of Regulator approval on 21 February

Main debates Debated Topic
Management of sensitive information related to CNE(C)s Internal CNECs should be included (or not) based on efficiency considerations, PTDF threshold criteria is only secondary Internal CNECs are allowed only for a transition period (2 years). After the transition period, internal CNECs are allowed only if other alternatives are less efficient Inputs (TSOs) Quick, transitional implementation, with review after 18 months Transitional measures for CNECs, GSK, FRM, Allocation constraints MinRAM - 70% with potential action plan/derogation, in line with Clean Energy Package Default minimum capacity is 70% of Fmax (available for exchanges from all CCRs). To derive the margin for Core, one needs to deduct the transit flows from other CCRs. If MS(s) go for action plan or NRAs grant a derogation, a linear trajectory applies between 2020 and A Linear trajectory compliant with the CEP is defined/interpreted in CCM: it applies unless the action plan or the derogation defines a different linear trajectory. Independently from the minRAM trajectory and from transit flows, at least 20% Fmax shall remain available for trade within Core. Calculation (CCC) Capacity reductions (decided by TSOs with CCC support) shall only be exceptional All deviations to the default rules are temporary and associated with strict publication requirements Exemptions

Expected gains for the IEM
Increased coordination across MSs Central role of the CCC, Central optimisation of Remedial Actions Increased transparency Oversight over constraints limiting the offer of cross-zonal capacity (allocation constraint, CNECs) Increased capacity : expected gross benefits of approximately 400 M€/Year in the Core region* * Estimate based on MMR 2017 Direct benefits additional cross-border capacity Longer term benefits bidding zone configuration where 70% minRAM cannot be achieved

Significant increase of cross-zonal capacity
Cross border CNEC Internal CNEC Fmax Fmax Flow Reliability Margin Loop Flow Internal Flow Unscheduled Allocated Flow Remaining Available Margin

AMS_AM0000_yyyymmdd_name
Implementation Beyond the Core CCM Implementation timeline DA CCM: 1 December 2020 The CCM does not address the operational decisions related to costly remedial actions and the related cost-sharing methodology (these issues will be tackled within the RDCT process) ID CCM: 1 December 2021 (1st re-calculation) and 1 December 2022 (2nd re-calculation) Significant CCM review 18 months after implementation, TSOs need to propose amendments to improve Capacity calculation inputs: reliability margin, allocation constraints, generation shift key, list of efficient internal CNECs Capacity calculation process: Advanced hybrid coupling Capacity validation: More clarity on coordinated validation The Agency would like to thank all stakeholders for their numerous and valuable contributions to this decision.

Next steps TSOs start implementing the methodology: testing, IT development, paralel runs… Discussion on the CEP compliance: How to interpret 70%? How to measure compliance before and after Core FB implementation What if TSOs cannot comply with 70 % at the beginning? If a bidding zone has a structural congestion: Action plan If it has problems because of other bidding zone or due to other reasons: Derogation Both should be decided by the end of 2019 as CEP applies in 2020 How to calculate the starting point of linear trajectory? ACER and NRAs will organise ad-hoc group to resolve these questions and coordinate actions to prevent deadlocks

Thank you for your attention

G.MEUTGEERT ACER decision on CORE DA & ID CCMs has a large impact ACER decision on CORE DA & ID CCMs has a large impact The DA FBMC Go-live date of Dec falls within the Go-live window identified earlier by TSOs and NEMOs, yet this Go- live window was based on the Core TSO CCM proposed in June 2018 Having the ACER methodology implemented and up and running on Dec is more than a challenge! IT implementation In order to meet the earlier-communicated Go-live dates the IT implementation process had already to be started in 2018 Given the ACER referral, the IT implementation process has been set up in such a way that requirements can be provided at different moments in time, such to facilitate the implementation of the changes decided by ACER Methodology The TSO CCM proposals were based on CWE experience and experimentations performed Though the ACER methodology builds on this same basis, fundamentally other choices have been made and are to be applied TSOs can only get a grip on how the ACER methodology works out by putting it in practice Internal parallel run The internal parallel run performed by TSOs up to now, is based on their June 2018 CCM proposal The internal parallel run is based on prototype tooling The internal parallel run is mainly focused on getting the computational chain in place – from all the local TSO input data up to and including the performance indicators (such as prices and net positions) – and to get a grip on the Core FBMC impact The prototype tooling, and the internal parallel run is now in the process of being aligned – to the extent possible – to the ACER methodology

