Annual Report 2009

European Network of Transmission System Operators for Electricity Annual Report 2009 Content

President’s Foreword ...... 6

Chairman’s Statement ...... 7

ENTSO-E – fully operational ...... 8 Inside ENTSO-E ...... 10 ENTSO-E Work Program 2009 / 2010 ...... 12 ENTSO-E Consultation Process ...... 13

Reliable ...... 16 From Operation Handbooks to Network Codes ...... 18 Compliance Monitoring ...... 20 System Adequacy Forecast ...... 21 ENTSO-E Winter / Summer Outlook / Review Reports ...... 24

Sustainable ...... 26 Ten-Year Network Development Plan ...... 28 Pilot Network Code ...... 30 Run-up to the first Edition of the Research & Development Plan . . . . . 32

Connected ...... 34 The Target Market Model for Europe 2015 ...... 35 Market Coupling between Central West Europe and the Nordic Region . . 37 The Last Voluntary Inter-TSO Compensation Agreement ...... 38 Transparency ...... 39 Interconnection Studies ...... 41

Outlook ...... 42

Appendices ...... 46 ENTSO-E in Brief ...... 47 The ENTSO-E Synchronous Areas ...... 48 ENTSO-E Members ...... 49 ENTSO-E Staff ...... 50 ENTSO-E Work Program 2009 / 2010 Indicative Schedule ...... 51 Abbreviations ...... 53 Imprint ...... 54

ENTSO-E Annual Report 2009 | 5 President’s Foreword Chairman’s Statement

2009 witnessed the creation of a new actor on the European energy stage : ENTSO-E’s vision – to become and remain the focal point for all European, ENTSO-E, following the European Commission’s proposals for a Third Pack- technical, market and policy issues related to TSOs – is well under way now age of Energy Legislation, adopted in 2009 after a two-year long process . that the association is proceeding through its first operative year .

“The Third Package”, as it is commonly known, is a Together, these three pillars are key to our work. In This means interfacing with many stakeholders: staff, comprise the multi-disciplinary virtual team major piece of legislation, which gives to ENTSO-E fact, I strongly believe that they will, even more power system users ( our members’ customers ), EU that is ENTSO-E. It is my pleasure here to seize the important responsibilities and recognizes the add- than legislation, be the driving force behind the in- institutions, regulators and national governments. opportunity and say Thank you, to all of you who ed value of TSOs in the process of market liberaliza- tegration of national power systems, and conse- have invested time and resources in the TSO com- tion and climate change remedial actions. quently, of their markets. ENTSO-E’s work products contribute to the securi- munity’s common pursuit of making this part of the ty of supply, a seamless, pan-European electricity electricity industry a valuable player and facilitator Moving towards a decarbonized pan-European Network codes, ten-year development plans, ade- market, the secure integration of renewable re- in achieving European energy policy goals. power system without jeopardizing customer de- quacy reports, are among the main deliverables sources and a reliable future-oriented grid, ade- mands for reliability is, in my opinion, a major chal- that all stakeholders are now contemplating from quate to energy policy goals, notably the so-called My thanks also go to representatives from our near lenge for all TSOs. In this respect, the establishment ENTSO-E. Work on these new tasks is well under- “20 -20 -20 -targets”. neighbors in the regulatory and policy-making of ENTSO-E better fits today’s and tomorrow’s real- way and the new premises, a location where our world. Continued close co-operation between all of ities in the energy policy arena. experts meet, where consultations with stakehold- Being the “TSO Hub” at European level, ENTSO-E’s us will be vital. As an example of this co-operation, ers as well as Board and Assembly meetings take mission is to promote important aspects of energy I would like to mention the establishment of the No less than 42 TSOs from 34 countries collaborate place, reflect ENTSO-E’s commitment to be an policy in the face of significant challenges : Ad-hoc Advisory Group ( AHAG ), established as within ENTSO-E on system operations, system de- open, efficient and transparent body. −− Security – it pursues coordinated, reliable agreed between the Commission and ERGEG at the velopment, and market-related issues while ensur- and secure operations of the electricity trans- December 2009 Florence Forum. The role of AHAG ing a supportive role for regional initiatives. Quite a In the coming years, ENTSO-E also intends to con- mission network. is to advise the European Energy Regulators ( in the challenge ! tribute to the European research and development −− Adequacy – it promotes the development future ACER ) on preparatory work for the develop- effort, as shown in our first R & D program. Exchang- of the interconnected European grid and in- ment of framework guidelines and network codes TSOs play a crucial role in the process of the EU ing experience and knowledge through relation- vestments for a sustainable power system. that come from those guidelines in the market meeting the so-called “20 -20 -20 -goals”, a corner- ships, or even partnerships, with TSO associations −− Market – it offers a platform for the market by area. stone in the combat against climate change. from other continents will be the next step for our proposing and implementing standardized ENTSO-E stands able and ready to support society young association. market integration and transparency frame- The coming years will by any standards mean a lot and stakeholders in the endeavor to increase re- works that facilitate competitive and truly of work for this young organization and I believe we newable energy sources from today‘s share of 6.5 % This first year has lived up to its promises thanks integrated wholesale and retail markets, per- have made a great start in meeting the challenges to 20 % by 2020. For power systems, this means that to the cooperation established with representatives haps achieved in regional steps. set by the great expectations placed upon us. a third of electricity will be generated by tens of of our stakeholders in the industrial, regulatory −− Sustainability – it facilitates the secure inte- thousands of small to medium size cogeneration and policy-making worlds. ENTSO-E staff were in- gration of new generation sources, particularly and renewable energy sources as well as tens of strumental in delivering in due time our first deliv- growing amounts of renewable energy and thus large solar power plants and on-shore and off-shore erables, organizing the consultation process and the achievement of the EU’s greenhouse gases wind power plants located all over Europe. workshops as well as tens of other pieces of work reduction goals. usually unnoticed but so important for a well- Graeme Steele New major transmission highways at the European functioning association. Among our deliverables, one document already level and local reinforcement of distribution and stands out: our first ( pilot ) Ten Year Network De transmission networks have to materialize, as mas- It is also my sheer pleasure to take this opportunity velopment Plan ( TYNDP ). Although launched on sive quantities of power from coastal areas to in- to convey a heartfelt thank you to representatives of 1 March 2010 ( when the public consultation period land – as well as between national power systems – our member TSOs, for their unflagging support in started ) much of the work going into it took place Regulation ( EC ) No 714 / 2009, Article 4: will flow, depending on weather or price changes. the creation phase of ENTSO-E. Without your com- during autumn and winter 2009. The drafting of this European Network of Transmission System Operators for Electricity mitment and proactive participation in the work plan was organized in an open and transparent “All transmission system operators shall cooperate at In addition to these renewable energy goals, the EU we would not be where we are today. manner in coordination with EC and ERGEG, with Community level through the ENTSO for Electricity, in order energy policy also stipulates a major effort to make early informal discussions with major stakeholders to promote the completion and functioning of the internal energy 20 % more efficiently utilized over the com- such as EURELECTRIC, EFET, EWEA, Greenpeace market in electricity and cross-border trade and to ensure the optimal management, coordinated operation and sound ing ten years, and geopolitical realities call for a and many others. technical evolution of the European electricity transmission much more focused concern on the secure supply network .” of energy to Europe’s citizens and industry. In its new Brussels base, ENTSO-E’s working organ- Daniel Dobbeni ization is finding its feet and the workload of the 23 strong staff is already challenging, as indeed it is for the many groups of experts who, with the Brussels

6 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 7 The Third Legislative Package for the Internal Energy ENTSO-E and its members have started an ambi- ENTSO-E – tious work program, doing their utmost to meet EU Market ( IEM ) was adopted by the European Commission and stakeholder expectations: a pilot network code on 3 September 2009, almost a year after ENTSO-E was on connection, consultation processes, the very fully operational founded on 19 December 2008 and two months after complex preparation of the first Ten-Year Network Development Plan ( TYNDP ), the wholesale market ENTSO-E became fully operational on 1 July 2009 . The target model, continued regional and statistical first annual report, presented to stakeholders herewith, work and the start of numerous other TSO cooperation activities have fully engaged experts from the thus reflects the year 2009 with the first half spent on member companies and from the ENTSO-E Secre- the starting-up process for the newly born organization tariat. for European TSO s, and the second half spent develop- Through its work, ENTSO-E addresses the challenging routines and first work products . es of pan-European transmission grids and supports the three pillars of EU goals for a pan- European energy policy.

Thus, in line with the EU’s energy policy goals and in line with Regulation ( EC ) 714 / 2009, ENTSO-E pursues primarily three objectives:

2009 can be described as a pioneering year reflect- −− Ensuring the secure and reliable operation of ing the advent of increased cooperation and coordi- the European power transmission system in an nation among transmission system operators increasingly complex pan-European electricity through ENTSO-E’s start of operations on behalf of transmission network. its 42 member TSOs in 34 European countries. ENTSO-E replaces its predecessor associations −− Facilitating the secure integration of renewable ATSOI, BALTSO, ETSO, Nordel, UCTE as well as energy sources and thus the achievement of the UKTSOA, and not only continues and consolidates EU’s greenhouse gases reduction goals. their work, but also takes on new mandates given to it by the Third Package. ENTSO-E’s genuine legal −− Enhancing the integration of the Internal raison d’être is Regulation ( EC ) 714 / 2009 on the Energy Market ( IEM ) by proposing and imple- conditions for access to the network for cross- menting standardized market integration and border exchanges in electricity, which is part of the transparency frameworks. Third Package.

The elaboration of network codes for providing and These objectives – secure and reliable operation, managing effective and transparent access to the the integration of sustainable energy sources and transmission networks across borders is now under the further development of the IEM – are the very way. So is the coordinated and sufficiently forward- essence of ENTSO-E’s existence and determine fun- looking planning and sound technical evolution of damentally all of ENTSO-E’s activities. the transmission system in the Community, as the regulation asks for. Put in short, this mission is expressed and emphasized in ENTSO-E’s maxim “Reliable, Sustainable, Connected”. In 2009, ENTSO-E built the foundation of its future deliverables by putting in place the necessary working structure and by kicking off work in these three important areas.

Hence, the aim of this annual report is to reflect the work accomplished by ENTSO-E in its first operational year along the lines of the association’s mission and maxim :

Reliable. Sustainable. Connected.

