Walter Boltz & Asta Sihvonen-Punkka, ERGEG Conference on Implementing the 3 rd Package Brussels, 11 th December 2008 Implementing the 3 rd Package Framework

Walter Boltz & Asta Sihvonen-Punkka, ERGEG

Conference on Implementing the 3rd Package

Brussels, 11th December 2008

Implementing the 3rd PackageFramework Guidelines and European codes

2Conference on Implementing the 3rd Package, Brussels, 11th December 2008

Agenda

• What is our starting point?

• Priorities for Gas

• Priorities for Electricity

• Procedural aspects

• Next steps

• Questions


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.


Framework guidelines and European codes for gas


Proposed priorities for Gas

• Priority I: Capacity allocation and congestion management rules; transparency rules; balancing rulesPlus: 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


Gas Framework Guidelineswork in 2009

• Input to Framework Guidelines on CAM & CMPLack of available firm capacity, often caused by

contractual congestion barrier to competition

• Input to Framework Guidelines on Transparencyfocus on information management and

transparency at the wholesale level Minimum level of transparencyMinimum set of rules required for the organisation

of information and its dissemination across the European market

General principles governing information release

Gas



• 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



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


Gas Framework Guidelines work in 2009

• Input to Framework Guidelines on Technical codesUnder 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 TradingNetwork-related rules for commodity trading, andTSO-related services in secondary capacity trading Guidance on the necessary cooperation between TSOs and

capacity trading platform operators

Gas


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


Framework Guidelines and European codes for electricity


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


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



• 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



• 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


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


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


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


Procedural aspects


Why ERGEG is considering the priorities for codes?Procedure

Commissionconsults the Agency

Commissioninvites ENTSO to prepare a code

Framework Guidelines will provide guidance for the code


Preparing draft Framework Guidelines

in the interim period Procedure


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?


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?


Thank you for your attention!More information on the consultation paper and the 3

appendices is available at:www.energy-regulators.eu

Thank You !

Documents

Walter Boltz & Asta Sihvonen-Punkka, ERGEG Conference on Implementing the 3 rd Package Brussels, 11 th December 2008 Implementing the 3 rd Package Framework