June 2010


European Energy Regulators’ News

Issue: June 2010

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- Framework Guideline on Gas Capacity Allocation “pilot tests” 3rd package implementation

- See calendar of next workshops
- CEER Birthday celebration (6 July)
- Regional Initiatives conference (8 July)

- Pilot Framework Guideline on Gas Capacity Allocation
- Conclusions Paper on Smart Grids
-  ERGEG final advice on 10 Electricity Network Development Plan
- Conclusion paper on a strategy for delivering a more integrated EU market
- Final GGP on Complaint Handling

Region in the Spotlight
-  Baltic electricity region

ICER report on regulatory practices for the promotion of energy efficiency.

At the 18th Electricity Regulatory Forum (Florence Forum) this month, regulators presented their work on a wide range of issues including ERGEG’s conclusion paper on Smart Grids; ERGEG’s final advice on the 10-year electricity network development plan and ERGEG input to the EU infrastructure package; ERGEG's views on how to integrate wind and on market integrity and transparency issues; ERGEG’s conclusion paper on a strategy for delivering a more integrated EU market and the role of the Regional Initiatives; and our work on 3 electricity framework guidelines and related impact assessments (on grid connection, on system operation, and on capacity allocation and congestion management).  At the Florence Forum the European Commission invited stakeholders’ comments to the 3-year plan for framework guidelines and network codes in electricity and gas, to which both regulators and the network bodies are committed.

Following the June 14th workshop on the 10-year gas network development plan (TYNDP), feedback is welcome (until end of August) on the EWI study which ERGEG had commissioned.  The study models infrastructure projects and market integration of the EU gas system. (See Press Release). This month’s feature article is on the first-ever Pilot Framework Guideline, (on Gas Capacity Allocation Mechanisms), which following extensive consultation, has been submitted to the Commission this month.

On consumer issues, ERGEG launched a public consultation on draft Guidelines of Good practice (GGP) on Smart Metering. Regulators have, following a public consultation, published their final GGP on Complaint Handling, Reporting and Classification.

A report on energy efficiency will be presented to the G-8 meeting (see international section below). This month the Baltic electricity region is in the spotlight.  Next events are the CEER 10 year birthday celebration (6th July) and the ERGEG/European Commission Regional Initiatives conference (8th July). 

 Framework Guideline on Gas Capacity Allocation “pilot tests” 3rd package implementation

Legal Background
At the heart of the 3rd Package legislation is the development of EU-wide network codes on 12 topic areas to integrate European electricity and gas markets and to enable cross-border trade and competition to develop across the EU energy markets. These will be drafted by the European Network for Transmission System Operators (ENTSOs) on the basis of (non-binding) Framework Guidelines set out by the new Agency for the Cooperation of Energy Regulators (ACER). ACER will also have a role in reviewing draft network codes, including their compliance with the Framework Guidelines, and may recommend them for adoption by the Commission. This process is set out in Article 6 of the new Electricity and Gas Regulations (Regulation (EC) 714/2009 and Regulation (EC) 715/2009, respectively).  But, ACER cannot formally act until 3 March 2011. 

ERGEG pilot tests the 3rd Package process on Framework Guidelines
In Autumn 2009 the European Commission invited ERGEG to act as if it were ACER and to submit a non-binding Framework Guideline on gas capacity allocation, to pilot test the procedure set out in the new Gas Regulation (EC) 715/2009.  In April 2010, the Commission granted ERGEG an extension (until 30 June) as the process, which should take 6 months including a mandatory public consultation, proved tight given ERGEG’s efforts to fully engage stakeholders in the process (including a 2-month public consultation period, the drafting of an initial impact assessment, the set up of an ad hoc expert group, feedback from the Madrid Forum and a public workshop). On 17th June ERGEG submitted the pilot Framework Guidelines to the Commission (see Press Release). ERGEG is also pilot testing the process in electricity (with a pilot FG on grid connection) and will review the process before March 2011 so that ACER can learn from our current experiences.

Framework Guideline is the path to the target model for gas capacity allocation
ERGEG developed a target model “or long-term vision” for the EU gas market. It focuses on trades concentrated at virtual hubs and facilitating cross-border trading between them, thus benefitting market liquidity. The pilot Framework Guideline on Gas Capacity Allocation allows a step-by-step approach towards this target model. It relates to cross-border interconnection points between two or more Member States as well as interconnections between adjacent entry-exit-systems within the same Member State, insofar as the points are subject to booking procedures by users.

