1. ENTSO-E’s Network Development Plans and Network Codes: How a strong European grid supports security of supply, affordable electricity prices through market integration, and sustainability through integration of renewable energy KONSTANTIN STASCHUS Secretary-General ENTSO-E Energy Paths in Region and Using of Renewable Sources Conference 19 October 2012, Belgrade, Serbia

2. Key activities set out in Regulation 714/2009 (on cross-border electricity trade, part of the 3 rd IEM Package) Deliver network codes binding to all network users (through ‘Comitology’) Deliver network plans European / regional view of system needs (“TYNDP”) Deliver crucial aspects of market integration (“market coupling”) R&D Plan Recent important work products: First 2 Network Codes on Requirements for Generators, Capacity Allocation and Congestion Mgt delivered for ACER Opinion – prerequisite for future system with more RES TYNDP 2012 incl. major improvements in methods, data Introduction: TSOs’ and ENTSO-E’s significant role for European energy and climate change objectives 41 TSOs from 34 countries; 530 million people; 910 GW gen.; 300 000 km transm. 41 TSOs from 34 countries; 530 million people; 910 GW gen.; 300 000 km transm. Energy paths conference Belgrade 19 Oct. 2012 | Konstantin Staschus | Page 2

3. Current and future challenges: a fast changing energy mix Huge flows all over Europe 2000 2010 2020 From a few large plants Thousands of small units Energy paths conference Belgrade 19 Oct. 2012 | Konstantin Staschus | Page 3

4. More fluctuating RES, more distributed gen., more pan- European markets, planning + operational coordination eHIGHWAY 2050 study: strong con- sortium, 3 years 80-95% reduction in greenhouse gases; higher reduction for electricity 2012 320 GW RES 538 GW peak load 3300 TWh demand 2020 – TYNDP 2012 536 GW RES 567 GW peak load 3600 TWh demand 2030 visions – 2014 TYNDP Change is at the core of transmission planning However scale and speed of change in recent years is unprecedented Share of total RES in net gen. capac. 1/2020, scen. EU2020 >50% <45% Energy paths conference Belgrade 19 Oct. 2012 | Konstantin Staschus | Page 4

5. Context & framework for infrastructure investment: Target model and Network Codes ENTSO-E Network Codes are a fundamental tool to achieve a single European market Market Network Codes will translate the target model into rules for implementation European directives and regulations define key principles and goals of the EU Energy System A Target Model for the IEM has been defined and now needs implementation Energy paths conference Belgrade 19 Oct. 2012 | Konstantin Staschus | Page 5

6. Context & framework for infrastructure investment: NWE Market Coupling… Status - Current day ahead market coupling 2013 – NWE Day-ahead market coupling One common matching On-going process… Further Market Integration will deliver a Single European Market not only for Day-Ahead but also for Intraday, Forwards and Balancing An integrated NWE market for 2300TWh Energy paths conference Belgrade 19 Oct. 2012 | Konstantin Staschus | Page 6

7. … towards a pan-European day-ahead market 3200 TWh 2300 TWh Energy paths conference Belgrade 19 Oct. 2012 | Konstantin Staschus | Page 7

8. Grid length +1.3% per year with RES triggering 80% of assets growth 1/3 of present generation capacity to be replaced to meet demand in the coming decade +3% per year Peak load growth +1.7% per year TYNDP 2012: A stronger grid to answer major challenges, jointly planned by all TSOs within ENTSO-E Europe-wide 52 300 km: Energy paths conference Belgrade 19 Oct. 2012 | Konstantin Staschus | Page 8

9. 2020 Europe - 100 bottlenecks in the transmission system RES is triggering 80% of assets growth Energy paths conference Belgrade 19 Oct. 2012 | Konstantin Staschus | Page 9

10. 2020 Europe – 17% increase in infrastructure By end 20162017 and beyond Energy paths conference Belgrade 19 Oct. 2012 | Konstantin Staschus | Page 10

11. One key driver for joint transmission planning: European market studies 5% of generating costs saved by new interconnection Direct connection for 125 GW RES - 170 Mt/y CO 2 emissions savings 52.300 km additional transmission lines Thousands of possible situations and overall social economic welfare assessed via market studies Energy paths conference Belgrade 19 Oct. 2012 | Konstantin Staschus | Page 11

12. Summary European Network Codes: crucial enablers for all 3 rd IEM Package objectives – and as the legal tool the EU has chosen and is fit for purpose 9 codes under development at the moment, to be finalized by the end of 2014 2 codes submitted to ACER for a reasoned opinion already 2 delivered Europe-wide Ten-Year Network Development Plans a good foundation for energy policy decisions like NREAPs Proposed EU Infrastructure Regulation a necessary step to speed permitting for new transmission, improve financing, with TYNDP as the basis Summary Energy paths conference Belgrade 19 Oct. 2012 | Konstantin Staschus | Page 12

13. Thank you very much for your attention! www.entsoe.euwww.entsoe.eu general web site www.entsoe.netwww.entsoe.net transparency platform