TITRE

Workshop on theAgency’s Work Programme for 2014

Ljubljana, 6 June 2013

Alberto Pototschnig - DirectorChristophe Gence-Creux - Head of Electricity dpt.Dennis Hesseling - Head of Gas dpt.Volker Zuleger - Head of Market Monitoring dpt.Andrej Beloglavec – Director’s office

ACER – An Expanding Role

Third Energy Package

REMIT

TEN-E Regulation

ORIGINAL MANDATE

TWO NEW MAJOR PIECES OF LEGISLATIONconfirm ACER’s growing responsibilities

These are reflected in the Four Themes of the2014 Work Programme

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.The Agency being assigned the human and financial resources on which the Work Programme is based

Implementation of WP depends on

ACER WORK PROGRAMME 2014

• Network Codes• Early Implementation• Internal Market Monitoring

Themes of ACER WP 2014

• Completing REMIT Implementation

• Wholesale Market Monitoring

• TEN-E Regulation Implementation

• TYNDPs

• Enhancement of the Electricity and Gas Target Models

Theme 1: 2014 Market Integration Target

Theme 3: The Infrastructure Challenge

Theme 2: Wholesale Energy Market Integrity and Transparency

Theme 4: Future Challenges, including RES Integration Challenge

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Theme 1 - Market Integration: FG & NC

State of Play

.8 Network Code (NC) priority areas identified by the Commission in 2011 to support the IEM integration by 2014

.ACER has already issued 7 Framework Guidelines (FG) √The 8th FG is expected by November 2013 ➦ NCs in 4 areas already recommended for adoption √Significant further progress expected this year ➦

FG NC RO Recomm. Adopted

Grid Connections √ √ √ √

Cap. Allocat. and Cong. Manag. √ √ √ √

System Operation √ √ ➦ ➦

Balancing √ ➦

Capacity Allocation Mechanisms √ √ √ √

Balancing √ √ √ √

Interoper. and Data Exchange √ ➦

Harmon. Trans. Tariff Structures ➦

Ele

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European Council conclusions: Priority to “speeding up the adoption and implementation of remaining network codes”

.Complete work on NCs in all 8 priority areas and recommend them to the European Commission for adoption:

. Reasoned Opinions and Recommendations on Network Codes

.Support the Comitology Process

.Scoping (and drafting FG in) new areas:

. Rules for Trading in Gas

. Incremental Capacity in Gas

Theme 1 - Market Integration: FG & NC

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Electricity

Title Issued NC SubmittedACER RO/QR/ Recomm/QR

NCAdopted

Grid Connections

20.07. 2011

RfG 3.07.2012DCC 4.01.2013HVDC Q2 2014

QR 25.03.2013R 25.03.2013Q2/Q3 2014

/

Capacity Alloc. and Cong. Manag.

29.07. 2011

CACM 7.09.2012FCA Q3/Q4 2013

QR 14.03.2013Q4 2013

/

System Operations

2.12. 2011

OS 28.02.2013 OPS 29.03.2013 LFCR Q2 2013ERPOT

RO 28.05.2013RO<29.06.2013

Q3 2013 /

Balancing18.09. 2012

BA Q4 2013 Q1 2014 /

Theme 1 - Market Integration: FG & NC

Theme 1 NC 2014 - Electricity

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1.Reasoned opinion and Recommendation on the Network Code on electricity balancing

2.Reasoned opinion and Recommendation on the Network Code on HVDC connections

3.Reasoned opinion and Recommendation on the Network Code on operational procedures in emergency

4.Preparation for and monitoring of the implementation of the adopted Network Codes

Theme 1 NC 2014 - Electricity

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. Early implementation will continue for Capacity allocation and congestion management and Balancing

State of Play

.Long-term: auction rules to be defined by March 2014 and implemented by 1 January 2015

.Day-ahead: delayed, but Nov 2013 “go live” target for NWE and 2014 EU-wide coupling goal still achievable

.Intra-day: key to accommodate RES. PXs failed to agree on the IT Platform. ACER to issue an informal opinion, which PXs have committed to follow

Title Issued NC SubmittedACER RO/

Recomm/QRNCAdopted

Capacity Allocation Mechanisms

03.08. 2011

06.03.2012

17.09.2012

RO 05.06.2012

QR 04.10.2012 09.11.2012

Approval Gas Com. 15.04.2013

Q3 2013

Balancing18.10. 2011

26.10.2012

21.02.2013

RO 25.01.2013

Rec. 25.03.2013/

Interoperability + Data Exch.

26.07. 2012

11.09.2013RO 11.12.2013Rec. Q4/13 -

Q1/14/

Harmonised Transmission Tariffs Rules

30.11. 2013

Q4 2014RO Q1 2015

Rec. Q2 2015/

Theme 1 - Market Integration: FG & NC

Gas

Theme 1 NC 2014 - Gas

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1. Reasoned opinion and Recommendation on the Network Code on rules regarding harmonised transmission tariff structures

2. Preparation for and monitoring of the implementation of the adopted Network Codes

3. Drafting amendments for the relevant network codes related to incremental capacity

4. Scoping of rules for trading related to technical and operational provisions of network access services and system balancing

. Early implementation will continue for Capacity allocation mechanisms

State of Play

. Coordinated auction-based allocation of a common set of bundled capacity products at all Interconnection Points at regional level

Theme 1 NC 2014 - Gas

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Internal Energy Market – Cross-sectoral (Electricity and Gas

.In 2014 the Agency will publish a market monitoring report covering:

- Retail prices in electricity and natural gas

- Wholesale market integration

- Access to networks (including electricity produced or gas sourced from renewable energy sources)

- Compliance with consumer rights

Theme 1 - Market Integration

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Regional Initiatives – Cross-sectoral (Electricity and Gas)

.The Agency coordinates the Regional Initiatives (ERI and GRI) and monitors the implementation of regional and cross-regional projects developed in this frame.

