Market design and fair transmission tariffication - things to improve for better competition

Gatis Junghans

Project managerElectricity Trade DepartmentAS LATVENERGO

Mini-fora. Vilnius. 23.11.2006

Benefits from Baltic Power Exchange Extend trade possibilities for market

participants, especially new market entrants

Reveals true cost of electricity in different time periods

Baltic Power exchange - logical next step to integrate Nordic and Baltic electricity markets

Baltics - Nord Pool Spotarea in the future ?

E ST

LV

LT

R U SBY

RUS

DK

D

PL

FINLAND

Charges levied on transactionsthrough Estlink

Fingrid- Input fee 0,3 €/MWh- Output fee 0,65 €/MWh- Market border fee 2 €/MWh- ETSO fee 1 €/MWh

Pohivork -Transmission fee 1,45 €/MWh

REGULATION No 1228/2003 [1] on conditions for access to the network for cross-border exchanges in electricity 4(2) Producers and consumers may be

charged for access to networks...

It would not be appropriate to apply distance-related tariffs or ... a specific tariff to be paid only by exporters or importers in addition to the general charge for access to the national network.

REGULATION No 1228/2003 [2] on conditions for access to the network for cross-border exchanges in electricity 4(4) ... charges for access to networks applied

to producers and consumers shall be applied regardless of the countries of destination and, origin, respectively, of the electricity ...

There shall be no specific network charge on individual transactions for declared transits of electricity.

To sum it up Baltic power exchange is needed for

increased trade possibilities, true reference price for electricity, logical next step towards further integration of Baltic and

Nordic markets.

Transmission tariffication applied by TSOs for deliveries through Estlink interconnection

place Baltic producers in unequal position against producers in Nordic market,

contradicts efforts to integrate European wholesale markets towards the ultimate goal - a pan-European electricity market,

contradicts EU Regulation No 1228/2003 (prohibits specific network charge on individual transactions for declared transits of electricity within EU).

Thank you

gatis.junghans@latvenergo.lv