March 2009

Issue: March 2009

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Table of Contents
Feature
- 3rd Package consultation conclusions

Publications
- Regulators Annual Report 2008
- ERGEG Status Review of end-user price regulation
- CEER response to 2nd Strategic Energy Review
- Regulators' experience with Art. 22 (gas) exemptions

Press Releases
- 3rd Package Implementation
- Regulators lack powers to remove regulated end-user prices
- Relaunch of market coupling well advanced

Public Consultations
- 2 new consultations launched (gas: 10yr dev. plan; electricity: grid connection & access)
- 2 consultations concluded (3rd Package Implementation; Monitoring Compliance with   Elec. Reg.)
- NEW: Calendar of future public consultations 

Region in the Spotlight
- Quarterly report on all regions

Editorial
With energy topping the political agenda, Europe’s regulators continue to be highly active (see 2008 Annual Report).

This month CEER has responded to the European Commission’s public consultation on the 2nd Strategic Energy Review. In parallel to MEPs and Council agreeing a long-awaited compromise deal on the 3rd Package, the energy regulators published their views on how the 3rd Package might be implemented. This Conclusions Paper is the result of an ERGEG public consultation in Autumn 2008 on Implementing the 3rd Package (See Feature and Press Release PR-09-05). 

Regulators have also concluded two other public consultations; one on ERGEG’s 2008 monitoring of compliance with the Electricity Regulation and the other on coherence and convergence in the Electricity Regional Initiative.  In addition, ERGEG has issued an update of its survey of NRAs' experience with granting exemptions for Third Party Access (TPA) to gas pipelines.

ERGEG also published the Status Review on End-User Regulation (see Press Release PR-09-06). This report shows that one year after full energy market opening in July 2007, end-user prices continue to co-exist (alongside market prices) in a large number of EU countries (15 in electricity, and 13 in gas). 

In an effort to improve transparency, the regulators have begun to publish the agenda and decisions of their monthly CEER meetings (as is the long-standing practice for the quarterly ERGEG meetings). We are also pleased to announce a new 6-month rolling calendar of current and future public consultations as a new standard feature of this monthly newsletter. 2 new public consultations were launched this month. 

This edition of the newsletter includes a quarterly update of the the Regional Initiatives.

How Europe's energy regulators intend to implement the 3rd Package

While MEPs and Council brokered a compromise deal on the 3rd Package following informal trialouge negotiations, the energy regulators published their views on how the 3rd Package might be implemented. This Conclusions Paper is the result of an ERGEG public consultation in Autumn 2008 (which included a public heading in December 2008). 

The Regional Initiatives are “pilots” of pan-EU energy solutions
There was broad support by the respondents for the regulators’ proposals to enhance coordination at regional and EU level. The Regional Initiatives are “pilots” of potentially pan-EU solutions. ERGEG has now refocused the Regional Initiatives on coordination issues in light of the 3rd Package.

Stakeholders engagement to be reinforced
Before the Agency becomes fully operational, energy regulators intend to use their time now to help in establishing the Agency’s various bodies and in paving the way for the Agency to function efficiently. For example ERGEG has refined its public consultation guidelines, including adding a calendar of future consultations on the website and in this newsletter, in an effort to improve transparency and facilitate stakeholders’ planning. ERGEG also intends to set up ad hoc expert groups for the development of Framework Guidelines.

Regulators’ priorities for network codes
The new EU Network Codes, if made binding, can be used to advance the level of convergence of national markets and to tackle some of the problems which prevent the development of competition. After consulting in Autumn 2008, the regulators have now confirmed their priorities for Framework Guidelines for electricity and gas. These focus on the key problems that must be tackled in the first set of Network Codes so as to achieve a single, secure and competitive European market. The key areas include security of supply, transparency, maximising and ensuring adequate capacity and congestion management

CEER/ERGEG Publications

Calendar of current and future public consultations

Events

Regional Initiatives Update

Region in the Spotlight - Quarterly Report on all RIs 

The following presents a brief overview of the major activities in the 7 electricity regions for the period October 2008 to February 2009.

As regards long term allocations, in the Central West, CASC-CW (the joint company for allocating cross border capacity) began operations with current rules. A single regional set of rules will be in place in Spring 2009 (phase 2).  The Single Auction Office (SAO) project for Central-South region was blocked at the stage of the signing of the MoU (due to a disagreement by RTE on the structure of the company and the geographical scope). Regulators have asked TSOs to reconsider the original project for a SAO with a practical step-wise approach. In France-UK-Ireland work continues on the development of a new capacity management system on IFA (interconnection France-UK). The new IFA rules will be finalised soon and should be put into practice in July 2009.  Finally, Central-East will proceed to the testing phase for the new flow based auction rules in Q2 2009. 

For day-ahead allocations, South-West reports that price coupling of regions has been identified as the right solution. On the other hand, for the market coupling MIBEL-CWE, concrete timetables for the study and implementation phases are delayed. The Central-West has set new target dates for market coupling due to critical capacity calculation issues: with the launch of an ATC-based coupling in March 2010 and the launch of a flow-based coupling in December 2010. In the Northern region, market coupling on the German-Danish interconnectors is planned to be re-launched during the second quarter of 2009, once incompatibilities in the reflection of the two market designs in the market coupling algorithm are solved. Meanwhile, lack of liquidity in the Polish market is still a barrier for introducing market coupling for SwePol Link.

Regarding intraday markets, in the Central-West region, bilateral intraday is in place on all borders except the Belgian-Dutch border, which should be implemented by end-May 2009.

On transparency, in the Central South region regulators published their Transparency Report on 12th February 2009. Meanwhile, the Baltic regulators are working on terms of reference for consultation with stakeholders and a draft Transparency Report, with a view to presenting results in 2010. In the Northern region, the 2nd monitoring of transparency requirements is planned for the second quarter of 2009. Central-East region is proceeding with a review of the implementation of its Transparency Report. In the South-West, TSOs are publishing new information following the recommendations of the region’s transparency report.

Regarding balancing markets, France-UK-Ireland is working on common balancing rules, with the aim of implementing interim rules from March 2009, with final rules, by November 2009. The Northern region is planning a “kick off report” on a joint balancing market for the second quarter of 2009, aiming to implement a joint balancing market during the fourth quarter of 2010.

During the last quarter, a number of developments have taken place in the 3 gas regions. In particular:

The NW region’s transparency project has made great progress in its first stage (with 90% of the data types provided by the TSOs) and is moving on to the second stage. In its ongoing day-ahead pilot project, Firm secondary capacity is now available day-ahead on 1 Interconnection Point (BOS).

Work in the South Region on interconnection continues, with a public consultation of capacity products to be sold at the French-Spanish border being completed in December 2009. 

A Strategic Advisory Panel to advise and give guidance for the SSE region has been established.  It met for the first time in January 2009 and it is on course to produce the 2009 Work Programme in February 2009, which, in light of recent events, will include security of supply issues. In addition, contracting TSOs (eustream, a.s., OMV Gas GmbH, Trans Austria Gasleitung GmbH and Baumgarten-Oberkappel Gasleitungsgesellschaft m.b.H.) have concluded the Interconnection Agreement for the Interconnection Point Baumgarten.

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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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