Transcript Task 1 overview

PANEL DISCUSSION
"Implementation of the Internal Electricity Market
& Climate – Energy Targets 2030"
(How) Should the Target Model evolve post -2020?
Volker Stehmann
EURELECTRIC
Kick-off Stakeholder Workshop
"Post 2020 framework in a liberalised electricity market with large
share of Renewable Energy Sources"
28 April 2014, Brussels
The energy-only market was meant to deliver on the energy
policy triangle, but competitiveness and security of supply are
now being challenged
The 3rd Energy Package
Current status
Competitiveness
The Internal Energy Market should
stimulate fair and competitive energy
prices as well as necessary investments
Customers across the EU are faced with rising
energy bills;
RES support costs have escalated in some
countries due to inefficient design mechanisms
Security of
Supply
Interconnected networks and the
Energy-Only Market (EOM) delivering
investments should guarantee security
of supply
Rising variable generation is displacing
conventional generation which is needed
for generation adequacy but is being forced
to shut down (economic factors)
The incorporation of the CO2 price in
the EOM should be the main driver
for decarbonisation
The EU is so far on track to meet its
emissions reductions and RES targets
up to 2020
Sustainability
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To address this challenge, different elements of market design
have to work together
Energy
Flexibility
Capacity1
Efficient dispatch
Short term system
adequacy
What it
does
Delivers energy in the
most cost-efficient
way by having the
market define the
system’s merit order
Ensures long-term
Enables the system to
system adequacy e.g.,
respond to short-term
+ in the case of extreme
variations in the
load peaks or backup
supply/demand
intermittent
balance
renewable generation
Market
instruments
Forward, day-ahead
and intraday markets
Day ahead, intraday
and balancing markets,
ancillary services
Goal
1. Especially relevant for some regional markets
Long term system
adequacy
Market-based capacity
remuneration
mechanisms
3
How to ensure that markets deliver on the energy policy goals?
• Implementation of the target model is crucial to provide efficient energy supply
and remunerate flexibility -> progress on DA, ID and balancing markets integration
should be ensured
• Operation integration of RES to the market & moving towards more market based
RES support are needed before 2020. Renewables deployment post 2020 should
be driven by the ETS
• Long term system adequacy is at risk in many markets, giving more urgency to the
CRM discussion. Main reasons:
– RES growth impact economic viability of capacity needed for system adequacy
– Definition of the needed adequacy level remains a political choice, not a customer
decision. Implementation of smart grids will facilitate customers involvement, but this
will be feasible only in the long term
• Proper design of CRM is crucial to ensure not hindering the completion of the IEM
• A regional approach to the implementation of market-based CRM models should
be followed, cross—border participation in CRM is an important stepping stone
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