1. Electricity Regional Initiative Northern Europe Region By: Finn Dehlbæk, Regulator Danish Energy Regulatory Authority (DERA) Creating a Single European Energy Market 30th January 2007

2. 2 ERI – Northern Europe Creating a Single European Energy Market, 30.01.2007 The market background Nordic countries: Reasonably well-functioning cross-border wholesale market Germany: - Reasonably well-functioning national wholesale market – Part of 4 Regions of ERI Poland: - New wholesale market with low liquidity - Part of 2 regions of ERI Interconnected, but different capacity allocation methods and obvious inefficiences in utilization

3. 3 ERI – Northern Europe Creating a Single European Energy Market, 30.01.2007 General focus and priority topics Focus of regional initiative: The well functioning of the whole-sale market interface between Nordel-area and Germany/Poland - taking into account other relevant interfaces as coming NorNed Cable and EstLink Priority topics - to deal with now: - Optimizing the use of interconnectors (allocation mechanism and congestion management) - 2 interconnectors between Germany and Denmark – available for the market - 2 ”merchant” interconnectors - between Sweden and Germany - between Sweden and Poland - Transparency for market-actors in whole sale market Priority topics - included in road-map: - Need for joint intra-day and regulation power markets - Planning and financing of new/strengthened interconnectors - Cooperation on integration of major shares of windenergy

4. 4 ERI – Northern Europe Creating a Single European Energy Market, 30.01.2007 ”Optimizing the use of interconnectors – KONTEK and Germany-Denmark West” Starting point KONTEK: Market splitting – operated by Nord Pool Spot DE-DK West: Explicit auctions MoU of 27-10-2006 between  By 4th quarter 2007 - Day ahead market coupling - Central auction office  Prepared for cross border intra-day market  Open for other TSOs and PEXes  NorNed Cable and Central Western Europe taken into account  Progress Integrated with Northern ERI  Very positive development in ”Close and fruitful cooperation”

5. 5 ERI – Northern Europe Creating a Single European Energy Market, 30.01.2007 ”Optimizing the use of interconnectors – SwePol and Baltic Cable” Starting point Both interconnectors operated and used entirely (in practice) by owners reflecting market conditions Status of work  Describing in depth present operation and use  Analysing the legal framework To be done  Analyse the consequences of illiquid Polish market  Drafting model(s) for capacity allocation and congestion management taking into account the results of the decisions on DE-DK interconnectors  Dead-line December 2007

6. 6 ERI – Northern Europe Creating a Single European Energy Market, 30.01.2007 ”Transparency for market actors in the electricity whole sale market” Starting point  Nord Pool Spot information mandatory requirements from members and continuous publication of information  EEX voluntary agreement on information collection and publication with major German generating companies Status of work  Analysing information collected and published at present  German (BNetzA) initial proposal on harmonized set of informations (with thorough definitions) to be collected and published – based on ERGEG guidelines  Stakeholder’s comments To be done  Drafting final proposal taking into account all input  Dead-line May 2007

7. 7 ERI – Northern Europe Creating a Single European Energy Market, 30.01.2007 Indicative meeting-plan first half 2007 (dates decided by now) Stakeholder group meeting Copenhagen 7th June RCC 11th May IG ”Transparency for market actors in the electricity whole sale market” April IG ”Optimizing the use of interconnectors – KONTEK and Germany-Denmark West” 14th February IG ”Optimizing the use of interconnectors – SwePol and Baltic Cable” 13th February 6th March 9th May