July - August 2010


European Energy Regulators’ News

Issue: July-August 2010

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- Pilot Framework Guidelines on electricity grid connection should help avoid future blackouts

- See calendar of next workshops
- 2010 Regional Initiatives conference (8 July)
- photos of CEER 10-year birthday (6 July)

- Conclusions Paper and Evaluation of Comments on wind integration
- Final recommendations on 10-year network development plan for gas
- Evaluation of Comments of the public consultation on the pilot framework guideline on CAM

Public Consultations
- Pilot Framework Guidelines on Electricity Grid Connection and accompanying  Initial Impact Assessment

Region in the Spotlight
-  2010 Regional Initiatives conference (8 July)

-  Energy Community approaching implementation of the 3rd Package

The CEER 10-year birthday party (6th July) was an opportunity to celebrate the past decade. Some photos are posted on the events section of our website (www.ceer.eu). The annual Regional Initiatives conference (8th July) focused on the way forward (see Press Release PR-10-06).  This was the 4th annual conference on the Regional Initiatives hosted by ERGEG and the European Commission and the first time it was webcast live. 

There is further evidence this month of gearing up for implementation of the 3rd Package (which enters into force on 3 March 2011).  Preparing the future work of ACER, this month ERGEG published its final recommendations on the 10- Year Gas Network Development Plan (TYNDP) (the final advice on the electricity one had already been published in June). It is the result of feedback from a public consultation, four stakeholder workshops and the lessons learnt from the 2009 ENTSOG TYNDP and from the scenario modeling study commissioned by ERGEG.

On the electricity side, CEER has published its conclusion paper on how to facilitate the deployment of wind generation whilst delivering increased market integration. Wind gives rise to both challenges and opportunities (e.g. balancing) for the European electricity market. In terms of electricity market arrangements, allowing wind generation to balance closer to real-time (where applicable) is good practice and CEER urges national regulatory authorities (NRAs) and market participants to consider shorter gate-closure times. Market arrangements must also facilitate, in an economic and efficient manner, intraday cross-border capacity allocation. In terms of network arrangements, CEER support a non-discriminatory approach to market arrangements. CEER appreciates that there is potential for the regulatory regime to serve an important role in incentivising TSOs to deliver investment and suggests further consideration should be given here, in addition to building on recent work on smart grids.

CEER sees the 3rd Package and its EU-wide network codes as an invaluable opportunity to drive forward improvements. See for example this months’ feature article on draft framework guideline on electricity grid connection which specifically considers issues related to large scale intermittent generation and to distributed generation.

As our Newsletter takes a summer break, we wish our readers warmth and relaxation during your holidays. 

Pilot Framework Guidelines on electricity grid connection should help avoid future blackouts 

The 3rd Package provides for EU wide network codes across 12 areas in electricity (including for example grid connection and operational security) drafted by the network operators which must be line with Framework Guidelines set by the Agency for the Cooperation of Energy Regulators (ACER).

ERGEG has now published its pilot Framework Guideline (FG) on Grid Connection and accompanying Initial Impact Assessment (IIA) for public consultation. In the process of developing the FG, ERGEG set up an Expert Group of stakeholders with the purpose of providing assistance to ERGEG (later ACER) and also held a public workshop on the 16 April 2010.  ERGEG has 6 months (from receipt of the letter by the Commission dated 26 March 2010, which requested ERGEG to submit a pilot framework guideline on grid connection) to submit the FG (including a 2-month public consultation which runs until 24 September 2010) to the Commission.  The FG is a short document which sets out the scope of the network codes that ENTSO-E must draft.  The pilot Framework Guidelines on grid connection are elaborated on the basis of (and should be read in parallel to) the related Initial Impact Assessment (IIA) which sets out the problem, the policy options and preferred options based on defined criteria.

Problem Definition
The overarching problem is that each EU country (or control area) has its own specific technical requirements for generators requesting connection, and its own approach to system operation. This lack of harmonisation between national systems is leading to uncoordinated and uncontrolled system operation and could expose Europe to future threats of interruptions (such as the November 2006 blackout which left much of Europe without electricity).

This is aggravated by specific problems such as insufficient communication and information sharing between parties involved in system operation, lack of consideration for some specific generation technologies (most notably large-scale intermittent generation like wind and distributed generation) and provision for demand response. This is in line with ERGEG's call on the European Commission to propose legally binding operational security rules which was made early in the wake of the 2006 blackout. 

How should the problem evolve, all things being equal? Should the EU act?
Without action, these grid connection problems will increase in the future as the system becomes more interconnected, with more intensified load flows in the grids, with higher volatility and in general as market integration evolves and the interdependencies between the different control areas grow. Furthermore, growing intermittent generation will further increase the pressure and demand for an appropriate and well-defined grid connection framework in the EU. As a result, the disparity between national rules and standards for grid connection and the related procedures for compliance verification will further increase. 

The goal should be therefore to create a harmonised and well-defined grid connection regime in the
EU that is transparent to everybody concerned with transmission grid connection and to which all parties can commit.