8 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 9 Inside ENTSO-E ment Plan including generation adequacy outlooks. The committee activities aim at a European grid Assembly which is adequate for the purposes of a well-func- The Brussels-based Secretariat assists and supports tioning European electricity market and, from the all ENTSO-E bodies in their work and is responsible planning point of view, aims at a high standard of for the direct and continuous interaction with Eu- interoperability, reliability and security of European Board Secretariat ropean institutions, ERGEG / ACER and European- networks. The committee introduces technical level stakeholders. rules or standards related to the planning of transmission systems and new technical concepts with- Legal & Regulatory Data Expert Group in its R & D activities. It also facilitates the exchange Group Assembly of information about efficient asset management, system technology and critical infrastructure ENTSO-E is governed by an Assembly, which is the protection. For these purposes, the committee may Working Groups general leading body of the association, and has full prepare system studies, investigate and develop System Development powers to enable the achievement of the associa- long- and medium-term system extension strate- Committee European Planning Network Modelling 10 Year S. Adequacy & Asset Implem. & tion‘s objectives and purpose. Membership is gies and manage system development data collec- R & D 2050 / Supergrid Standards and Data Netw Devt Plan Market Modelling Management required to be approved by the Assembly and the tion relevant to the committee’s activities. Assembly appoints the main office holders as well Regional Groups as the members of the Board. Chairman : Jean Verseille,

Réseau de transport d’électricité ( FR ) Continental Continental Continental Continental EWIS North Sea Baltic Sea President : Daniel Dobbeni, CS SW SE CE Project Elia System Operator ( BE ) Vice President : Jukka Ruusunen, Fingrid ( FI ) System Operations Committee Working Groups System Operations The System Operations Committee is in charge of Committee European Operational Critical System Board technical and operational cooperation of TSOs. Electronic Highway Standards Protection

ENTSO-E is divided into three committees – The objective of the committee is to contribute to Ad hoc Teams System Operations, System Development and ensuring and maintaining a high standard of opera- Incident Market – and into a number of working groups, bility, reliability and security of European networks. Functional Operational Coordinated Classification Model Reserves Service regional groups and expert groups. The ENTSO-E It introduces technical rules or standards related to Scale Board has a central role in this structure as it coor- the operation of the transmission system and dinates the committees’ work and external repre- reports on how these rules and standards have Regional Groups Voluntary Regional Group sentation, and implements Assembly decisions. been implemented. The committee introduces new Continental Great Ireland - The Board consists of 12 members that are appoint- technical concepts for operation and aims at coher- Nordic Baltic Northern Europe Europe Britain N. Ireland ed by the Assembly. ence and harmonization in operational issues between regions. It will deliver accurate, relevant and Chairman : Graeme Steele, National Grid ( UK ) fast information for all stakeholders about power Working Groups Vice Chairwoman : Malgorzata Klawe, system operation and emergencies. Market Committee PSE Operator ( PL ) Market Ancillary Market Information Electronic Data Economic Renewable Chairman : Klaus Kleinekorte, Amprion ( DE ) Integration Services & Transparency Interchange Framework Energy Sources

Legal & Regulatory Group Regional Groups Market Committee Besides providing advice on legal issues and on the Baltic Sea North-West South-East South-West Figure 1 : positioning of ENTSO-E in the evolution of the reg- The Market Committee is in charge of TSO cooper- ENTSO-E organizational structure ulatory framework, it ensures legal and regulatory ation in market-related issues. compliance of the association’s activities. The objective of the committee is to facilitate a well- tion of renewable energy sources and decentralized Chairwoman : Jacqueline van Overbeek de Meyer, functioning European electricity market by con- generation are also included in focus areas in close Members: TenneT TSO ( NE ) tributing to market design and network-related collaboration with other committees. Pierre Bornard ( Réseau de transport d’électricité, FR ) market rules from the TSO perspective. It aims at Zbynek Boldis ( CEPS, CZ ) integrating the views of market participants and all Chairman : Juha Kekkonen, Fingrid ( FI ) Luigi De Francisci ( Terna, IT ) System Development Committee stakeholders into its activities. Martin Fuchs ( transpower, DE ) Stelian Gal ( Transelectrica, RO ) The System Development Committee is in charge of The committee promotes efficient market mecha- ENTSO-E Board Members Bente Hagem ( Statnett, NO ) TSO cooperation regarding network development nisms covering long-term, day-ahead, intra-day Darius Masionis ( LITGRID, LT – till 23 /09/2009 ) and planning. The main objective of the activities of and balancing markets and system services. For Graeme Steele, Chairman of the Board Aloyzas Koryzna ( LITGRID, LT – since 23 /09/2009 ) the committee is to contribute to the adequacy and these purposes, the committee may initiate studies ( National Grid, UK ) Damjan Med-imorec ( HEP - OPS, HR ) security planning of the transmission system by on relevant areas such as market structure and con- Malgorzata Klawe, Vice Chairwoman of the Board Lajos Oroszki ( Mavir, HU ) preparing the ENTSO-E Ten-Year Network Develop- gestion management issues, economic framework ( PSE Operator, PL ) José Penedos ( Rede Eléctrica Nacional, PT ) for TSOs and transparency policies. Market integra-

10 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 11 ENTSO-E Work ENTSO-E Program 2009 / 2010 Consultation Process

The preparation of an annual Work Program is one In line with the requirements of Regulation ( EC ) of the key deliverables required from ENTSO-E 714 / 2009 Art. 10, ENTSO-E defined in December under the EU’s Third Energy Package. According to 2009 its consultation process. The process applies Art. 8 ( 5 ) of Regulation ( EC ) 714 / 2009, the ENTSO-E to outputs such as work programs, network codes, Work Program “shall contain a list and description ten-year network development plans. Since Regula- of the network codes to be prepared, a plan on tion ( EC ) 714 / 2009 does not provide any further coordination of operation of the network, and re- guidance on the design of the public consultation, search and development activities, to be realized in the definition of the process is left to ENTSO-E. that year, and an indicative calendar”. Once ACER is put in place in March 2011, the document will be submitted to the Agency for reasoned As the Third Package has now begun its implemen- Further Priorities opinion and may be reviewed to accommodate tation phase ( which will be complete in March ACER’s opinion. 2011 ), ENTSO-E decided to publish a Work Program Because of the importance of network codes and Other outstanding priorities that are equally as early as mid-2009 such that it can make best use the entirely new and complex process for their de- required by ENTSO-E – as stipulated in the Third of the implementation period to test the Third velopment, a pilot code is one of the highest priori- Package – include the Ten-Year Network Develop- Objectives Package processes and to advance those issues of ty projects to advance the process together with the ment Plan ( TYNDP ), a consolidated R & D Plan, and most interest to stakeholders, regulators and the European Commission, ERGEG and stakeholders. measures for improved operational coordination. Through consultations with stakeholders, ENTSO-E European Commission. One goal is that formal Due to its urgency, grid connection with special Overall, the chosen priorities are not only informed aims to obtain expert input and views on ENTSO-E work on network code developments can progress focus on wind generation was chosen for the pilot by the Third Package but also by other pieces of draft proposals; create buy-in for ENTSO-E final rapidly after March 2011. code project. legislation relevant to TSOs. proposals; provide openness and transparency, while ensuring confidentiality of information. Due The formal process can only begin after the Agency Network codes are very important deliverables of In addition to the high priority items listed in the to these multiple objectives, there is a need for a for the Cooperation of Energy Regulators ( ACER ) ENTSO-E. The Third Package defines the code de- Work Program 2009 – 2010, ENTSO-E’s Committees flexible approach to consultation, meaning that the can execute its tasks. Nonetheless, it is essential velopment process in great detail and lists 12 topic and Groups carry out a wide range of other activi- principles should be adaptable according to the that as much preparatory work as possible is car- areas for network codes. More importantly, the ties, largely in continuation of the work of previous significance and urgency of the issue at stake. ried out before spring 2011 as this will be in the best Comitology process is foreseen to make ENTSO-E’s associations. Examples are statistical and technical interests of all concerned. The ENTSO-E Work Pro- network codes binding not only for TSOs but also data, network maps, electronic data interchange gram 2009 – 2010 therefore focuses on: for other affected market participants. ( EDI ) standards, critical systems protection, asset implementation and management, requests for ex- −− Pilot network code on grid connection with The involvement of the European Commission, tensions of the continental Europe synchronous special focus on wind generation; as well as the member states, ACER and the extensive consulta- area, and legal and regulatory issues affecting many preparation of further priority code areas tion will ensure that the codes are well balanced. work items including network codes. Making the codes binding for others remedies a dif- −− Further key areas of TSO cooperation, such as ficult shortcoming of the European energy market the pilot Ten-Year Network Development Plan before the Third Package, namely that TSOs could and a Research & Development Plan make their operational rules binding for themselves through instruments such as operation handbooks and multilateral agreements, but that no one could impose these rules on other market participants whose cooperation is often crucial for operational security and market integration.

Article 7( 3 ) of Regulation ( EC ) 714 / 2009 stipulates that The Work Program 2009 – 2010 accounts for the ENTSO-E shall produce an annual work program. Article 7( 5 ) makes this more precise and reads : choices of priority network code areas : wind connection ( pilot code ), transparency, preparations for “The annual work programme referred to in point (d ) of paragraph 3 shall contain a list and description of the network market integration-related codes, general genera- codes to be prepared, a plan on coordination of operation tion connection, load flow management, balancing of the network, and research and development activities to tools / ancillary services, and standardized coordi- be realised in that year, and an indicative calendar .” nation methodology / procedures.

In addition, 11 other projects that do not ( yet ) lead to network codes are of high priority. ENTSO-E will ENTSO-E President, Daniel Dobbeni ( Elia ), ERGEG President, Lord Mogg ( Ofgem ) as well as MEP, Lena Ek engage with the EC and ERGEG in the first half of ( SE ) and former Energy Commissioner, Andris Piebalgs, discussed important issues like the consultation process at ENTSO-E ’s opening reception on 17 November 2009. 2010 to prepare a common view of framework guideline and network code work for 2011 and 2012, with possible adjustments in the Work Program 2009 – 2010 resulting from that assessment.

12 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 13 Application

ENTSO-E commits to consult with stakeholders on Step1 : Tasks from Step 2 : Step 6 : Step 3 : Step 5 a) : all key deliverables mentioned in the Third Package Electricity ENTSO-E EC + Develop the Prepare final ( i. e. work program, TYNDP, network codes ). How- Regulation, Committee Comitology: proposal proposal ever, consultation exercises will also be conducted or EC / ACER starts drafting Adoption requests with regard to other issues, whenever this is deemed appropriate with regard to the significance for Step 4 : stakeholders. A suitable example of this flexible ap- Formal Step 5 b) : proach is the Research & Development Plan, which consultation on ACER opinion went into public consultation although this is not Stakeholder draft proposal workshops required by the Third Package.

