1. The EU internal energy market
Istanbul, May 25th 2015
The EU internal energy market
6th WFER - Istanbul
Vittorio Musazzi
General Manager

2. European Gas Transmission Network 2014

3. Dimensions of EU gas and electricity
Source: TYNDP ENTSO-E/ENTSOG
Gas and power markets have different characteristics:
Gas: 90% of gas flows across international borders and connected markets
Power: mainly national markets with market coupling/price convergence
Transmission costs for gas is far lower than for electricity

4. 242,000 km 23,1% Directly employed staff: 49,540
Length of high-pressure pipeline network:
242,000 km
Energy covered in the EU:
23,1%
Directly employed staff: 49,540

5. Role of ENTSOG
As laid down mainly in Article 4 of the Regulation 715/2009, the purpose of ENTSOG is that:
All transmission system operators shall cooperate at Community level through the ENTSO for gas
in order to promote the completion and functioning of the internal market in natural gas and cross-border trade
and to ensure the optimal management, coordinated operation and sound technical evolution of the natural gas transmission network.

6. Board: President and 12 Members
ENTSOG structure
Capacity
Balancing
Tariffs
Investment
Interoperability
Transparency
Board: President and 12 Members
General Assembly 44 TSOs, 3 Associated Partner and 4 Observers
Regional Co-operation
General
Manager
System
Development
Market
Operation
Liaison Group
Legal
Financial
Ad hoc DTFS
Administrative
Research Plan

7. ENTSOG activities Network Code development: 12 months
Pan-European Network Codes to cover cross-border/market integration issues
framework Stability
Pan-European Ten-Year Network Development Plan (‘TYNDP’)
Regular gas supply/demand outlooks on the European market
Develop common operational tools (CNOTs): network security and reliability
Providing information/data (Transparency Platform, maps)
Network Code development: 12 months
Preparatory work
Project planning
Prepare launch document
Interactive draft code development
Prepare final code
ACER review
Comitology
Cooperation amongst Stakeholders, Institutions and TSOs made this possible!

8. Internal Energy Market (1)
Rules and tools
TYNDP and Platforms
Network Codes
Implementation
Transparency Information
Market Opening through the implementation of the common rules
and transparency and information availability

9. On the way to EU law Network Code development: 12 months
Preparatory work
Project planning
Prepare launch document
Interactive draft code development
Consultation
Prepare final code
ACER review
Comitology
CMP Guidelines
Approved as amendment to the Reg. 715
on August 2012
ENTSOG third NC - published as Regulation (EU) No 703/2015 (30th April 2015)
ENTSOG first NC - published as Regulation (EU) No 984/2013 (14th October 2013)
CAM NC -Network Code on Capacity Allocation Mechanisms in Gas Transmission Systems
INT NC - Network Code on Interoperability and Data Exchange Rules
BAL NC - Network Code on Gas Balancing of Transmission Networks
ENTSOG second NC - published as Regulation (EU) No 312/2014 (26th March 2014)
ACER Reasoned Opinion 26th March 2015: on going discussion ex art. 6(8) Reg. 715/2009. Gas Committee meetings: Q Q1 2016
TAR NC - Network Code on Harmonised Transmission Tariff Structures for Gas
CAM NC Amendment for Incremental capacity
In line with the invitation from EC ENTSOG drafted the NC amendment and submitted to ACER. Same timescale as TAR NC for Gas Committee

10. Designing the EU Internal Market (3rd Package)
Framework
Guidelines
Network
Code
Evaluation
Comitology
Entry
into force
The objective of the EC is to meet the 2014 target from the EU Council
 Rules on priority topics are developed by 2014
Project
Plan
Launch
Doc
SJWS
Draft
Formal
Consult.
Revision
Final
12 months maximum

11. TSOs‘ Commitment to ENTSOG
Brussels based
Small ENTSOG team working with extensive inputs from member companies
ENTSOG Members’ commitment
Working Group participants
Stakeholders involvement
Stakeholders Joint Working Session
Up to 100 attendees per meeting
Institutions cooperation
Deep discussion and
High level of cooperation
ENTSOG team
Members’ staff

12. ENTSOG working processEC
ACER
Member States
Shippers
End users/
Connected operators
Stakeholder consultation is at the heart of the team’s work
Huge progress made in engaging a range of market participants
Market participants see ENTSOG as a fair partner
Stakeholders have responded very positively to our processes and outputs
… involvement of all market participants is the key of success of the work done!
The real spirit and the results possible in line with the 3rd Energy Package!

13. Early Implementation of network codes

14. Projects in the CAM Roadmap
Introduction
Projects in the CAM Roadmap
Review of national regulatory frameworks
Issues and challenges being addressed in CAM implementation
To note verbally during the presentation:
Madrid Forum XXI (March 2012) called for early implementation of CAM NC through pilot projects and platforms
Madrid Forum XXII (October 2012) endorsed the first draft CAM Roadmap jointly presented by ACER and ENTSOG and encouraged to proceed with implementation
ACER and ENTSOG in close cooperation with NRAs and TSOs have now finalised the CAM Roadmap which aims to facilitate the early implementation of CAM NC
The CAM Roadmap aims to facilitate the early implementation of CAM NC by:
Promoting experience sharing and exchange of lessons learned between pilot projects
Identifying good practices and critical issues of EU relevance
Informing adequately all interested stakeholders
Enabling ACER and ENTSOG to monitor the whole process, as requested by the MF, ensuring the coherence of solutions adopted by different projects
CAM Roadmap document published on ENTSOG and ACER websites Friday 1st March
Voluntary implementation via pilot projects is already well underway, ahead of mandatory implementation deadline