G.MEUTGEERT Planning for the DA external parallel run DA external parallel run Next to the current (operational) capacity calculation and allocation process, TSO operators perform a daily Core DA FB capacity calculation by using industrial IT tools, and the NEMOs perform FBMC simulations using the operational order books The high-level planning is presented in the graph below, and consists of the following prerequisites: TSOs CCC operational readiness: Final TSO and CCC infrastructure validated and deployed, TSO operational IT tooling validated and deployed, TSO operator training completed. Disclaimer: impact of ACER decisions are being assessed and depending on the outcomes the start of the EXT//run might change

G.MEUTGEERT Transparency With regard to the publication of data (Art. 25), ACER followed the TSO CCM proposal to a large extent. Foreseen interaction with stakeholders and NRAs, before go-live, on: Art 25(5) – “utility tool” Pursuant to Article 20(9) of the CACM Regulation, the Core TSOs shall establish and make available a tool which enables market participants to evaluate the interaction between cross-zonal capacities and cross-zonal exchanges between bidding zones. The tool shall be developed in coordination with stakeholders and all Core regulatory authorities and updated or improved when needed. The CWE utility tool is the result of developments based on the dialogue between stakeholders and TSOs in CWE to address this requirement As a starting point Core TSOs propose to adjust / extend the CWE utility tool to a Core equivalent Art 28(4) – “quarterly report” During the internal and external parallel runs, the Core TSOs shall continuously monitor the effects and the performance of the application of this methodology. For this purpose, they shall develop, in coordination with the Core regulatory authorities, the Agency and stakeholders, the monitoring and performance criteria and report on the outcome of this monitoring on a quarterly basis in a quarterly report. After the implementation of this methodology, the outcome of this monitoring shall be reported in the annual report. Core TSOs propose to Align the internal parallel run to the ACER methodology (to the extent possible) – in progress Draft an initial report, when first valid results are available Initiate the dialogue with NRAs, ACER, and stakeholders based on this initial report

RD&CT Experimentation
M. VUKASOVIC Status update and RD & CT Roadmap (1/2) Core TSOs provided last December 2018 the following Core RD&CT project roadmap to Core NRAs Core TSOs provided last December 2018 the following Core RD&CT project roadmap to Core NRAs 2018 2019 2020 Q4 Q1 Q2 Q3 Related project Art 75 (SOGL) Art 76 (SOGL) Art 35.1 Coordinated RD&CT Art RD&CT Cost sharing RD&CT Experimentation NRAs + MPs NRA approval ACER decision process Implementation SO GL 76 “Proposal for regional operational security coordination” Methodology & Public Consultation NRA approval RfA NRA app. Implementation Submission methodology 3m after ACER decision Methodology & Public Consultation TSOs amendment of methodology after approval (based on experimentations) Implementation 22/02: Submission methodology NRA approval 22/08: NRA conditional approval Submission amended methodology Methodology TSOs amendment of methodology after approval (based on experimentations) Implementation 22/02: Submission methodology NRA approval 22/08: NRA conditional approval Submission amended methodology Exp. approach 14/02: NRAs feedback on exp. options Developments for Experimentation Finalization of Exp. KPIs Experimentation ramp-up tooling phase Experimentation Timestamps ramp-up phase RD&CT Exp. monthly reporting to NRAs Continuous NRAs and TSOs alignment (Rolling process)

