1. How do CEE countries benefit from improved regional cooperation? from the Czech TSO perspective The Regional Initiatives - Progress and Prospects Joint Conference EC & ERGEG, Brussels 28.03.2007 Zbyněk Boldiš, ČEPS, a.s.

2. CEE Regional Development I. Today  Coordinated Auctions among 5 TSOs  Bilateral Auctions  NTC based explicit auctions Y/M/D ahead  Intraday on CZ/SK border  Concept for the FBA Tomorrow  Independent CEE Auction Office in Bavaria  Co-ordinated auctions among all CEE TSOs  No agreed common allocation method for Y/M auctions  Intraday on all CEE borders  FBA for D-1?  Questions to be answered

3. CEE Regional Development II. Today  Maximization of the cross-border capacity  Security risk: more frequent violation of N-1  Separated balancing markets & price structure  Different imbalance settlement mechanism  First experiences with cross-border balancing on CZ/SK border Tomorrow  Likely decrease of capacity on specific borders  Complying with security standards  New construction needed  Regional balancing market with single price structure  Harmonised regional settlement market  Regional market with ancillary services

4. Major improvements in the CEE Region  Intensive regional communication and understanding  Regional capacity allocation Independent Regional Auction Office in Bavaria Co-ordinated auctions among all CEE TSOs Coordinated introduction of intraday on all CEE borders  Coordinated Transmission System Development Annually upgraded list of priority projects Sharing experience in the field of procedures, workflows, etc... Modelling of new investments’ impact on interconnected systems Carry out discussion on the transmission systems’ development  System Security Common analysing of critical situations Joint procedure for investigation of emergency situations Coordination of maintenance of grids (not just interconnectors) Real time data exchanges incl. Emergency

5. Major challenges in the CEE region  FBA implementation Unlikely increase of cross-border capacities Shift from an option to use the capacity to an obligation of traders Limited transparency Potentially discriminating  Increasing difference between scheduled and real flows Influenced by expansion of wind generation in North Germany Existence of regional bottlenecks (often inside the countries)  Interconnection improvements without stronger EU support to overcome environmental and ownership barriers  More intensive market coordination: Regional balancing market with single price structure Harmonised regional settlement market Regional market with ancillary services

6. Thank you for your attention! boldis@ceps.cz