15. Projects in the CAM Roadmap
PILOT PROJECTS
Rapid progress towards early implementation of CAM NC in large number of MSs spanning most EU regions
Driven by voluntary initiatives established by TSOs, with support from NRAs.
To be noted here during the presentation the very positive nature of recednt developments for european gas markets

16. Capacity Platforms Luxembourg UK Denmark Netherlands TBC Daily Daily
Pilot project via Prisma (Q2 2015)
PRISMA UK
TBC
Netherlands
Daily
Monthly
Quarterly
Yearly
Denmark
Daily
Monthly
Quarterly
Yearly
GSA
RBP
Ireland
TBC
Poland
TBC
Belgium
Daily
Monthly
Quarterly
Yearly
Czech Republic
Pilot project via Prisma (Monthly, Daily)
Pilot project via GSA
Slovakia
Pilot project via Prisma (Q2 2015)
France
Daily
Monthly
Quarterly
Yearly
Hungary & Romania
Daily
Monthly
Quarterly
Yearly
Spain
Monthly
Quarterly
Yearly
Interruptible capacities
Germany
Daily
Monthly
Quarterly
Yearly
Portugal
Monthly
Quarterly
Yearly
Interruptible capacities
Austria
Daily
Monthly
Quarterly
Yearly
Slovenia
Daily
Monthly
Quarterly
Yearly
Italy
Daily
Monthly
Quarterly
Yearly
Interruptible capacities

17. Transparency Platform:

18. Legal Obligation
1. Transparency guidelines (Reg. (EC) 715/2009, Chapter 3 of Annex 1)
Definition of the technical information necessary for network users to gain effective access to the system
Definition of all relevant points for transparency requirements
Definition of the information to be published at all relevant points and the time schedule according to which that information shall be published
2. Congestion Management Procedure
Amendment of Transparency Guidelines by CMP Commission Decision of 24th august 2012 (2012/490/EU)
TSOs obliged to publish data on a Union-wide central platform, established by ENTSOG
New data to be published (CMP data)

19. Transparency Platform 2.0

20. Next step: Implementation of network codes

21. Implementation of the network codes
Introduction
Implementation of the network codes
01/10/2015 Balancing
01/11/2015 CAM
01/05/2016 Interoperability
To note verbally during the presentation:
Madrid Forum XXI (March 2012) called for early implementation of CAM NC through pilot projects and platforms
Madrid Forum XXII (October 2012) endorsed the first draft CAM Roadmap jointly presented by ACER and ENTSOG and encouraged to proceed with implementation
ACER and ENTSOG in close cooperation with NRAs and TSOs have now finalised the CAM Roadmap which aims to facilitate the early implementation of CAM NC
The CAM Roadmap aims to facilitate the early implementation of CAM NC by:
Promoting experience sharing and exchange of lessons learned between pilot projects
Identifying good practices and critical issues of EU relevance
Informing adequately all interested stakeholders
Enabling ACER and ENTSOG to monitor the whole process, as requested by the MF, ensuring the coherence of solutions adopted by different projects
CAM Roadmap document published on ENTSOG and ACER websites Friday 1st March
Voluntary implementation via pilot projects is already well underway, ahead of mandatory implementation deadline

22. Internal Energy Market (2)
Integration and Diversification
Interconnections
New routes
supplies, routes
Investments
Information and vision
Regulatory framework Stability and vision for investments are needed

23. Ten Year Network Development Plan 2015 2035

24. Executive Summary - Infrastructures
From projects to commissioned infrastructure
259 projects (South Stream withdrawn)
A bit less projects than previous edition
Construction works are on time but FID are often delayed
Main barriers to investments
Based on project promoter feedback
Regulatory frameworks are often perceived as focusing too much on tariff reduction ignoring the economic benefits of well-integrated markets
Market is not able to provide necessary investment signals due to economic situation, short term orientation given by regulation and lack of visibility on the role of gas in the EU energy mix

25. Executive Summary - Demand
Stable demand driven by global context
Gas demand for power generation is the major driver
Use of two demand scenario differentiated by commodity price (gas, coal, CO2), power generation capacity mix, economic environment...
Scenarios in the upper half of other outloks (IEA 450 and DG ENER trends to and Eurogas slow progression are lower)
0.4% increase per annum but situation is heterogenous from one region to the other

26. Executive Summary - Supply
Europe needs to enlarge its supply portfolio
In line with current situation of midstreamer having difficulty to manage ToP
Situation will become tighter with the continuous decrease of indigenous production
Under current perspective Russian gas and LNG will be the sources compensating this decrease with negative consequence on Europe control on import prices
Potential exist to further diversify European supply and limit the import bill
Russia
LNG

27. Executive Summary – Assessment - 1
Market integration, a constant challenge
Confirmation of results of previous edition
Extension of the time horizon shows how regional issues may impact the whole Europe without the proper investment decisions or

28. The basic blocks: Supply
Facing national production decline…
… Europe will have to develop new imports and indigenous production
Biomethane
This can materialize through the implementation of many projects of different sizes
Shale gas

29. Stable Regulatory Framework: Why?
High capital intensive infrastructures
Economic lifetime of gas infrastructures is 30 to 55 years
What will be the situation in ?
Private investor interest
The bulk of the investment has to continue to come from private investors
This requires the attractiveness of the sector which has to be insured through:
Stable and incentivising regulatory framework recognizing the social benefits of market integration
Visibility on the long term role of gas
Funding from European Institutions
This funding can only represent only few percent of the investment need
But as it is tax payer money, supported projects should be thoroughly selected

30. European Gas Transmission Network 2014

31. Vittorio Musazzi ENTSOG General Manager