ERGEG Electricity Regional Initiative Central-East Europe

1. ERGEG Electricity Regional Initiative Central-East Europe Tahir Kapetanovic E-Control

2. Highlights • ERGEG Electricity Regional Initiative – the whatabouts • Central East Europe region: history, present status, prospects

3. Highlights • ERGEG Electricity Regional Initiative – the whatabouts • Central East Europe region: history, present status, prospects

4. ERGEG Electricity Regional Initiative

5. ERGEG ERI – Rationale and Underlying Thoughts • Regulators as the main motivating force • Participation, initiative and actions from other key players are crucial: MS governments, TSOs, stakeholders, etc. • Extensive consultation of all parties by a variety of methods • Complement, not duplicate any existing initiative • Flexible approach is mandatory – but specific actions and deliverables required too • Monitoring and reporting are key tools • Focus on coherence in governance and framework since powers and duties vary between the different Member States

6. EU COMMISSION FLORENCE FORUM Overall forum for discussing progress in regional initiatives and pan-European consistency ERGEG Regional Co-ordination Committees (RCCs). Each RCC : • comprises regulators from the region; • autonomy, own decision making process, chairs stakeholder groups (mini fora) MEMBER STATES Input into identifying and solving market integration issues – e.g. legislative proposals, Member State to Member State interface IMPLEMENTATION GROUP Includes TSOs, Market Operators (where appropriate) and other stakeholders This is the ‘do-er’ for each Regional Initiative Chaired by RCC STAKEHOLDER GROUP (mini-fora) Wide participation including market players Each SG chaired by RCC and used for consultation ERGEG ERI – Organisation

7. Highlights • ERGEG Electricity Regional Initiative – the whatabouts • Central-East Europe region: history, present status, prospects

8. Poland Germany Czech Republic Slovakia Austria Hungary Slovenia ERGEG RI CEEwww.ergeg.org->RI Electricity->CEE • First initiative already end of 2003 • 1st CEE Mini Forum 01/2005 • RCC kickoff 05. April 2006, followed by regular RCC meetings • 1st Implementation Group* 25. April 2006 • 2nd CEE Mini Forum / Stakeholders Group 22. June 2006 • 2nd Implementation Group* 14. July 2006 • 3rd Implementation Group* 29. Sept 2006 • 4th & 5th* IG 13-14. Dec 2006 * IG on CM and Transparency

9. The degree of market evolution in CEE countries varies - priority issues to foster market development ! Priority Issues • Short term 2006/2007: • Congestion Management with full implementation of CM Guidelines • Information management and transparency in line with the ERGEG Guidelines • Identification of and dealing with market entry barriers • Coherence and harmonization of the regulatory competences • Mid term >2007 • Balancing markets integration • Market design issues of relevance for regional market

10. CEE CongestionManagement Work progress: • Draft concept of technical parameter calc. (daily process). • First test calculations started (on technical parameter concept). • Description of scheduling process. • Update of business plan and decision on location of Auction Office. • Letter to UCTE submitted in order to impose changes in Policy 2, Operation Handbook. • Revenue distribution allocation scheme already started.

11. CEE Information Mgmt & Transparency • Objectives: (i) achieve adequate transparency by ensuring (ii) harmonized data publication and (iii) easy information access • Dedicated Implementation Group for quick implementation • Evaluation of the current situation against the ERGEG Guidelines on Information Management and Transparency • CEE Regulators to ensure stepwise approach: (i) Transparency cf. Regulation and CM Guidelines in 2006; (ii) Implement with „best effort“ ERGEG Guidelines in 2006/2007; (iii) contribute to the establishment and implementation of the legally binding EU framework on transparency, within the scope of ERGEG work

12. CEE Market Entry Barriers • Wholesale market • Bureaucratic licensing procedures • Lack of appropriate market places • Insufficient coordination of TSOs • All stakeholders commited to remove these obstacles • Practical solutions with roadmap to be defined Q1/2007 • Retail market barriers to be addressed at a later stage

13. CEE Regulatory Competences • EU Directives legal implementation, regulatory models and competences differ in the CEE countries • In order to remove undesired impacts on the market functioning and evolution (e.g. in cross-border issues) better coherence and compatibility of regulatory competences is needed • Member States‘ representatives informed at the 2nd CEE Mini Forum / Stakeholders Group 06/2006 • Dedicated Implementation Group with CEE Regulators and Member States‘ representatives to address this issue 2007

14. CEE Summary • Degree of market evolution and the related framework differ • Resolving the defined priority issues will foster market integration and help deliver benefits to the customers • All involved parties are committed to practical solutions • The ongoing work shows already important results • Further effort required to achieve the (ambitious !) objectives • Coherence with other regions is ensured through ERGEG

15. Actual Information: www.ergeg.org

16. Thank you for your attention ! Tahir Kapetanovic Director Electricity Energie-Control GmbH Austrian Energy Regulatory Authority Rudolfsplatz 13a, A-1010 Vienna, Austria Tel: +43-1-24724-500 tahir.kapetanovic@e-control.at www.e-control.at