1. Parallel local initiatives – Central West electricity region and the Pentalateral Forum Mr Dominique Woitrin CREG, Belgium The Regional Initiatives: Progress and Prospects Conference Brussels, 28 March 2007

2. 2 Parallel local initiatives – Central West electricity region and the Pentalateral Forum  Parallel Initiatives of the regulators  Electricity Regional Initiative (ERI)  Pentalateral Energy Forum  Key to Success and Next steps Structure of Presentation

3. 3 The Regional Initiatives: Progress and Prospects Conference Brussels, 28 March 2007 Parallel local initiatives – Central West electricity region and the Pentalateral Forum  Two parallel road maps launched end 2005:  a common road map for integration of the electricity wholesale markets of Belgium, France and the Netherlands  a common road map for congestion management at the French- German border Road maps specified detailed actions and time schedule Although some actions not fully executed, a lot of progress made in 2006 (see Main achievements below)  ERGEG Electricity Regional Initiative (ERI) set up Feb 2006  CREG is “lead regulator” of the Central West electricity REM comprising 5 countries (BE, FR, DE, NL and LUX) Parallel Initiatives of the regulators

4. 4 The Regional Initiatives: Progress and Prospects Conference Brussels, 28 March 2007 Parallel local initiatives – Central West electricity region and the Pentalateral Forum ERI: Central West REM Action Plan – Feb 2007  Ensures harmonised approach:  Geographically: one Action Plan for the entire Central Western region  Replaces for 2007 and onwards all the outstanding and remaining actions mentioned in the 2005-2006 road maps  But also encourages sub-regional (bilateral) progress towards market integration  Work method adopted for the Action plan :  Study/proposal made by the TSOs  Consultation of stakeholders/market players  Decision/agreement of the Regulators  Implementation  Close communication and co-ordination with Pentalateral Energy Forum:  Avoid duplication of work  Harmonising views of regulators, governments and TSOs

5. 5 The Regional Initiatives: Progress and Prospects Conference Brussels, 28 March 2007 Parallel local initiatives – Central West electricity region and the Pentalateral Forum ERI: Central West Action Plan Priority Topics 1.Harmonisation and improvement of the long-term explicit auctions  Proposal of TSOs in March 2007  Stakeholders consultation: April 2007  RCC agreement: July 2007  Implementation in 2008 2.Implementation of a day-ahead flow-based market coupling  Workshop in Bonn (done in February)  Implementation study TSOs, with PX support: July 2007  Orientation study TSOs: July 2007  Stakeholders consultation: August 2007  RCC agreement: November 2007  Implementation in 2008

6. 6 The Regional Initiatives: Progress and Prospects Conference Brussels, 28 March 2007 Parallel local initiatives – Central West electricity region and the Pentalateral Forum ERI: Central West Action Plan Priority Topics 3. Implementation of cross-border intraday and balancing trade  TSOs proposal on intraday: July 2007  Stakeholders consultation on intraday: August 2007  RCC decision: October 2007  Intraday implementation: 2008  TSOs cross-border balancing proposal: June 2008  Stakeholders consultation on balancing: July 2008  RCC decision: October 2008  Cross-border balancing implementation: March 2009

7. 7 The Regional Initiatives: Progress and Prospects Conference Brussels, 28 March 2007 Parallel local initiatives – Central West electricity region and the Pentalateral Forum ERI: Central West Action Plan Priority Topics 4.Common calculation for cross-border capacities  TSOs proposal to the Pentalateral Energy Forum: First draft received in February 2007  TSOs implementation report of new congestion management guidelines: November 2007 5.Maximisation of the amount and of the utilisation of cross-border capacities  TSOs proposal: August 2007  Stakeholders consultation: September 2007  RCC agreement on next steps: November 2007

8. 8 The Regional Initiatives: Progress and Prospects Conference Brussels, 28 March 2007 Parallel local initiatives – Central West electricity region and the Pentalateral Forum ERI: Central West Action Plan Priority Topics 6.Regional capacity investment plan  RCC proposal to the Pentalateral energy forum  Objective: plan available in December 2007 7.Transparency  TSOs report on the implementation of new Congestion management guidelines: end March 2007  RCC monitoring report: December 2007 8.Regional market monitoring  Implementation of a regional monitoring taskforce established: work will start soon 9.Harmonisation and improvement of data exchange

9. 9 The Regional Initiatives: Progress and Prospects Conference Brussels, 28 March 2007 Parallel local initiatives – Central West electricity region and the Pentalateral Forum ERI/Road maps: Main achievements  Common view of Regulators  Market monitoring (report France Germany expected soon)  Implementation of auctions on all borders and timeframes  First steps for the harmonisation of auction rules (force majeure, secondary trading, level of firmness,…)  TLC: trilateral market coupling between France, Belgium and the Netherlands with fall-back scenarios and increased transparency  General improvement of market transparency  Intraday: implementation between France and Belgium in June 2007

10. 10 The Regional Initiatives: Progress and Prospects Conference Brussels, 28 March 2007 Parallel local initiatives – Central West electricity region and the Pentalateral Forum Pentalateral Energy Forum  June 2005 Initiative of the 5 ministers of energy of Belgium, France, Germany, Luxemburg and the Netherlands  Assembles governments, regulators, TSOs and some market players  Concern cross-border exchange of electricity  Set up 3 support groups dealing with :  Interconnection capacity: SG1  Security of supply and new interconnectors: SG2  Legal barriers to closer co-operation: SG3

11. 11 The Regional Initiatives: Progress and Prospects Conference Brussels, 28 March 2007 Parallel local initiatives – Central West electricity region and the Pentalateral Forum  SG1: Optimisation of interconnection capacity and allocation mechanisms  D-2 information exchange  Cross border capacity calculation  Flow based methodology  Market coupling  SG2: Security of supply and development of new interconnectors  System adequacy forecast  Grid safety and coordination  Regional grid plan  SG3: The removal of legal barriers to closer co-operation  Exchange of (confidential) information between regulators, TSOs  Harmonisation issues (gate closure times, bank guarantees, licensing procedures, electronic data exchange, …) Pentalateral Energy Forum: 3 support groups

12. 12 The Regional Initiatives: Progress and Prospects Conference Brussels, 28 March 2007 Parallel local initiatives – Central West electricity region and the Pentalateral Forum  ERGEG’s RCC continuous follow-up and co- ordination:  Implementation of the Action Plan  Developments inside Pentalateral Energy Forum  Coherence and consistency across regions  Next Mini Forum in September 2007  Coupling with other regions (Northern electricity region,…)  Political Support of Ministries is essential Key to Success and Next steps

13. 13 The Regional Initiatives: Progress and Prospects Conference Brussels, 28 March 2007 Parallel local initiatives – Central West electricity region and the Pentalateral Forum Thank you More information on the Central West Electricity REM is available at the ERGEG website (www.ergeg.org)www.ergeg.org Become an “Online Subscriber” to automatically receive news from the region(s) www..be