Depending on the nature of the work product being developed, ENTSO-E will consult informally with EC / ACER ENTSO-E ACER EC stakeholders at an early stage in order to get ideas and elements for preparatory work, and at a later Step 1 Art. 6 (1) Step 4 Art. 6 ( 6 ) stage, conduct a formal consultation to seek feed- ENTSO-E & ACER coordinate common understanding of priorities, which have ENTSO-E completes its draft proposal and organizes a formal consultation on it back on a draft proposal. At all stages where consul- previously been defined by the EC. (web-based). tation is used, ENTSO-E will consult sufficiently Step 2 Art. 6 ( 2 – 3 ) Step 5 Art. 6 ( 7 – 9 ) EC requests ACER to draft framework guidelines for given areas. ACER formally ENTSO-E receives feedback and submits the final proposal to ACER. early to take responses into account. consults with ENTSO-E and also with other relevant stakeholders. ACER assesses whether an additional consultation exercise is needed, provides a reasoned opinion to ENTSO-E, and once it is satisfied that the proposal is in line Step 3 Art. 6 ( 6 ) with the framework guideline, submits the document to the EC with a recommenda- Further, ENTSO-E commits to actively seek consul- The EC requests ENTSO-E to draft network codes in line with the relevant tion for adoption. tation with any interested party directly affected by framework guidelines. ENTSO-E starts drafting the network code and organizes the subject matter in accordance with Article 10 (1) workshop( s ). Step 6 The EC adopts the proposal through Comitology and with scrutiny from the EP of Regulation ( EC ) 714 / 2009, by making clear the making it final and legally binding target audience in the consultation document. These parties are normally industry associations representing transmission grid users ( generators, Figure 2 : distribution networks, suppliers and traders ), mar- ENTSO-E consultation process for network codes ket participants, consumers ( including industry ), power exchanges, the Agency and national regulators where appropriate. In addition, ENTSO-E commits to keeping the consultation open to any interested party, by announcing workshops and formal consultations on its website and through mailings The final ENTSO-E position following the consulta- velopment process makes close coordination be- Regulation 714 / 2009, Art. 10, to which any interested party can subscribe at any tion, including an evaluation of the responses re- tween the EC, ENTSO-E and ERGEG /ACER neces- on the Subject of Consultations time free of charge. ceived, explaining the reasons why comments have sary. The priorities for the development of Art. 10 ( 1 ) or have not been taken into account, are, in accord- framework guidelines and network codes will be es- “While preparing the network codes, the draft Community- wide network development plan and the annual work ance with Article 10 ( 3 ) of the Regulation, are made tablished by the EC and detailed priorities and programme referred to in Article 8 (1), ( 2 ) and ( 3 ), the Consultation Channels public. If necessary, and where timescales permit, timetables will be communicated to stakeholders ENTSO for Electricity shall conduct an extensive consulta- ENTSO-E consults a second time if the response to in the respective work programs of ENTSO-E and tion process, at an early stage and in an open and transparent manner, involving all relevant market participants, and, ENTSO-E organizes, where appropriate, informal the first consultation indicates significant prob- ERGEG/ACER. It is an objective that the consulted in particular, the organisations representing all stakeholders, discussions with stakeholders at an early stage. This lems or where revised proposals are radically differ- stakeholders see the consultation process on a in accordance with the rules of procedure referred to in may be especially important when certain stake- ent from the original proposals. ENTSO-E leaves it specific framework guideline and corresponding Article 5 (1) . That consultation shall also involve national regulatory authorities and other national authorities, supply and holders are more directly affected by an ENTSO-E up to the consulted party to decide whether their network codes as one integrated process where the generation undertakings, system users including custom- code or plan than others, or when their input or response to a consultation is to be treated confi- input sought by ACER on principles and that by ers, distribution system operators, including relevant indus- data form an important basis for ENTSO-E’s work. dentially. ENTSO-E on the actual codes and their practical try associations, technical bodies and stakeholder plat- forms . It shall aim at identifying the views and proposals of implications, complement rather than duplicate all relevant parties during the decision-making process .” ENTSO-E seeks stakeholder engagement during Through its consultation process document, each other. Art. 10 ( 2 ) the development process through one or more ENTSO-E has committed itself to working towards “All documents and minutes of meetings related to the con- workshops, open usually to all interested stake- a process, which, on the one hand, ensures stake- sultations referred to in paragraph 1 shall be made public .” holders and announced via a public announce- holder involvement at all important stages and, on Art. 10 ( 3 ) ment, prior to the formal consultation. the other hand, avoids duplication with ERGEG / “Before adopting the annual work programme and the network codes referred to in Article 8 (1), ( 2 ) and ( 3 ), the ACER consultations. The Third Package’s code -de ENTSO for Electricity shall indicate how the observations received during the consultation have been taken into consideration . It shall provide reasons where observations have not been taken into account .”

14 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 15 “Reliable . Sustainable . Connected .” As one can read In this context, it is indispensable to point out that Reliable from ENTSO-E’s maxim, the reliable and secure supply security of supply is directly connected with ENTSO-E’s other two core missions: market inte- of electric power is the TSO’s most important task and gration and integration of renewable energy sourc- the importance of a reliable power supply will not es. Market integration with Europe-wide power trading and the rapid increase of fluctuating renew- change in future . But why is this so? able energy sources ( such as wind power ), far from the load centers, mean that the power system – built over decades for a different world – must be operated closer and closer to its limits.

ENTSO-E therefore works on a number of tools to ensure that electricity continues to be supplied se- curely and reliably at any time and to address the Reliable system operation is essential to the func- present challenges. Some of these tools and mecha- tioning of today’s society. As a matter of fact, in the nisms, especially Operation Handbooks, the associ- last decades, our society’s dependence on electrici- ated compliance monitoring, system adequacy ty and all devices associated with it has grown forecasts and outlook reports were developed by phenomenally. Our daily life is marked by this de- ENTSO-E’s predecessors and are now continued pendence on electrical devices: hospitals, relying and further developed by ENTSO-E. Other means increasingly on high-technology instruments such for ensuring reliable electricity supply have been as x-rays, MRI scanners or life-sustaining respirato- entrusted to ENTSO-E by the Third Package. This ry machines; modern information and communica- includes most notably the development of operation systems like the Internet are electrically tional network codes, establishing operational rules powered; and it is not unusual for an average house- that become legally binding for all users of the hold to rely on dozens of different electrical devices, transmission networks. Both types of instruments like fridges, ovens, vacuum cleaners, TV sets, per- help ensure today and in the future the highest pos- sonal computers, etc. sible security of supply.

In short, electricity dependence has penetrated all Reliable system operation is only noticed when it spheres of our daily life. The industrial revolution, is missing. Day in and day out, the grid operators – then the computerization and now the introduction invisible and un-noticed – perform their important of the Internet have dramatically changed our soci- tasks to make society function. This also continues ety and have made us fundamentally dependent on in today’s changing context with new technical and electric power. At the same time, the possibilities of energy policy challenges. storing electric power in larger quantities have re- mained limited. Thus, providing secure and reliable supply of electricity has become a fundamental pillar of the functioning of our society. The electricity transmission network is a central element in providing the electricity our society needs today.

More precisely, not only is the transmission network necessary to transport electricity from power System Operations Committee – Working Group plants to distribution systems and to customers, European Operational Standards ( WG EOS ) but it is also crucial to the reliability of the power The SOC is organized into a number of regional groups and into three functional working groups . supply. Only because the transmission network connects many power plants to many distribution The Working Group European Operational Standards provides proposals for the harmonization of operational systems, can the supply be switched seamlessly to standards on a pan-European level and for the promotion of another plant when one plant has a forced outage, operational coherence among regions, facilitating market without the customers even noticing. The primary processes, but ensuring reliability and security of the Euro- pean electricity transmission systems within the framework driver behind international interconnections devel- of liberalized energy markets . It helps to ensure compatibili- oping since about 1950 was the better use of the ty between system operation, market solutions and system available power reserves. The more connected the development issues . systems have become, ultimately on today’s pan- On a pan-European level, WG EOS analyses proposals for definitions and updates of technical and operational stand- European scale, the more important is the optimal ards for implementation by regions and individual TSOs . use of the reserves needed for a reliable supply. This means there must be clear and fair international rules for the joint operation of the interconnected transmission network, including methodologies for the sizing and use of operational reserves.

16 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 17 From Operation areas for network codes. More importantly and very centrally, Comitology procedures are foreseen to Handbooks to Network make ENTSO-E’s network codes binding not only for TSOs but also for other affected market partici- Codes pants and grid users. The involvement of the European Commission, In order to ensure technical and organizational member states, ACER and extensive consultation standards for a secure and reliable operation of the will ensure that the codes are well balanced. Mak- transmission system, ENTSO-E’s predecessor asso- ing the codes binding for others remedies this diffi- ciations such as NORDEL and UCTE established a cult shortcoming of the European energy market collection of operation principles and rules. In the before the Third Package, namely that no one could case of UCTE, ENTSO-E’s largest predecessor asso- impose binding rules ( such as those stipulated in ciation, a set of technical rules and recommenda- an Operation Handbook or similar ) on other mar- tions was collected over more than 50 years in a ket participants whose cooperation is crucial for range of different documents before consolidating operational security and market integration. these rules, for the first time in 2002, into one firm document : the UCTE Operation Handbook. The Operation Handbook was made binding for Network Code Areas as defined by the TSOs through multilateral agreements and its Third Package implementation was ensured through a compliance monitoring process. Due to their importance for effective system opera- ENTSO-E’s Work Program 2009 – 2010 thus based System Operations Committee – tion, market integration and also system develop- network code priorities on the importance of se- Regional Group Continental Europe ( RGCE ) In 2007, building on experiences following distur- ment, network codes will cover, in accordance with cure network operation, integration of renewable The System Operation Committee’s ( SOC ) Regional Group bances in the system and adapting to the changing Article 8 ( 6 ) of Regulation ( EC ) 714 / 2009 the follow- energy sources and market integration, and on the Continental Europe ( RGCE ) represents the area formerly covered by UCTE . The main purpose of RGCE is to pursue TSO operational conditions, UCTE launched a revi- ing areas : other hand on sufficient clarity and consensus -be the reliable and efficient operation of the Continental Eu- sion of all policies in its Operation Handbook. tween TSOs, regulators and market participants on rope Synchronous Area . RGCE’s activities include, inter alia : In March 2009, revised Policies 1, 2 and 3 were ap- 1. Operations-related code topics goals and methods. From this perspective, network −− Management of all operational issues ( among others proved by its Steering Committee: load-frequency −− Network security and reliability rules including codes in the operational area will focus first on those related to frequency regulation, scheduling and control and performance, scheduling and account- rules for technical transmission reserve capaci- operational security. accounting, coordination services ) −− Development and updating of the Operation Handbook ing, and operational security. Policies 4, 5, 6 and 7 ty for operational network security ( and pursuing its revision as initiated by UCTE in 2007 ), ( coordinated operational planning, emergency pro- −− Interoperability rules Monitoring of Implementation and adapting it as Europe-wide network codes begin to cedures, communication infrastructure and data −− Operational procedures in an emergency take over the Handbook’s function −− Implementation of the Operation Handbook and the pro- exchanges ) have been in revision for most of 2009 −− Balancing rules including network-related The monitoring of the implementation of codes and cedures to be applied in case of potential infringements and are expected to be approved by ENTSO-E’s reserve power rules guidelines according to Art. 8 ( 8 ) of Regulation ( EC ) −− Compliance monitoring against the Operation Handbook System Operations Committee Regional Group 714 / 2009 will also be performed over the coming −− Interoperability assessments for requested extensions of the synchronous system Continental Europe in the second half of 2010. 2. Development-related code topics years. This may partly build on the compliance − In order to pursue all these activities, the RG CE is organ- − Network connection rules monitoring experience of TSOs in continental ized in a number of sub-groups such as the System Fre- −− Energy efficiency regarding electricity Europe and will thus include important regional as- quency, Network Models and Forecast Tools, Coordinated Network Codes remedy the Shortcomings networks pects. Due to the inherent aspects of synchronous System Operations, System Protection & Dynamics and Compliance Monitoring & Enforcement sub-groups . of Operation Handbooks areas, the current regional operational rules differ 3. Market-related code topics widely in terms of scope, content and applied tech- System Operations Committee – Regional Groups Given that the only possible way to make the rules −− Third-party access rules nical solutions. The System Operations Committee − Beyond Regional Group Continental Europe ( RGCE ), four binding for TSOs were contracts between them, the − Data exchange and settlement rules compares the approaches and develops a common additional Regional Groups have been established within Operation Handbook could not address issues −− Capacity allocation and congestion terminology, ensuring the same understanding of the SOC: Nordic, Baltic, Great Britain as well as Ireland / where users of the grid such as power plants, cus- management rules technical terms used in different synchronous are- Northern Ireland . Moreover, the Voluntary Regional Group − Northern Europe has likewise been established . Regional tomers or distribution networks were affected. − Rules for trading related to technical and as. Such a common understanding is a prerequisite Groups under the System Operations Committee have been Thus, standards for network access of customers operational provision of network access for further work related to pan-European network created following the principle of synchronous areas to al- and other economic rules, but also technical rules services and system balancing codes, in both operational and market areas. low for closer cooperation among TSOs that are for the most − part neighboring . Their activities include things like main- for connection to the grid, were only set by nation- − Transparency rules taining and managing information systems, and frequency al grid codes, laws or contracts but could not be −− Rules regarding harmonized transmission regulation issues . In order to do so, regional groups can be within the scope of international documents such tariff structures including locational signals further sub-divided into functional sub-groups . as the Operation Handbook. and inter-transmission system operator compensation rules The Third Package recognizes the significance of this problem. This is why it entrusts ENTSO-E with the very important task of drafting network codes. Together, these codes have the potential to become Regulation ( EC ) 714 / 2009 defines the code devel- the framework of consistent detailed rules needed opment process in great detail and lists 12 topic for the secure operation of European power systems and for the implementation of a liberalized Europe-wide electricity market according to the Third Package.

