EUROPEAN COMMISSION 

3rd Internal Market package

EEF 17.02.2009

Matti Supponen Electricity and Gas unit

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Structure of the presentation

Status and content of the third package Consequences of the third package to the market Market challenges Conclusions EEF 17.02.2009

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3rd package: main measures

» » » » Effective unbundling of transmission networks EU Regulatory Agency Cooperation of network operators (ENTSO) Stronger powers for national regulators Also Transparency Retail market & consumer protection Third country clause Level playing field | 3 EEF 17.02.2009

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Third Package : main remaining issues

TSO Unbundling: will Council prevail ?

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Fuel poverty: will EP get what they want?

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Comitology on European guidelines : needed for making the rules legally binding  First priority… climate and renewables package | 4 EEF 17.02.2009

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Third Package : timing

Informal conciliation through trialogues has started Second reading of the Parliament has to agree on a compromise latest in April 2009 Formal adoption by the Council can be in September 2009 => If not, important delay | 5 EEF 17.02.2009

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Third Package : implementation

Agency setup: 18 months ENTSO setup by summer 2009 Starting to prepare codes and guidelines in practise Make best use of transition period  Stakeholder involvement | 6 EEF 17.02.2009

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Network codes

ENTSO Work programme Preparation of codes Commission Agency: Preparation of framework guidelines Framework guidelines Commission ENTSO Voluntary codes Commission EEF 17.02.2009

Agency Comitology Legally binding codes | 7

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Network codes

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network security and reliability rules technical transmission reserve capacity for operational network security; including rules for grid connection rules; third party access rules; data exchange and settlement rules; interoperability rules; operational procedures in an emergency; capacity allocation and congestion management rules; rules for trading related to technical and operational provision of network access services and system balancing; transparency rules ; balancing rules including network related reserve power rules; rules regarding harmonised transmission tariff structures including locational signals and inter-TSO compensation rules ; energy efficiency regarding electricity networks | 8 EEF 17.02.2009

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ENTSO-E network planning

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Market challenges

Three major challenges: Wind, wind and wind There will be huge investments in renewable energies » » How will the necessary network infrastructure be built?

» » » How will the renewable energy be introduced into the market?

Renewables alone will not be enough Only difficult choices available: Gas Coal Nuclear | 10 EEF 17.02.2009

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Kriegers flak

Söderåsen Kingstrup Audorf Hovegård Gørløsegård Barsebäck Sege Kruseberg Hurva Kiel Lübeck Herslev Storebælt Fraugde Bjæverskov Rislev Radsted Rødsand Kontek Baltic I Kriegers Flak

Combined Solution

Baltic Line Rostock Bentwisch Güstrow Siedenbrünzow Lüdershagen Lubmin

Separate Solution

Kriegers Flak Which solution is better?

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Regulated prices

Regulated prices Government acts No market Pressure to prices No investment EEF 17.02.2009

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How is the market doing?

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Herfindahl-Hirschman index » » » » Belgium Latvia Slovenia France 8390 8110 7208 6960  Dominant positions EEF 17.02.2009

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Conclusions

Third package will give a push for further development of the market : quick adoption .

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needed No-compromise climate change policy is the underlying assumption : 20-20-20 objectives!

Pressure towards higher prices, Governments scared about price increases, regulated prices seriously hamper investments Investments urgently needed both in production capacity and in networks | 14 EEF 17.02.2009

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The end

Thank you for your attention

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Regional market approach

Nordic UK/IE SWE CWE CEE Baltic IPS/UPS CSE SEE EEF 17.02.2009

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Regional markets: results of the regional forums +++ Market coupling is spreading Capacity allocation moving to flow based methods Stakeholder involvement - - Progress slower than wanted Unanimous approach showing its limits Old unsolved problems block the progress No full power exchange coverage yet | EEF 17.02.2009

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Strategic energy review

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Vision for 2050 » Decarbonisation of electricity » » » Away from oil in transport Low energy and positive power buildings Smart interconnected power grid  Rest of the world to follow!

EEF 17.02.2009

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