May 2010


European Energy Regulators’ News

Issue: May 2010

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- ACER -a leap in energy regulation

- See calendar of next workshops
- Regional Initiatives conference, 8 July

- CEER/ERGEG 2009 Annual Report
- Press Release on ACER

Region in the Spotlight
-  Quarterly update on the regions

The reality of Europe’s new cross-border energy regulatory framework recently reached new heights when (a) the main boards of the new EU Agency – the Agency for the Cooperation of Energy Regulators (ACER) were constituted and its chairs elected, (b) its director designated and (c) the first wave of ACER’s staff recruitment began. ACER’s existence will be a giant step towards the further integration of Europe’s national energy markets. The feature article below explains what ACER means in practice and what to expect from ACER in the run up to March 2011 when it must be fully operational.

The 2009 Annual Report is published. Our work also continues to deepen at the international level as outlined in the recently published 3-year work plan of the International Confederation of Energy Regulators (ICER).

All of the electricity and gas regions are in the spotlight with the quarterly report across regions. The Regional Initiatives annual conference takes place on Thursday, 8th July in Brussels. The next public workshops are on transparency of fundamental data (organised with ENTSO-E on 1 June) and ERGEG’s 4th workshop on the 10-year Gas Network Development Plan (14 June).

 ACER - A leap in energy regulation

3rd Package – what it means and when it takes effect
New laws, published in July 2009 (the so called 3rd Package), also establish the Agency for the Cooperation of Energy Regulators (ACER). The 3rd Package is a suite of five energy laws (comprising 2 Directives and 3 Regulations) which aims to put in place effective unbundling of vertically integrated energy utilities; support the further integration of the European energy markets and improve the general functioning of markets; facilitate the delivery of the massive energy investment that Europe crucially needs; and strengthen customer rights. One of the most important elements of the 3rd package is the creation of ACER, an EU Agency which will act in the consumer’s interest.  The Electricity and Gas Regulations shall apply 18 months after their entry into force (i.e. March 2011). The Electricity and Gas Directives must be transposed into national law by the same date (with the exception of the rules on unbundling of transmission, which are to be transposed after 30 months, i.e. by March 2012). ACER (which will have its seat in Ljubljana, Slovenia) must be fully operational by March 2011.

ACER’s key role for the overall economy
Unlike several other sectors where the integration of national markets is useful but not a necessity, the integration of electricity and gas markets across Europe is critical. ACER will play a key role in facilitating the EU’s energy policy objectives of sustainability, competitiveness and security of supply. ACER will have a role in harmonising rules and will oversee network development plans that will encourage investment and thus enable more electricity and gas flows across borders and more new low carbon sources of energy to be connected. This is important not just for the energy sector but rather because energy fuels our economy. It is a basic necessity for the quality of life and is essential for our economic growth, international competitiveness and standard of living. ACER’s creation is a significant development.

What will ACER do?
This new Agency, funded from the EU budget and with a staff of about 45persons, will provide the new framework for cross-border regulatory cooperation.  It has a central role in the process for developing EU-wide network codes, which regulators see as critical for a truly integrated-EU energy market. ACER will retain ERGEG’s current advisory role to the European Commission and extend it also to the other Community institutions. ACER has some decision-making powers, for example on technical issues, or on exemptions for third party access to interconnectors that cross more than one Member States.  It has extensive monitoring powers.  It will take over the work on regional integration being pursued through the Regional Initiatives and will monitor the regional cooperation by Transmission System Operators (TSOs) as well as the operation of their EU bodies, the European Networks of Transmission System Operators (ENTSOs).  Its creation is a significant shift in energy regulation.

Developing from a voluntary regulatory cooperation to a formal Community structure
With ACER, the long established voluntary cooperation of national regulators moves up a gear as it will now take place within a Community structure.  On 4-5 May the 27 national energy regulators of met (in Brussels) for the first time as ACER’s Board of Regulators.  At this inaugural meeting, Lord Mogg (the current Chair of ERGEG and CEER) was elected Chair of ACER’s Board of Regulators and Walter Boltz its Vice Chair (see Press Release).  Alberto Pototschnig was designated as Director of ACER (he will appear before the European Industry Committee on 1 June). The first wave of ACER’s staff recruitment has begun. 

Head-start for ACER on 6 technical issues
Recognising that implementation of the measures in the 3rd package would take some time, ERGEG has already put in place an open and consultative process for developing Framework Guidelines which will guide the ENTSOs in drafting the EU-wide Network Codes.  The process itself is being pilot-tested with specific projects so that ACER can learn from ERGEG’s experiences and introduce improvements when it is up and running in March 2011. ERGEG has already begun work (or will shortly do so) on Framework Guidelines in six areas - 3 in electricity (congestion management, operational security and transparency) and 3 in gas (gas capacity allocation mechanism; balancing rules and harmonised transmission tariff structures). Informal advice has also been given to the ENTSOs about the codes and the (non-binding) Community-wide 10 year network development plans.