18 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 19 Compliance Monitoring System Adequacy Forecast

Compliance monitoring conducted within the The regular compliance monitoring process is The ENTSO-E System Adequacy Forecast ( SAF ), for In order to assess adequacy, the “Remaining Capac- System Operations Committee’s Regional Group based on self-assessment and on-site compliance the time period 2010 – 2025, was developed as the ity” is compared to a given “Adequacy Reference Continental Europe ( RGCE ) is the continuation of audits : successor to the former UCTE System Adequacy Margin” ( ARM ) . The Remaining Capacity is calcu- compliance monitoring activities initiated in the Forecast Report and ETSO Power System Adequacy lated as Net Generating Capacity ( NGC ) minus former UCTE. The objective of the compliance −− The annual compliance self-assessment is con- Report. The system adequacy methodology is thus Unavailable Capacity ( which consists of outages, monitoring process is to encourage TSOs’ compli- ducted through reviews of member self-assess- very well established, and the various system system services reserves, maintenance and non- ance with the RGCE Operation Handbook ( OH ) ments and subsequent sets of data provided by adequacy retrospectives and long-term and short- usable capacities, e. g. because of energy limitations ( cf. previous article ) which is necessary to preserve the RGCE member TSOs on a regular basis. term forecasts are an important work product for or fluctuating production ) ; it is thus the part of the security of supply of the synchronous area. the European market. It is also a major input NGC left on the system to cover any unexpected −− Periodic on-site compliance audits are per- to ENTSO-E’s Ten-Year Network Development load variation and unplanned outages. The ARM The 2009 Compliance Monitoring Program (CMP ) formed on a five-year basis on every RGCE Plan ( TYNDP ) as prescribed by Regulation ( EC ) gives an indication of capacities needed beyond was put in place after introducing a few minor member TSO to verify compliance with a chosen 714 / 2009. those explicitly accounted for elsewhere in the changes in methodology, which resulted from the set of RGCE Operation Handbook standards. methodology, i. e. capacities to cover the difference Compliance Monitoring Programs of 2006 – 2008. The SAF provides an overview of : of load at the reference time point to the peak load From 2010 onwards periodic on-site audits eventu- ( “margin against peak load” ), and unexpected de- ally become mandatory. The exceptional compliance monitoring process −− Generation adequacy analysis for the whole of mand variations or longer term generation outages. is based on on-site compliance audits launched un- ENTSO-E If Remaining Capacity exceeds the ARM, it means der control of the RGCE plenary following a trigger- Compliance Monitoring Methodology ing event that jeopardized the security and reliabil- −− Generation adequacy assessment for each indi- ity of system operation of the interconnected vidual country based on national comments Compliance self-assessment information, sched- system, after analysis by expert bodies. Such an on- received from TSOs’ data correspondents ules, documents and reviews are adapted and up- site compliance audit can also be performed if an dated on a yearly basis. RGCE member TSO does not fulfill its obligations −− Role of transmission capacities related to regarding the self-assessment process. security of supply on a regional basis The CMP is performed via regular and exceptional processes. At the end of the yearly activities related to the CMP, an annual Compliance Oversight Report Thus, for the market and for policy-makers, the SAF ( COR ) is prepared and submitted to the Plenary of is an indispensable tool, providing an overview on RGCE for acknowledgement. whether the generation capacity, by country, by region or Europe-wide is sufficient to cover for the In the 2009 CMP, the same three compliance levels expected consumption. already used in 2007 and 2008 continued to apply: fully compliant ; sufficiently compliant ; non-com- System Operations Committee – pliant Assessment Methodology Working Group Electronic Highway (WG EH) Working Group Electronic Highway ( WG EH ) was estab- The assessment was primarily carried out using in- lished only in February 2010 . The Electronic Highway ( EH ) is a communication network that provides the necessary Overview of the 2009 Compliance put data provided by each TSO for the years 2010, infrastructure to support data exchanges among TSOs . Oversight Report 2015, 2016, 2020 and 2025 ; other years and time ho- It is designed for real-time and non-real-time data exchange rizons are calculated as linear extrapolations and between TSOs . WG EH coordinates the usage and exten- Recommendations resulting from the Compliance are to be considered only as best estimates. The sion of the electronic highway in order to provide a secure Monitoring Process 2009 highlight the need to year 2016 has been introduced in order to assess the and reliable information exchange for system operations throughout Europe . revise the Operation Handbook with the aim of consequences on generation adequacy of the de- providing measurable standards, enabling more commissioning of the oldest thermal plants by the objective and clearer evaluations. The ENTSO-E end of 2015 at the latest, as a consequence of entry Secretariat will play an increasingly important role into force of the Large Combustion Plant Directive. in compliance audits and compliance monitoring to ease the process and provide for improved meth- The adequacy analysis is carried out vis-à-vis two odology. scenarios covering generating capacity evolution ( conservative Scenario A and best estimate Sce nario B ) and is based on a comparison between available generation and load at three reference time points of the year ( 3 rd Wednesday in January at 11 a.m. and at 7 p.m. , 3 rd Wednesday in July at 11 a.m. ) .

20 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 21 that no security of supply problems are expected pacity after 2015, particularly with regards to fossil The following graph shows the most important TWh Consumption Forecast and that some generating capacity is likely to be fuel power plants. The LCP Directive applies only to results of the SAF 2010 – 2025, i. e. the comparison of available for export. 4200 EU member states; countries outside the EU perim- Remaining Capacity RC and the Adequacy Refer-

4000 eter are not obliged to follow its goals. The LCP ence Margin ARM for the ENTSO-E area. In the load and consumption forecasts, most TSOs Directive is a plausible cause for the significant de- consider the influence of the economic crisis. 3800 crease of installed capacity in fossil fuels after 2015 The generation adequacy in Scenario B should thus

All values provided are connected to the Gross 3600 in both scenarios. In Scenario A, the decrease in be maintained during all monitored periods in each National Product ( GNP ) and could change accord- 2016 is about 3 % ( 1,463 GW ) compared to 2015. In reference point. In Scenario A, the generation ade- ing to the rate of economic recovery / development 3400 Scenario B it is still a decrease of 0.19 % ( 1 GW ) com- quacy should be maintained until 2020. After this

in the future. 3200 pared to 2015. In Scenario A the projected decrease term new generation capacity would be needed to carries on until 2025 ( about 22 GW until 2025 ), achieve at least today’s levels of adequacy, but it 3000 2010 2015 2020 2025 while Scenario B projects a renewed sizeable in- must be recalled that Scenario A only includes firm- Summary of Results crease of about 27 GW until 2020. ly known new generating units and thus very few known additions in the far future past 2020. During the entire monitored time period load fig- Figure 3 : Noteworthy is the share of gas power plants in total ures are growing. The energy consumption growth Consumption forecast fossil fuels installed capacity, which is dispropor- for the period 2010 – 2015 must be monitored care- tionately high and points to a preference for gas fully and could still prove too optimistic due to the among potential investors. A range of reasons could financial and economic crisis ( despite the fact that be brought forward to explain such preferences national data correspondents already take into ac- among investors. The two most plausible include: count the consequences of the crisis ) . ENTSO-E consumption is expected to be 3690 TWh in 2015 −− lower investment costs and a higher flexibility GW Adequacy Reference Margin and 4004 TWh in 2020. GW Net Generating Capacity compared to other types of thermal units, 1200 which in many countries is also related to a 200 Scenario B 175 The net generating capacity ( NGC ) is increasing in 1100 motivation to participate in ancillary services 150 both scenarios until 2015, with one isolated excep- markets; 125 tion in Scenario A after 2015 ( and a corresponding 1000 Scenario A 100 − slowdown in Scenario B ). Scenario B shows NGC 900 − existing climate change policies (favoring gas 75

increases of 3.43 % until 2015 and of 1.79 % after with lower CO2 emissions per kWh than coal 50 800 2016. power plants ) 25

700 0 2010 2015 2020 2025 600 Scenario A Scenario B 2010 2015 2020 2025 The gas power plant installed capacity in Scenario ARM RC ARM RC A is almost stable after 2015, with a slight continuous increase (from 193.6 GW in 2015 up to 200.7 GW Figure 4 : in 2025 ) whereas in Scenario B the increase is more Figure 5 : ENTSO-E Net generation capacity, January 7 p.m. rapid (from 214.6 GW in 2015 up to 253 GW in ENTSO-E 2010 – 2025 Adequacy Reference Margin ( ARM ) and Remaining Capacity ( RC ) comparison 2025 ).

This increase in installed capacity of gas power plants is also closely linked to the higher development of Renewable Energy Sources ( RES ) except System Development Committee – Scenario A suggests about 1007 GW of NGC in 2020 for hydro power plants. Although this link can be Working Group System Adequacy and Market Modelling System Operations Committee – while, Scenario B about 1163 GW. In 2025 the cor observed in both scenarios, it is more visible in sce- ( WG SAMM ) Working Group Critical System Protection ( WG CSP ) responding values are 1010 GW in Scenario A and nario B than in Scenario A. In Scenario A, the annu- The aim of WG SAMM is to provide ENTSO-E bodies, TSOs, The Working Group Critical System Protection ( WG CSP ) 1238 GW in Scenario B. The values for 2025, al average growth in RES ( excluding hydro ) is 6.02 % regulatory bodies, European institutions and electricity deals with the development of critical system and infrastruc- market stakeholders with consolidated retrospective and ture protection issues on a European level . The establish- however, are to be seen in the context of rather high per year ( representing a total increase of about prospective views of ENTSO-E system adequacy . Thus, ment of the WG follows the European Commission’s Direc- uncertainty of data provided by national data 140 GW until 2025 ) while in Scenario B it is 7.95 % it is in charge of examining the adequacy of the electricity tive on the identification and designation of European correspondents. A number of documents and pub- per year with a total increase of about 218 GW until generating and transmission systems, at regional and critical infrastructures and the assessment of the need European levels . to improve their protection ( EPCIP ) . Thus, WG CSP is re- lic policies with relevance to the forecasts do not 2025. This increasing course of RES capacity ( ex- It monitors and forecasts the security of supply according sponsible for critical system protection issues regarding cover such a long-term period. cluding hydro ) is visible at each reference point. to demand in agreement with adopted criteria and sustaina- electricity transmission and is the official counterpart for The main contributors between 2010 and 2025 are bility concerns ( including environmental and competitive the European Commission in all questions related to critical aspects ) . It builds prospective scenarios of the European system protection within ENTSO-E . Germany (45.8 GW ), Spain ( 39.9 GW ), France Projection of installed Capacity according ( 26.8 GW), Italy and Great Britain ( both about electricity systems able to match the European energy policy objectives ( e .g . 20 -20 -20 ); defines and implements to Energy Sources 17.5 GW ). the enhancement of harmonized methodologies needed for system adequacy assessment and market modeling . The Large Combustion Plant ( LCP ) Directive, which The evolution of RES installed capacity ( excluding It also provides ENTSO-E members with forecast scenarios applies to combustion plants with a rated thermal hydro ) correlates mainly with increased wind pow- of load, generation and exchange flow evolution as a basis for planning studies undertaken by the SDC, especially input equal to or greater than 50 MW is one signifi- er development. It is influenced by EU politics and those needed in the framework of the Ten-Year Network cant factor resulting in a decrease of installed ca- also by individual member state policies. Development Plan .