TSOs submission to NRAs
3. RD & CT M. VUKASOVIC Status update and RD & CT Roadmap (2/2) Please find below the status of Core RD & CT methodologies Core TSOs submitted the following deliverables to Core NRAs 17/01/2019: Delivery of CACM 35.3 Report assessing the progressive coordination and harmonisation of mechanisms and agreements for RD & CT + Consultation Report to NRAs Documents available on Core CCR webpage: 03/2019: Delivery of CACM 35.1 Coordinated RD & CT Methodology + Explanatory Report + Consultation Report to NRAs 03/2019: Delivery of CACM 74.1 RD & CT Cost Sharing Methodology + Explanatory Note to NRAs Art. CCR Obligation Public consultation (official start) TSOs submission to NRAs CACM 35.1 Proposal for a coordinated RD & CT methodology 5 Sept 2018 March 2019 35.3 Report assessing the progressive coordination and harmonisation of mechanisms and agreements for RD & CT 13 Dec 2018 Jan 2019 74.1 Proposal for RD&CT cost sharing methodology Not required SO GL 76.1 (a) Conditions and frequency of intraday coordination of operational security analysis and updates to the CGM by the RSCs Q2 2019 Q (Sept) 76.1 (b) The methodology for the preparation of RAs managed in a coordinated way, considering their cross-border relevance 77 Organisation for regional operational security coordination

3. RD & CT RD & CT experimentation (1/2)
M. VUKASOVIC RD & CT experimentation (1/2) RD & CT experimentation phase to be used as “proof of concept” for the full chain of processes related to CACM art. 35, CACM art. 74 & SO GL art. 76 methodologies Ramp-up approach Duration: from October 2018 until June 2020 Oct 2018 – Feb 2019: preparation phase Mar 2019 – Sept 2019: experimentation ramp-up tooling phase Oct June 2020: experimentation timestamps ramp-up phase As this is a new process, Core TSOs use a ramp-up approach for the RD&CT experimentation. Highly complex process due to the numbers of congestions to be solved The process and quality of inputs will continuously evolve during experimentation (learning by doing). The number of timestamps will be further increased: start with 4/5 timestamps per week in March towards the target of 24 timestamps per day. (!) The feasibility of a high number of timestamps computed and analyzed depends on the number of cost-sharing options simulated.

3. RD & CT RD & CT experimentation (2/2)
M. VUKASOVIC RD & CT experimentation (2/2) Below a depiction of the high level business process to be executed during RD&CT experimentation Provide CNEC selection results Remedial actions (costly and non-costly) and parameters (e.g. bid prices) to be provided Provide IGM (DACF) based on own expertise and (if required) best forecast Merged IGMs Optimisation of remedial actions by RAO (prototype) Flow decomposition on congested CNECs* Mapping of RA cost to congested elements & cost sharing by cost sharing methodology Analysis of results from each cost sharing option TSO activity RSC activity * analysis on the CGM which is to be used for flow decomposition process is ongoing

4. Long-term capacity calculation methodology (LTCCM)
F. HEUS Status update and LTCC roadmap (1/2) FCA article 10.1: Text of article or at least a quick summary to be included here FCA article 10.1: “No later than six months after the approval of the common coordinated capacity calculation methodology referred to in Article 9(7) of Regulation (EU) 2015/1222, all TSOs in each capacity calculation region shall submit a proposal for a common capacity calculation methodology for long-term time frames within the respective region. The proposal shall be subject to consultation in accordance with Article 6.” Submission date of LTCC methdodology: 6 months after approval of DA CCM i.e December 2017: definition of high level aspects for the LTCC methodology Core TSOs decision for a coordinated NTC methodology; Scenario-based; Initiation of continous interaction and alignment with Core NRAs. Officially started February 2018 14 TSOs and 2 RSCs; Two methods explored; Merged into one methodology with different approaches; Core TSOs ensure consistency accross all capacity calculation methodologies; Discussion on several topics ongoing.