Press Release:
• Energy regulators’ new Agency (ACER) starts work, 5 May 2010

• European Energy regulators publish the 2009 Annual Report, 7 May 2010
• Announcement of the Designation of ACER’s first Director, 7 May 2010
• International Confederation of Energy Regulators (ICER) 2010-2012 Work Plan, 25 May 2010

Events (see Events section of website for the new calendar of next workshops) :
• Joint ENTSO-E & ERGEG workshop on IEM transparency fundamental data, rules and tools, 1 June 2010
• 10 year gas network development plan, Renaissance Brussels Hotel, Brussels, 14 June 2010

Calendar of current and future public consultations

Area Issue Consultation
publication date
Gas Guidelines of Good Practice on CAM & CMP to storage facilities TBD
  Input to the Framework Guideline on gas balancing rules TBD
  Framework guideline on gas transmission tariffs TBD
Electricity Framework guideline on electricity capacity allocation and congestion management July -
September 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 - July 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 - quarterly update on the regions

The Central-East electricity region will continue to work on coordinated flow-based capacity calculation. The region aims to complete the transparency roadmap in 2010. A questionnaire was circulated among regulators in order to monitor the current state of compliance with the Guidelines of Good Practice on Information Management and Transparency in Electricity Markets.

In the Central-South electricity region full harmonisation has been achieved with regard to long-term allocation between Italy and France from 1st April 2010. The negotiations for signing a Memorandum of Understanding by the TSOs for CASC-CWE to become the common auction operator also for the Central-South region are ongoing. The pilot project for implementing a market coupling for the Italy-Slovenia border is progressing and the relevant ministries of the two countries are expected to sign a Memorandum of Understanding by the end of May 2010. As the testing phase performed by power exchanges has provided good results in terms of reliability of the price formation algorithm, the start of operation is foreseen for the 3rd quarter of 2010.

In the France-UK-Ireland electricity region regulators elaborated a Work Plan 2010-2012 which will be further discussed with stakeholders of the region. The Work Plan identifies the regional coordination of longer-term explicit auctions on IFA (Interconnexion France Angleterre), Moyle, Britned and East-West Interconnector as priority. In this context firmness is still under discussion in the scope of the priorities paper addressing barriers to efficient flows. Another priority is the day-ahead market coupling between the FUI (on Britned and IFA) and CWE electricity regions.

The South-West electricity region approved its Action Plan 2010-2012, which includes inter alia day-ahead market coupling between MIBEL and CWE (subject to the implementation of the ATC-based market coupling within CWE) and in terms of balancing the development of a TSO-TSO model for the region. The region is close to an agreement within MIBEL on a coordinated long-term product for the Spain-Portugal interconnector.

In the Baltic electricity region the final Report on Transparency in the Baltic Energy Markets will be presented in June 2010 after public consultation and work on the power exchange transparency report – based on NordPool Spot rules – will be launched also in June 2010.

In the North-West gas region a roadmap describing the future role and establishing a forward plan of the North-West GRI was presented this month.

In the South gas region, work in the transparency area focused on the development of the procedure (Open Season 2015) to allocate new interconnection capacity between France and Spain which will be available from 2015. The Open Season was launched on 11 May 2010. Stakeholders were informed about the progress and comments were invited on regulators´ and TSOs´ work with the aim to integrate their needs and preferences into the procedure. The final Information Memorandum is available at the European energy regulators website. The region agreed to update the Transparency Study carried out in July 2007 with the aim to verify compliance with the new transparency provisions of the new Gas Regulation (Regulation (EC) No 715/2009 on conditions for access to the natural gas transmission networks). Regulators of the South gas region have analysed congestion management procedures (CMPs) applied at the borders of each country in order to gain a better understanding of their functioning, as a first step in the development of coordinated CMPs at the borders.

In the South South-East gas region the Hungary-Slovakia interconnector is a project of major importance as currently there is no interconnector at this border. The 120km long pipeline will be bi-directional. The project enjoys strong political support. The non-binding phase of the Open Season ended 2009 and the binding phase started on 1 March 2010 and runs until end of May. With regard to security of supply the South South-East gas region will continue monitoring the implementation of reserve flows in the region and will focus in autumn 2010 on the issue “Regional cooperation inside the 3rd Package – regional emergency plans”.

International Activities

On 5 May 2010, the International Confederation of Energy Regulators (ICER) published its multi-annual Work Plan for 2010-2012, which covers important aspects of energy regulation across the following four themes:
* Competitiveness and affordability; 
* Reliability and continuity of supply; 
* The role of regulators in responding to climate change;
* Regulatory training, education and best practices.

ICER brings together over 200 energy regulators from 6 continents. The aim of ICER's work is to enhance regulatory practices and develop the interaction between regulation and policy in areas which pose critical global challenges.

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