22 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 23 ENTSO-E Winter / Summer Out- look / Review Reports

The ENTSO-E Winter / Summer Outlook / Review The review of the winter 2008 / 2009 pointed in par- The Statistical Yearbook Reports are published twice annually, in June and ticular to the gas dispute between Russia and The Statistical Yearbook ( SYB ) used to be a traditional November, and are prepared at European level. Ukraine in January 2009, which resulted in a reduc- UCTE report . The edition published in 2009 reflected the They present a summary of the national power bal- tion in gas supplies to a number of Central and situation in 2008 and covered only the area of the former UCTE ( ENTSO-E’s Continental Europe Region ) The Statisti- ances between foreseen generation and peak load South-Eastern European countries. The availability cal Yearbook brings together a wide range of historical data for the winter and summer periods, respectively. of gas from storage facilities and the ability of gas- on power systems in member countries, like generation, fired generation to operate on alternative fuel consumption, cross-border exchanges, network compo- nents, etc . In 2009, new data developments among all The forecasts present an outlook of the expected meant that the effects on the electricity supply- ENTSO-E members focused on the harmonization of data situation and point to potential shortages or risks demand balance could be minimized. processes, data definitions and IT tools, to allow the publi- in the near future of the electricity supply in all cation of ENTSO-E-wide reports and yearbooks . ENTSO-E countries. The surveys give TSOs the opportunity to share information and provide a basis Main Results from the Winter Outlook / Data Handling at ENTSO-E and the Data Expert Group ( DEG ) for further, more detailed studies if required. The Summer Review Report The ENTSO-E Data Expert Group ( DEG ) is a data facilitator objective of the reviews is to compare the forecast and service centre for the entire association and all commit- to the situation actually faced by TSOs, taking into The Winter Outlook 2009 / 2010 predicted on the tees . The DEG tackles pan-European standardization of data account weather conditions and their consequenc- whole, no particular risk of shortage under normal handling and cooperates very closely to the Secretariat, which performs most of the regular data processing work es on the power system ( temperatures, hydro and conditions. A few countries though were expected ( implementing and operating data management tools, issu- wind conditions ) ; availability of generation units; to depend on imports from their neighbors during ing data reports, performing quality checks, etc .) and has a market conditions ; use / availability of interconnec- specific periods. central function of handling data related to statistics, publications, system adequacy, power flow, including the Statisti- tions and imported energy, etc. cal Yearbook and the transparency platform ( maintenance, In the North Sea Region, French RTE predicted plausibility and consistency checking ) . Furthermore, it pre- the need for imports of up to 4,000 MW from mid- pares the data for issues such as the Common Information Model ( CIM ) and the interface with international standardiza- Main Results from the Winter Review / November to January, in order to cover its electrici- tion organizations . The DEG is also responsible for making Summer Outlook Report ty demand and to satisfy the security criterion set proposals and coordinating work on the ENTSO-E Data Con- by RTE, due to reduced availability of the French fidentiality Policy . The Summer Outlook Report, with reference to the generating fleet over the winter period. period 1 June to 4 October, forecast no particular risk of power shortages throughout the summer of During winter 2010, parts of the Continental South 2009. The balance between power generation and East Region were also forecast to depend on im- demand in the different regions was expected to ports of electrical energy. However, no particular remain adequate. risk of shortage was expected for the winter 2009 / 2010 : the available generation capacities in Besides considering normal conditions, the TSOs Bulgaria and Romania were sufficient to cover the also took into account a scenario of severe weather import needs even in severe conditions in neigh- conditions, such as the effect of a prolonged spell of boring countries. hot, dry weather which could increase electrical demand for air-conditioning or reduce the output Finland and Latvia were equally expected to de- from hydro-generation or thermal generation facil- pend on imports, but with a clear expectation that ities. Under such conditions, a number of TSOs these imports would be available. Even with the identified periods when power imports from their shutdown of the Ignalina nuclear plant at the end of neighbors would be needed under these circum- 2009, Lithuania was predicted to be able to cover stances, and have described the measures in place peak load during the winter period. In 2010, gas- to ensure that this support would be available. fired power plants will form the major part of generation capacity in Lithuania. The main supplier of that gas is Russia.

24 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 25 Besides the uncompromising necessity for reliable Sustainable operations and a secure electricity supply, ENTSO-E fully recognizes and is committed to contributing to the European Union’s sustainability goals . “Sustainable” therefore refers directly to the integration of renewable energy sources into the transmission system .

Renewable energy sources are at the core of the This chapter therefore illustrates to what extent the current European energy policy agenda. The Euro- integration of renewable energy sources into the pean Union’s 20 -20 -20 goals are the prime example transmission network and, more generally, the Eu- in this context. They stipulate that, by 2020 at least ropean Union’s 20 -20 -20 goals constitute drivers for 20 % of EU energy consumption has to come from some of the most important of ENTSO-E’s delivera- renewable resources, green-house gas emissions bles. The Ten-Year Network Development Plan should be reduced by 20 % of 1990 levels, and 20 % ( TYNDP ), the Research and Development Plan and of energy consumption should be saved compared the pilot network code with special focus on wind to projected 2020 levels. Because of the fact that energy generation directly promote the achieve- electricity offers more possibilities for decarboniza- ment of the 20 -20 -20 goals. In 2009, preparations tion than other energy forms, this target may well for all of these projects started and the first results imply that more than one third of electricity con- became available in the first half of 2010. sumption will have to be met by renewable energy sources such as wind or solar power. By delivering high-quality results on the above tasks and building on the unique expertise and know- According to ENTSO-E projections for 2020, the how of its members, ENTSO-E has the ambition to share of renewable energy in the electricity genera- contribute significantly to the attainment of the EU tion mix stands at about 25.5 % within the EU energy policy goals, and as a consequence to a high- ( 29.8 % for the entire ENTSO-E area ). The electricity er standard of living for European citizens and to a grid and transmission system operators are at the sustainable economic development. The transmis- center of significant efforts that are therefore still sion systems are thus a cornerstone for achieving required in order to efficiently integrate into the the energy policy goals. system the necessary additional renewable energy generation while maintaining the reliability of the system and the quality of supply. In addition, sig nificant technological and operational progress is necessary in order to promote energy efficiency through the renovation of ageing infrastructure, the employment of innovative technologies, or smart grids.

Renewable sources of energy are often located in remote areas: wind in the North Sea or sunshine in Southern Europe or even North Africa. The challenge lies in the fact that significant transmission capacity is necessary to bring this energy to consumers who live in, say, London, Madrid, the Ruhr area, or the densely populated Netherlands, or to the mountainous areas of the Alps where it can be stored in the form of water reservoirs and be used at opportune moments via hydroelectric generators.

26 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 27 Ten-Year Network Development Plan member states are committed to submitting in June 2010 to detail how they plan to achieve their parts System Development Committee – Regional Groups of the renewable energy targets in the Renewable Aside from its seven working groups, the System Develop- The transmission network has always been central Having recognized the challenge, the EC through Energy Directive. To achieve the above objectives, ment Committee organizes its work in six Regional Groups : North Sea, Baltic Sea, Continental Central South, to the economic evolution of Europe. From the first Regulation ( EC ) 714 / 2009 calls upon ENTSO-E to the pilot release of the TYNDP provides the most Continental South West, Continental South East and local grids that expanded the access to electricity to draft every two years a non-binding Union-wide up-to-date and accurate information on the Continental Central East . the citizens of Europe over 100 years ago, to nation- Ten-Year Network Development Plan ( TYNDP ) planned or envisaged transmission investment Beyond regional initiatives, such as the definition of the al grids that optimized the usage of natural resourc- with the objective of ensuring greater transparency projects of European importance. It provides an North Sea offshore grid ( RG North Sea ), Regional Groups es, and to transnational grids that ensure security of of the entire electricity transmission network in the outlook of the future condition of the electricity sys- are instrumental in developing regional plans and market studies, network models, etc ., as important input to future supply and market integration, the transmission Community and to support the decision-making tem in Europe and discusses the development and releases of the TYNDP . network has always been adapting to the needs of processes at regional and European level. ENTSO-E, evaluation of generation-demand scenarios, based each era. being at the heart of the evolution, proactively de- on which analyses ( such as the System Adequacy System Development Committee – cided in summer 2009 to launch a pilot TYNDP, Forecast ) will be performed. It also puts forward Working Group Network Modelling & Data ( WG NM&D ) The industry structure has been undergoing an with the aim of publishing the document in June the challenges related to the development of the The main objective of WG NM & D is to build common especially deep transition in the last years with the 2010, well ahead of a formal application of the transmission network. The pilot project initiates a network models that allow TSOs to perform grid analyses, needed for evaluating the future behavior of the European liberalization of national electricity markets and Regulation, in order to : “learning-by-doing” process to build TYNDP re- transmission system, and thus to assess the envisaged their integration into an internal European electric- ports in an open and transparent manner, with development of pan-European high voltage transmission ity market ( 1st, 2 nd and 3 rd EU Internal Energy −− Gain feedback from stakeholders regarding the strong involvement of stakeholders, European infrastructures . Market Legislative Packages ). In addition, the EU content and collaboration they expect for the Regulators and the European Commission. It provides support for medium- and long-term planning studies carried out by the TSOs with the purpose of improv- has set ambitious objectives with regard to climate next releases of the report; ing system studies ( e .g . coordinated planning, integration change and sustainable development ( e. g. EU Much of the second half of 2009 was devoted to of renewables, or system extension studies concerning the Renewable Energy Directive and 2020 CO2 and −− Illustrate existing trends for attaining European planning the scope and outlook of the TYNDP, and future connection of the European transmission network with other systems ) .Therefore, the support provided by the energy efficiency goals). energy policy objectives; accumulating a wealth of background material WG NM & D is crucial to the preparation of ENTSO-E’s regarding the current infrastructure and best prac- TYNDP which will use network models based on the re- What is particular to today’s conditions is the mag- −− Test the necessary processes and Europe-wide tices of TSOs. In parallel, TSOs provided expert es- quirements prepared by WG NM & D . nitude and speed of the changes in the industry’s methodologies; timations for the evolution of the power system In 2009, WG NM & D worked on the requirements for the landscape stimulated by EU legislation and the over the next ten years and the corresponding future data collection process related to network models . A substantial part of the work was done by the end of 2009 technological advances in the sector, but within a −− Feed the political debate with an in-depth transmission infrastructure investments. At the end which allowed the start of the first pan-European data col- regulatory and infrastructure permitting context review of existing trends; of 2009, all material had been collected in order to lection on network models in early 2010 . In addition to these that does not favor the rapid expansion of transmis- permit adequate time for the drafting of the TYNDP activities, WG NM & D contributes to the development of a common database for planning studies, data exchange sion infrastructure. at the beginning of 2010 and the beginning of the standards and associated methodologies . What is more, an early release of the pilot TYNDP public consultation on the report on 1 March 2010. also aims to deliver valuable input for the National System Development Committee – Renewable Energy Action Plans ( NREAPs ) that All in all, the TYNDP is a multi-faceted vehicle for : Working Group Ten-Year Network Development Plan ( WG TYNDP ) −− Raising awareness on the challenges faced in As can be guessed from its name, the main mission of WG TYNDP consists in issuing the ENTSO-E TYNDP on a In 2010 2012 and further developing the transmission network; periodic basis ( i .e . every two years ), in very close cooperation with other WGs and RGs of the System Development 3rd package + −− Providing accurate and comprehensive infor- Committee . stakeholders’ mation to all stakeholders on which their own Beyond the release of the TYNDP itself, WG TYNDP expectations State of the art supports the SDC’s regional groups in creating and consoli- planning ( generation investments, industrial dating a framework that allows TSOs to exchange informa- developments, etc. ) could be based; tion on their development plans, to initiate joint planning Inputs/data for studies and to assess the effect of new grid devices that Network data are announced on the whole pan-European system . First draft ß-TNDP background scenarios −− Assisting decision-makers to build on its contents in order to efficiently promote infrastruc- It fosters the coordination of regional system adequacy studies and network studies . It develops and compiles ture investment; appropriate methodologies and tools and makes them First ß-TNDP Background scenarios Background Background scenarios Grid adequacy available to regional groups . consultation development scenarios validation analyses −− Initiating a constructive dialogue to better coordinate market forces and political leadership in seeking to fulfill EU policy goals. Next issues of Draft TNDP Investment gaps TNDP consultation Grid projects As part of the TYNDP, ENTSO-E has described Grid adequacy analyses plans to improve methodologies, scenarios and criteria further over the next releases. Comments on these plans from stakeholders, the Commission Figure 6 : and ERGEG have been especially valuable and Build-up process of the TYNDP confirm the urgency for ENTSO-E to provide this pan-European overview as early as possible, and to continue improving it.

