TITRE Workshop on the Agency’s Work Programme for 2014 Ljubljana, 6 June 2013 Alberto Pototschnig - Director Christophe Gence-Creux - Head of Electricity dpt. Dennis Hesseling - Head of Gas dpt. Volker Zuleger - Head of Market Monitoring dpt. Andrej Beloglavec – Director’s office

ACER – An Expanding Role Third Energy Package REMIT TEN-E Regulation ORIGINAL MANDATE TWO NEW MAJOR PIECES OF LEGISLATION confirm ACER’s growing responsibilities These are reflected in the Four Themes of the 2014 Work Programme 2

. The Agency being assigned the human and financial resources on which the Work Programme is based Implementation of WP depends on ACER WORK PROGRAMME 2014

Network Codes Early Implementation Internal Market Monitoring Themes of ACER WP 2014 Completing REMIT Implementation Wholesale Market Monitoring TEN-E Regulation Implementation TYNDPs Enhancement of the Electricity and Gas Target Models Theme 1: 2014 Market Integration Target Theme 3: The Infrastructure Challenge Theme 2: Wholesale Energy Market Integrity and Transparency Theme 4: Future Challenges, including RES Integration Challenge 4

Theme 1 - Market Integration: FG & NC State of Play. 8 Network Code (NC) priority areas identified by the Commission in 2011 to support the IEM integration by ACER has already issued 7 Framework Guidelines (FG) √ The 8 th FG is expected by November 2013 ➦ NCs in 4 areas already recommended for adoption √ Significant further progress expected this year ➦ FGNCRORecomm.Adopted Grid Connections√√√√ Cap. Allocat. and Cong. Manag.√√√√ System Operation√√ ➦➦ Balancing√ ➦ Capacity Allocation Mechanisms√√√√ Balancing√√√√ Interoper. and Data Exchange√ ➦ Harmon. Trans. Tariff Structures ➦ Electricity Gas 5

European Council conclusions: Priority to “speeding up the adoption and implementation of remaining network codes”. Complete work on NCs in all 8 priority areas and recommend them to the European Commission for adoption:. Reasoned Opinions and Recommendations on Network Codes. Support the Comitology Process. Scoping (and drafting FG in) new areas:. Rules for Trading in Gas. Incremental Capacity in Gas Theme 1 - Market Integration: FG & NC 6

Electricity TitleIssuedNC Submitted ACER RO/QR/ Recomm/QR NC Adopted Grid Connections RfG DCC HVDC Q QR R Q2/Q / Capacity Alloc. and Cong. Manag CACM FCA Q3/Q QR Q / System Operations OS OPS LFCR Q ERP OT RO RO< Q / Balancing BA Q4 2013Q / Theme 1 - Market Integration: FG & NC

Theme 1 NC Electricity 8 1.Reasoned opinion and Recommendation on the Network Code on electricity balancing 2.Reasoned opinion and Recommendation on the Network Code on HVDC connections 3.Reasoned opinion and Recommendation on the Network Code on operational procedures in emergency 4.Preparation for and monitoring of the implementation of the adopted Network Codes

Theme 1 NC Electricity 9. Early implementation will continue for Capacity allocation and congestion management and Balancing State of Play. Long-term: auction rules to be defined by March 2014 and implemented by 1 January Day-ahead: delayed, but Nov 2013 “go live” target for NWE and 2014 EU-wide coupling goal still achievable. Intra-day: key to accommodate RES. PXs failed to agree on the IT Platform. ACER to issue an informal opinion, which PXs have committed to follow

TitleIssuedNC Submitted ACER RO/ Recomm/QR NC Adopted Capacity Allocation Mechanisms RO QR Approval Gas Com Q Balancing RO Rec / Interoperability + Data Exch RO Rec. Q4/13 - Q1/14 / Harmonised Transmission Tariffs Rules Q RO Q Rec. Q / Theme 1 - Market Integration: FG & NC Gas

Theme 1 NC Gas 11 1.Reasoned opinion and Recommendation on the Network Code on rules regarding harmonised transmission tariff structures 2.Preparation for and monitoring of the implementation of the adopted Network Codes 3.Drafting amendments for the relevant network codes related to incremental capacity 4.Scoping of rules for trading related to technical and operational provisions of network access services and system balancing

. Early implementation will continue for Capacity allocation mechanisms State of Play. Coordinated auction-based allocation of a common set of bundled capacity products at all Interconnection Points at regional level Theme 1 NC Gas 12

Internal Energy Market – Cross-sectoral (Electricity and Gas. In 2014 the Agency will publish a market monitoring report covering: - Retail prices in electricity and natural gas - Wholesale market integration - Access to networks (including electricity produced or gas sourced from renewable energy sources) - Compliance with consumer rights Theme 1 - Market Integration 13

