Investment workstream 20 October 2008 Investment project (I1)‏ Update on Consultation Presentation at account and by project manager

2 Investment workstream, GRI NW Agenda update 1. Outcome of consultation Response rate 2. Quick scan content response First results 3.Way forward? Process

3 Investment workstream, GRI NW 1. Outcome of consultation (1) Response sufficient? Response rate of 15 was OK to ERGEG standards (10 – 26 on average)  13 online responses - 1 with confidential elements  2 official paper submissions (key Operator Group, German operators commonly)  Some informal s (disregarded at this stage) Does it represent region? To a large extent.  All type of players covered - Larger industry (like IFIEC), banks/traders/hedgefunds are little represented. - No governmental response.  All involved countries covered to a large extent - NU with activities in France, Ireland, Northern Ireland and Belgium could be better represented.  Sufficiently large response - Especially running and future projects well covered (see gasinvestment.org) Proposal is to extend till end of this week to allow for 3 to 5 more responses.

4 Investment workstream, GRI NW 2. Outcome of consultation (2)….switch to Excel…. Is there need of encouraging investment climate? Is there basis for solutions? Y/Y!

5 Investment workstream, GRI NW 3. Way forward RCC: update on consultation (today) PB: report on progress Workshop RCC-members 6/7 11 Madrid forum: potentially 1 slide as part of GRI on process Governmental representatives mtg (TSO, 1 nov, via Open Seasons project)‏ SG including workshop Investment Project managers conference call January ‘09: Next AG meeting: virtual test case (? to TSO to work with EFET to prepare, question pending ?)

6 Investment workstream, GRI NW Back-up slides

7 Investment workstream, GRI NW What shall be projects outcome by end of ‘09? ‏(2) In a co-operation I2. Agreed framework for a sound (regional) investment climate  By means of a thorough confirmation via market consultation - Using common principles developed by NW-EU TSOs  Leading to a side-letter to MoU between Regulators and any additionally, based on consultation outcome, required measures (e.g. testing in pilot projects)‏ Mechanism(s) for incentives for TSO’s, encouraging regulated investment  By means of a report on incentives - Including addressing question of alternatives (next) to user commitments as basis for investment  Leading, if required, to advise of GRI NW on adjustment of regulatory framework by either governments and/or regulators Encourage(d)‏ Sound Regional Investment Climate By end of 2009

8 Investment workstream, GRI NW What shall be projects outcome by end of ’09? (1) In a co-operation I2. Quote Roadmap from “9 building blocks of our successful regional market by 2012”: “The investment climate should be such that investments in capacity… are sufficient and timely and persistent physical congestion is avoided. Investments should facilitate gas supplies from diverse sources to meet the need for secure gas supplies” See point III, p. 10 Encourage(d)‏ Sound Regional Investment Climate By end of 2009

9 Investment workstream, GRI NW What happened so far?‏ (1)‏ Investment project (I1) started as of 10 June 2008 and is now gathering momentum on way to SG workshop of in London.  During June and July in co-operation with I2-stream workshop for RCC and Operators on was prepared and held (re: 'principles for sound investment climate', proposal by TSOs). - A sub-product of has been identification of a legal mismatch, which could be addressed with governmental representatives on (Thank you to Operators team): - “Legalisation for TSO x-border co-operation in open seasons”  Subsequently on the consultation was launched on sound regional investment climate in general and TSO principles encouraging such climate in particular (due today!)‏  In parallel study on incentives was launched and is in progress.  By meeting of Advisory Group was formed via public webcall (TSO’s, Market, Academic, Bank). Current primary focus of Advisory Group has been work on incentives. Advise in general arising issues shall be used as well.

10 Investment workstream, GRI NW What happened so far? (2) Personal lesson learned from consultation paper process: Building required by project trust requires detailed mutual understanding, certain “vulnerability” and time to agree to (dis)agree. Feasible

11 Investment workstream, GRI NW Work timing and milestones Investment (I1) visualised June 08July 08August 08Sep.08Oct. 08Nov. 08Dec. 08q1-q Ok- plan Preconsult with RCC and sign MOU: general issues (step 1)‏ Develop with I2, and AG, present and verify test case(s)‏ for application of MOU and/or Incentives Online consultation & conclusions, in form of draft MOU, based on draft principles of I2 q3 -q409 Report to PB, RCC Final report to PB, RCC Investment framework Incentives MOU (addendum 1)‏ Preconsult with RCC and sign MOU: 'left' issues (st.2)‏ MOU (addendum 1b, if relevant)‏ Concerns co-ordinated approach to 'OK” for” decisions on 'regional dimension' investment Control Workshop SG incl. workshop Test cases live test report(s) incl. legal bottlenecks (if any, filed with gov. and Comm.)‏ Draft letter by RCC (to SG and) Gov. forum with (incentives) recommendations “FYI” and law change (if relevant)‏ Letter Gov. forum Concerns incentives for TSOs to invest in extra capacity (of regional dimension; with and without contract)‏ Draft with AG regional recommendations on incentives and discuss at SG; advise on input for MOU Draft study on (best practice) incentives in NW-EU; tested with advisory group (AG)‏ Consult recommendations with TSO forum; afterwards apply incentives in test cases 1. Planning visualised (3)‏