Regulatory Approaches

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Regulatory Approaches

• Powers of national regulators defined by EU and
  national legislation
• At EU level shall cooperate with each other and
  with the Commission
• Commission Decision of 11 November 2003
  establishing the ERGEG
• ERGEG Guidelines including
• e.g. Congestion Management Guidelines for
  Electricity
• Measures of a more incentive nature e.g. Regional
  Initiatives
• Ex post remedies of competition law

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The Wider Context

• European Energy Regulators strongly welcome
• Communication from the Commission An Energy
  Policy for Europe
• Final report on the Sector Inquiry
• Single European energy markets are at the heart
  of achieving security, sustainability and
  competitiveness
• Lack of cross-border framework for investment
  create a regulatory gap

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The ERGEG approach

• Key features
• The development of integrated electricity and gas
  grids
• Regulatory oversight at national and EU level,
  including appropriate organisational structure
• Accountability of regulators and TSOs
• Effective unbundling
• A third package of EU legislation is essential

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Development of an EU grid

• Objective define roles and responsibilities for
  cross-border
• investment
• Key elements
• TSO responsible
• Collectively, for developing EU operating and
  security standards
• Individually, for developing (and joining)
  national grids in line with EU standards
• EU TSOs must meet collective obligations
• Transparency vitally important

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Regulatory Oversight

• Objective developing stable, predictable
  regulatory climate for
• investment, including across borders
• Key elements
• NRAs should oversee obligations, including EU
  obligations on national TSOs
• European Regulatory Arrangements needed to
  oversee ETSOplus/GIEplus
• NRAs should have harmonised powers and guaranteed
  political independence
• NRAs should co-operate, including through
  ERGEGplus, on cross-border investigations and
  enforcement

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Accountability

• EU organisations to be accountable to the EU
  Institutions

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Unbundling

• Objective fair access and appropriate investment
  incentives
• Key elements
• From an energy regulatory point of view,
  ownership unbundling is the cleanest and most
  secure response
• Independent system operator arrangements will
  inevitably involve intrusive regulatory
  arrangements

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Regional Initiatives in a Wider Context?

• Objective of a single energy market, not
  differing regional approaches
• Potential to deliver real outcomes in the
  interim (i.e. before the necessary legislation
  is adopted)
• e.g. transparency
• Can help in practical way to shape the outcome
  and facilitate the implementation of new
  legislative requirements
• Continuing role for the Regional Initiatives i.e.
  some investment decisions will always be of
  regional nature

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The Regional Initiatives One Year On (1/2)
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The Regional Initiatives One Year On (2/2)

• But, pace of progress varies across REMs
• ERGEG there to ensure consistency
• Peer pressure
• Reporting to the Florence and Madrid fora
• Flexible organisation
• Norwegian Ministry included, within the framework
  of North West gas REM, given the importance of
  Norways gas supplies
• Establishment of enabler groups, made up of a
  small number of regulators, market operators and
  other stakeholders
• Steps being taken to involve Romania and Bulgaria
  in the work of the relevant electricity and gas
  REMs

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Need for Political Support

• European Commission endorsed Regional Initiatives
  from the beginning
• Member States involved via participation in the
  Madrid and Florence fora their political support
  is needed
• European Parliament, national members of
  parliament

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Thank You

• More information on the
• Regional Initiatives is available at
• www.ergeg.org
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