Guidelines on Congestion Guidelines on Congestion ManagementManagement

ERGEG Public HearingERGEG Public Hearing

30 June 200530 June 2005

EuroPEXEuroPEX

EuroPEXAssociation of European

Power Exchanges

EuroPEXAssociation of European

Power Exchanges

Key MessagesKey Messages

• Welcome the support in the Guidelines for the Welcome the support in the Guidelines for the implicit auction approaches proposed by implicit auction approaches proposed by ETSO/EuroPEX ETSO/EuroPEX

• Guidelines should, however, allow flexibility in Guidelines should, however, allow flexibility in termsterms of of local and regional approaches local and regional approaches

• Implicit auctions, flow-based transmission Implicit auctions, flow-based transmission models and financial hedging should be models and financial hedging should be clearly established as the longer term vision clearly established as the longer term vision for the European electricity marketfor the European electricity market

• Good progress on local initiativesGood progress on local initiatives

FlexibilityFlexibility

• Local variation: a balance between existing Local variation: a balance between existing local arrangements and European local arrangements and European standardisationstandardisation– Essential European harmonisation onlyEssential European harmonisation only– Subsidiarity: build on existing local structures and Subsidiarity: build on existing local structures and

regulatory arrangementsregulatory arrangements

• Implementation: a phased approach will Implementation: a phased approach will achieve the long term goal more quicklyachieve the long term goal more quickly– Local market coupling initiativesLocal market coupling initiatives– Local flow-based transmission model initiativesLocal flow-based transmission model initiatives– Avoid rigid geographic definitionsAvoid rigid geographic definitions

Coordination RegionsCoordination Regions

Coordination RegionsCoordination Regions

Longer Term VisionLonger Term Vision

• Implicit auctions: both market coupling and Implicit auctions: both market coupling and market splittingmarket splitting– Efficient physical network useEfficient physical network use– Ease of access for all to a pan-European marketEase of access for all to a pan-European market– Strengthen development of liquid energy marketsStrengthen development of liquid energy markets– Price difference bids/explicit auctions (firm flows)Price difference bids/explicit auctions (firm flows)

• Flow-based transmission modelFlow-based transmission model– Improved network capacity availabilityImproved network capacity availability

• Financial instrumentsFinancial instruments– Financial transmission rightsFinancial transmission rights– Efficient forward price difference hedging (CFD)Efficient forward price difference hedging (CFD)

Local InitiativesLocal InitiativesRegionRegion Congestion Congestion

Mgmt ApproachMgmt ApproachTransmission Transmission ModelModel

Possible Possible LaunchLaunch

Germany, AustriaGermany, Austria Market splittingMarket splitting (no congestion)(no congestion) 20052005

Spain, PortugalSpain, Portugal Market splittingMarket splitting ATCsATCs 20052005

Denmark, Denmark, GermanyGermany

Market splittingMarket splitting ATCs (HVDC)ATCs (HVDC) 20052005

France, Belgium, France, Belgium, NetherlandsNetherlands

Market coupling, Market coupling, PTRsPTRs

ATCsATCs Early 2006Early 2006

Central Eastern Central Eastern EuropeEurope

Coordinated Coordinated auctionsauctions

Coordinated Coordinated ATCsATCs

Early 2006Early 2006

France, SpainFrance, Spain Market coupling, Market coupling, PTRsPTRs

ATCsATCs 20062006

NorNedNorNed Market couplingMarket coupling ATCs (HVDC)ATCs (HVDC) 20072007