The second session of the conference was dedicated to the question of how to find equilibrium between top-down and bottom-up approaches in harnessing regional markets. It was moderated by Juan Jose Alba Rios, Director for Regulatory Affairs at Endesa and Chairman of the EURELECTRIC expert group Wholesale Markets & Trading.




 

Cécile George, Director for electricity grid access at CRE, praised the agreement on target models in the 2009 market design project and described it as a sign of progress in market integration. "It is the first time, we have a minimum common denominator for congestion management and cross-border trade that will help reduce the risk of divergence and provide guidance", said Ms George. She also stressed that all stakeholders have to facilitate the implementation of current regional and inter-regional projects, in line with the agreed target model, if the deadline of 2015 for an integrated pan-European market is to be adhered to. Closer involvement of Member States, a clearer European Commission stance, as well as active participation of the Ad Hoc Advisory Group (AHAG) should all enable challenges related to inter-regional coordination to be more easily solved and further progress to be made.

 

Juha Kekkonen, Chairman of ENTSO-E Market Committee, also expressed his full support for the agreement reached on the target models for congestion management, which will feed in as input to the work on Framework Guidelines and Network Codes. Mr Kekkonen shared his belief that the agreement between Transmission Systems Operators (TSOs) and power exchanges on an enduring governance model for the day-ahead timeframe is within reach. According to the proposal currently under debate, power exchanges perform the task of coordinated matching, acting as a service provider to the TSOs. Under the new legislation, TSOs will be legally responsible for the proper functioning of congestion management. He also reaffirmed the TSOs’ eagerness to make progress in building grids, but highlighted problems relating to delays in licensing and approval procedures.

 

Andrew Claxton, Director of Business Services and International Development at APX, underlined the important role of power exchanges in the implementation of the target model for day-ahead and intra-day markets. He emphasised that this process will have to take place in parallel with the development of network codes. For the day-ahead market, the main task is to establish a core market, which will later be extended to include other markets. In this context, governance is one of the key aspects. Mr Claxton favoured a balanced approach to governance principles that would distinguish clearly between the TSOs’ main task of coordinated capacity determination and the Power Exchanges’ (PXs) main task of coordinated matching and price discovery.

Gunnar Lundberg, Chairman of EURELECTRIC Markets Committee, outlined the main messages of the EURELECTRIC report, "The path from regional electricity markets to a pan-European market: building a comprehensive EU market strategy", publicly launched at the conference. He outlined the main priorities for market integration from the market parties’ point of view, which included day-ahead market coupling and intra-day continuous trading, effective cooperation between TSOs and PXs, governmental involvement and stakeholder participation in the process. He called for an EU Market Integration Strategy based on the use of a pragmatic oil-spread approach, underpinned by agreed target models and regional roadmaps and monitored by supervisory and advisory bodies such as the AHAG. Mr. Lundberg concluded that building a culture of cooperation was crucial to the success of this entire process.