November 2010


European Energy Regulators’ News

Issue: November 2010

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- Success in regional and inter-regiona market integration

- Status Review on the ERGEG Regional Initiatives 2010
- ERGEG study on congestion management procedures & antihoarding mechanisms in the European LNG terminals  
- Evaluation of ENTSOG’s European Ten Year Network Development Plan 2010-2019

Press release
-  Success in regional and inter-regional energy market integration
-  European Energy Regulators welcome the European Commission’s Communication on Infrastructure
-  The Slovenian Government and ACER sign Seat Agreement

Public Consultations
-  Conceptual model for the European gas market

Region in the Spotlight
-  How the ERGEG Electricity Regional Initiative is leading to transparency improvements

This month the European Commission issued its “Energy 2020” strategy which defines five energy priorities for the next ten years.

Importantly, the Commission has also published its Energy Infrastructure priorities, which will be discussed at the Energy Council (December 2010) and the special summit on energy of the European Council (February 2011). European Energy Regulators' initial reaction to the Infrastructure Package (see Press Release PR-10-09) emphasises that efficient development of infrastructure is key to tackling challenges of climate change and security of supply – but costs must also be managed; and that the proposals must be linked closely to measures introduced in the 3rd Energy Package. In particular ACER (and national energy regulators) will play a key role in driving market integration through the process of Framework Guidelines and overseeing the Ten-Year Network Development Plan (TYND).

ERGEG published a report on the different congestion management mechanisms and anti-hoarding mechanisms currently applied at European LNG terminals. It focuses on the need for harmonisation and transparency at the EU level.

ERGEG’s evaluation of ENTSOG’s European Ten-Year Network Development Plan (TYNDP) 2010-2019 recommends that a top-down model-based scenario analysis be used also in future TYNDPs (this the first gas TYNDP was based on a bottom-up approach only). ERGEG has also launched a call for evidence regarding an EU gas target model.

Success in regional and inter-regional energy market integration is the topic of this month’s feature article.  This is particularly timely given that the inter-regional market coupling between the CWE and Nordic markets went live on 9 November.  The short feature in this newsletter gives a flavour of some of the achievements (further detail,region by region and topic by topic, is set out in the Status Review on the ERGEG Regional Initiatives 2010 published this month). In the regional spotlight this month, rather than focusing on one of the regions, we demonstrate how the ERGEG Electricity Regional Initiative is leading to transparency across the seven electricity regions.

Also this month, the Slovenian Government and ACER signed a Seat Agreement which governs the relationship between the Slovenian Government and ACER (see ACER Press Release)


Feature: Success in regional and inter-regional energy market integration

Aim of the Regional Initiatives
ERGEG’s Regional Initiatives (RIs) are aimed at speeding up the integration of Europe’s national energy markets in an innovative “bottom-up” approach.  Based on the voluntary cooperation of stakeholders, and led by regulators, specific barriers to trade and competition are identified and solutions found within each of the seven electricity and three gas regions so as to improve market integration.

Achievements – electricity
The 2010 Status Review of the ERGEG Regional Initiatives details the major achievements during the past year as well as coherence and convergence across regions. It includes some case studies and also, for the first time, policy advice from the Regional Initiatives’ experiences (see Press Release, PR-10-08).

In electricity there are important and concrete results particularly with regard to capacity calculation, capacity allocation and congestion management. Some regions have in place single auction platforms (Central-West and Central-East) and others are moving in that direction. A key development is a new interregional dimension with extension of price coupling to the whole Central-West region (9 November 2010) and simultaneously the harmonisation of two regional market coupling projects (Central-West electricity region and the Northern market). These are important steps towards the target of pan-European price coupling by 2014. In January 2010 the European Commission mandated ERGEG to elaborate proposals for guidelines on fundamental data transparency in electricity. The regional transparency reports (developed in six regions) are an extremely valuable basis for this work (see Region in the spotlight section of this newsletter).

Achievements – gas
The GRIs have played a central role in strengthening existing and new cross-border infrastructure, thus improving security of supply.

In all three gas regions, investments have been evaluated based on the actual needs of the market (e.g. coordinated open seasons have been used to assess the need for capacity and to secure project financing) and regional investment plans are being developed. Regions are also optimising the use of existing capacity through improved capacity allocation and congestion management procedures. The North-West gas region has significantly improved gas transparency which serves as an example for other regions to follow and has helped shape EU comitology guidelines on gas transparency.

From regional market integration towards a single EU energy market
Despite the many challenges to market integration (for which, ultimately, legislation has been introduced to overcome) each of the regions has been successful in taking practical steps towards integration in areas such as cross-border electricity trading, transparency of information and much needed coordinated regional infrastructure investment.

