November 2009


European Energy Regulators’ News

Issue: November 2009

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- Strategy for delivering a more integrated EU energy market

-  Regional Initiatives conference, 17 Nov. 2009
-  Voltage Quality Workshop, 18 Nov. 2009
-  "Smart Grids" official side event at COP-15, Copenhagen, 9 Dec. 2009

- 10-year gas network development plan, ERGEG Evaluation of Responses
- ERGEG Status Review on Smart Metering

Public Consultations
- Draft Strategy for delivering a more integrated EU energy market
- Regional Initiatives Progress Report

Press Release:
- Strategic Vision needed to deliver a more integrated EU energy market, 17 Nov. 2009

Region in the Spotlight
- Market Coupling

The feature article is on the strategy for delivering a more integrated EU energy market. This new public consultation was announced at our annual Regional Initiatives conference on 17th November.  The conference, co-hosted by the European Commission and ERGEG and attended by 180 participants, focused on the role of the Regional Initiatives in the context of the 3rd Package (which changes the basis for the Regional Initiatives from what was essentially a voluntary process to one where binding rules will apply). ERGEG is also consulting on coherence and convergence across the 7 electricity and 3 gas regions of the ERGEG Regional Initiatives.

A joint CEER/Eurelectric workshop on Voltage Quality Monitoring took place on 18th November in Brussels to share current practices (see events section of our website).

This month, ERGEG published its Status Review on the Regulatory Aspects of Smart Metering.

The big event of the year is of course the United Nations Climate Change Summit in Copenhagen (COP-15).  CEER are official observers.  CEER, along with American regulators,   will represent energy regulators worldwide in Copenhagen, encouraging all parties to cooperate in reaching a comprehensive agreement that provides a clear framework regarding Green House Gas (GHG) reductions.  

On the same day that President Obama attends (Wednesday 9th December), CEER will host an official COP-15 side-event on the topic of Smart Grids.  We invite all registered COP-15 participants to join us in Copenhagen (See International Section).

Energy regulators globally  (meeting last month in Athens) established the International Confederation of Energy Regulators (ICER).  ICER's first output is a statement on climate change (see feature article of October Newsletter) agreed by 11 regional associations representing 200 energy regulators worldwide. 

Strategy for delivering a more integrated EU energy market

In setting up the Regional Initiatives in 2006, ERGEG created 7 regional electricity markets, and 3 regional gas markets in Europe.  The concept is simple - each country works with its neighbours (in defined regions) to remove barriers to trade. The overall aim is to move from these regions to one single EU energy market.  The Regional Initiative Progress Report (November 2009) shows the remarkable progress (e.g. in transparency and congestion management), and publicly consults on key issues such as coherence and convergence of the ERGEG regions.  The Regional Initiatives have also played an important role in monitoring compliance with community law.  However, the fact that the RIs are voluntary processes means that progress could be made only by consensus. There was also no comprehensive cross-border regulatory framework to make faster progress possible.

The 3rd Package can speed up regional market integration
But now the 3rd Package contains key tools to accelerate the progress towards a single European energy market. Such measures include the establishment of new European institutions (i.e. ACER and ENTSOs) as well as through the development of Framework Guidelines and the adoption of network codes through comitology procedure which will establish a binding cross-border regulatory framework. The enhancement of regulators´ powers in respect of cross-border issues will allow them to enforce their decisions. These measures, when implemented, will transform the context within which the ERGEG Regional Initiatives operate from an essentially voluntary one, to one with binding and enforceable rules.

The future role of the Regional Initiatives
The central theme of the 3rd annual Regional Initiatives conference (18 November 2009) was the future role of the Regional Initiatives in the context of the 3rd Package.  The Regional Initiatives, under the supervision of ERGEG and the European Commission, provide a structured pan-European approach with built-in safeguards for its 7 electricity and 3 gas regions to move to one single-EU energy market.  The afternoon session of the conference (see presentations and photos) had a particular political focus on the reality of regional cooperation and the challenges of moving from national to European markets through regional market integration.  The European Commission's consultants presented their initial findings of their review of progress of the ERGEG Regional Initiatives. 

Commisssioner Piebalgs said "Given the explicit emphasis on regional cooperation and regional markets in the 3rd Package, the Regional Initiatives and new EU Agency (ACER) will play a key role in integrating Europe’s energy markets".

A common message from ERGEG and the European Commission is that “bottom-up” approaches of regional energy market integration projects must be aligned with the “top-down” Europe-wide measures of the 3rd Package. The Commission and ERGEG underlined the need for a European "vision". 

Strategy needed to deliver a more integrated EU energy market
In launching for public consultation (until 31 January 2010) its draft Strategy for Delivering a more integrated EU energy market, ERGEG underlined the importance of the EU Institutions having a clear  strategy for the direction of European energy market integration. Lord Mogg states "The 3rd Package is like Lego – we now have the pieces but we don’t yet know which market model to build.”   ERGEG encouraged Member States, the European Commission, regulators, TSOs, power exchanges and all stakeholders to be deeply engaged in the integration process.