28 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 29 During autumn 2009 and winter 2009 / 10, ENTSO-E The resulting network code will need to pass engaged in a scoping exercise in close collaboration through the formal steps again after ACER’s tasks System Development Committee – with ERGEG in order to best define the relevant are in force, but this should proceed much faster Working Group European Planning Standards ( WG EPS ) contents. In parallel, ENTSO-E’s experts have been leading to a swift submission to – and passage On behalf of the System Development Committee, the Working Group European Planning Standards is responsible working on synthesizing a consistent Europe-wide through – the Commission’s Comitology process. for TSO cooperation and coordination on planning stand- picture of existing codes and practices within This will not only lead to speedier completion of ards for the development of the electricity network . Its main former TSO associations and in the different coun- one specific urgent network code, but would also mission is to coordinate the development of European planning codes in line with the framework guidelines according tries, on which the pilot code is to be based. In ac- provide a much firmer basis for future swift adop- to European legislation ( Third Energy Package ) in order to cordance with Regulation ( EC ) 714 / 2009, but also tion of network codes building on an improved provide a secure, adequate, economic and environmentally answering a concrete need for technical collabora- common understanding of the network code estab- sustainable European grid and interface to its customers (generators, industrial customers and distribution system tion, ENTSO-E has initiated a series of informal lishment process. operators) and between TSOs . Its work is intended to help meetings with EWEA, the European Wind Energy create a well-functioning European electricity market and, Association, to achieve a common understanding from the planning point of view, a high standard of inter operability, reliability and security . on the structure and content of the pilot code. Expected Benefits Considering the future European regulatory and legislative framework, the main objectives of the WG EPS lie in the es- Compared to the present situation of having wind- tablishment of network codes for the European transmission Focus and Scope of the Pilot Code generator-to-network connection requirements system based on the framework guidelines which will be specific to each EU member state, there are a developed by ACER . A further field of action will be to investigate methodologies ( probabilistic studies …), criteria, The pilot code will give special focus to wind gener- number of benefits that will result from harmoniza- standards and processes for grid planning . ation connection conditions. This aspect was tion across Europe: chosen by ENTSO-E and ERGEG, with support Market Committee – from the European Commission and the Florence −− Common standards promote the adoption of Working Group Renewable Energy Sources ( WG RES ) Forum, acknowledging that wind energy is set to best practices across Europe and thereby facili- On behalf of the Market Committee and ENTSO-E, WG RES shoulder the greatest part of renewable energy tate the achievement of policy goals ( i. e. with works towards the development of a market-oriented integration of renewable energy sources ( RES ) . The working growth over the next few years. A goal is to identify respect to security / quality of supply, economic group aims to contribute to the creation of an appropriate and develop European rules for harmonizing grid efficiency and environmental objectives ). regulatory framework for renewables by delivering concrete code requirements, particularly relevant to the con- and constructive proposals compatible with existing market and operational rules that are applicable to the electricity nection of wind generators to transmission net- −− Manufacturers and developers of wind turbine sector . Whenever needed, it also produces proposals for Pilot Network Code works across Europe. In order to ensure consistency generators will be able to reduce costs by new rules . Such rules focus on security of supply, market of connection conditions for all types of generation standardizing the design of wind generator development and economic efficiency . resources and to find the best overall set of future equipment, protection and controls ( rather More specifically, the WG formulates policy suggestions aiming at the realization of a harmonized pan-European The development of network codes is one of connection conditions, the pilot code will likewise than being expected to meet the specific regulatory framework; prepares input to network code ENTSO-E’s most important new tasks under the include a section applicable to all generators. With requirements of each member state. development when needed; and drafts relevant position Third Package’s Art. 6 ( 6 ) of Regulation ( EC ) only a slight delay after the pilot work, additional Wind generation developers and network papers on issues related to the integration of renewable energy sources . 714 / 2009 : “The Commission shall request the sections will be added to the network code dedicat- operators will benefit from lower costs of inter- ENTSO for Electricity to submit a network code ed to the specific features of other types of genera- facing standardized turbines ( i. e. reduced which is in line with the relevant framework guide- tion resources. costs in connection design, commissioning / line, to the Agency within a reasonable period of compliance testing and implementing opera- time not exceeding 12 months.” In line with its Work Harmonizing wind generator connection rules is tional requirements ). Program 2009 / 2010 ( see Chapter 1.3 ) , ENTSO-E a relatively new issue and is urgent not only in the started preparations for a pilot network code al- perception of TSOs, but also of ERGEG, the Euro −− A European harmonization mechanism for ready in 2009. pean Commission, stakeholders including EWEA, the structure and technical content of genera- and of the European Wind Integration Study tion requirements will increase transparency In summer 2009, ENTSO-E announced the com- ( EWIS ). The available EWIS outputs provide a valu- and bring benefits to every affected party. mencement of expert work on a pilot code on grid able starting point for these codes. With such a structure, it is intended that all EU connection with special focus on wind generation, Member states will have generation connection in parallel with the relevant Pilot Framework Guide- requirements of the same format and defini- lines on grid connection by ERGEG. Pilot Code Drafting Process tions, including the requirement for criteria to relate to the point of common coupling be- The objective of the pilot code project is to experi- This pilot code relates to a planned ERGEG frame- tween a wind park and network. ment with the process of framework guidelines and work guideline to be developed between March and code drafting and the associated consultations September 2010. This framework guideline together −− The respective challenges and resulting effects even before ACER’s tasks are in force in March 2011. with the initial impact assessment shall lead regula- of achieving a “generic format” and a “content- It is intended to demonstrate the efficiency and tors to select between possible policy options ; related harmonization” for the requirements set practical benefits of the new approaches made the framework guideline will cover the network for the generation type under review will be possible by the Third Package’s network code connection issue as a whole. ENTSO-E and ERGEG considered. processes. have already begun to coordinate these two mutu- ally dependent pilot projects closely. Where needed, issues that impact on distribution system operators ( DSOs ) will likewise be addressed and included in the network code in a consistent way.

30 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 31 Run-up to the first System Development Committee – Working Group Asset Implementation & Management ( WG AIM ) Edition of the Research WG AIM’s main task is to coordinate and harmonize the implementation and management of assets so that they & Development Plan contribute to a secure, environmentally sustainable and economic transmission system . This is to ensure that the European transmission grid has a high standard of availability, reliability and security, thus supporting the develop- In 2009, ENTSO-E started preparations for its first Priority research fields, which are included in the ment of the European electricity market . Research and Development Plan ( R & D Plan ). R & D plan and subsequently in R & D projects man- The objective of WG AIM is to develop and coordinate The document is required by the Third Energy Pack- aged by ENTSO-E members, beginning in 2010 and recommendations in relation to asset implementation and age, both by Directive ( EC ) 72 / 2009 and by Regula- 2011, include the following : management, to support the implementation of assets tion ( EC ) 714 / 2009, which underlines that ENTSO-E identified in development plans and to promote new technologies for existing grids . Such recommendations will shall adopt a research plan for common network −− Architecture and planning tools for the cover the optimization and refurbishment of existing assets operation. pan-European network and the installation of additional assets . The implementation of these harmonized recommendations will, however, remain the task of each individual TSO as the owner of the In the context of the European Electricity Grid −− Tools to prove the efficiency of technology assets . Initiative ( EEGI ) for a common platform for TSOs aimed at increasing both the flexibility and and Distribution System Operators ( DSOs ), the security of transmission system operation System Development Committee – consolidated ENTSO-E R & D Plan serves TSOs’ Working Group 2050 / Supergrid needs and contributes to the process launched by −− New tools based on simulation techniques that WG 2050 / supergrid is a newly created ENTSO-E working the European Commission for a Strategic Energy will give rise to new market design options group, established in early 2010, with the task of preparing ENTSO-E’s position on how to approach a pan-European Technology ( SET ) Plan. The ENTSO-E R & D Plan supergrid . ENTSO-E, being the most competent entity with thus defines priority research fields as a basis for regards to the electricity transmission grid, needs to re- ENTSO-E’s active participation in the SET Plan. The specific R & D products will likely extend ad- search and evaluate all aspects of a comprehensive and sustainable supergrid . vanced tools for designing future energy scenarios : In this context, all required concepts, scope of work and ENTSO-E’s member TSOs have recognized the im- scenarios that are relevant to the supergrid concept are portance of research and development across the −− Tools for pan-European network behavior mon- work items for WG 2050 / supergrid . The working group will whole range of ENTSO-E’s activities and have itoring in order to provide better transmission consult and cooperate with relevant stakeholders and will assess previous supergrid concepts and visions that have established a Working Group for Research and adequacy assessments so far been suggested by various parties . It is of utmost im- Development ( WG R & D ), which ensures the cross- portance for ENTSO-E to obtain a complete overview of the functional role of coordinating within ENTSO-E −− Tools for better surveys of pan-European long-term energy pwolicy in order to develop the grid in line with European objectives . the R & D portfolio in all matters in relation to TSO markets business: system operation, electricity market oper- System Development Committee – ation, transmission grid development, asset imple- −− New tools for modeling markets, taking into Working Group Research & Development ( WG R & D ) mentation and management. The ENTSO-E R & D account the rapidly increasing penetration of WG R & D is constituted as part of ENTSO-E’s System plan also underlines the need to define the interac- renewable energy sources Development Committee . However, since R & D activities tion between TSOs and DSOs so that smart grids, have a significant impact not only on system development, − but also on system operations and the market, it works in investments in meters and the distribution system − Complementary tools for facilitating the very close cooperation with all three committees . can lead to substantial benefits at the European specific integration into the market of these One of the most important tasks of WG R & D in 2009 was transmission level through demand-response con- renewable energy sources the preparation of the consolidated ENTSO-E R & D Plan, tributions to intraday and balancing markets. which puts forward research and development projects that −− Dedicated planning tools that take into are to be executed in the coming years . WG R & D has, within ENTSO-E, important coordination tasks in all fields of Given the enormous investments in transmission account active demand research and development : it coordinates ENTSO-E’s R & D and generation infrastructure needed over the com- portfolio across all business areas of ENTSO-E members, ing decade to replace aging assets and to integrate coordinates the association’s R & D activities with corresponding R & D programs from the European Commission renewable resources and markets, innovation and The preparation of the first ENTSO-E R & D Plan and stakeholders and manages a network of TSO experts R & D should contribute to choosing the most effi- was based on existing materials available from the in the area of R & D . cient investments. Progress in information commu- TSOs involved in EEGI, which was extended by a nication technology ( ICT ) will keep opening up joint effort of all TSOs involved in WG R & D and all new, cost-effective opportunities for improved mar- three ENTSO-E committees. The first draft of ket integration while maintaining reliability. the ENTSO-E R & D Plan was approved by the The future-oriented concepts of smart grids and of ENTSO-E Assembly on 16 December 2009. Al- a potential European supergrid exemplify this. though Regulation ( EC ) 714 / 2009, Art. 10 does not R & D coordinated by TSOs and by ENTSO-E should require ENTSO-E to conduct a formal consultation contribute to a realistic discussion of these con- on the R & D Plan, ENTSO-E held a public consulta- cepts in preparation of well-founded and well- tion on the document in the first Quarter of 2010, tested implementations. with the expectation of receiving highly valuable stakeholder input to the document. The final version of the first edition of the ENTSO-E R& D Plan which reflects input from the public consultation was published by ENTSO-E on 31 March 2010.