The Framework Guideline on Gas Capacity Allocation (a) addresses the scope and level of TSO cooperation in capacity allocation (b) sets out the framework for harmonising capacity products and (c) sets out the tools to be applied for capacity booking procedures and allocation mechanisms to be applied (e.g. auction, pro rata First Come First Serve), and the facilitator (e.g. booking platforms) to be used

Next Steps
These draft Framework Guidelines are not legally binding - they are what the network operators will use to draft Network Codes (it is the Codes which may become legally binding). ENTSOG has 12 months (from the time the Commission formally invites ENTSOG) to draft the corresponding network code which are then reviewed by ACER before being sent to the Commission.


Press Release:
• Gas Capacity Allocation Framework Guideline starts 3rd Package implementation (21 June 2010)
• Regulators promote integrated EU approach to assessing gas infrastructure gaps (14 June 2010)
• EU Strategy towards a more integrated EU energy market (07 June 2010) 
• Pilot Framework Guideline on Gas Capacity Allocation (E10-GWG-66-03)
•Conclusions Paper on Smart Grids (E10-EQS-38-05) and Evaluation of Comments
• ERGEG final advice on 10 Electricity Network Development Plan (E10-ENM-22-03) and Evaluation of Comments
• Conclusion paper on a strategy for delivering a more integrated EU market (E10-RIG-10-04)
• Final GGP on Complaint Handling, Reporting and Classification (E10-CEM-33-05) and Evaluation of Comments

Events (see Events section of website for the new calendar of next workshops) :
• CEER 10-year birthday celebration (6 July)
• Regional Initiatives conference (8 July)

Calendar of current and future public consultations

Area Issue Consultation
publication date
Gas Guidelines of Good Practice on CAM & CMP to storage facilities Aug -
October 2010
  Input to the Framework Guideline on gas balancing rules July -
September 2010
  Framework Guideline on gas transmission tariffs TBD
Electricity Framework Guideline on electricity capacity allocation and congestion management September - October 2010
  Framework Guideline on electricity grid connection TBD
  Framework Guideline on operational security / system operation TBD
  ERGEG advice on comitology guideline on electricity transparency TBD
Customer Draft GGP on Indicators for retail market monitoring April -
June 2010
  Draft GGP on regulatory aspects on smart metering gas and electricity

June - 

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 - 10th Baltic Electricity Market Mini-Forum

Under the umbrella of the ERGEG Baltic electricity region, the Estonian Competition Authority hosted the 10th Baltic Electricity Market Mini-Forum, held on 4th June 2010 in Kuressaare. This forum brought together regulators, ministry representatives and stakeholders from Latvia, Lithuania, Estonia, Finland and Norway.

The regulators gave an update on the latest developments in Norway and the Baltic states regarding the implementation of the 3rd Energy Liberalisation Package and revealed the main regulatory issues related to market opening and monitoring as well as to the promotion of the renewable energy and investments. Participants discussed how to avoid market manipulation based on lessons learnt in Norway and from the cooperation between regulators. Attendees also exchanged views on the new ITC mechanism.

Participants received an update on trading tendencies and prices at the Lithuanian power exchange. Trade through the power exchange has increased to more than 55 % of all electricity trading volumes. According to the Baltic Energy Market Interconnection Plan (BEMIP) the Baltic electricity market will be integrated in the EU market by 2015. Another big development was the successful start of the Estlink price area on 1st April 2010. The trading volumes are growing and the price dynamics reflect the Nordic power market and congestions at Estlink 1. Regarding congestion management and capacity allocation, the three Baltic countries aim at introducing implicit auction from 1st January 2011.

The final Report on transparency in Baltic Electricity Markets was published – following public consultation - at the European Energy Regulators´ website. It was furthermore agreed to prepare common Baltic electricity market monitoring and surveillance rules for 2011-2013. Participants underlined the importance of opening the market for external market players and in this context making information broadly available for all interested parties. The next Baltic Electricity Market Mini-Forum will be held in autumn 2010 in Latvia.

International Activities

The Council of European Energy Regulators (CEER) heads up the climate change working group of the International Confederation of Energy Regulators (ICER). ICER prepared a report on regulatory practices for the promotion of energy efficiency the G8 meeting in Muskoka, Canada (25-26 June). This is the first step taken by energy regulators worldwide to gather data on regulatory practices aimed at fostering energy efficiency.  It is one of 8 concrete commitments given by ICER at its inception at the World Forum on Energy Regulation (October 2009). 

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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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