Some interesting questions raised by ERGEG (in these 2 consultations) include:
• Is a high level/strategic vision needed to set the overall direction of market integration? Would it delay or could it facilitate progress?
• Are the 7 existing electricity regions of the ERGEG Regional Initiatives too many?  Should they evolve to fewer regions and if so when and how?
• Should the regional projects which lie outside of the ERGEG Regional Initiatives (e.g. Pentalateral Group) be incorporated in some way in the overall approach of achieving a single European energy market? If so how?

CEER/ERGEG Publications

Events (see Events section of website) :
•  CEER-Eurelectric Voltage Quality Monitoring Workshop, 18 November 2009
•  European Commission/ERGEG annual Regional Initiatives conference, 17 November 2009

Public Consultations (see Public Consultations section of website):
ERGEG Strategy for delivering a more integrated European energy market: The role of the Regional Initiatives, 17 November 2009 (E09-PC-42) (deadline 31 January 2010)
ERGEG Regional Initiatives Progress Report of November 2009 , 17 November 2009 (E09-PC-41)(deadline 31 December 2009)
Area Issue Consultation
Gas Pilot Framework Guideline on Gas Capacity Allocation January - February 2010
  Input to the Framework Guideline on gas balancing rules February - March 2010
  ERGEG Guidelines of Good Practice on CAM & CMP to storage facilities March -
April 2010
Electricity Regulatory aspects of the integration of wind generation in European electricity markets December 2009 -
January 2010
  10-year electricity network development plan (Joint Grid Planning, Infrastructure and Generation Adequacy) December 2009 -
January 2010
  Position paper on smart grids January -
February 2010
  Call for evidence on incentives schemes to promote cross-border trade in electricity January -
March 2010
  GGP on generation adequacy February -
March 2010
Customer Draft Advice on Customer Complaint Handling, Reporting and Classification October -
December 2009
Cross Sectoral Regional Initiative Progress Report November -
December 2009
  Strategy for delivering a more integrated European energy market: the role of the Regional Initiatives November -
January 2010

The standard period for ERGEG public consultation is 8 weeks. For further information (including ERGEG’s newly revised public consultation guidelines) visit the public consultations section of the website.   


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

Regional Initiatives Update

Market Coupling 

EMCC and its shareholders jointly decided to resume market coupling activities on the interconnectors between Denmark and Germany on 9 November after a temporary suspension in October 2008 due to price differences and associated operational problems. The decision about the re-launch of the market coupling was taken after throughout consultation with the involved national regulatory authorities as well with other market participants. Both the algorithm and the volume coupling model, which provide NordPool Spot with the elasticity of the German market, were improved since the end of last year.

During the first days of market coupling the switch from simulation environment to live operation produced flows which have been resolved, thus the calculation algorithm works appropriately. Market coupling serves as a key to build a power bridge across electricity regional markets in Europe, further improves market efficiency and will promote the further integration of regional markets towards a European-wide market.

The European Market Coupling Company GmbH was established as central auction office for market coupling between Germany and the Nordic countries. The company carries out day-ahead congestion management services on the two interconnectors between Germany and Denmark, DK West and DK East. The aim is to improve market efficiency of cross-border congestion management based on implicit auctions. Agreements between EMCC and TSOs have to be notified to and approved by the relevant National Regulatory Authorities. The Danish-German market coupling scheme is open to include other congested network capacities and to offer specific congestion management services.

On the 5th October 2009 the three power exchanges (Nord Pool Spot, EPEX Spot and OMEL) announced a project, “Price Coupling of Regions (PCR)”, to test a common concept through which spot electricity price formation will be coordinated in an area covering ten countries - Portugal, Spain, France, Germany, Austria, Switzerland, Denmark, Norway, Sweden and Finland. This proposal has been welcomed by regulators in the Central West, Northern and South West regions.

International Activities

Energy Regulator from across the globe, coming together in Athens last month at the World Forum on Energy Regulation (WFER) intensified our international dialogue on climate change by establishing a new International Confederation of Energy Regulators (ICER). ICER is chaired by CEER President Lord Mogg (for the first 3 years).  

ICER’s first concrete output is the World Energy Regulators Climate Change Statement in which worldwide regulators support the actions needed to help meet the climate change objectives by setting the important (but not always immediately obvious) role that energy regulators play in tackling climate change and moreover, by committing energy regulators worldwide to a set of eight concrete actions within our areas of responsibilities (see

ICER will be represented in Copenhagen by CEER and US regulators (NARUC). On the day that President Obama attends (Wednesday 9th December), CEER will host an official COP-15 side-event (from 18.00 – 19.45) on the topic of Smart Grids with a focus on the experiences of the EU, US and developing countries (China). Check official COP-15 website for details of the room.

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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 a national level.

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