Regional Initiatives – Cross-sectoral (Electricity and Gas). The Agency coordinates the Regional Initiatives (ERI and GRI) and monitors the implementation of regional and cross-regional projects developed in this frame. In 2014 towards the Agency will publish: - The Regional Initiatives Annual Status Review Report - On-line quarterly reports on the activities of the Electricity Regional Initiative and the Gas Regional Initiative ( besides coordinating and monitoring activities for the early implementation of Network Codes) Theme 1 - Market Integration 14

Theme 2 - REMIT Actively preparing for Market Monitoring REMIT entered into force on 28 December 2011 Prohibitions of Market Abuse: -Market Manipulation -Attempted Market Manipulation -Insider Trading Obligations: -to Publish Inside Information -to notify ACER of delays in the publication of Inside Information -to establish effective arrangements and procedures to identify breaches of Market Abuse prohibitions -to notify NRAs of suspected breaches of Market Abuse prohibitions These Prohibitions and Obligations already apply 15

REMIT entered into force on 28 December 2011 Registration Platform ready in Q Market Monitoring Solution Development launched in Q and ongoing Pilot Project on Data collection, data sharing and market monitoring (full cycle) ACER’s REMIT Information System Development Theme 2 - REMIT Actively preparing for Market Monitoring 16

. Completion of the Monitoring Platform. Tier 1: Data Sourcing. Tier 2: Data Cleaning. Tier 3: Surveillance System. Tier 4: Data Exchange. Activation of Systematic Wholesale Market Monitoring. Timing dependent on Adoption of Implementing Acts. Approach dependent on available resources Theme 2: REMIT Preparing to Go-live in

Wholesale Market Monitoring Approach Data Acquisition Trade Data Fundamental Data Preliminary analysis of “Anomalous Events” Notification of “Suspicious Events” to NRA(s) Coordination of NRAs (if needed) Automatic Screening to identify “Anomalous Events” Monitoring Methodology: “Anomalous Events” definition 18

Guidance on the application of REMIT Definitions (2 Editions issued so far) Recommendations to the Commission on the Records of Transactions required for effective monitoring, to be defined in Implementing Acts Definition of Reporting requirements and standards REMIT application, Definition of Reporting Requirements, Standards and Procedures Actively preparing for Market Monitoring Theme 2 - REMIT REMIT entered into force on 28 December 2011 Monitoring Platform Development 19

Policy Documents Document Legal basis Public Consult. Issued Guidance on the application of REMIT definitions – 1 st Edition 16(1)n/a20 Dec 2011 Format for the Registration of Market Participants (CEREMP) 9(3)Apr-May Jun 2012 Guidance on the application of REMIT - 2 nd Edition 16(1)n/a28 Sep 2012 Recommendations to the EC on the Records of Transactions 7(3)Jun-Aug Oct 2012 Recommendations to the EC on the Records of Transactions (balancing and capacity markets) 7(3)Jun-Aug Mar 2013 Guidance on the REMIT application - Update of 2 nd Edition 16(1)n/a24 April 2013 RRM and RIS registration guidelines12(1)Mar-May 2013Exp.Q Guidance on the application of REMIT - 3 rd Edition 16(1)n/aExp.Q Registration and Transaction Reporting User Manuals 12(1)n/aExp. Q Guidance on the application of REMIT – 4 th Edition 16(1)n/aExp. Q2 2014

IT Implementation Timeline Q1 Q2 Q3Q4 Q1 Q2 Development of the Registration System Design Study for MM SW Development of the Mkt Monitoring System Development of data collection/sharing solutions GO LIVE ACER Pilot Project REMIT

Theme 3 – The Infrastructure Challenge. Opinions on (electricity and gas) methodologies for cost-benefit analysis (CBA) of infrastructure projects. Guidance and Recommendation on Incentives and Risk Assessment. Guidance on Cross-border cost allocation methodology. Annual consolidated report on progress of projects of common interest and recommendations to facilitate the implementation and overcoming delays/difficulties in PCI implementation (if necessary) 22

Theme 4 – Future Challenges and RES European Council conclusions: “the deployment of renewable energy sources will continue, while ensuring their cost reflectiveness [and] further market integration”. Review of the Electricity and Gas Target Models State of Play. Detailed Target Model for the Internal Electricity Market. Broader Target Model for the Internal Gas Market. These Target Models represent robust starting points for any evolution to handle the increasing penetration of renewable-based electricity generation:. Greater flexibility in electricity and gas markets required. Resource adequacy concerns in electricity generation 23

Next steps The 2014 Work Programme Outline is available on the ACER Website: Deadline for Stakeholders to submit comments on the 2014 Work Programme Outline 14 Jun 30 Jun The 2014 Work Programme is submitted by the Director to the BoR, the EP and the EC 1 Sep The Board of Regulators approves the 2014 Work Programme 30 Sep The Administrative Board, after consulting the EC, adopts the 2014 Work Programme approved by the BoR, and transmits it to the EP, the Council and the EC 24

Thank you for your attention Thank you for your attention!