1. Civil Societies Expectations on the Energy Union Providing Secure and Affordable Energy to EU Citizens EESC Hearing May 12 2015 S Nies Susanne Nies Corporate Affairs Manager ENTSO-E

2. What do Civil Society and Customers want? WhatHow Security of Supply High performance of System operators, market design Better Deal! Affordability Internal energy market, competition, market design Energy poverty welfare policies Sustainability Regulatory framework, incentives to all actors, including customers (dynamic pricing), cultural change! Transparency of the bill EU rules implementation Innovation and change Market design Participation and co-decision, control! Market design, regulatory framework, cultural change Nice design! (eg Tesla power wall) Market design

3. Major responsibilities in the 2009 3 rd IEM Package (Regulation on cross- border trade): All TSOs shall cooperate through ENTSO-E Draft network codes Adopt Ten-Year Network Development Plans and adequacy outlooks Adopt common network operation tools and research plans Since then additional legal mandates: 2010 Inter-TSO Compensation Mechanism (Regulation 838/2010) 2013 Transparency Regulation (Regulation 543/2013) 2013 Infrastructure Regulation: CBA for PCIs (347/2013) Implementation of 10 network codes, including market integration tools to come? 2016: EU wide system adequacy assessment? ENTSO-E’s Role in the Third IEM Package and Subsequent EU Legislation

4. Better Deal? EU …Physical Energy Flows

6. Interconnections as Vital Parts of the Energy Union: TSO= Transmission, and System! Variable generation Thousands of small units Huge flows all over Europe System Stability, Resource Variability, Uncertainty, Variability, New Connections, Changed Power Flows Challenges

7. 1 LFP/C Chemistry; based on costs for automotive applications SOURCE: ESA; McKinsey 2012 2020 2008 Lead- Acid CAPEX €/kWh capacity 500 200 150 2,0008,00010,000>10,000Cycle life Li ion 1 Lead- Acid Li ion 1 Lead- Acid Molten Salt 4,0006,000 400 300 Li ion 1 Molten Salt Pumped hydro Molten Salt Will flow cells be a game changer with radically low costs? Innovation! Storage Learning...Disruptive after PV? Which Impact?

8. Innovation: Power Infrastructure Relies on Information Infrastructure

9. The Regional Security Coordination Initiatives (RSCIs)  An all-TSOs Multilateral Agreement will be developed in 2015, making participation in RSCIs mandatory for interconnected TSOs

10. The Central Information Transparency Platform *live as of 5 January 2015* Commission Regulation 543/2013: Need for transparency in electricity markets Central Information Transparency Platform provides data on: Load Generation Transmission Outages Balancing Congestion management Transparency Platform: https://transparency.e ntsoe.eu/

11. Towards an Energy Union: ENTSO-E’s Policy Recommendations Full application of the existing legislation through swift adoption and implementation of the ten electricity network codes which are in the basis of the Internal Energy Market Facilitation of investments into transmission infrastructure through the launch of a pan-European communication plan to support publicly critical EU infrastructure projects Stronger coordination between Member States’ energy-mix and security of supply policies at both regional and European level - ENTSO-E with its regionally coordinated system adequacy reports provides a strong contribution for this Stronger regional coordination to prevent and manage any energy scarcity situations Upgrade the current market design with a view to integrating renewables into the market, empowering end-consumers and improving market incentives Fostering innovation and new technologies in power systems, including storage and demand side response

12. Thank you for your attention! Susanne Nies, ENTSO-E Susanne.nies@entsoe.eu