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Toward a Target Model

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Oliver Koch from the European Commission presents on the future of EU market design at the Vienna Forum on European Energy Law 2014

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Toward a Target Model

  1. 1. Energy On the Way to the Target Model Vienna Forum on European Energy Law Vienna 14.3.2014 Oliver Koch European Commision This presentation replects solely the personal views of the author and does not bind the EU Commission
  2. 2. What is the “EU Target Model”? Future EU Market Design
  3. 3. 2014 Target Model Future EU Market Design EU-wide day ahead market coupling EU-wide intraday markets Forward MarketsFlow-based market coupling Balancing
  4. 4. Vienna Forum 2013: 2 game changers • Europeanisation • Intermittent energy
  5. 5. Commission 2013, e.g. • Network Codes • Infrastructure Package • ”State interventions” • EEAG & GBER
  6. 6. What prevails?
  7. 7. Security of Supply 2009 Russia – Ukraine dispute & impact on individual countries > 75 % 50 - 75 % 25 – 50 % < 25% 0% Ukraine % of gas supplies lost
  8. 8. Reduce Greenhouse Gas Emissions levels by 20% Increase share of Renewables to 20% Reductions in 2012: -18% 2020 Targets 2020 Projection: 24% Share in 2011: 12.7% 2020 Projection: 21% 2020 Projection Climate and energy: where do we stand? Reduce energy consumption by 20% ~ 16-20 % 2030 Projection: 32% 2030 Projection: 24% 2030 Projection: 21%
  9. 9. 2030 climate and energy Framework 20 % GHG 40 % GHG 20% RES 20 % EE ≥27% RES ..2014 2020 2030 New Key Indicators New governance system
  10. 10. Target 2014 Where are we?
  11. 11. Is the idea of a market still valid? Where they work, markets bring prices down…
  12. 12. • Traded volumes at EU gas hubs
  13. 13. Is the idea of a market still valid? And they start to work…
  14. 14. • Liquid hubs with sufficient and efficiently used infrastructure • Functioning markets in all of Europe • Ensure that gas flows to Europe Hub * Zones drawn for illustration. Size of zones will depend on CBA. Source: CEER Vision for the GTM in a nutshell The vision is to connect liquid hubs
  15. 15. Are isolated markets a concept of the past? Building the missing links
  16. 16. Target Model 2014 Where are we?
  17. 17. “Network Codes” E.g. Market Coupling 2014 • Optimised capacity calculation • EU-wide aggregation of bids and offers
  18. 18. Florence Forum 13. November 2013 Future EU Electricty Market Design Need for a new Target Model?
  19. 19. 2014 Target Model: Outdated? Future EU Market Design 2014 Target Model: MODERN!
  20. 20. Target Model in a state intervention reality: Possible adaptations?
  21. 21. •Value for Flexibility •Balancing responsibility •“Best practice” for C/B-open CRM? •Solutions for C/B SoS •True balancing harmonisation
  22. 22. Wholesale Market Design Issues Issue: Will merit curve survive?
  23. 23. Cooperation in parallel supply crisis? ?
  24. 24. •Price zones – lacking behind? •Tariffs? •Governance: focus too national? • TSO fragmentation and ENTSO-E • “ACER Ljubljana” vs “NRA-ACER” • Scope of Regulation 714/715 • Scope od Directive 2009/ 72 & 73
  25. 25. Target Model/IEM Don’t underestimate… Participate!
  26. 26. Thank you for your attention Dr. Oliver Koch Deputy Head of Unit European Commission DG Energy Unit B-2 (Internal Market II: Wholesale; gas & electricity) DM 24 – 6/117 Brussels/Belgium oliver.koch@ec.europa.eu ++32 229 87302

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