1. Walter Boltz & Asta Sihvonen-Punkka, ERGEG Conference on Implementing the 3 rd Package Brussels, 11 th December 2008 Implementing the 3 rd Package Framework Guidelines and European codes

2. 2Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Agenda What is our starting point? Priorities for Gas Priorities for Electricity Procedural aspects Next steps Questions

3. 3Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 What is our starting point? The existing Guidelines of Good Practice (GGPs) which have already been developed, consulted on and monitored, will be the basis for the development of Framework Guidelines A new challenge to be met is how to adjust and transform the existing documents into Framework Guidelines as envisaged in the new European regulatory framework Where no directly suitable documents like Guidelines of Good Practice exist, workshops with stakeholders will be held to define the scope and contents of the guidelines The European energy regulators will use the interim period to prepare a sound framework, according to which ENTSOs shall prepare detailed codes.

4. 4Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Framework guidelines and European codes for gas

5. 5Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Proposed priorities for Gas Priority I: Capacity allocation and congestion management rules; transparency rules; balancing rules Plus: GGP on 10-year investment plan Priority II: Rules regarding harmonised transmission tariff structures; interoperability rules Priority III: Security and reliability rules; grid connection and access rules; data exchange and settlement rules; rules for trading related to technical and operational provision of network access services and system balancing Priority IV: Operational procedures in an emergency, energy efficiency regarding gas networks Gas

6. 6Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Gas Framework Guidelines work in 2009 Input to Framework Guidelines on CAM & CMP  Lack of available firm capacity, often caused by contractual congestion  barrier to competition Input to Framework Guidelines on Transparency  focus on information management and transparency at the wholesale level  Minimum level of transparency  Minimum set of rules required for the organisation of information and its dissemination across the European market  General principles governing information release Gas

7. 7Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Gas Framework Guidelines work in 2009 Input to Framework Guidelines on Balancing Rules  Greater standardisation and harmonisation of the requirements outlined in the GGP-GB Issues for harmonisation:  Balancing period  Associated market design rules  Market rules on issues of cost reflectivity  introduction of market-oriented procurement mechanisms for balancing energy  Reduction of balancing zones and creation of regional balancing markets Gas

8. 8Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Gas Framework Guidelines work in 2009 GGP on the 10-year investment plan  Regionally varying need for new transport infrastructure  Connecting well-developed national transport systems  Building new long distance transport capacity  Guidelines on information gathering and information access for TSOs/ENTSO-G  Guidelines on planning, determining capacity need and transparency  Proposals on how to proceed from the 10-year investment plan to actual construction Gas

9. 9Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Gas Framework Guidelines work in 2009 Input to Framework Guidelines on Technical codes  Under the new legislation, ENTSO-G will be responsible for elaborating network codes for a number of technical issues:  Network security and reliability rules  Grid connection rules  Data exchange and settlement rules  Interoperability rules  Operational procedures in an emergency  Energy efficiency regarding gas networks Input to Framework Guidelines on Rules for Trading  Network-related rules for commodity trading, and  TSO-related services in secondary capacity trading  Guidance on the necessary cooperation between TSOs and capacity trading platform operators Gas

10. 10Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Upcoming issues Workshop on CAM & CMP in February 2009 Further specification of existing guidelines on transparency Greater standardisation and harmonisation of the requirements outlined in the GGP-GB Commission a study to research and list all existing European-wide rules in the relevant areas A public consultation (as well as a public hearing/workshop) on the Framework Guidelines on trading rules is foreseen Gas

11. 11Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Framework Guidelines and European codes for electricity

12. 12Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Areas for codes Security and reliability Grid connection and access Data exchange and settlement Interoperability Operational procedures in emergency Capacity allocation and congestion management Rules for trading Transparency Balancing including reserve power Tariff harmonisation and Inter-TSO Compensation (ITC) Energy efficiency (10-year investment plan) Electricity

13. 13Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Envisaged contents of the areas Operational security – Roles and responsibilities, organisational framework – Technical framework (e.g. security criteria, transmission capacity calculation, co-ordinated operational planning, real-time operation, emergency operation, restoration and interoperability) – Training and certification provisions for TSO staff Grid connection and access – Ensure EU-wide equal, non-discriminatory treatment of all network users Interoperability – Procedures relating to operation, monitoring, data sharing and disturbance management on interconnections Electricity

14. 14Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Envisaged contents of the areas Operational procedures in emergency – Procedures for remedial actions shall be defined by TSOs and agreements and coordinated procedures between neighbouring TSOs shall be implemented to complement national rules and procedures Capacity Allocation and Congestion Management  CM GL with proposed amendments based on Compliance Monitoring Report Transparency  in line with CM GL and ERGEG GGP on Information Management and Transparency (GGP IMT) Balancing Electricity

15. 15Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Envisaged contents of the areas Harmonised transportation tariff structures including locational signals and inter-TSO compensation (ITC) – Draft Tariff Harmonisation Guidelines Energy efficiency – Losses 10-year investment plan – All the inter- and intra-control area new lines at the 220/380-kV (or higher) that are to be built and enter operation – Each of those projects shall be specified in terms of e.g. rationale behind/justification, costs, responsible TSOs and/or other parties (e.g. investors), implementation and completion time, expected benefits for security of supply and for the market, i.e. technical/economic evaluation Electricity

16. 16Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 One possible approach to choose priorities is to group areas 1.The rules to provide and maintain a well-functioning and secure platform for electricity trade 2.The rules for using the platform 3.The rules for providing a level playing field for the wholesale market operators Electricity

17. 17Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Proposed priorities for Electricity Priority I: Security and reliability rules; interoperability rules; and operational procedures in an emergency Priority II: Grid connection and access rules; capacity allocation and congestion management rules; and transparency rules Priority III: Balancing rules including reserve power rules; and data exchange and settlement rules Priority IV: Rules regarding harmonised transportation tariff structures including locational signals and ITC rules; energy efficiency regarding electricity networks Electricity

18. 18Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Work related to provide input to draft Framework Guidelines is underway in the following areas Security and reliability rules, including interoperability rules and operational procedures in an emergency; Grid connection and access rules; Capacity allocation and congestion management rules; Transparency rules; Balancing rules, including reserve power rules; and Energy efficiency regarding electricity networks. Electricity

19. 19Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Procedural aspects

20. 20Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Why ERGEG is considering the priorities for codes? Procedure Commission consults the Agency Commission invites ENTSO to prepare a code Framework Guidelines will provide guidance for the code

21. 21Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Preparing draft Framework Guidelines in the interim period Procedure

22. 22Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Next steps CEER/ERGEG will carefully analyse the results of the public consultation The plans for the work on draft Framework Guidelines will be finalised, taking into account the results of the consultation, including possible fine-tuning of the Work Programme Work will be staged, focusing on a limited number of areas at a time to ensure good quality, adequacy of resources and proper involvement of the relevant stakeholders Important next step to be tackled – define and agree what the Framework Guidelines should be like?

23. 23Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Questions Are the proposed priorities for the codes and technical areas the right ones? If not, what should the priorities be? Do you agree with our proposed approach grouping the technical areas into codes (see Appendix 2)? If so, what could the groupings be? Which aspects of market design or network operation should be fully harmonised across the Union through the first set of codes? In Annex 1 of Appendix 2 we describe the content of each area mentioned in the Commission’s initial proposals. Do you think the description is complete? If not, what aspects should be elaborated within the areas?

24. 24Conference on Implementing the 3rd Package, Brussels, 11 th December 2008 Thank you for your attention! More information on the consultation paper and the 3 appendices is available at: www.energy-regulators.eu Thank You !