MINUTES 1 (4) Date 2007-05-07

Minutes Implementation Group Meeting “Optimizing the use of interconnectors – SwePol Link and Baltic Cable”, November 29th 2006 Participants Energy Markets Inspectorate (EMI): Margareta Bergström (chair), Henrik Gåverud, Stefan Hellmer, Johan Roupe and Charlotte Zackari. Björn Hagman, from Hagman Energy, participated as a consultant for EMI.

Baltic Cable AB: Jan Brewitz, Håkan Feuk and Berit Flagstad.

Danish Energy Regulatory Authority (DERA): Peter Hoffmann.

E.ON Netz: Christian Dobelke

PSE: Maciej Olejniczak.

Svenska Kraftnät: Björn Forsberg, Roger Kearsley, Lars Marketeg and Björn Terbruggen.

Vattenfall: Bo Wahrgren

Vattenfall Transmission: Jens Mattausch

§ 1 Welcome and purpose of the implementation group Margareta Bergström welcomed the participants and presented the background of the initiative. All participants introduced themselves.

The purpose of the implementation group is to (1) list alternative solutions (including pros et cons) and (2) propose capacity allocation and congestion management mechanisms for SwePol Link and Baltic Cable aligning them as much as possible with other interconnectors between the Nordel area and continental Europe.

§ 2 Approval of the agenda

29 The draft agenda was approved without any comments.

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§ 3 Terms of reference The comprehensive purpose of the three implementation groups is to integrate the whole sale electricity markets in the region. This calls for appropriate and coordinated market based methods for allocation of capacity and congestion management.

This implementation group will focus on the two merchant interconnectors located in the Northern European region. The implementation group will pay special attention to the consequences of present ownership structure and the “merchant line” elements and with a view to move towards common capacity allocation and congestion management methods on all present and future interconnectors between the Nordel area and continental Europe.

A modification of the terms of reference wording was suggested and agreed upon. The expression “capacity allocation” or “congestion management” is used. Capacity allocation when setting transmission limits is a necessary and separate step prior to congestion management. Allocation of available trading capacity on Baltic Cable and SwePol Link, by the owners of the links, is a third step.

§ 4 The situation today with regard to the two cables – ownership structure, present allocation mechanisms and the possibilities for intra day trade

Both cable companies are grid customers to Svenska Kraftnät and as such are subject to the grid-access agreement on tariff. Allocation of permissible total trading capacity for export or import is performed daily according to the same rules as for the links to Denmark. Svenska Kraftnät is concerned that the power flows should be market driven and that the cable capacity should in the long-term be opened up to the market players.

Some of the participants were asked to prepare a presentation in order to give the group a brief introduction about the situation today.

Berit Flagstad, representing Baltic Cable AB, presented the principles

and basis for how Baltic Cable is operated.

Bo Wahrgren from Vattenfall (owning 16% of the shares in SwePol Link AB) made a corresponding presentation for SwePol Link as Berit Flagstad did for Baltic Cable. The long-term ambition is that the Swedish and Polish TSOs shall own 50% each of SwePol Link.

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Christian Dobelke from E.ON Energie () gave the group an

introduction to congestion problems and congestion management in Germany. Christian also presented the agreement between EEX, Nord Pool Spot, Vattenfall Europe Transmission, Energinet.dk and E.ON Netz on market coupling for the two interconnectors between Denmark and Germany.

For details from the presentations above, please see attached power point presentations.

§ 5 The EU legal framework and the requirements in the”Congestion Management Guidelines”

Ulf Öberg, consultant from Öberg and Associés, gave the group a presentation over the legal impact of Case C – 17/03 in relation to Baltic Cable and SwePol Link and what requirements may follow from the Congestion Management Guidelines.

§ 6 Implementation group “Transparency for market participants in the electricity whole sale market” Since the German regulator Bundesnetzagentur (BNetzA), who chairs the implementation group on transparency, was not represented in this

meeting, Peter Hoffmann from the Danish regulator summarized the work in this implementation group. The group had its first meeting October 24th and has participants from all regulators in the region and from EURELECTRIC and EFET. The group will draft a proposal for harmonized transparency rules which is compliable with ERGEG guidelines on transparency.

Implementation group “Optimizing the use of interconnectors – § 7 and Germany-DK West” Peter Hoffmann summarized the work also in this implementation group since it’s chaired by the Danish regulator, DERA. The group had its

first meeting October 31st. The group has participants from regulatory authorities, owners, power exchanges and TSOs. The regulators of the group had welcomed memorandum of understanding between EEX, Nord Pool Spot, Vattenfall Europe Transmission, Energinet.dk and E.ON Netz on establishment of day-ahead market coupling on the German-Danish interconnectors by 4th quarter 2007. This work will be the core of the Implementation Group work.

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§ 8 Road map for further work • A status report will be sent to RCC (Regional Coordinating

Committee) in December 2006. • Report to RCC on descriptive and analytical tasks, March 2007. This report will include the situation today regarding the cables, the EU legislative framework, interpretation of the legal situation for SwePol Link and Baltic Cable and the division of work. • In February a meeting with exchanges, traders and participants from the implementation group described in § 7 will be held. • A common workshop for this implementation group, the implementation group “Optimizing the use of interconnectors – Kontek and Germany-DK West” and stakeholders are planned during late spring of 2007. • Final report including “proposal”, December 2007

Forthcoming meetings: • Implementation group meeting in Stockholm, January 23rd. • Meeting with exchanges and traders in Copenhagen, February 13th at 14.00. • Implementation group meeting in Stockholm, March 6th. • Implementation group meeting in Stockholm, May 9th.

Vid protokollet Justeras

Henrik Gåverud Margareta Bergström