1. Detailed action plan (2007-2009) Electricity Regional Initiative. South West Electricity Regional Energy Market 1st Implementation Group Meeting Madrid, 20th July 2007

2. 2 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007 Summary 1. Meetings 2. Priorities 3. Actions

3. 3 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007 Meetings held within the South-West Electricity REM: Taking benefits from MIBEL and bringing forward the 2005 common position by CNE-CRE on capacity allocation mechanisms at the Spanish-French Interconnection  RCC. REGIONAL COORDINATION COMMITTEE MEETINGS  1st SW RCC Paris, 18 September 2006  2nd SW RCC (Joint) Paris, 30 May 2007  1st Technical SW RCC Madrid, 7 June 2007  IG. IMPLEMENTATION GROUP MEETINGS  1st South IG Madrid, 20 July 2007  SG. STAKEHOLDER GROUP MEETINGS  No meetings so far although a first meeting will take place in late September 2007 The South-West Electricity REM. 1. Meetings

4. 4 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007 Priorities identified within the SW Electricity REM: Phase I  Interconnections and available transmission capacity.  Transparency requirements.  Evolution of the mechanism for congestion management.  Compatibility of the rules of the market. Phase II  Balancing mechanisms.  Security of supply. The South-West Electricity REM. 2. Priorities

5. 5 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007 First Action Plan agreed in May 2007 by the RCC. Recently, the RCC at technical level has produced a detailed action plan for 2007-2009. The South-West Electricity REM. 3. Actions 3. Actions

6. 6 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority I. Interconnections and available transmission capacity  Deliverable I.1. Analysis of the current status of the interconnection infrastructures.  TSOs will be requested to provide, as a first step, a description of the current situation in terms of cross-border infrastructures. The South-West Electricity REM. 3. Actions 3. Actions

7. 7 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority I. Interconnections and available transmission capacity The South-West Electricity REM. 3. Actions 3. Actions DELIVERABLE I.1: Analysis of the current status of the interconnection infrastructures ACTIONRESPONSIBLEDEADLINE First presentation on the current status of interconnection infrastructures in the region By TSOs to the IGSeptember 2007 Public consultationthrough the SGNovember 2007 Conclusions from the public consultationby the IGJanuary 2007 Publication of conclusionsIGFebruary 2007

8. 8 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority I. Interconnections and available transmission capacity  Deliverable I.2. Analysis of the future interconnection infrastructures needs (until 2015).  TSOs will be requested to analyse the interconnection needs until 2015, as a first step, which will be followed by a consultation through the SG. The South-West Electricity REM. 3. Actions 3. Actions

9. 9 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority I. Interconnections and available transmission capacity The South-West Electricity REM. 3. Actions 3. Actions DELIVERABLE I.2: Analysis of the future interconnection infrastructures needs. ACTIONRESPONSIBLEDEADLINE First presentation on the future interconnection infrastructures needs (until 2015) By TSOs to the IGNovember 2007 Public consultationthrough the SGDecember 2007 Conclusions from the public consultationby IGJanuary 2008 Publication of conclusionsIGFebruary 2008

10. 10 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority I. Interconnections and available transmission capacity  Deliverable I.3. Agreement on further actions to make possible new infrastructure projects, further actions to manage possible congestions.  TSOs will be requested to provide, as a first step, description of the existing plans and proposals for developing new cross-border capacities, as well as a description of administrative, technical or other barriers and difficulties The South-West Electricity REM. 3. Actions 3. Actions

11. 11 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority I. Interconnections and available transmission capacity The South-West Electricity REM. 3. Actions 3. Actions DELIVERABLE I.3: Agreement on further actions to make possible new infrastructure projects, further actions to manage possible congestions, taking into account the functions and powers of each regulator. ACTIONRESPONSIBLEDEADLINE First proposed actions to bring forward new interconnection projects TSOsJanuary 2008 Agreed actionsIGJanuary 2008 Public consultationthrough the SGFebruary 2008 Conclusions from the public consultationIGMay 2008 Publication of final proposed actions to bring forward new interconnection projects IGJune 2008

12. 12 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority II. Analysis of convergence in transparency and information management  Deliverable II.1. In-depth comparative analysis of the state- of-the-art as regards information management and wholesale market data handling across States in the region.  This part is devoted to reach a higher degree of coordination in data exchange across the region, paving the way to the desired internal market paradigm via a more levelled playing field in terms of improved information requirements. This request for increased transparency appeals every market participant. The South-West Electricity REM. 3. Actions 3. Actions

13. 13 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority II. Analysis of convergence in transparency and information management The South-West Electricity REM. 3. Actions 3. Actions DELIVERABLE II.1: An in-depth comparative analysis of the state-of-the-art as regards information management and wholesale market data handling across Member States in the region. ACTIONRESPONSIBLEDEADLINE Questionnaire issued to TSOs and PXs RCCSeptember 2007 Responses to the questionnaireTSOs & PXsNovember 2007 First Paper on main findings from replies to the questionnaire RCCDecember 2007 Public consultationthrough the SGFebruary 2008

