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Regional Market Monitoring Mini Forum CWE REM

Regional Market Monitoring Mini Forum CWE REM. Paul Giesbertz DTe Brussels, 20 June 2006. Legal framework.

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Regional Market Monitoring Mini Forum CWE REM

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  1. Regional Market MonitoringMini Forum CWE REM Paul Giesbertz DTe Brussels, 20 June 2006

  2. Legal framework • DTe is responsible to monitor energy markets. This requirement was included in the Dutch Electricity Act (article 5) and came into force on July, 14 2004 and follows Article 23 of the European Directive 2003/54/EU.: • These regulatory authorities shall … at least be responsible for … monitoring in particular …. the level of transparency and competition 2

  3. Market Monitoring in Power Markets is particularly relevant, difficult and important • Electricity is non-storable • Each 15 minutes defines a new product! • Low demand elasticity • European energy markets are concentrated • Existence of transmission constraints can cause local market power problems • A large consumer with some load shedding potential can have significant market power in certain periods • European market design is NOT mandatory pools with bids on a per generation unit basis • Multiple markets entail risk of cross-market gaming • Effective monitoring can establish threat and reduce risk of abuse and improve market confidence 3

  4. Regional markets require regional market monitoring • Market participants are international parties that act in several markets and optimise their portfolio as a whole • National markets are closely and increasingly linked • Market coupling implies further close interaction between national markets • Further market integration may reduce regulatory threat on “national champions” • The Roadmap FR-BE-NL therefore foresees set-up of joint monitoring Task Force 4

  5. Pentalateral Energy Forum – Report June 8th • The 5 Ministers invite: • the relevant legislators … to amend … legislation in order to enable regulatory authorities … to exchange … confidential information • Regulators to draft a multilateral agreement on confidentiality that will facilitate the information exchange between themselves. 5

  6. What is next? • Regional market monitoring is much more than sharing confidential information • But also: joint analysis and joint reporting • Market structure and possible power mitigation measures require regional perspective 6

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