F. HEUS Status update and LTCC roadmap (2/2) Core TSO plan to deliver the Long-term Capacity Calculation (LT CCM) and Long-term Splitting Rules (LT SM) methodologies in late August, close to the formal submission deadline. Both methodologies are aimed to be submitted together. Core TSOs aim to submit both LT CCM and LT SM at the formal deadline: 21/08/2019 Formal deadline to submit the LTCCM is 6 months after the DA CCM approval by ACER (21/02/2019). Consequently, the Public Consultation will take place in June-July 2019. For the Public Consultation, Core TSOs could submit a LT CCM with no or partly no robust experimentation results available. Possible next step: discuss the challenge with the NRAs during Core IG and conclude together the preferred timeline (options) But first conclude on SG level what is the underlying core of the issues: Resources and time Content??? F.HEUS states that the real issue is the resource availability of TSOs and RSCs and not in the content. Core SG asks more transparency on what is not delivered, which TSOs have insufficient participation, etc. F.HEUS indicates that in his view only Amprion, TransnetBW are sufficiently available and actively involved/ contributing in the discussion and deliverables. The other TSOs are only participating to the telco’s and meetings, but not further involved in preparations and follow up. The challenges for the Experimentation is the quality checks of input files (RAM values). There are huge differences of RAM values discovered between the two RSCs. C.PELLIGRIN complements that the methodology definition required an adaptation of the RSCs tooling. This delayed the experimentations. The issue impacting the experimentations seems to be solved this week. F.HEUS indicates that there is no real preference expressed in the LTCC PT. F.HEUS would recommend to go for option 2, being the only realistic and feasible option. M.RUBEN adds to the discussion that when going for option 2 there are quite some legal challenges with regards to the LT splitting rules obligations. Positions - 50Hertz proposes to not deviate from option 1 (the legal obligation), considering the RSCs issue for experimentation is sovled now. And discuss with NRAs the two alternatives and have their feedback. Amprion: can not agree to delay due to lack of resources especially since it’s a legal obligation, Amprion can not agree on option 2. Agrees with 50hertz position. But when NRAs give the possibility to postpone with 3 months, it would be very good since it will give TSOs a change to deep dive in the results under the methodology. If it would be legal to postpone the LTCC PT milestones and there is the nRAs consent Amrpion would prefer option 2. APG: option 2 would be acceptable and it would good since it will give TSOs a change to deep dive in the results under the methodology. CEPS: option 2, in order to have more time but also ok with option 1 CREOS: discuss with NRAs the options, prefer option 2 above 1, but the real issue has not been tackled and SG shall discus how to support the experts in the PT ELES: talk to the NRAs, inform on the risks . Preferred option 1. If NRAs agree the option 2 is preferred Elia: raising the risk to NRAs is fine, but they will not care about our resources issue. TSOs should be careful to raise all issues to the EC. We should commit to deliver something in Augst, there will be hanges for a RfA. Option 1. HOPS: option 1 preferred, Mavir: fully agree with position of Elia, the real issues have still not been solved. Core SG should do the strategy discussion on the program roadmap and its challenges. RTE: option 2 Tennet: PSE: see sheet Transnet: option 1 trying to submit something under the deadlines given and clearly indicating the impact to NRAs and discuss it in Core IG 02/04. Transncet will not Core SG concludes that the resource availability for LTCC PT is an issue not to deny. All SG members will discuss internally to ensure focus of their experts and secure sufficient availability of their experts for LTCC PT as defined in the project plan (8 md per month on average). Further PMO is asked to try to further optimize and make more efficient the communication in the PT. RSCs are to confirm their feasibility and timeline. TSOs conclude to inform NRAs that their way forward is the OPTION 1 and inform to NRAs that as a consequence they will receive a CCM with some open options and not based on exp. results, but within the formal milestones. TSOs will stick to the approach to provide the draft methodologies to NRAs on 02/04. TSO SG realizes the consequence regarding the availability and involvement of the experts in the PT and on RSCs. IG meeting participants: F.HEUS, M.RUBEN, K.TREPPER, B.GENET, PSE member, G.VISAN (to be confirmed), Tennet member (to be confirmed) PMO In addition M.VATJA asks for a strategic discussion on the prioritization of the projects and the CCR obligations, acknowledging the resource challenge. 27

F. HEUS High Level Business Process Initial data preparation (out of CC process) Data preparation (out of CC process) Capacity calculation LT Splitting Validation Capacity allocation Core TSOs All ENTSO-E RG CE TSOs Core CCCs (Core RSCs) ENTSO-E (RSCs) SAP (JAO) Data Preparation Validation Provided Outputs: Validated Split LT Capacities Available LT Capacities Provided Inputs: GSK CNEC DA reservation Split ratios (NP update) Initial Data Preparation Data Preparation Provided Inputs: seasonal IGMs Provided Inputs: planned outages LT CC computation Model Preparation Provided Outputs: NTCs Split Computation Submission to the SAP Provided Outputs: updated CGM Provided Outputs: Split LT Capacities Intermediate step European Merging Function Provided Outputs: DA reservation Outage Planning Coordination Provided Outputs: seasonal CGMs Provided Outputs: planned outages LT allocation Not needed in case of no DA Reservation Need is depending on the chosen split approach

