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Draft Cross-regional roadmap for intraday

Draft Cross-regional roadmap for intraday. Work in progress, for discussion 13 July 2011. The CACM FG intraday target model. Target model: an evolution of continuous implicit trading, featuring reliable capacity pricing reflecting congestion automatic matching appropriate block bids

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Draft Cross-regional roadmap for intraday

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  1. Draft Cross-regional roadmap for intraday Work in progress, for discussion 13 July 2011

  2. The CACM FG intraday target model • Target model: an evolution of continuous implicit trading, featuring • reliable capacity pricing reflecting congestion • automatic matching • appropriate block bids • avoid discrimination between products • Interim model: • continuous implicit allocation • Implicit auctions may be implemented if sufficient liquidity and adequate gate closures • Explicit access allowed on some borders for OTC and non-SOBF PXs TSOs responsible for cross-border capacity matrix PXs responsible for shared order book to pool liquidity

  3. The NWE Intraday Project • The NWE project was initiated by NWE TSOs to implement the European target model in NWE region, extendable to other regions • The 20th Florence Forum supported the North West European project to establish a intraday market by the end of 2012 • The Forum urged the NWE project participants to actively coordinate with stakeholders from other regions • The NWE intraday project is effectively the European pilot project to implement the Intraday target model

  4. NWE Regulators Timeline

  5. Key: * - NWE intraday 1 step; ** - NWE intraday 2 step; √ - implicit intraday solution; … - unclear whether would join NWE

  6. CWE region • Regional actions • Mechanisms for implicit allocation of intraday capacity were launched on the France-German border in December 2010 and the Belgian-Netherlands border in February 2011 • A project has been established to implement intraday trading on the NordNed interconnector in Q1 2012 • CWE countries are active members of the NWE intraday project to introduce an implicit intraday solution by the end of 2012 and implement the CACM FG target model by 2014

  7. Northern region • Regional actions • The Nordic intraday trading solution (ELBAS) facilitates continuous trading and is an integrated system with effectively a one-to-one relationship between CMM and SOBF • Projects have been established to implement intraday trading on the NorNed interconnector in Q1 2012, on SwePol Link in Q4 2011, and to extend ELBAS to the Baltic region in 2013 • Northern region countries are active members of the NWE intraday project to introduce an implicit intraday solution by the end of 2012 and implement the CACM FG target model by 2014

  8. FUI region • Regional actions • The FUI region is an active member of the NWE intraday project to introduce an implicit intraday solution by the end of 2012 and implement the CACM FG target model by 2014 • The SEM market may face challenges implementing a purely continuous approach. Options for incorporating SEM into the NWE project to implement the CACM FG target model will be explored in Q4 2012.

  9. CS region • Regional actions • A project has been established to implement an interim explicit allocation process on all CS region borders in Q1 2012 • CS region will propose a roadmap to implement the CACM FG target model, which takes into consideration the NWE pilot project, in Q2 2012 • After checking coherence of the propose roadmap with existing intraday projects, the roadmap will be submitted for consultation in Q4 2012 • After the consultation is closed, the NRAs will decide on and commit to the necessary steps to implement the CACM FG target model

  10. SW region • Regional actions • The SW region agreed on a process to implement the CACM FG target model at its Implementation Group meeting in Q1 2011 • A public consultation with the Stakeholder Group is planned for Q3 2011, and for the Implementation Group to undertake a feasibility study and simulation • A testing phase is planned for Q4 2011 to identify the necessary systems and regulatory changes to implement continuous trading by Q4 2012 • Implicit auctions could be retained as a second layer in the SW interconnections.

  11. CE region • Regional actions • Improve existing intraday allocation mechanism on CE borders in Q4 2011 • A stepwise approach to implementing an intraday solution, compatible with the NWE intraday project will be proposed in Q2 2012 • The options for stepwise integration will be evaluated by regulators and a solution decided upon in Q3 2012 • An intraday solution, in line with the NWE project, will be implemented during 2013

  12. Baltic region Regional actions - Implementation of intraday trading based on the ELBAS is planned for 2013

  13. SE region • Regional actions • Implement a step-wise approach with: • (i) sub-regional implementation of simple cross-border intraday capacity allocation mechanism; • (ii) pan-regional approach in line with the CACM FG target model

  14. Critical issues Interaction with day-ahead • Implementation and extension of the intraday platform will have to follow implementation of day-ahead market coupling Target model design issues • Unlike day-ahead, the intraday target model is yet to be implemented. The NWE project is a pilot to resolve the existing and significant design issues Governance • A clear and transparent governance framework is needed to extend the project to non-NWE countries Overlap with rest of target model • There is a strong interaction between the intraday timeframe and balancing mechanisms

  15. Critical issues Relationship between PXs and TSOs • TSOs identified three core functions that need to be provided to implement the intraday solution. The functions are (i) pooling of PX bids and offers (ii) capacity allocation function (iii) capacity information function • The key issue currently being tackled is the allocation of the three functions between PXs and TSOs. In particular, whether PXs or TSOs should operate the allocation function. • Broadly, there are two options • The ELBAS approach, where PXs operate the allocation function • The EPEX Spot approach, where TSOs operate the allocation function • The allocation of functions needs to be resolved before implementation can begin An important breakthrough was recently achieved

  16. Recent events • On 27 June Europex presented a common position and proposal for the allocation of functions at the NWE ID Implementation Group Meeting • NWE TSOs and NRAs intend to work with Europex to develop a coordinated proposal for implementation to be discussed with the Commission in September

  17. Thank you for your attention www.acer.europa.eu

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