DG Energy and transport 1

Matti SupponenElectricity and gas unit

Matti.Supponen@ec.europa.eu

“3rd liberalisation package”

ERI CEE SG Meeting7.November 2007

European commissionDG Energy and transport

DG Energy and transport 2

EU energy policy in construction

Under preparation:

Climate change policy with emissions trading

Renewable targets and support mechanisms

Energy market package

DG Energy and transport 3

Background

EdF

Market concept not implemented

Price regulation

Long term contracts

Lack of capacity

Not gas for everybody

Big four

Bottlenecks

€Reform in process

North sea depleted, nuclear?

Suez

Enel

DG Energy and transport 4

ETSO Generation adequacy forecast (UCTE, Nordel, UK, Ireland)

Remaining capacity at peak load

0

20

40

60

80

100

2008 2010 2015

Year

GW

Best estimate

Conservative

Minimumvalue (ARM)

DG Energy and transport 5

Cross-border flows

Cross-border Electricity Exchange in EU

10,3%9,2%9,7%9,6%9,0%9,1%

8,4%7,7%

0%

2%

4%

6%

8%

10%

12%

20052004200320022001200019991998

Year

Exch

an

ge/C

on

su

mp

tio

n

DG Energy and transport 6

Ownership unbundling

DG Energy and transport 7

Share of congestion revenue reinvested in interconnection

Source: Energy sector inquiry

900

800

700

600

500

400

300

200

100

0

Ownership unbundled TSOs Vertically integrated TSOs

Share of reinvested congestion revenue33.3% 16.8%

Congestion revenue (2001-6/2005)

Interconnector investment

387

129 104

623

DG Energy and transport 8

TSO co-operation

DG Energy and transport 9

TSO co-operation

Common tasks: Draft technical and market codesOperate the networkPrepare 10-year investment planCo-ordinate research

Organisation: ENTSO

DG Energy and transport 10

Congestion management methods in 2008

Use of implicit auction

Explicit auction only

Special features

No congestionin the region

PX

PXPX

PX

PX

PX Power exchangewith implicitauctioning

PX

PXPX PX

Pool

PXPXPX

PX

PX

AO Auction office

AO

AOAO?

AO?

PoolPool

DG Energy and transport 11

Omistuksellinen eriyttäminen

DG Energy and transport 12

Regulators

DG Energy and transport 13

Regulators

More powersSelectively new powersSingle authority

Co-operationEuropean Energy Agency

DG Energy and transport 14

European Energy Agency

DG Energy and transport 15

European Energy Agency

TasksIndividual decisions on issues

provided for in the EU legislationMonitoring the market and the co-

operation between TSOs Advice the Commission

OrganisationAbout 50 permanent staffRegulatory boardLocation ?

DG Energy and transport 16

SummaryEuropean Investment Plan

TSO ENTSO NRA AGENCY COMMISSION OTH.STAKEH.

Monitor

Propose

Do

Review

Decide

Opinion

Consult

National plansReview National plan, Consistency with European plan D (el) 22c (f)

ConsultedR (el) 2f (1)

Monitors investments R (el) 2d (1)

Reviews draft and gives opinion R (ag) 6 (3)

Receives opinion if drafted measures do not ensure non disc., comp. and eff. func. marketR (ag) 6 (4)

Consultation on European investment planR (el) 2f (1)Draft 10-year investment planR (el) 2d (2)

Adopt European Investment planR (el) 2c (1c)Publish R (el) 2c (5)

Receives opinionR (ag) 6 (3)

Receives opinionR (el) 2d (2)

TEN-E guidelines

Invests

DG Energy and transport 17

SummaryEuropean Technical and Market Codes

TSO ENTSO NRA AGENCY COM OTH.STAKEH.Monitor

Propose

Do

Review

Decide

Opinion

Consult

Invites ENTSO to prepare codes.R (el) 2e (1)

Consultation on codesR (el) 2f (1)Drafts codesR (el) 2c (1) (3)

ConsultedR (el) 2f (1)

COM decision on ComitologyR (el) 2e (3)

Adopt codesR (el) 2c (1) (3)

Monitors impl. of Codes R (el) 2c (4)

Monitors activities of theTSO and other relevant parties D (el) 22c (1a)

Monitors activities of ENTSOR (el) 2d (1)

Reviews draft and gives opinion R (el) 2d (2)R (ag) 6 (3)R (el) 2e (2)

Opinion if drafted measures do not ensure non disc., comp. and eff. func. market or are not agreed or implemented in timeR (el) 2e (2)

ConsultedR (el) 2e (1)

Receives opinionR (el) 2d (2)

Implement

Implement

Implement Implement

Annual Work ProgrammeR (el) 2c (2)

Implement

Implement

ConsultedR (el) 2d (2)

DG Energy and transport 18

Market information

DG Energy and transport 19

Market information

Objective: Better access to market for small players

Current legislation For example load, network and

production capacity data already requested but badly respected

Transparency for OTC-trading

Record keeping Possibility for authorities to investigate

for example market manipulation

DG Energy and transport 20

Retail market

DG Energy and transport 21

Retail market

Opening: Legislation until now concentrated on

wholesale markets DSO unbundling and consumer

protection already on board

Content Harmonisation Objective at least regional retail markets “Retail forum” á la Florence and Madrid Smart metering

DG Energy and transport 22

Regional energy markets in the EU

Moderately concentrated

Highly concentrated

Very highly concentratedcongestion

DG Energy and transport 23

End of the story

Thank you for your attention