The development of regional electricity and gas markets is an important step and practical bridge towards the ultimate goal of a single competitive EU market. The next step is creating a single European market from the seven electricity and three gas regions.

How the Regional Initiatives fit in with the European Commission's Infrastructure Package
The Regional Initiatives are a key complement to the Energy Infrastructure Package in delivering concrete results on the ground such as methods for maximising the use of existing infrastructure and increasing physical capacity based on coordinated investment decisions involving several Member States.

Future Prospects – the Regional Initiatives under ACER
ERGEG has advocated (Strategy Paper Conclusions, June 2010) that going forward the Regional Initiatives, under the EU’s Agency for the Cooperation of Energy Regulators (ACER), could be used to focus on implementing the new harmonised rules (e.g. Framework Guidelines and resulting Network Codes in areas such as capacity allocation or gas balancing), which are currently being developed. They could assist ACER by sharing best practices and in monitoring progress towards a single EU market in electricity and gas.


Press Release:
•  Success in regional and inter-regional energy market integration (10 November 2010)
•  European Energy Regulators welcome the European Commission’s Communication on Infrastructure
   (19 November 2010)
•  Status Review on the ERGEG Regional Initiatives 2010 (Ref. E10-RIG-11-03 )
•  ERGEG study on congestion management procedures & antihoarding mechanisms in the European 
   LNG terminals (Ref: E10-LNG-11-03)
•  Evaluation of ENTSOG’s European Ten Year Network Development Plan 2010-2019 (Ref: E10-GIF-01-04)

 (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 Existing transparency requirements for natural gas Oct - Nov 2010
  Conceptual model for the European gas market – Call for Evidence Nov - Dec 2010
Electricity Framework guideline on operational security / system operation TBD
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 - How the Electricity Regional Initiative is leading to transparency improvements

Providing transparent and reliable information to market players is a key element for efficient and competitive markets. The purpose of transparency on physical information is to support security of supply, facilitate (regional) market development for making energy markets more efficient, foster competition, and provide additional (partly price sensitive) information in order to prevent insider trading and market abuse.

More harmonised transparency across regions
A direct result of the Electricity Regional Initiatives is a more harmonised level of transparency both within and across regions. Six electricity regions (the Northern, Central-West, Central-East, Central-South, South-West and the Baltic regions) have adopted “Regional Transparency Reports” with detailed transparency requirements – mainly on fundamental/infrastructure data. The Baltic region's transparency report was published in May 2010. The basis of these regional reports is the Northern Transparency Report (September 2007).  It requires TSOs in the region to publish information on load, transmission and interconnection as well as on generation and balancing in a harmonised way for the whole region. Furthermore the report recommended a set of wholesale market data for publication. The goal is to provide market participants with all relevant information inducing fairer market conditions and reducing information asymmetries in the electricity market.

Compliance with regional transparency reports
To ensure improvement of transparency, regulators monitor compliance with the Regional Transparency Reports. In the Northern region (which was the first region both to introduce regional transparency requirements and to monitor compliance), their 1st monitoring report in August 2008 on load, transmission, interconnectors and balancing data showed that transparency on the mentioned issues was high in the Nordic region but the degree of harmonisation of transparency in the region was limited. The Northern region's 2nd Transparency Monitoring Report, published in November 2010  found the level of transparency of generation and consumption data is quite high in the region. In order to comply with the requirements TSOs have adapted their publication procedures. In the Nordic Countries (Denmark, Finland, Norway, Sweden) and in Germany, the TSOs are taking advantage of publishing most of the information on joint internet platforms of the Nord Pool Spot and EEX. Very little information remains on TSOs’ individual websites. In Poland, the TSO publishes the information on its website (and in Polish, not English). However compliance is not fully achieved in all countries yet (a useful colour coded guide provides an overview of national compliance across the six countries). The regulators found that the publication of the information on joint platforms has fostered transparency.

The Central-East region's first Transparency Monitoring Report, published in November 2010, provides a clear overview (including a traffic light system of red, yellow, green) of the fulfilment of transparency requirements (of the 2008 regional transparency report) by the region’s TSOs. It finds that transparency is reasonably good but there is still room for improvement especially regarding updating the information according to the required timeframe. The fiirst monitoring report revealed the need to improve above all the quality of publication data.

Monitoring is considered necessary as there are gaps between the requirements and the actual publication practice the work in the region.  Nevertheless the regions are  focusing on closing these gaps. Furthermore these regional transparency initiatives have served as the central basis for preparing the European energy regulators’ advice to the European Commission on a new legally binding framework (via comitolgy proecdure) concerning electricity fundamental data transparency.

About the European Energy Regulators' News

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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 national level.

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