ERI CS REM, 11th IG meeting. Milan, 21 November 2008

Towards a single auction platform in the SW region

Rafael Gómez-Elvira

Deputy Director for European Affairs (CNE)

2 ERI CS REM 11th IG meeting, 21 November 2008

Index

1. ERI SW REM action plan

2. Current status of explicit auctions

3. Joint proposal REE-RTE-REN A. Harmonisation requirements

B. Proposed actions

4. High Level Group meeting with the EC

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ERI SW REM action plan

Deliverable III.2: Coordination and potential harmonization in the long and medium term explicit auction mechanisms

For the “longer-term” improvements to be addressed by 1st January 2009, the following issues shall be subject to the correspondent feasibility studies (Deliverable III.2.b):

Implementation of a “Use-it-or-sell-it” mechanism

Feasibility study for a single auction platform in coordination with other regions.

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ERI SW REM action plan

delayed - WHEN?

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Current status of explicit auctions

1. Explicit auctions in the Fr-Sp border Annual / monthly / daily / intraday

New version of the IFE rules in the context of ERI SW REM.

REE esica RTE ariba REE esica

Target: day-ahead market coupling

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Current status of explicit auctions

2. Explicit auctions in the Pt-Sp border Annual / quarterly / monthly IPE rules: Approved in Portugal and soon in Spain. Day-ahead and intraday capacities allocated implicitly.

Market splitting since July 2007 (MIBEL).

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Joint proposal REE-RTE-REN. Harmonisation requirements

1. Participation requirements Globally harmonised within SWE region

2. Products Horizons of the long-medium term products:

Annual and monthly. On the SP – PT border, quarterly products too.

Form of the product: On the SP – FR interconnection, the product may not include capacity for one or

several periods, due to the lack of physical capacity.

Conditions for refund in case of curtailment: Refund at the market spread with a cap. Already harmonised with the new version of

IFE rules.

Conditions for refund of non nominated capacity: Automatic resale at the day-ahead auction in both interconnections (with the new

version of IFE rules).

3. Secondary market Already harmonised within SWE region

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4. Calculation and sending of programming authorisations It is already coherent within SWE region.

5. Nominations Designation of Nomination Agents

The nomination agents are already coherent within SWE region.

Nomination The gate closure for long term PTR nomination is 07:45 on the FR – SP

interconnection and 09:35 on the SP – PT interconnection. The formats for the nominations are already coherent within SWE region.

6. Harmonisation of the access rules

- The access rules within the region are quite convergent.

- It is advisable to study the creation of a set of interconnection rules common to the whole SWE region. Each border would have its own specificities, described in the appendix of the common SWE Interconnection Rules.

Joint proposal REE-RTE-REN. Harmonisation requirements

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Joint proposal REE-RTE-REN

Activities involved in the long term mechanism1. Customer Relationship Management (registration, claim management, etc)

2. Platform for primary auctions (software, hardware, maintenance)

3. Platform for secondary market (software, hardware, maintenance)

4. Calculation & sending of Programming Authorizations

5. Invoicing to market participants & sharing of congestion revenues

6. Nominations

Possible organization schemes : Centralized or De-centralized

Provisionally in SP-FR interconnection, possibility of extending the use of the single auction platform to day-ahead and intraday timeframes

- Until the implementation of market coupling.

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Joint proposal REE-RTE-REN

Centralized organizations

- Create SWE auction office Simple once it is created / heavy organisation

- Appoint an existing auction office - Joint auction office for CWE and SWE

Sub-regional harmonisation / governance + time schedules - Joint auction office for CSE and SWE

Sub-regional harmonisation + first steps being taken / governance

De-centralised organisations : Repartition of activities from 1 to 5 between TSOs

Much simpler-quicker / interpreted as less harmonised ?

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Joint proposal REE-RTE-REN. Proposed actions

First

- Approval of the IPE Rules

- Implementation of the explicit auctions on the Spanish-Portuguese border

Then

- Working in the creation of a set of SWE common Auctions Rules specificities of each border in appendix

- Defining the organization of a common auction platform that permits a full harmonization of all the activities related to explicit auctions in SWE region

The implementation of a common auction platform in the SWE region would be of great interest for market participants and TSOs…

…but some preliminary requirements need to be met, in special the launching of IPE explicit auctions

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High Level Group meeting with the EC

From the 3rd High Level Group meeting on 30th September:

Working towards a common auction platform in the region following the proposals made by TSOs, having regard to the other EU regulatory requirements: within the South-West region, integration should be embraced, bearing in mind the final objective of harmonised and unified auction platforms

(harmonised set of auction rules and single interface for market players) across different regional initiatives. Work will continue on these issues with all relevant parties.

3 December – Next IG for the SW Elect. REM