32 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 33 Associations need to be well connected to policy This final chapter will provide an overview of the Connected makers and ENTSO-E has built on the contacts of ETSO first steps taken in 2009, constituting the building blocks on which ENTSO-E will construct its contri- and UCTE in Brussels and is now well-known within the bution to a fully developed Internal Energy Market. energy policy community in Europe . But of course con- Transparency is in this context as important as market coupling initiatives and a well-regulated nections take on an even more important meaning for inter-TSO compensation mechanism, to mention network operators – interconnections are the very just a few of the most important aspects. essence of any network . In the context of the electricity transmission system, a sufficiently connected network requires very close collaboration between TSOs and is The Target Market a pre-requisite for effective cross-border trading and European energy market integration . Thus, the network Model for Europe 2015 development shown in the TYNDP is not only important One central element on the way towards a fully de- for the integration of renewable energy and Europe’s veloped Internal Electricity Market is the definition climate change goals, but also for Europe’s customers of a target market model for Europe in 2015. The truly integrated internal electricity market will ben- to benefit more and more from a well-functioning inter- efit consumers by providing competitive prices and nal market in electricity . sustainable as well as secure supply through efficient utilization of the power system. The target model establishes the essential elements for inter- regional and EU-wide coordinated congestion management. It represents a medium-term view, for progressive implementation until 2015. The interrelationship between ENTSO-E’s three core missions will, once again, also become visible Therefore, work towards a target market model for in this chapter. A fully developed IEM is a key means Europe has been one of the highest priorities of to reaching the energy policy goals of security of ENTSO-E’s Market Committee in 2009 and the supply, sustainability and, eventually, competitive Committee’s most important preparatory work for end-user prices. The reason is that the Internal En- network codes concerns corresponding designs for ergy Market generally stimulates efficiency in both market integration. This work was brought into a the utilization and development of the power sys- substantially new phase in the Electricity Regulato- tem, which delivers significant benefits of trade and ry Forum 1) ( or so-called Florence Forum ), in De- competitive markets for customers. cember 2009. The discussions focused in particular on how the emerging target model agreed by the In 2009, ENTSO-E together with regulators, the Project Coordination Group ( PCG ) could be further Commission and stakeholders contributed strong- developed and eventually implemented in future. ly to the development of the first clear target model for European wholesale market integration. ENTSO-E is committed to helping implement this target model, ultimately through network codes, based on a robust road map for integrating physical and financial markets in all time-frames, including the market impact of growing contributions from renewable energy. The TSOs’ contributions are crucial so that every single European customer can stay connected to all of Europe’s electricity generators and suppliers.

1 ) The Florence Forum was set up in 1998 to discuss the creation of a true internal electricity market. It addresses cross-border trade of electricity, in particular the tarification of cross-border electricity exchanges and the management of scarce inter connection capacity. Participants include national regulatory authorities, member state governments, the European Commission, transmission system operators, electricity traders, consumers, network users and power exchanges. Since 1998, the Forum has met once or twice a year, formerly in Florence and now in Rome.

34 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 35 The Forum confirmed a tentative roadmap for the Market Coupling establishment of a European target model for the electricity market and emphasized the need to con- Local Order Local Order between Central West Member X Member Y tinue the work in the form of concrete implementa- Book Area A Book Area B tion projects. Europe and the Nordic Following the Forum’s conclusions, the work will be Region continued through an Ad-hoc Advisory Group Shared Order Book function ( AHAG ) of all stakeholders, which will assist ERGEG in overseeing the work and solving issues In order to support and accelerate the development which might hinder progress. The AHAG is chaired of the internal electricity market, the thirteen trans- by ERGEG and acts as a “steering forum” for mission system operators ( TSOs ) of the Central Capatity Management the three market integration projects. Besides West Europe and Nordic Regions agreed in October ENTSO-E, it involves Eurelectric, EuroPEX, EFET, 2009 on a joint declaration representing their com- IFIEC, CEFIC, as well as the European Commis- mon view of the main market coupling principles sion. for day-ahead markets. TSO A TSO B In total, three specific market integration projects Market coupling is a service in the public interest. were launched of which ENTSO-E is chairing two Its main objectives is to maximize the total social ( one project to develop a European capacity calcu- welfare from the use of cross-border transmission lation concept based on a common grid model and capacity; the non-discriminatory and transparent Figure 7 : flow-based calculation, where clear benefits can be allocation of capacity and efficient price signals. Or, The target model for Inter-Regional Intraday capacity allocation: the capacity management module will demonstrated; and one project to develop the tar- to put it differently, market coupling is a method interact with the shared order function so that only feasible bids / offers are visible in each market area. get model for intraday trade as well as a means for whereby TSOs and power exchanges cooperate in its implementation where appropriate ). The Euro- matching day-ahead energy trades and cross- pean Commission, on the other hand, chairs one border transmission capacities in one integrated project that will design a governance framework for process. This ensures an efficient use of intercon- day-ahead market coupling followed by the imple- nection capacity and gives the right price signals mentation of a common European day-ahead and flows across the coupled area. Market Committee – market coupling by 2015, including the use of price- Market Committee – Regional Groups Working Group Market Integration ( WG MI ) coupling methodology. The thirteen TSOs involved are Amprion, 50 Hertz Within ENTSO-E’s Market Committee, four regional groups The main objective of Working Group Market Integration is Transmission, transpower, EnBW TNG ( Germany ), have been established ( Baltic Sea, North-West, South-East to work toward the establishment of an integrated and and South-West ) . seamless European electricity market . More specifically, the Beyond developing the target model & road map Creos ( Luxembourg ), Elia ( Belgium ), Energinet.dk The Market Committee’s Regional Groups work on regional WG works on the convergence and integration of Europe’s presented by the PCG, the main objective of the ( Denmark ), Fingrid ( Finland ), RTE ( France ), initiatives with a view to improving the functioning of elec- physical and financial markets in forward, day-ahead and three market integration projects is to provide in- Statnett ( Norway ), Svenska Kraftnät ( Sweden ), tricity markets with a regional focus between several coun- intra-day timeframes . It contributes to improving coordinat- tries and with the eventual objective of creating an internal ed and efficient congestion management methodologies in put to ERGEG’s work on framework guidelines on TenneT ( The Netherlands ) and National Grid ( UK ). EU electricity market . capacity calculation, allocation and transmission capacity capacity allocation and congestion management, Together with power exchanges, they have been usage . Moreover, it develops appropriate governance as appropriate, and pave the way for code-making pursuing a number of local market coupling projects Regional initiatives, such as market coupling or the harmoni- frameworks to support market integration activities and, zation of markets at a regional level are conducted while in close coordination with WG Ancillary Services, it works and implementation. All three projects were put in in the Central West Europe and Nordic regions : taking into account overall consistency with the rest of on market integration issues associated with consistent place in early 2010, starting with the approval of TLC ( to be replaced by CWE ), EMCC and NorNed. Europe and with emerging European target models . imbalance settlement mechanisms . their terms of reference. Work on all three projects These initiatives are temporary market harmoniza- Further examples of initiatives and activities include, among will continue throughout 2010, making progress to- tion steps towards a more European solution. others, the development of common congestion manage- Market Committee – wards the target market model for Europe 2015. ment and capacity allocation methods, the coordination of Working Group Ancillary Services ( WG AS ) reserves and balancing power markets between participat- As part of the initiative, the parties agreed to pursue ing countries, and the coordination of ancillary services and Working Group Ancillary Services works on harmonized, balancing markets . efficient and market-based procurement schemes for a single price coupling mechanism across their ancillary services (such as demand-side management) area, creating one market region. Such a mecha- as well as on the associated regulatory framework that con- nism is considered to be the most efficient, objec- tributes best to the establishment of a seamless European electricity market . tive, non-discriminatory and transparent solution for allocating cross-border capacity, thus enhanc- The WG’s key objectives are : ing social welfare. One key principle of the coopera- −− Separated and clear-cut roles for TSOs and providers of ancillary services as an important prerequisite for tion is that TSOs will make the day-ahead capacity effective unbundling . available to power exchanges, which, in turn, will −− Efficient markets, meaning harmonized rules to facilitate provide the required data on markets ( market data, market processes and to eliminate entry barriers of market rules, matching algorithms, etc ). A criterion national markets for potential providers of ancillary for the price coupling solution is that it is extenda- services . ble to other regions. −− Cross-border markets for ancillary services and balancing where possible and reasonable improvement in social welfare while observing capacity constraints . The TSOs are already in dialogue with all relevant −− Enhanced TSO -TSO cooperation in the procurement stakeholders, including power exchanges, market and dispatch of ancillary services . parties, national regulatory authorities, and the European Commission.

