1. 1 Priority issues for the French-UK-Irish regulators What is expected from TSOs? 30 May 2006 To increase trade between adjacent markets and therefore have a more efficient use of the interconnectors

2. 2 Cross-border congestion management Compliance with the CM guidelines –UIOLI, firmness, compensation scheme, use of auction revenues, minimum reserve price, etc. Improvement and Harmonization of auction rules –Between North-South, Moyle and IFA interconnectors –With existing rules on continental interconnectors Implementation of a coordinated explicit auction mechanism (same set of auction rules, timeframes, etc.) –To facilitate competition on the regional market –And develop integration of the F-UK-I electricity markets

3. 3 Intraday and Balancing trade Implementation of a simple specific allocation mechanism for cross-border intraday trade –To offer a greater flexibility to market actors –To optimize the utilization of cross-border capacities Integration of balancing mechanisms –To enhance competition in the real-time market –To enhance stability of the network –To reduce the TSOs’ overall balancing costs

4. 4 Wholesale market Transparency Assessment of current situation across the region in regards to the Congestion management guidelines : –Information on the interconnections (e.g. capacities, use of congestion rents, etc.) Assessment of current situation across the region in regards to the draft ERGEG Transparency guidelines Assessment of any constraints on TSOs in meeting the ERGEG GGP Proposal to achieve a level-playing field

5. 5 Main objectives 1.Discuss the 3 identified first priorities and determine precisely for each priority what has to be achieved -> High level definition of a common “roadmap” 2.Discuss further improvements to be investigated -> Potential use of implicit auctioning -> Other improvements?

6. 6 Back-up slides

7. 7 F-G : Exp. Auction G-F : Exp. Auction « Market-based » non coordinated F-B : Exp. Auction B-F : Exp. Auction French current situation F-I :- 50% Exp. Auction - 50% by Terna I-F : No congestion « Market-based » coordinated F-UK : Exp. Auction. UK-F : Exp. Auction F-S : Exp. Auction S-F : Exp. Auction By the 1st of June 2006 F-Ch : No commercial capacity Ch-F : No congestion Non « market-based »

8. 8 Next steps: implementation of main action points foreseen in the 3 roadmaps Secondary Capacity markets Cross-border intraday and balancing trade Cross-border capacity calculation method Harmonization of cross-border auction rules Implementation date July 2006 January 2007 CRE-CREG-DTeCRE-FNACRE-E control

9. 9 Main expectations from the Regional Initiatives UK-Ire-F region:  Harmonization of IFA auction rules with those currently implemented on other links (Implementation of the UIOLI principle and of a specific intraday allocation mechanism) Central Western Region  Implementation of the two roadmaps (CRE-CREG-DTe, CRE-FNA) South Central Region  Implementation of a coordinated explicit Auction with Italy