1. Report from balancing workshop Lesley Queripel 1 February 2007

2. © 2004 E.ON19 December 2015, E.ON UK, Page 2 Summary of meeting  Meeting chaired by David Halldearn  Reported on the congestion management workshop  Intraday is to be dealt with as part of CM workstream  TSOs presented two models for balancing (IG2-3)  High level, conceptual models - detail not fleshed out at this stage  Attempting to reflect the different balancing systems in GB and France

3. © 2004 E.ON19 December 2015, E.ON UK, Page 3 Model 1  Reserve provider contracts directly with the neighbouring TSO

4. © 2004 E.ON19 December 2015, E.ON UK, Page 4 Model 2  Reserve provider contracts directly with its host TSO  TSO contracts with the neighbouring TSO

5. © 2004 E.ON19 December 2015, E.ON UK, Page 5 Summary of discussions  Model 1  More complex model  Host TSO would still need to be notified if RP in its area provided reserve to neighbouring TSO  May be more appropriate to a well developed intraday market  Model 2  Simpler model to operate  Some concerns from market participants about transparency  Debate on where value should fall where price differences between TSO areas

6. © 2004 E.ON19 December 2015, E.ON UK, Page 6 Way forward  Model 2 generally preferred, if sufficient transparency  Issue of where economic benefit falls needs to be considered  TSOs asked to develop model 2 further  Timescales  How it could work  Impact on market participants  A number of stakeholders offered to input to the process  RWE Trading, E.ON UK, EdF Trading, Elexon  Paper to be produced by mid-March  Next meeting scheduled for 23 March 2007

7. Report from balancing workshop Lesley Queripel 1 February 2007