European commission DG Energy and transport “3rd liberalisation package” ERI CEE SG Meeting 7.November 2007 Matti Supponen Electricity and gas unit Matti.Supponen@ec.europa.eu

EU energy policy in construction Under preparation: Climate change policy with emissions trading Renewable targets and support mechanisms Energy market package

North sea depleted, nuclear? Background North sea depleted, nuclear? Bottlenecks Price regulation Long term contracts Big four Suez Reform in process € EdF Enel Lack of capacity Market concept not implemented Not gas for everybody

ETSO Generation adequacy forecast (UCTE, Nordel, UK, Ireland)

Cross-border flows

Ownership unbundling

Share of congestion revenue reinvested in interconnection 900 800 700 600 500 400 300 200 100 Ownership unbundled TSOs Vertically integrated TSOs Share of reinvested congestion revenue 33.3% 16.8% 387 129 104 623 Congestion revenue (2001-6/2005) It should be noted that these results need to be interpreted with caution because, firstly, interconnector investment is influenced by a number of factors and not only by the unbundling, secondly, investment planning and implementation takes some time and, thirdly, situations in which an ownership unbundled TSO at one side of the border faces an integrated TSO at the other side of the border can be an obstacle to investments. This being said, these caveats apply to all TSOs in an equal manner and should not systematically influence the above findings. Interconnector investment Source: Energy sector inquiry

TSO co-operation

TSO co-operation Common tasks: Organisation: Draft technical and market codes Operate the network Prepare 10-year investment plan Co-ordinate research Organisation: ENTSO

Congestion management methods in 2008 Use of implicit auction Explicit auction only PX No congestion in the region Pool Pool PX PX PX Power exchange with implicit auctioning AO PX PX PX PX AO? AO AO PX PX Auction office PX PX Special features PX AO? PX PX Pool

Omistuksellinen eriyttäminen

Regulators

Regulators More powers Co-operation Selectively new powers Single authority Co-operation European Energy Agency

European Energy Agency

European Energy Agency Tasks Individual decisions on issues provided for in the EU legislation Monitoring the market and the co-operation between TSOs Advice the Commission Organisation About 50 permanent staff Regulatory board Location ?

Summary

Summary

Market information

Market information Objective: Current legislation Better access to market for small players Current legislation For example load, network and production capacity data already requested but badly respected Transparency for OTC-trading Record keeping Possibility for authorities to investigate for example market manipulation

Retail market

Retail market Opening: Content Legislation until now concentrated on wholesale markets DSO unbundling and consumer protection already on board Content Harmonisation Objective at least regional retail markets “Retail forum” á la Florence and Madrid Smart metering

Regional energy markets in the EU Moderately concentrated Highly concentrated Very highly concentrated congestion

Thank you for your attention End of the story Thank you for your attention