December 2010 - January 2011

     

European Energy Regulators’ News

Issue: December 2010 - January 2011

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Feature
- A major step towards harmonised electricity grid connection and gas capacity allocation in Europe

Fact Sheets
-
The Regional Initiatives Fact Sheet (December 2010)

Publications
-  2011 Work Programme

- Status Review of Liberalisation and Implementation of the Energy Regulatory Framework
ERGEG pilot framework guideline on electricity grid connection 

- Revised final pilot framework guideline on gas capacity allocation mechanism 

- ERGEG 2010 Report on compliance with the GGP of Open Season procedures

- ERGEG 2010 Report on compliance with Electricity Regulation (EC) 1228/2003

- ERGEG final advice on Comitology Guidelines on Fundamental Electricity Data Transparency

- ERGEG GGP on Estimation of Costs due to Electricity Interruptions and Voltage Disturbances

Press release
-  3rd Package implementation is needed to deliver benefits to energy consumers (PR-10-11)
- Transparency to be enhanced and wholesale energy markets to be properly monitored (PR-10-10)

Region in the Spotlight
-
  New cross-border balancing arrangements in the France-UK-Ireland (FUI) electricity region

Editorial
Europe’s energy regulators had a busy end to a busy year.  A major achievement is the two sets of Framework Guidelines which ERGEG has delivered to the European Commission (one on gas capacity allocation and the other on electricity grid connection) which are the focus of the feature article below.

Typical of this time of year, we published the 2010 Status Review of Liberalisation and Implementation of the Energy Regulatory Framework along with the 28 individual national reports (see PR-10-11). We also published the 2011 Work Programme which provides a comprehensive overview of all activities by both CEER and ACER (the new EU Agency for the Cooperation of Energy Regulators which becomes fully operational on 3 March 2011).

In gas, ERGEG published its 2010 Report on the compliance with the Guidelines of Good Practice for Open Season procedures.

On 13-14 December, ERGEG presented at the EU Electricity Regulatory Forum (“Florence Forum”), its 3rd report on compliance with the Electricity Regulation (EC) 1228/2003.  In it, ERGEG monitors compliance across the EU and recommends a set of actions to different stakeholders in order to ensure that the legally binding requirements of the Regulation and the Congestion Management Guidelines are properly met.

ERGEG has submitted to the European Commission formal advice on how to improve fundamental electricity data transparency. This ERGEG final advice on Comitology Guidelines on Fundamental Electricity Data Transparency is published along with an accompanying evaluation of responses to the public consultation and an update of the initial impact assessment.  The advice proposes, inter alia, that a central information platform for publishing the electricity data is established. See the Press Release (PR-10-10) in which we also welcome the Commission’s proposals (announced on 8 December 2010) for a Regulation of Energy Market Integrity and Transparency (REMIT).

In addition, CEER has developed, for regulators, Guidelines of Good Practice (GGP) on the Estimation of Costs due to Electricity Interruptions and Voltage Disturbances. After publishing last month ERGEG’s assessment of the first ENTSOG gas Ten Year Network Development Plan (TYNDP), this month we publish ERGEG’s opinion on the ENTSO-E pilot electricity TYNDP. Presentations for the aforementioned electricity reports (and others presented by ERGEG at the 19th Florence Forum) are available online.

On 7 December the European Commission published, for consultation until 15 February 2011, its Communication on the Future Role of the Regional Initiatives.  Our region in the spotlight this month is the France-UK-Ireland electricity region with the entry into force on 1 December 2010 of the new Cross-Border Balancing (CBB) enduring arrangements on the French-UK interconnector.

Also this month, CEER/ERGEG published a Fact Sheet on the Regional Initiatives. It pays tribute to the many stakeholders who have willingly dedicated huge efforts in the pursuit of enhancing regional energy market integration in Europe.

We wish all our readers a Happy New Year and a fun-filled break until our next edition in February 2011.

 
 

Feature: A major step towards harmonised electricity grid connection and gas capacity allocation in Europe

This month ERGEG submitted to the European Commission two sets of Framework Guidelines on electricity grid connection and gas capacity allocation which will lead to more harmonised electricity grid connection and will help free up gas capacity on existing pipelines in Europe.

European Commission invited ERGEG to act as if it were ACER
The 3rd Package legislation provides for the development of EU-wide Network Codes by the European network of transmission system operators in 12 topic areas in order to integrate European electricity and gas markets and to enable cross-border trade and competition to develop across the EU energy markets.  These Network Codes must comply with Framework Guidelines set by the Agency for the Cooperation of Energy Regulators (ACER). However, ACER will only become fully operational in March 2011. Hence, the European Commission asked ERGEG to act as if it were ACER in developing two pilot Framework Guidelines. The issues chosen were grid connection in electricity and capacity allocation in gas.

Pilot framework guideline on electricity grid connection
The pilot Framework Guideline on Electricity Grid Connection submitted to the Commission this month is the result of extensive engagement with stakeholders including a public consultation, a public workshop and the preparation of an Initial Impact Assessment.

In terms of scope, the Framework Guideline on Electricity Grid Connection applies to grid connection of all kinds of grid users (generators, consumers and distribution system operators). The objective of the Framework Guideline and the resulting Network Code is better harmonisation of electricity grid connection rules across Europe so as to ensure equitable treatment in the connection of power plants and consumers to the extent that these rules may impact on cross-border system security and trade.

Revised Pilot framework guideline on gas capacity allocation mechanisms (CAM)
ERGEG submitted its first-ever pilot framework guideline on Gas Capacity Allocation Mechanisms to the European Commission on 16 June 2010. The European Commission then had some comments, which had to be taken into account in the Revised Pilot Framework Guideline on Capacity Allocation Mechanism (CAM) which ERGEG submitted this month to the Commission. 