F. HEUS Overview of the LTCC framework The LTCC Methodology will consider the following elements: Common understanding: application of a coordinated NTC method, Scenario-based: use of the ENTSO-E year-ahead scenarios. Article 65 of the SO GL; resulting in CGMs Outages are incorporated in the CGMs (from the ENTSO-E OPC database) Quality check of the CGMs Calculation of long-term capacities Validation of results Flows on non-Core BZBs remain as they are in the year-ahead scenarios

5. Long Term Splitting Rules
M.RUBEN Status update Art. 16(1) FCA Regulation requires Core TSOs to develop a methodology for splitting long-term (LT) cross-zonal capacity in a coordinated manner between different long-term time frames. The required Long-term Splitting Methodology Needs to be developed in parallel to the LT capacity calculation methodology according to Art. 10 FCA Regulation and is subject to a public consultation Is due 6 months after the approval of the Core TSOs’ day-ahead capacity calculation methodology  i.e. 21/08/2019 Shall split capacities between yearly and monthly time frames (cf. art. 6 of the Core TSOs’ LTTR Design acc. to Art. 31 FCA Regulation) Must comply with the following conditions (Art. 16(2) FCA Regulation): meeting the hedging needs of market participants ensuring coherence with the LT capacity calculation methodology no restrictions in competition, in particular in access to long-term transmission rights Core TSOs will run public consultation of the Long-term Splitting Methodology in parallel with the LT capacity calculation methodology.

M.RUBEN Survey on hedging needs (1/2) In order to get ‘first hand insights’ and consequently better understanding of market participant’s hedging needs and behavior, Core TSOs run a survey among market participants via ENTSO-E consultation hub in December By this TSOs have been aware that Hedging strategies are quite diverse per trader Traders will not reveal too much of their hedging strategies The survey might not have the level of a representative survey Nevertheless Core TSOs intended to receive at least some general tendencies and trends with regards to Market Participant’s hedging needs.

M.RUBEN Survey on hedging needs (2/2) Core TSOs thank 18 companies/associations for their participation in the survey. Respondents indicated to be 11 trading companies; 4 associations; and 3 participants w/o indication on their type. Majority of respondents gave their answers either as a general view on the topic or they referenced their answers directly to the DE-AT border. One MP referenced his answers specifically to Croatian borders. Today Core TSOs want to verify the conclusions taken from the received responses .

M.RUBEN Main Conclusions Core TSOs thank 18 companies/associations for their participation in the survey. Respondents indicated to be 11 trading companies; 4 associations; and 3 participants w/o indication on their type. Core TSOs took the following main conclusions from the responses: There is clear preference of the majority of respondents to provide as much capacity as possible as soon as possible even on the expense of having no capacity on monthly auctions. It has to be noted that there were some (limited) voices against this position. In general all indicators for splitting LT capacity proposed by Core TSOs were seen as not appropriate/relevant by the majority of MPs. The general opinion expressed was that historical data is not appropriate to assess the future hedging needs of the MPs. A limited number of alternative solutions for meeting MPs’ hedging needs were received. Question to MPs: What could be adequate indicators to the view of MPs? There seems to be a potential need for: Multi yearly products, quarterly products; Organising yearly and monthly auctions well in advance of the delivery day i.e. from several months to two years in advance. Core TSOs will take this feedback into account for the LT Splitting approach, which must be a balanced approach between hedging needs, capacity calculation and non-discrimination.

