Transcript Slide 1

Congestion Management
Mr Carlo Crea
AEEG, Italy
The Regional Initiatives: Progress and Prospects Conference
Brussels, 28 March 2007
Congestion Management
Structure of Presentation
 CBT congestion management
 Long-term objectives
 Key developments to date
 Planned developments
 Focus on the Central-South Region
 Cross border allocations in 2006
 Cross border allocations in 2007
 The way forward
The Regional Initiatives: Progress and Prospects Conference
Brussels, 28 March 2007
2
Congestion Management
CBT Congestion Management: objectives
 Electricity Regional Initiative (ERI)’s goal is to create seven
electricity Regional Energy Markets (REMs) as an interim
stage towards a single European electricity market.
 Effective market integration requires an efficient
mechanism for the allocation of interconnection capacity.
 Harmonization of congestion management mechanisms:
 Coordination of long term CB capacity allocations;
 Flow based market coupling for short-term allocations.
The Regional Initiatives: Progress and Prospects Conference
Brussels, 28 March 2007
3
Congestion Management
CBT Congestion Management:
key developments to date
 Positive steps, even though integration is proceeding
at different paces.
 Day-ahead market coupling:
 Central-West REM (France-Belgium-Netherlands);
 Northern REM (Denmark-Norway-Sweden-Finland);
 Coordinated explicit auctions:
 Central-East REM: all borders – five coordinated;
 Central-South REM: three borders.
The Regional Initiatives: Progress and Prospects Conference
Brussels, 28 March 2007
4
Congestion Management
CBT Congestion Management:
planned developments
 Planned improvements:
 Central East REM: flow-based coordinated CM
system;
 France-UK-Ireland REM: removal of the reserve price
on capacity auction on the French- UK interconnector;
 South-West REM: single Iberian spot market.
 Northern REM: day-ahead market coupling on the
Danish-German interconnectors.
The Regional Initiatives: Progress and Prospects Conference
Brussels, 28 March 2007
5
Congestion Management
Focus on the Central-South REM
Key priorities:
 harmonization of CBT
congestion management
methods;
Inter-TSO coordination
(harmonisation of operational
and security standards)
transparency;
integration of intra-day and
balancing markets.
The Regional Initiatives: Progress and Prospects Conference
Brussels, 28 March 2007
6
Congestion Management
Focus on the Central-South REM:
Cross border allocations in 2006
 Non-coordinated allocation of interconnection capacity
(50/50 approach);
 On the 50% capacity allocated by Italy:
 short-term: import/export bids to IPEX (implicit auction);
 long-term: explicit auction of financial rights.
 Critical issues:
-
lack of coordination;
-
partial inefficiency (no market coupling).
The Regional Initiatives: Progress and Prospects Conference
Brussels, 28 March 2007
7
Congestion Management
Focus on Central-South REM:
Cross Border allocation in 2007

Coordinated allocation of interconnection capacity on three
borders (Italy-France, Italy-Austria; Italy-Greece).

Each country allocates all the available export capacity:
 short-term and long term explicit auction of physical transmission
rights.

Critical issues:
 bilateral, not regional coordination;
 no coordination on day-ahead or intraday;
 partial inefficiency: no opportunity to allocate spare capacity after
the daily explicit auction.
The Regional Initiatives: Progress and Prospects Conference
Brussels, 28 March 2007
8
Congestion Management
Focus on Central-South REM:
the way forward
 Improvement of regional coordination:
 long and medium term allocation (yearly and
monthly): guidelines for coordinated explicit
auction of physical transmission rights;
 short term allocation (daily): guidelines on market
coupling.
The Regional Initiatives: Progress and Prospects Conference
Brussels, 28 March 2007
9
Congestion Management
Conclusions
 The REMs are a pragmatic approach towards a single
European electricity market;
 In 2006, the REMs made a number of positive steps
towards market integration, especially in the area of
congestion management;
 Cooperation among regulatory authorities in the context
of ERGEG and CEER is essential to reach such results.
The Regional Initiatives: Progress and Prospects Conference
Brussels, 28 March 2007
10
Congestion Management
Conclusions/2

Further developments towards a single European Electricity
Market require parallel improvements of hardware
(interconnection expansions) and software (networks and
congestion management harmonisation);

To this end, we need:
 adequate and binding ETSO agreements involving all the necessary
parties, including Switzerland (develop ETSOplus);
 shared solutions to the NIMBY problems;
 national regulatory authorities with strengthened and harmonised
powers together with ERGEGplus.
The Regional Initiatives: Progress and Prospects Conference
Brussels, 28 March 2007
11
Congestion Management
Thank You
More information on the
Central-South Electricity Regional Energy Market
is available at www.ergeg.org
Become an “Online Subscriber” to automatically
receive news from the regions
The Regional Initiatives: Progress and Prospects Conference
Brussels, 28 March 2007
12