Public hearing

"The State of the Energy Union, Its

Governance and Challenges to

Achieving the European Energy Union “

EECS - Brussels

Koen Locquet - Director March 2nd 2016

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Berlin “The Wall” Mobile second generation (GSM) 1991

Chunnel 1994

ECSC-Treaty 1951

European Coal and Steel Community :

pooling coal & steel production and merging the economic interests :

avoid destructive competition between major economies & prevent another

world war

raise standards of living

first step towards a more united Europe

•Signed in Paris on 18 April 1951 by BE, DE, FR, IT, LU and NL

•Concluded for a period of 50 years (23 July 1952 - 23 July 2002)

•Practical follow-up to the Schuman declaration of 9 May 1950

•Placing Franco-German production of coal and steel under a common High

Authority

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1st, 2nd & 3rd Energy Packages Overview:

Key Measures

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1st Package 1996-1998 2nd Package 2003 3rd Package 2009

Unbundling: financial Legal and Functional

unbundling

TSOs & DSOs

designations

Unbundling +++

Independent regulators

New powers for

regulators regarding

tariffs and TPA-rules

Independence and

powers of NRAs +++

TPA: Negotiated or

Regulated or

Single Buyer

Access to network based

on published & approved

network tariffs

ACER

ENTSOs

Network Codes

Barriers removal on

supply side

Calendar opening

energy market

Consumer protection

Gradual removal of

switching restriction

Regulators act as

dispute settlement

authority

Climate objectives:

- Energy efficiency

- RES

National Regulatory Authorities (NRAs):

duties & powers (3rd package)

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Duties Powers (non-exhaustive list)

Tariffs for access to networks: - Fixing or approving transmission and

distribution tariffs and/or their

methodologies

Binding decisions:

- Fully reasoned & justified to allow judicial review

Unbundling:

- Certification

- No cross subsidies

Carry out investigations into the functioning of the

market

Monitoring:

- Regulated activities (i.e. TSOs &

DSOs legal obligations)

- Non-regulated activities (i.e. prices)

Decide and impose any necessary &

proportionate measures to promote effective

competition including penalties

Consumer protection Require any information from energy

undertakings (confidentiality)

Dispute settlement

Council of European Energy Regulators (CEER)

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Agency for the cooperation of Energy

Regulators (ACER)

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ACER under Regulation 713/2009

CEER and ACER: complementary

A complementary approach to energy regulation in Europe:

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Broader variety of issues (e.g. customer rights,

sustainable development and climate change,

technological development of electricity and gas

networks), and a broader vision of Europe’s

energy

landscape both within and beyond EU borders

(e.g. CEER’s international work)

2014 Regulators “Bridge to 2025”- proposals

Five key objectives for the Internal Energy Market (IEM)

by 2025:

Establishing liquid, competitive and integrated wholesale energy market

Enhancing Europe’s security of supply and channeling the external

element of IEM

Moving to a low carbon society with increased renewables and smart,

flexible responsive energy supply

Developing a functioning retail market that benefits consumers

Building stakeholder dialogue, cooperation and new governance

arrangements

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2015 EC “Energy Union Communication”

Energy Union strategy: 5 mutually-reinforcing, interrelated

“dimensions” to bring greater energy security, sustainability

and competitiveness:

Ensure Energy supply security and solidarity

A fully integrated European energy market (IEM)

Energy efficiency contributing to moderation of demand

Decarbonising the economy

Research, Innovation and Competitiveness

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From “the Bridge” towards an Energy Union

Towards an Energy Union: how “the Bridge” helped and helps to pave

the way

From a supplier centric model towards a consumer centric model

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Strong link between “Bridge to 2025” and

the Energy Union

Key actions for its delivery :

Continuous process of holistic dialogue with consumers,

stakeholders, all energy actors and Institutions to deliver the Energy

Union strategy

Linking wholesale & retail markets in an integrated IEM

New governance arrangements for an integrated market

Strengthening interaction with NRAs outside EU and regulatory

capacity building

NRAs: remain fully committed to reinforced regulatory cooperation

within ACER and CEER

Delivering these actions in close cooperation with stakeholders through

dialogue, engagement and cooperation - e.g. extensive public consultations

and workshops

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Recalling our cross-cutting proposals

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Governance to fit an integrated IEM

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Governance to fit an integrated IEM

Bridge proposals draw many similarities with new EC Energy

Market Design consultation

Moving towards a single energy market will likely bring a growing

interaction between electricity and gas sectors

Need to ensure adequate cooperation between ENTSO-E and

ENTSOG

As markets integrate, there will also be closer interaction of the

wholesale and retail markets

This requires greater cooperation between DSOs and TSOs and

perhaps a new DSO structure

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Governance to fit an integrated IEM

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Most recent development:

2016 « Energy security package »

16 Feb 2016: EC releases new regulatory package:

“Energy Security Package” composed of:

Revised Regulation on Security of Gas Supply

Proposal for an EU strategy on LNG and gas storage

Proposal for an EU strategy on Heating and Cooling

Decision and report on Intergovernmental Agreements

(IGAs) with non-EU countries in the field of energy.

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