6. AOB & closure Results of the MPs engagement survey
K. TREPPER Results of the MPs engagement survey Core TSOs have launched a survey in Feb 2019 among the Core Consultative Group to review the current engagement of MPs. Unfortunately, only a few MP participated in the launched survey: 13 respondents of which only a few provided feedback on all questions Therefore, only limited interpretation of the feedback possible. However, drawn conclusions: More detailed and more often communication is preferred (4 responses) MPs are not aware about the ENTSO-E newsletter communication from Core and the dedicated CCR sections on the ENTSO-E website (only 1 response is aware) Core section on ENTSO-E website (e.g. upload of methodologies and reports on public consulations, current status of the Core CCR program, CG minutes, … ): Link: ENTSO-E newsletter informs regularly about updates in the different CCRs (e.g. submitted methodologies, launch of public consultations, …) Subscription via

3. RD & CT CACM 35.1 – Consultation Report (Extract)
M. VUKASOVIC CACM 35.1 – Consultation Report (Extract) 2 stakeholders ask for a more market-oriented redispatching approach or ask for general price-related RD Core TSOs answer: In the Article 35(5) of CACM guideline the revenues for RD and CT can either be price-based (market) or cost-based. The rules for pricing of the RD CT resources are based on the national legal and regulatory frameworks. An alignment of the pricing rules in CCR region is not a task of the TSOs and will not be considered in this methodology. 2 stakeholders ask for independent implementation of the CACM 35 methodology and fear a large delay for the implementation of the proposed common coordination methodology. They propose a stepwise application. Core TSOs answer: Continuous improvement of RD and CT is a daily task of the TSOs. TSOs see strong dependencies with other methodologies, especially in the methodology pursuant to Article 74(1) of CACM guideline and the methodology pursuant to Article 76(1) of SO guideline where the cost sharing and the consideration of non-costly and costly remedial actions will be described. The Core RD and CT Methodology covers only costly RA and is an input for the methodologies pursuant to Article 74(1) of CACM guideline and to Article 76(1) of SO guideline. Therefore RD and CT cannot be implemented separately. An optimization of RD and CT is only possible with cost sharing. 4 stakeholders ask to adjust the definition of “Redispatching” to make clear that the counterpart (balancing) of redispatching can also be countertrading and that redispatching is only performed by a single asset The definition of "Redispatching" combined with the definition of "RD and CT Measure" meet already the criteria asked by the stakeholder. The existing definitions include all possibilities needed, including the possibility to perform RD and/or CT in different bidding zones. For each timestamp where RD and CT Measures are included in the grid model, the sum has to be energy-balanced. It can be composed of Countertrading only, Redispatching only, or a mix of both.

M. VUKASOVIC CACM 35.1 – Consultation Report (Extract) 3 stakeholders oppose to the use of the balancing market as a resource for countertrading Core TSOs answer: Core TSOs do not agree to refrain from the use of the balancing market as a resource for Countertrading. One of the main reasons for this is that some Core TSOs already use the balancing market as resource for Countertrading. For these Core TSOs, however, the balancing market may be the only resource for Countertrading, e.g. because some Core TSOs are not allowed to take position in the intraday market, not even if it is requested by a third party on their behalf. A more detailed description on how balancing markets are used as a resource for Countertrading on a national level is provided in the explanatory note. 3 stakeholders request clarification how a third party takes position in the intraday market on request of a Core TSO Core TSOs agree with the request for clarification and provide a description in this report. The option that a third party may take position in the intraday market on request of a Core TSO addresses the fact that there are different national legal framework conditions in the Core region. In particular, not all Core TSOs are allowed to take positions in the intraday market themselves, but have the possibility that a third party acts on their behalf. Please note that the actual practical implementation how a third party may take position in the intraday market on request of a Core TSO depends on the specific national legislation. Apart from the specific national implementation, Core TSOs acknowledge the importance of full transparency on this matter. Therefore, as stated in the Core RD and CT Methodology, Core TSOs Countertrading and Redispatching actions (in particular also those actions conducted by a third party on behalf of a Core TSO) will be reported as described in the Transparency Regulation and in the Commission Regulation (EC) 543/2013 and 1227/2011 for Energy Market Integrity and Transparency. Furthermore, it is important to stress that the responsibilities and obligations of a third party acting for a Core TSO must be clearly defined. In particular, there will be a clear separation between the obligations of a third party due to balancing responsibility and the obligations due to her actions for a Core TSO. Please also note that the scope of a third party acting for a Core TSO is limited to the intraday market in this Core RD and CT Methodology Proposal.