In 2014 towards the Agency will publish:

- The Regional Initiatives Annual Status Review Report

- On-line quarterly reports on the activities of the Electricity Regional Initiative and the Gas Regional Initiative

(besides coordinating and monitoring activities for the early

implementation of Network Codes)

Theme 1 - Market Integration

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Theme 2 - REMIT

Actively preparing for Market Monitoring

REMIT entered into force on 28 December 2011

Prohibitions of Market Abuse:-Market Manipulation-Attempted Market Manipulation-Insider Trading

Obligations:-to Publish Inside Information-to notify ACER of delays in the publication of Inside Information-to establish effective arrangements and procedures to identify breaches of Market Abuse prohibitions-to notify NRAs of suspected breaches of Market Abuse prohibitions

These Prohibitions and Obligations already apply

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REMIT entered into force on 28 December 2011

Registration Platform ready in Q3 2013

Market Monitoring Solution Development launched in Q4 2011 and ongoing

Pilot Project on Data collection, data sharing and market monitoring (full cycle)

ACER’s REMIT Information System Development

Theme 2 - REMIT

Actively preparing for Market Monitoring

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. Completion of the Monitoring Platform

. Tier 1: Data Sourcing

. Tier 2: Data Cleaning

. Tier 3: Surveillance System

. Tier 4: Data Exchange

. Activation of Systematic Wholesale Market Monitoring

. Timing dependent on Adoption of Implementing Acts

. Approach dependent on available resources

ACER’s approach to market monitoring

Data Acquisition

Trade DataFundamental Data

Preliminary analysis of “Anomalous Events”

Notification of “Suspicious Events” to

NRA(s)

Coordination of NRAs (if needed)

Automatic Screeningto identify “Anomalous

Events”

Monitoring Methodology:

“Anomalous Events”definition

Theme 2: REMIT

Preparing to Go-live in 2014

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Wholesale Market Monitoring Approach

Data Acquisition

Trade DataFundamental Data

Preliminary analysis of “Anomalous

Events”

Notification of “Suspicious Events”

to NRA(s)

Coordination of NRAs (if needed)

Automatic Screeningto identify “Anomalous

Events”

Monitoring Methodology:

“Anomalous Events” definition

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Guidance on the application of REMIT Definitions (2 Editions issued so far)

Recommendations to the Commission on the Records of Transactions required for effective monitoring, to be defined in Implementing Acts

Definition of Reporting requirements and standards

REMIT application, Definition of Reporting Requirements, Standards and Procedures

Actively preparing for Market Monitoring

Theme 2 - REMIT

REMIT entered into force on 28 December 2011

Monitoring Platform Development

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Policy Documents

DocumentLegal basis

Public Consult.

Issued

Guidance on the application of REMIT definitions – 1st Edition

16(1) n/a 20 Dec 2011

Format for the Registration of Market Participants (CEREMP)

9(3) Apr-May 2012 26 Jun 2012

Guidance on the application of REMIT -2nd Edition

16(1) n/a 28 Sep 2012

Recommendations to the EC on the Records of Transactions

7(3) Jun-Aug 2012 23 Oct 2012

Recommendations to the EC on the Records of Transactions (balancing and capacity markets)

7(3) Jun-Aug 2012 26 Mar 2013

Guidance on the REMIT application -Update of 2nd Edition

16(1) n/a 24 April 2013

RRM and RIS registration guidelines 12(1) Mar-May 2013 Exp.Q3 2013

Guidance on the application of REMIT - 3rd Edition

16(1) n/a Exp.Q3 2013

Registration and Transaction Reporting User Manuals

12(1) n/a Exp. Q4 2013

Guidance on the application of REMIT – 4th Edition

16(1) n/a Exp. Q2 2014

IT Implementation Timeline

2013 2014Q1 Q2 Q3 Q4 Q1 Q2

Development of the Registration System

Design Study for MM SW

Development of theMkt Monitoring System

Development of data collection/sharing solutions

GO LIVE

ACER Pilot Project REMIT

Theme 3 – The Infrastructure Challenge

. Opinions on (electricity and gas) methodologies for cost-benefit analysis (CBA) of infrastructure projects

. Guidance and Recommendation on Incentives and Risk Assessment

. Guidance on Cross-border cost allocation methodology

. Annual consolidated report on progress of projects of common interest and recommendations to facilitate the implementation and overcoming delays/difficulties in PCI implementation (if necessary) 22

Theme 4 – Future Challenges and RES

European Council conclusions: “the deployment of renewable energy sources will continue, while ensuring their cost reflectiveness [and] further market integration”

.Review of the Electricity and Gas Target Models

State of Play

.Detailed Target Model for the Internal Electricity Market

.Broader Target Model for the Internal Gas Market

.These Target Models represent robust starting points for any evolution to handle the increasing penetration of renewable-based electricity generation:

.Greater flexibility in electricity and gas markets required

.Resource adequacy concerns in electricity generation23

Next steps

The 2014 Work Programme Outline is available on the ACER Website: www.acer.europa.eu

Deadline for Stakeholders to submit comments on the 2014 Work Programme Outline14 Jun

30 JunThe 2014 Work Programme is submitted by the Director to the BoR, the EP and the EC

1 SepThe Board of Regulators approves the 2014 Work Programme

30 SepThe Administrative Board, after consulting the EC, adopts the 2014 Work Programme approved by the BoR, and transmits it to the EP, the Council and the EC

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Thank you for your

attention

Thank you for your attention!

www.acer.europa.eu