FUI Priorities 2010 - 2012

FUI Priorities 2010 - 2012

9th FUI Stakeholder Group MeetingDublin, 16 June 2010

FUI Priorities 2010 - 2012

• Coordination of Long Term Auctions• Market Coupling• Addressing barriers to efficient flows• New Interconnector Investment• Balancing• (Intra Day)

Coordination of Long Term Auctions• Regional coordination of long term explicit auctions is a key

component of the CMGs.• Main options identified in the paper are:

– Full harmonisation: single set of rules leading to single auction system for FUI for all borders in the region, operated by a central body

– Moderate harmonisation: matching of timeframes for auction of capacity, types of products and implementation of fully compatible systems

– Gradual approach• CWE - common auction platform with capacity on interconnectors

is offered separately.• TSOs proposals on coordination of long term auctions – 9th SG

Meeting:– Products– Nominations– Other aspects

Market Coupling• Target Model - Single Price Coupling across Europe PCG, AHAG and

Framework Guidelines• Implications of and development in for the FUI region• Scenario A: IFA and Britned couple GB to CWE• Scenario B: Britned interim solution for 2011, then full IFA FUI –

CWE Coupling• Consideration to be given to GB/CWE - SEM coupling following this• Prerequisites to Market Coupling and other issues:

– Price References– Physical Firmness– Triad Charges and other identified barriers to efficient flows

Addressing Barriers to efficient Flows

• Key barriers identified are:– SEM design issues (gate closure, requirement to bid ½

hourly prices in SEM etc)– GB charges and Interconnector Losses, Firmness on IFA

• SEM RAs to update FUI on barriers• NG will review charges and consult on possible changes in

summer 2010• Ofgem consultation and conclusions considering firmness

issue• Bundled products

New Interconnector Investment• Ofgem consultation on interconnector policy - seeks views on the

appropriate framework for regulated investment. • CRE consultation on new IC investment -merchant interconnectors

and how to deal with exemptions• Potential work areas for FUI include:

– develop a regional model on regulated interconnector investment,

– improve cross border investment climate by enhancing communication and cooperation between IC owners, potential investors and regulators

– and/or develop a coordinated regulatory approach on how to deal with exemptions

Balancing• FUI Workstream to look at potential mechanisms for increased

provision of cross border balancing services. • Work stream considering how increased competition in the

provision of balancing services can be facilitated by balancing options from cross border reserve providers.

• GB – France (IFA) focus to date• Model for balancing exchanges at the interconnection between

France and England, known as the BALIT (BALancing Inter TSO) project – enduring solution November 2010

• Compromise solution on 2hr Cross Border Balancing (CBB) product on IFA – Presentation by NG/RTE

• Regulators will approve the new fee methodology• Coordination of balancing on other ICs – extension to Moyle and

East West?• Links with Intra Day timeframe

Intra Day

• FUI priority paper following target model development at EU level

• Intra Day Implementation Group• Target Model – implicit continuous allocation inter regional

with flexibility allowed within regions• Market based mechanism and auctions• Intermittency in FUI region and Intra Day• Intra day – balancing link

Conclusions

Priorities 2010 -2012Long Term Coordination

Market CouplingIntra DayBalancing

Address Barriers to tradeInterconnector Investment