M. VUKASOVIC CACM 35.1 – Consultation Report (Extract) 3 stakeholders ask to harmonize the pricing mechanisms for redispatching in the different countries of the Core region & propose specific pricing mechanisms to be used (Art. 10: Price information exchange) Core TSOs answer: According to Article 35(5) of CACM guideline, the revenues for RD and CT can either be price-based (market) or cost- based. The rules for pricing of the RD and CT resources are based on the national legal and regulatory frameworks. An alignment of the pricing rules in CCR region is not a task of the TSOs and will not be considered in this methodology. The Core RD CT Methodology is not affecting the national obligations regarding capacity remuneration. It depends on the national regulatory framework.

M.RUBEN Questions & Answers summary Q3: Do you agree that hedging on average happens progressively over a period, meaning the closer the delivery, the higher the share (of his consumption and/or generation) that a market participant hedges? A: MPs generally disagreed with this statement. Majority of votes went for the option to give to the market as much LT capacity as possible as soon as possible. There were some voices to split the capacity resulting from yearly capacity calculation process but even in this case the general tendency expressed was to offer more on yearly auction and less on monthly auction. Q4: In case long-term splitting is applied, would you prefer to have fixed percentages as a splitting rule or a fixed MW amount of capacity reserved for monthly auctions? A: Quite diverging answers have been received but in general a fixed ratio seemed to be preferable. There were also some votes to cap min values and update ratios from time to time. Nevertheless the majority of MPs would still like to have as much capacity as possible as early as possible.

M.RUBEN Questions & Answers summary Q5: Would it be acceptable if, as result of applying splitting rules, no capacity would be offered in some months, but there would be a larger share of offered capacity for the yearly auction? A: In general MPs accepted the risk of having no monthly capacity offered which is in line with previous statements to offer as much capacity as possible as soon as possible. Some MPs considered the secondary market as potential solution for a lack of monthly capacity. Two MPs were strictly against claiming that monthly timeframe is essential for them to cover their hedging needs. Q6: How would you as a market participant choose to split 100 MW between yearly and monthly LTTR products to best meet the hedging needs in the market? Please justify your choice. A: Similar to previous answers the majority of the responders would like to have as much LT capacity as possible available as soon as possible. For some an acceptable compromise could be 75/25. Other voices preferred a splitting close to an equal split i.e. 60/40 or 40/60.

M.RUBEN Questions & Answers summary Q7: What criteria have you applied for your offered LTTR splitting described above? Please describe them in detail and their underlying rationale. A: Majority of responders would like to have the ability to hedge as early as possible which goes in line with previous answers to give to the market as much LT capacity as possible as soon as possible. Some MPs justified their answers concerning their preference for a fix ratio.

M.RUBEN Questions & Answers summary Q8: At the moment, Core TSOs consider the following indicators as worth to be investigated for the decision making on potential ratios of offered capacities between yearly and monthly auctions: Indicator DEMAND VS OFFERED A: 2x YES, 15x NO, 1x no answer. Indicator HISTORICAL PRICES A: 3x YES, 13x NO, 3x no answer. Indicator SEASONALITY A: 4x YES, 11x NO, 3x no answer. No respondent proposed alternative indicator approaches.

M.RUBEN Questions & Answers summary Q9: Do you have any suggestions how Core TSOs can ensure that the hedging needs of market participants are met by the splitting rules? A: MPs gave several proposals. Yet, some of them are not very clear or of relevance: Allocate capacity to the market as soon and as much as possible. Present some simulations/examples of split outcome and run second survey. Introduction of auctions for several years in front i.e. 2 years. Introduction of quarterly products. Possibility of trading transmission rights on a secondary market without banking license.

M.RUBEN Questions & Answers summary Q9: Do you have any other aspects that you would like to make Core TSOs aware of? A: The answers provided were: One MP is concerned about the outcome of financial capacity allocation on yearly level – impact on physical delivery. Offering monthly products shortly before delivery can hardly be understood as a long term time frame. Proposal to have monthly auctions several months before delivery. Need for secondary market (without banking license) for transmission rights is necessary. To develop peak and off peak instead of base products. Consider introduction of multi-year cross-zonal products, quarterly products. To run yearly auctions as early as possible even in September..

Core CG meeting 3rd of April 10:00-16:00 NH Hotel, Vienna Airport.

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Core CG meeting 3rd of April 10:00-16:00 NH Hotel, Vienna Airport.

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