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IFIEC Energy Forum 22 November 2011

Electricity

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Contents

• Pricing mechanism

• Market integration

• Climate Policy and renewables

• Structural elements

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Pricing mechanisms• Efficient, liquid, competitive and transparent market platforms

• Access to long term competitive contracts on normal market conditions • Long term visibility of electricity prices• Accelerate work on forward markets in Target Model

• Day-ahead market is key• All available capacity should be offered• At marginal cost+

• Intraday and balancing markets are “corrective” markets only• On cross-border: no OTC

• Capacity markets:• Risk of paying the highest price for both capacity and electron• Better ways to stimulate investments

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Market integration

• Necessary for effective competition AND better security of supply

• Investments in additional grid capacity if it brings value to the end customer (as long as it is economically justified)

• Make optimal use of existing capacities• Target model:

• Coordinated flow-based capacity calculation• Smaller bidding zones are OK, but price zones cannot

be reduced in size but rather increased!

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Climate Policy and Renewables

• ETS: compensation for exposed industries are essential as long as no international commitment exists:

100% compensation

No decrease over time

• Integration of renewables

- impact on the market

- fuel cost – marginal pricing

- intermittence

- impact on grid (costs)

- impact of support schemes on overall electricity cost

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Structural elements

• Transparency• IFIEC in principle welcomes additional transparency rules

(REMIT / MAD / fundamental power data / ...) but we oppose for additional administrative or financial burdens for industry

• Consultation processes (ACER / Florence Forum / EC / ENTSO-E)• IFIEC supports the consultation process and will contribute

with all its available resources

• Closed Distribution Systems• IFIEC insists on workable solutions in EU member states

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Thank you for your attention