Erik Rakhou - Energiekamer 19th Madrid Forum 22 March 2011

1. Erik Rakhou - Energiekamer 19th Madrid Forum 22 March 2011 Amendment of the Guidelines of Good Practice for Storage System Operators- Capacity allocation and congestion management -

2. Reason for amendment • Interpretation of storage rules in 3rd Package to ensure storage access (GGPSSO offer non-binding specification, in conformity to EU law) Lack of availability of storage capacity in some markets 1 Issues signalled in status reviews 2008 & 2009 Lack of economic efficiency in capacity allocation and incentives for investments 2 3 UIOLI is seen as hard to apply and interruptible products are not favoured 4 Secondary markets are preferred - but are not transparent or liquid

3. Followed drafting process • Balance ensured between users and SSOs CAM CMP guidelines Drafting of guidelines by ERGEG Public workshop and consultation to gain stakeholders’ feedback Assessment of feedback and revisement of guidelines

4. Summary of guidelines for CAM and CMP • Subject to consultation with market and detailed publication • Allow development of combined products tuned to balancing • Do Open Subscription Period - where ‘scarcity’: auctions • Ex-ante review in dialogue with NRA’s CAM • Standardisation of secondary market process – “web-based”, “user-friendly” - in proportion to market need of storage • Timely nominations followed by dynamic capacity calculations • Offering of mixed contract duration • Aggregating nominations, to overcome as far as possible technical constraints (e.g. minimum flow) CMP

5. GGPSSO should not lead to overregulation and negative impact to the competiveness of the storage market. Five key issues in feedback: • UIOLI is last step in CMP - secondary market is preferred • Secondary market is “customers market”, no push needed in liquid market • Buy back of capacity should not be mandatory due to financial risk • Only processes should be standardised, not products • No additional competences for NRA’s for CAM and CMP Stakeholders’ feedback • CAM/CMP can ensure level playing field, but timing of amendment was questioned

6. ERGEG’s response to feedback • ERGEG has partially modified guidelines and explained guidelines in more detail No firm UIOLI; but - in Evaluation of Comments - guidance for determining unused capacity. “Reasonably expected to be used” is needed; 1 Buy back of capacity remains, but is now voluntary; 2 Only stronger push by NRAs for secondary market if market is illiquid; 3 Products should fit market needs and should therefore not be standardised; 4 No reason for endowing NRA’s with additional competences at the moment, except for ex-ante review check with SSO of CAM procedures. 5

7. ERGEG’s position towards GSE comments • ERGEG is willing to further clarify those guidelines that are difficult to implement Short consultation on suggested implementation clarifications & potential inclusion of clarifications in Annex Implementation Note or in explanatory text GGPSSO GGPSSO is finalised

8. Next steps by European regulators • Guidelines are to ensure guidance for common EU approach to storage access and one level playing field Next stop: Madrid Forum 2012? NRA’s will monitor compliance of GGPSSO at least at EU-level Report on EU Member States' compliance with GGPSSO

9. Thank you for your attention! www.energy-regulators.eu