14. 14 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority II. Analysis of convergence in transparency and information management  Deliverable II.2. Consistent regulatory proposal, having ERGEG’s GGP as reference and benchmark, on how to reach a stable, satisfactory -as well as feasible- degree of transparency.  The RCC will closely monitor the implementation of the new transparency requirements resulting from the Guidelines for Congestion Management. However, the prime action to implement the transparency requirements will remain on each of the TSOs and will be supervised by its national Regulatory Authority The South-West Electricity REM. 3. Actions 3. Actions

15. 15 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority II. Analysis of convergence in transparency and information management The South-West Electricity REM. 3. Actions 3. Actions DELIVERABLE II.2: A consistent regulatory proposal, having ERGEG’s GGP as reference and benchmark, on how, to what extent and incurring in which costs is possible to reach a stable, satisfactory -as well as feasible- degree of transparency. ACTIONRESPONSIBLEDEADLINE Conclusions from the public consultation under deliverable II.1 IGApril 2008 Regulatory proposalRCCMay 2008 Presentation to the SGRCCJune 2008

16. 16 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority III. Improvement of cross-border congestion management methods  Deliverable III.1. Optimization and transparency of the cross-border capacity calculation.  The aim is to improve the coordination and transparency of TSOs regarding the calculation of available capacity, towards the use of a common transmission model. The South-West Electricity REM. 3. Actions 3. Actions

17. 17 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority III. Improvement of cross-border congestion management methods The South-West Electricity REM. 3. Actions 3. Actions DELIVERABLE III.1: Optimization and transparency of the cross-border capacity calculation ACTIONRESPONSIBLEDEADLINE Paper on common proposals for optimizing and increasing the transparency of cross-border capacity calculation. - Providing a general and common scheme for the calculation of the transfer capacity - Providing an historical of the redispatching costs, as well as their causalities, that each TSOs has supported in 2006 - Explaining in which extent the activation of these redispatching costs is coordinated between TSOs - Proposing a clear structure for the allocation of capacity between different timeframes TSOsSeptember 2007 Public consultationThrough the SGOctober 2007 Final paper on common proposalsAgreed by the IGNovember 2008 Implementation of proposalsBy TSOs1 st January 2008

18. 18 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority III. Improvement of cross-border congestion management methods  Deliverable III.2. Improvements in the long and medium term explicit auction mechanisms.  The aim is to harmonize in coordination with other regions and improve the nature and amount of long and medium term products, analysing work undergone in other ERIs. These expected improvements will be divided in two parts, according to the requested time for implementation. -“Quick win” improvements (to be implemented by 1st January 2008) -“Longer-term” improvements to be addressed by 1st January 2009 The South-West Electricity REM. 3. Actions 3. Actions

19. 19 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority III. Improvement of cross-border congestion management methods The South-West Electricity REM. 3. Actions 3. Actions DELIVERABLE III.2.a: “Quick-win” Improvements in the long and medium term explicit auction mechanisms ACTIONRESPONSIBLEDEADLINE Paper on common proposals for a coordinated and potentially harmonized and improved set of auction rules with other European borders, including, in particular, the following issues: - Improvement and transparency of the degree of firmness of capacity rights. - Improvement of compensation scheme in case of curtailment of capacity. - Implementation of a compensation scheme in case of cancellation of auction - Clarification of TSOs’ responsibilities for the management of cross-border access Implementation of a UIOSI mechanism TSOsSeptember 2007 Public consultationThrough the SGOctober 2007 Implementation of proposalsBy TSOs1 st January 2008

20. 20 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority III. Improvement of cross-border congestion management methods The South-West Electricity REM. 3. Actions 3. Actions DELIVERABLE III.2.b: “Longer-term” Improvements in the long and medium term explicit auction mechanisms ACTIONRESPONSIBLEDEADLINE Paper on common proposals for a coordinated and improved set of auction rules with other European borders, including in particular: - Feasibility study of creating balancing perimeters in the Spanish system - Feasibility study for a single auction platform in coordination with other regions TSOsNovember 2007 Public consultationThrough the SGDecember 2007 Final paper on common proposalsAgreed by the IGJanuary 2008 Implementation of proposalsBy TSOs1 st January 2009 Monitoring exercise on the implementationRCCStarting in January 2009 Monitoring report on the implementationIGJuly 2009 Public consultationThrough the SG September 2009 Publication of the Monitoring reportRCC1 st October 2009

21. 21 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority III. Improvement of cross-border congestion management methods  Deliverable III.3. Implementation of a day-ahead market coupling mechanism between the Iberian and the Central- West markets.  The RCC fully supports the implementation, as soon as possible, of market coupling mechanisms between France and the Iberian market, taking into account ongoing developments in the Central- West region. As a first step, regulators ask TSOs and market operators to analyze impact of one single PXs gate closure time. The South-West Electricity REM. 3. Actions 3. Actions

