1. 1 IFIEC Energy Forum 22 November 2011 Electricity

2. 2 Contents Pricing mechanism Market integration Climate Policy and renewables Structural elements

3. 3 Pricing mechanisms Efficient, liquid, competitive and transparent market platforms Access to long term competitive contracts on normal market conditions Long term visibility of electricity prices Accelerate work on forward markets in Target Model Day-ahead market is key All available capacity should be offered At marginal cost+ Intraday and balancing markets are “corrective” markets only On cross-border: no OTC Capacity markets: Risk of paying the highest price for both capacity and electron Better ways to stimulate investments

4. 4 Market integration Necessary for effective competition AND better security of supply Investments in additional grid capacity if it brings value to the end customer (as long as it is economically justified) Make optimal use of existing capacities Target model: Coordinated flow-based capacity calculation Smaller bidding zones are OK, but price zones cannot be reduced in size but rather increased!

5. 5 Climate Policy and Renewables ETS: compensation for exposed industries are essential as long as no international commitment exists: 100% compensation No decrease over time Integration of renewables - impact on the market - fuel cost – marginal pricing - intermittence - impact on grid (costs) - impact of support schemes on overall electricity cost

6. 6 Structural elements Transparency IFIEC in principle welcomes additional transparency rules (REMIT / MAD / fundamental power data /...) but we oppose for additional administrative or financial burdens for industry Consultation processes (ACER / Florence Forum / EC / ENTSO-E) IFIEC supports the consultation process and will contribute with all its available resources Closed Distribution Systems IFIEC insists on workable solutions in EU member states

7. 7 Thank you for your attention