Objectives of the Framework Guideline on Grid Connection
The FG scopes 3 specific objectives which ENTSO-E should address in the network codes:
Objective #1: To devise standardised minimum requirements for connection of grid users (generators and demand). 
Objective #2: To promote (real-time and other) exchange of information between parties and improved coordination)
Objective #3: To establish an appropriate connection regime for specific grid users namely
i) large-scale intermittent generation;
ii) distributed generation;
iii) demand response.

In achieving this, the FG and resulting Network Code will contribute to maintaining security of the system, its availability and supporting the completion and functioning of the internal EU electricity market. Moreover the FG seeks to provide clarity on the relationship between national and European grid codes.

ERGEG’s Preferred Policy Options
For each of these 3 specific objectives, the accompanying initial impact assessment (IIA) examines policy options and the impact of each of the policy options against 3 criteria (effectiveness, efficiency and consistency). 

The preferred overall policy option for the future grid connection regime in the EU is expressed in the following terms:
1) In order to achieve Objective #1, an EU wide standardised minimum set of grid connection requirements and detailed technical codes shall be developed, that apply to all grid users (i.e. generation and demand);
2) For Objective #2, a specific framework for improved exchange of information and coordination is necessary, possibly at different level of details for the EU and for regions / Member States.
3) In line with the Objective # 3, ERGEG identifies intermittent generation, distributed generation andresponsive demand as requiring specific grid connection guidelines. The public consultation (which ends on 24 September) seeks answers to a set of 9 questions including on grid user and implementation issues.


Press Release:
•  New role for Regional Initiatives in 3rd Package, (8 July 2010)
• Evaluation of Responses on the Pilot Framework Guideline on Gas Capacity Allocation
• Conclusions Paper and Evaluation of Responses on Regulatory aspects of the integration of wind
  generation in European electricity markets (C10-SDE-16-03a )
• Final recommendations on 10-year network development plan for gas (E10-GIF-01-03)

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

Calendar of current and future public consultations

Area Issue Consultation
publication date
Gas Guidelines of good practice on CAM & CMP to storage facilities Aug - Oct 2010
  Input to the framework guideline on gas balancing rules Aug - Oct 2010
  Existing transparency requirements for natural gas Sep - Nov 2010
  Framework guideline on gas transmission tariffs TBD
Electricity Pilot framework guideline on electricity grid connection July - Sep 2010
  Framework guideline on electricity capacity allocation and congestion management Sep - Oct 2010
  ERGEG advice on comitology guideline on electricity transparency Sep - Oct 2010
  Framework guideline on operational security / system operation TBD
Customer Draft GGP on regulatory aspects on smart metering gas and electricity

June - Sep 2010

Cross Sectoral CEER response on interdependencies with other markets TBD

The standard period for ERGEG public consultation is 8 weeks. See 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


Region in the Spotlight - Europe’s energy policy objectives and regional market integration – the way forward

At the 4th Regional Initiatives Annual Conference jointly organised by ERGEG and the European Commission (DG ENER) on 8th July in Brussels there was widespread support for the ERGEG Regional Initiatives (a regulator-led project which enhances regional market integration) to start facilitating the implementation of 3rd Package cross-border rules. The central focus of the conference debate was on the future strategy for moving from regional to a single market and the role of the existing Regional Initiatives in the context of the strong regional cooperation elements of the 3rd Package.

The conference gathered representatives from National Regulatory Authorities, Member States,the European Commission and from the energy industry. 

During the first session on the forward plan of energy market integration in Europe, Mr Lowe (Director General of DG Energy) presented the Commission’s draft vision for the future of the Regional Initiatives and Lord Mogg presented ERGEG´s strategy for delivering a more integrated European energy market. In the second session Mr Hilbrecht´s (Director, DG Energy) presentation on the future work of the Regional Initiatives triggered a lively discussion among the panelists and audience. Panel discussions addressed the issues of the future policy direction of regional integration and the future work and structure of the Regional Initiatives.

The European Commission committed to provide clear direction on how the Regional Initiatives could be more integrated into the EU energy policy. In this context the Commission has already commissioned a study on the RIs (“From regional markets to a single European Market ") and also confirmed its intention to publish a Communication on regional initiatives in fall 2010.

The presentations from the conference (including Commissioner Oettinger's closing speech) and the recorded web streaming are available at the European Energy Regulators´ website under: http://www.ceer.eu/portal/page/portal/EER_HOME/EER_INITIATIVES/Regional_Initiatives_Conferences/2010%20RI%20Conference

International Activities

Energy Community approaching implementation of the 3rd package
The group of ministerial representatives (“Permanent High Level Group”, PHLG) of the Energy Community at its recent meeting on 29 June 2010 endorsed a Commission proposal encouraging the members of the Energy Community (Contracting Parties) to implement the 3rd package acquis for electricity and gas. A related recommendation is envisaged to be adopted by the Energy Community Ministerial Council at its next meeting on 24th Sept. 2010. The PHLG clearly stated that binding targets have to be defined and expressed its hope for the Ministerial Council to take an implementing decision in the course of 2011.  

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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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