22. 22 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority III. Improvement of cross-border congestion management methods The South-West Electricity REM. 3. Actions 3. Actions DELIVERABLE III.3: Implementation of a day-ahead market coupling mechanism between the Iberian and the Central-West region ACTIONRESPONSIBLEDEADLINE Analysis of one single PXs gate closure time from PXs and TSOs TSOs & PXs1 st April 2008 Agreement on one single gate closureIGMay 2008 Public presentation and consultationThrough the SGJune 2008 Conclusions from the public consultationAgreed by the IGOctober 2008 ImplementationTSOs1 st January 2009

23. 23 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority III. Improvement of cross-border congestion management methods  Deliverable III.4. Improvement of cross-border intraday capacity allocation.  On the French-Spanish border, TSOs have put in place two coordinated intraday explicit auctions (one in D-1 and one in D). The RCC requests TSOs to assess the current explicit auction method and the possible improvements. The South-West Electricity REM. 3. Actions 3. Actions

24. 24 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority III. Improvement of cross-border congestion management methods The South-West Electricity REM. 3. Actions 3. Actions DELIVERABLE III.4: Improvement of cross-border intraday capacity allocation ACTIONRESPONSIBLEDEADLINE Assessment of current method and possible improvement of the current method TSOs & PXs1 st April 2008 Public consultationThrough the SGOctober 2008 Agreement on improvementsIGNovember 2008 Drafting of a detailed proposal for the implementation of a continuous trading platform TSOs1 st January 2009

25. 25 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority III. Improvement of cross-border congestion management methods  Deliverable III.5. Cross-border access to balancing markets.  The past experience shows that a new mechanism should be developed to allow effective cross-border trade of balancing energy. The South-West Electricity REM. 3. Actions 3. Actions

26. 26 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority III. Improvement of cross-border congestion management methods The South-West Electricity REM. 3. Actions 3. Actions DELIVERABLE III.5: Cross-border or Reciprocal access to balancing markets ACTIONRESPONSIBLEDEADLINE Detailed analysis of current barriers to cross-border access to balancing markets (national legislations, national time-frames, etc) and choice of the models to be implemented (TSO-TSO vs actor-TSO model as described by ERGEG and ETSO) TSOs1 st April 2008 Action planIGOctober 2008 Public consultation on the action planThrough the SGNovember 2008 Conclusions from the public consultation and required regulatory proposals (if needed) RCC1 st January 2009 Implementation of solutionsIGAccording to the agreed action plan

27. 27 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  IV. Additional task: Analysis of the administrative procedures for the changing of the legislation in force in each country.  Deliverable IV.1. Analysis of the administrative procedures for the changing of the legislation in force in each country.  The aim is to identify differences among regulators’ powers and duties as well as difficulties that may exist in the integration of the South-West Electricity REM and, if necessary, to promote regulatory changes and coordination regarding administrative procedures. The South-West Electricity REM. 3. Actions 3. Actions

28. 28 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  IV. Additional task: Analysis of the administrative procedures for the changing of the legislation in force in each country. The South-West Electricity REM. 3. Actions 3. Actions DELIVERABLE IV.1: Paper on analysis of the administrative procedures for the changing of the legislation in force in each country. ACTIONRESPONSIBLEDEADLINE First draft paperRCCJune 2007 Presentation to the IGIGJuly 2007 Public consultation on potential regulatory gap Through the SGSeptember 2007 Conclusions from the public consultationRCCNovember 2007 Publication of conclusionsBy the RCC to the SGDecember 2007

29. 29 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007  Priority V. Analysis of the compatibility of the rules of the MIBEL and French markets.  Deliverable V.1. Analysis of the compatibility of the rules of the MIBEL and French markets.  Since the main goal of the South-West region will be the effective integration of both MIBEL and France towards a European electricity market, regulators agreed on ensuring compatibility between the MIBEL and the French electricity market rules. The South-West Electricity REM. 3. Actions 3. Actions

30. 30 ERI – SW Electricity REM 1st Implentation Group Meeting. Madrid, 20th July 2007 The South-West Electricity REM.  Priority V. Analysis of the compatibility of the rules of the MIBEL and French markets. 3. Actions 3. Actions DELIVERABLE V.1: Assessment report on the compatibility of market rules between MIBEL and the French electricity market. ACTIONRESPONSIBLEDEADLINE Draft discussion paperRCCJune 2008 First discussionIGJuly 2008 Public consultationThrough the SGSeptember 2008 Conclusions paper from the public consultation: detailed analysis of points of conflicts and proposed regulatory changes RCCNovember 2008 Final AgreementIGNovember 2008 Final proposal of regulatory changesRCCDecember 2008