The goal of the CAM Framework Guideline (and the subsequent Network Codes) is to optimise the use of network capacity across borders, the integration of markets, and enhancement of cross-border trading. The main measures of the Framework Guideline are the following:
-  standardisation and simplification of the set of capacity services;
-  application of auctions as standard allocation mechanism;
-  bundling of capacity services offered by adjacent TSOs; and
-  implementation of virtual interconnection points.

What happens next with these pilot Framework Guidelines?
ACER will take over the process as soon as it is fully operational in March 2011. The European Network of Transmission System Operators (ENTSO-E in electricity, ENTSOG in gas) has 12 months (from the time the European Commission formally invites them to do so) to draft the corresponding Network Code which has to comply with the Framework Guideline developed by ACER and which may be made legally binding via comitology.

Are there other Framework Guidelines in the pipeline?
The ACER 2011 work programme (published in September 2010) commits to producing Framework Guidelines in eight core areas (in electricity on capacity allocation and congestion management, grid connection, system operation and balancing; and in gas on capacity allocation mechanisms, balancing, harmonised transmission tariff structures and interoperability). The completion of eight Framework Guidelines is an ambitious target but the work will rely on the preparatory work currently being carried out by ERGEG on a total of four separate Framework Guidelines which are at different stages of development.

CEER/ERGEG Events

Press Release:
•  3rd Package implementation is needed to deliver benefits to energy consumers (10 December 2010)
•  Transparency to be enhanced and wholesale energy markets to be properly monitored (8 December 2010)
 
Fact Sheet:
•  The Regional Initiatives - a major step towards integrating Europe's national energy markets (FS-10-03), December 2010
 
Publications:
•  ERGEG Monitoring Report 2010 on the compliance with the GGP OS (Ref: E10-GMM-11-04)
•  ERGEG 2010 Status Review of Liberalisation and Implementation of the Energy Regulatory Framework and 28 individual national reports (Ref: C10-URB-34-04)
•  CEER  2011 Work Programme (Ref: C10-WPDC-20-07)
•  ERGEG Pilot Framework Guideline on Electricity Grid Connection (Ref: E10-ENM-18-04)
•  ERGEG Opinion on ENTSO-E’s pilot Ten Year Development Plan (Ref: E10-ENM-22-04)
•  ERGEG Revised Final Pilot Framework Guideline on Gas Capacity Allocation Mechanism (Ref: E10-GWG-71-03)
•  ERGEG Final advice on Comitology Guidelines on Fundamental Electricity Data Transparency and accompanying evaluation of responses and updated initial impact assessment  (Ref: E10-ENM-27-03 )
•  ERGEG Electricity Regulation (EC) 1228/2003 - Compliance Monitoring, 3rd Report 2010 (Ref: E10-ENM-04-15 )
•  CEER Guidelines of Good Practice (GGP) on Estimation of Costs due to Electricity Interruptions and Voltage Disturbances (Ref: C10-EQS-41-03)

Events (see Events section of website for the new calendar of upcoming workshops)

Calendar of current and future public consultations

 
Area Issue Consultation
publication date
Gas Conceptual model for the European gas market - Call for evidence Nov - Jan 2011
  CEER vision paper for a conceptual model for the European gas market Q1 / Q2
  CEER advice on NRA roles in implementing the SoS Regulation Q2
Electricity CEER advice on the implications of non-harmonised renewable support schemes Q2
Customer CEER GGP on retail market design, with a focus on supplier switching and billing Q2
  CEER advice on the take-off of a demand response electricity market with smart meters Q2
Cross Sectoral CEER advice on the legal framework for sector - specific oversight regime - competences and cooperation of regulators Q2
  CEER advice on wholesale trading licenses Q2

The standard period for ERGEG public consultation is 8 weeks. See the public consultations section of the website.   

Events

See all dates of Regional Initiatives meetings (RCC, IG, SG) on the ERGEG online Calendar.  

Regional Initiatives Update

 

Region in the Spotlight - New cross-border balancing arrangements in the France-UK-Ireland (FUI) region

On 1 December 2010, new system operator (TSO-TSO) trading arrangements came into force on the GB-France interconnector, IFA. The new service, the so-called Cross-Border Balancing (CBB) enduring arrangement, was initiated by Ofgem and CRE (the GB and French energy regulators respectively) to improve the balancing opportunities of TSO-TSO trading on the IFA interconnector.

The aim is to provide reciprocal access to balancing markets in GB and France and to increase the range of balancing providers available to each TSO. This proposal could be further applied across multiple borders increasing competition for available reserve energy. No capacity will be reserved for TSO-TSO trades, only utilisation of spare capacity after the markets have made final flow nominations.

The increased number of pricing periods, introduction of a price curve and exchange of prices close to real-time will better reflect the actual cost of the service by the delivering TSO and potentially increase the volume of interconnector energy utilised for balancing in each balancing mechanism. This will create a closer link between the interconnected markets and provide reassurance to balancing parties that TSOs are utilising all opportunities to minimise balancing costs.

Energy regulators ensured effective cooperation between the French and GB TSOs and facilitated the TSO-led project. Regulators provided a platform through the FUI region’s Stakeholder Group and Implementation Group meetings for discussions with relevant stakeholders.

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European Energy Regulators' News is a free, electronic newsletter and covers the period from the previous issue to the date of publication. It is your gateway to the news from Europe’s energy regulators, press releases, public consultations, advice to the European Commission, news from the Regional Initiatives, and regulation and policy developments at national level.

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