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Security of Supply Seminar Melnik castle 31.5.2005

European Commission DG Energy and Transport. Security of Supply Seminar Melnik castle 31.5.2005 “ Keeping balance between electricity supply and demand in the European Union ”. Matti Supponen Electricity and Gas Unit Matti.Supponen @cec.eu.int. Summary. EU legislation

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Security of Supply Seminar Melnik castle 31.5.2005

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  1. European CommissionDG Energy and Transport Security of Supply Seminar Melnik castle 31.5.2005 “Keeping balance between electricity supply and demand in the European Union” Matti SupponenElectricity and Gas UnitMatti.Supponen@cec.eu.int

  2. Summary • EU legislation • Electricity market context • Short, medium and long-term security of supply • Conclusions

  3. An Energy Policy for the EU The two oil crises (1973 and 1979) prompted concerns to secure the energy supply and led to EU energy policy being considerably extended. Increasing environmental concerns and the establishment of the internal market for energy have been a source of fresh impetus in recent years. EU energy policy seeks to find a balance between: • security of supply • competitiveness • environmental protection

  4. DG Energy and Transport key dossiers Internal market Security of electricity supply Renewable energies Energy efficiency Oil prices, oil and gas stocks Nuclear energy Energy networks Emissions trading (DG ENV)

  5. Unbundling: ownership? ERGEG+ ETSO+ Powers of national regulators/single regulators Binding rules for technical and commercial operation of the grid Investment in the grid Transparency Further legislative mesures

  6. Electricity directive 2003/54/EC Obligation to have a tendering procedure (Article 7) Security of electricity supply directive 2005/89/EC : Create stable conditions for generation and network investments (Article 3) Obligation to publish regulatory approach to wholesale market (Article 3) Maintenance of reserve by TSOs (Article 5) Regulatory role in providing incentives for new network infrastructure (Article 6) Security of electricity supply in EU legislation

  7. Regional energy markets in the EU Moderately concentrated Highly concentrated Very highly concentrated congestion

  8. Northern Europe Cons. 388 TWh Exch.int 36 TWh = 9,3% Exch.ext. 28 TWh=7,2% Electricity consumption and exchanges in regions in Europe in 2005 EU legislation on Internal market 11 TWh 3 TWh UK and Ireland Cons. 400 TWh Exch.int. 2 TWh = 0,5% Exch.ext.12 TWh=3,0% Baltic countries Cons. 23 TWh Exch.int 2TWh = 10,0% Exch.ext 3TWh = 13,0% 2 TWh 15 TWh 12 TWh 35 TWh Central Eastern Europe Cons. 335 TWh Exch.int 39 TWh = 11,6% Exch.ext. 70 TWh = 20,9% Central Western Europe Cons. 1310 TWh Exch.int 97 TWh = 7,4% Exc.ext. 111 TWh=8,6% 8 TWh 18TWh 1 TWh 8 TWh 9 TWh South East Europe Cons. 207 TWh Exch.int. 25 TWh = 12,1% Exch.ext. 20 TWh=9,7% 41 TWh Iberian peninsula Cons. 303 TWh Exch.int. 12 TWh = 4,0% Exch.ext. 9 TWh=3,0% Italy Cons. 328 TWh Exch.int. 0 TWh = 0,0% Exch.ext. 51 TWh=15,2% 1 TWh 1TWh Cons. = Consumption Exch.int. = Cross-border electricity inside region Exch.ext. = Cross-border electricity between regions

  9. Cross-border flows

  10. Congestion management methods in 2007 Use of implicit auction Explicit auction only PX No congestion in the region Pool Pool PX PX PX Power exchange with implicit auctioning AO PX PX PX PX AO? AO AO PX PX Auction office PX PX Special features PX AO? PX PX Pool

  11. Key objectives Avoiding blackouts

  12. Natural disasters France 1999, storm Southern-Europe summer 2003, heat-wave Technical failures London, August 2003 Southern-Sweden and Denmark, September 2003 Operational failures N-E U.S.A and Canada, August 2003 (5 G€) Italy, September 2003 (0,5G€) Germany, November 2006 (?G€) Market failures California 2000, 2001 (100G€) Electricity supply shortages

  13. ETSO Generation adequacy forecast (UCTE, Nordel, UK, Ireland)

  14. Trans European Electricity Networks, prioritet EL8

  15. Priority Interconnection Plan * = In the PIP * * * * * * * * * *

  16. Network adequacy  Generation adequacy  Competitive market  Incentives for new investments  Dependence on gas  Renewables  Future of nuclear  CZ Security of supply check-list

  17. Conclusions • Community Policy on security of supply is developed • Directives are “light” and leave much to Member States • Objective to give transparency and a stability to market actors • Objective that necessary investments are realised in a timely and efficient way

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