36 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 37 The Last Voluntary Transparency Inter-TSO Compensation Agreement Transparency is essential in order to achieve well-functioning, efficient, liquid and competitive In December 2009, European TSOs reached a new The ENTSO-E agreement is based on the EC pro- wholesale markets and thus a fully developed IEM. voluntary agreement on inter-TSO compensation posal for binding guidelines on ITC, which had been Additional information is requested by market ac- for transits ( ITC ). This continued a long successful submitted for approval by EU member states under tors to follow and understand the electricity market history of such voluntary agreements in ETSO since Comitology. The agreement foresees two compo- and manage their business risks properly. Further- the first IEM Directive, contributing significantly to nents to be compensated : transmission losses and more, transparency is the foundation for creating efficient and easy-to-implement cross-border trad- infrastructure costs. a level playing field, thus increasing competition ing. The Agreement, which was signed by 39 TSOs between different market players. from 33 countries, was an interim solution until the In line with previous practice, transmission losses official EC guideline for ITC compensation enters are compensated based on the WWT ( With and European TSOs have already contributed and will in force, later in 2010. Without Transit ) model. This means that losses are continue to enhance transparency provisions calculated on the transmission grid of each TSO in through data and publications made available on a load flow situation with transits and in a load flow their own websites. But they make their most im- situation without transits. The price used to calcu- portant contribution to transparency through late the value of transit losses shall be equal to the www.entsoe.net the European transparency plat- price used to compensate losses by national tariffs. form, offering the best information available today, All ITC parties will therefore receive full compen including all member TSOs of ENTSO-E and thus sation for losses in their system attributable to surpassing the scope of the European Commission. Market Committee – transits. Market Committee – Working Group Economic Framework ( WG EF ) Transparency has improved significantly over the Working Group Market Information and Transparency Working Group Economic Framework provides the ENTSO-E A framework fund will be used to compensate past few years ( e. g. thanks to European legislation WG MIT works towards achieving the highest possible level Market Committee with appropriate tools to promote a con- of transparency of market information . It develops, supports sistent and sound economic framework for TSOs . Besides transmission system operators for the costs of mak- and voluntary initiatives by market participants ) . and promotes the www .entsoe .net ( formerly ETSOVista ) the inter-TSO compensation ( ITC ) mechanism, it focuses on ing infrastructure available to host transit flows of However the need for further legislation and initia- platform as a compliance tool supporting the work and har- the regulatory treatment of revenues and costs, pricing electricity. In line with the EC proposal, the value of tives to improve transparency on a European scale monization of the European Electronic Data Interchange . structures and methods of sharing joint revenues and costs . The working group analyses transparency requirements and The Working Group is also in charge of producing regular the framework fund has been set at 100 million has been widely recognized. Following a request by develops the ENTSO-E transparency policy, which defines overviews on transmission tariffs, congestion rents, ITC and Euros per year. the Commission, ERGEG is currently working on a what data and information need to be published by TSOs . other relevant financial data . draft guideline on fundamental data transparency, It develops and guides the work of www .entsoe .net, with Within the context of the Market Committee’s long-term ob- Similar to previous ITC agreements, and to draft EC which will eventually become legally binding by the aim of turning it into a compliance tool to : ( a ) ensure jective of developing an integrated and seamless European guidelines, the agreement foresees that perimeter passing through Comitology. A final version of the full participation from the TSOs ; ( b ) achieve a satisfactory electricity market, WG EF aims, among others, to : quality of data; and ( c ) ease access of information to flows ( i. e. third country imports and exports ) shall draft guideline is expected by the end of 2010. market participants . – promote fair treatment of TSO revenues /costs and effective incentive schemes for TSOs; contribute to the framework fund and WWT calcu- ENTSO-E’s role will be to closely cooperate with In close cooperation with WG EDI ( see below ), it harmoniz- lations. The perimeter fee amounts to 0.7 MWh for ERGEG throughout the drafting process of the es electronic data interchanges by developing standards for – promote efficient and consistent transmission pricing information exchange and supports the implementation of structures which provide market participants with effec- 2010. guideline. standardized EDI documents . tive signals; In the European Commission’s Electricity Cross- In early 2010, ENTSO-E has published its transpar- Market Committee – Border Committee meeting in March 2010, the pro- ency policy, summarizing the positions and main Working Group Electronic Data Interchange ( WG EDI ) posed guidelines on inter-TSO compensation and initiatives related to transparency of ENTSO-E. The Working Group EDI contributes to the establishment of an on transmission charging were eventually adopted. transparency policy is subject to a revision proce- effective European Electricity Market ( EEM ) by actively sup- In order to address accurately the distinct situation dure every two years or whenever necessary ( e. g. porting the harmonization and implementation of standardized Electronic Data Interchange ( EDI ) between TSOs and before and after March 2011 ( when ACER and where there are changes in legislation, such as the market participants . Standardized EDI solutions aim to low- ENTSO-E are officially put in place according to the future transparency guidelines ). er the costs for all parties and facilitate market integration . Third Package’s schedule ) Regulations ( EC ) WG EDI works in close cooperation with other working 1228 / 2003 and ( EC ) 714 / 2009 will be amended cor- As part of this policy, any infrastructure connected groups to develop the electronic data interchange required respondingly and changes will come into force in to the European HV grid which may have an impact for market business processes . Its long-term objective is : 2010 and on 3 March 2011, respectively. The techni- on the IEM is believed to be subject to transparency – to develop standards for information exchange in co-operation with other working groups; cal provisions in both regulations are very similar. ( e. g. interconnectors, generation units, significant Thus, with this decision, further voluntary ITC consumption units, etc ) . The same is also true for – to support the implementation of standardized EDI documents wherever these are needed for the European agreements will no longer be required. ENTSO-E external factors such as weather forecasts, shortag- Electricity Market ; is pleased that based on the successful ITC history es in primary fuels or general economical / political – to cooperate with other standardization bodies such as of ETSO and ENTSO-E, these complex and often conditions. Although ENTSO-E acknowledges the the International Electrotechnical Commission ( IEC ) in controversial rules are now clarified in European need for enhanced transparency in all these areas, order to encourage IT vendors to develop ENTSO-E standards into commercial products which will reduce legislation. the principal focus of ENTSO-E will be information IT costs for TSOs and market participants in the future . on fundamental data pertaining to TSOs and data from other sources related to TSO core business ( e. g. auction data, balancing data, generation data ) . In this context, fundamental data are data describing physical conditions that influence the electricity market directly or indirectly. In parallel to this

38 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 39 Interconnection Studies

ENTSO-E’s “being connected” does not only refer to In 2009 significant progress was made towards the the market but also to interconnections in general foreseen tests and trial parallel operation. An and also to possible new interconnections with “Agreement Concerning the Procedure Steps and non-member TSOs. Requests for new interconnec- Measures to Achieve the Interconnection of the tions or system couplings may grow out of EU Turkish Power System with the Continental Europe policy, or come from external countries – they are Synchronous Area of ENTSO-E” was signed in Sofia usually motivated by the same reserve sharing, reli- on 18 December 2009. The ENTSO-E Project Group ability and market benefits that have led to Europe’s on the synchronous interconnection of the Turkish existing extensive interconnections. electrical system concluded that the Turkish power system has completed all necessary measures in or- Beyond the ENTSO-E area, interconnections der to start so-called “island tests”, i. e. closely moni- already exist to the East – from Estonia, Latvia and tored periods of operation of the Turkish system Lithuania to Russia and Belorussia via meshed al- without interconnection to other countries. Two ternating current (AC ) network connections, and such island tests, under low and high load condi- from Finland and Norway to Russia via direct cur- tions, each of two weeks duration, were successful- rent ( DC ) connections – and to the South – from ly carried out in the first quarter of 2010. transparency policy on fundamental data, the Com- ENTSO-E.NET – the Transparency Spain to Morocco via two AC subsea cables, with mission is currently also preparing a second legal Platform Morocco also being connected synchronously to Pending the analysis of these tests and provided document on transaction data transparency. Algeria and Tunisia. Further studies and tests have there is a positive outcome, a one-year trial involving ENTSO-E will provide market actors, the European been on-going or in preparatory stages for a possi- the parallel operation of TEIAS with the ENTSO-E’s Commission, regulators and the public in general ble interconnection between Tunisia and Libya / Regional Group Continental Europe interconnect- Main Transparency Principles with fundamental market data at a pan-European Egypt /Jordan /Syria, and also for a possible inter- ed network could begin in 2010. level through the transparency platform www.ent- connection of Ukraine and Moldova to Continental Individual TSOs and ENTSO-E are already publish- soe.net. This platform facilitates comparisons of Europe synchronous area. The most advanced stud- ENTSO-E’s regional groups under the System ing a huge variety of information items. As market data, understanding of price formation and risk ies and tests concern a synchronous interconnec- Operations Committee and System Development participants request additional information and co- analysis. It will be developed into a complete trans- tion between Continental Europe and Turkey. In Committee have both been deeply committed to herent data describing the functioning of the IEM, parency compliance platform where as a minimum March 2000, the Turkish system operator TEIAS supporting the activities of the Project Group. increased ex ante and ex post information and har- all data required by legislation can be found. made an application to UCTE for synchronous in- monization of definitions and methods are needed. ENTSO-E will implement common definitions and terconnection to Continental Europe and for mem- Also, in the future, such services delivered by standards for the publication of market relevant in- bership. After consideration by the UCTE Steering ENTSO-E will mainly be focused on fundamental formation on www.entsoe.net and in addition each Committee, a Project Group was established and market data. An extension to other categories is not TSO will publish any individual information on its scheduled the activities for carrying forward the ENTSO-E’s Network Map intended although the scope of data publication own website needed to meet individual require- connection in three phases : In January 2010, ENTSO-E published its first grid map, may change. ments unique for its area. which is based on the previous UCTE map of the interconnected network . 1. Preparatory Phase – complementary static ENTSO-E aims to become the front runner for The publications on www.entsoe.net will be- ex and stability studies and investigations on the The grid map is a comprehensive illustration of the inter connected networks . It shows power plants ( distinguishing transparency on a regional and European level. panded with additional data according to existing Turkish power system in accordance with the between hydro, wind and thermal ), stations, existing high- Therefore, ENTSO-E is committed to providing and future legal and regulatory transparency re- standards defined by the UCTE Operation voltage lines and lines under construction for voltages of market participants with simultaneous, homoge- quirements. Also, some additional publications can Handbook. This phase was finished successfully 220 kV and higher, as well as high-voltage lines of 110 kV to 150 kV if these lines cross national borders . nous and reliable data of appropriate quality, with- be made. Examples of such future publications are : in April 2007. The ENTSO-E map is an indispensable tool in understand- out discrimination. ing the present state of the grid as well as the need for −− Exports and imports out of and into Europe 2. Monitoring of the implementation of upgrading future grid investment projects in order to achieve European ENTSO-E will support the improvement of market measures – in order to meet all the require- energy policy goals . The map has been upgraded with the − latest data, while the Russian grid has been entirely up transparency at a regional and European level by − Aggregated data on renewable generation, ments of the complementary studies, TEIAS dated and Cyprus’ network has been added . The grid map periodic consultations with stakeholders on addi- wind solar power, etc. decided to launch, in July 2007, a second is available in various sizes and can be ordered from the tional information which can be made available, project : “Rehabilitation of the Frequency ENTSO-E website www .entsoe .eu . thus surpassing minimum requirements in the leg- Control Performance of the Turkish Power islation. Moreover, it will operate, maintain and, Today www.entsoe.net is prepared to publish data System for Synchronous Operation with UCTE” where appropriate, enhance its central data plat- at a European level corresponding approximately with the task of providing consultancy and form, www.entsoe.net, which will display relevant, to congestion management guidelines 1228 /2003. elaborating recommendations. coherent, well-defined and structured data for all The transparency platform can already be accessed ENTSO-E regional electricity markets in an easily via the Internet at www.entsoe.net . Further infor- 3. Tests in island mode and trial parallel opera accessible manner. The data will be free of charge mation on ENTSO-E’s transparency policy and any tion – before its synchronous interconnection, and of the highest standard available at the time of updates to this policy can already be found on the performance of the Turkish power system publication. ENTSO-E’s website ( www.entsoe.eu ) . must be evaluated in a trial phase comprising tests in isolated mode and interconnected mode under real operating conditions.

40 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 41 The first year of operations having concluded, ENTSO-E’s Outlook Work Program for 2009 – 2010 urgently focuses on a number of important new tasks assigned to the TSOs by the Third Legislative Energy Package . Among these, the pilot Ten-Year Network Development Plan, the R & D Plan, and, not least, the pilot network code stand out .

The need to develop network codes in 12 different Besides the pilot network code on conditions for topic areas and the entirely new, complex process grid connection, there are further important net- for their development, make the drafting of a pilot work codes to be drafted in the areas of market in- network code one of the highest priority projects, tegration and system operations. Since the develop- not least in order to try out the code drafting proc- ment process of network codes may take three ess together with the European Commission, years and ACER, which plays a significant role in ERGEG and stakeholders. Grid connection of wind that process, cannot exercise its tasks before March generation has been the topic of choice for the pilot 2011, the regional groups under the System Opera- code, thereby responding to the urgency of provid- tions Committee will also continue the revision of ing a harmonized framework for the massive pro- existing rules and the monitoring of compliance jected investments in this sector in attainment of and adequate implementation of these policies by EU policy goals. all TSOs.

The pilot network code on grid connection with Furthermore, in 2009, important steps were also special focus on wind generation has witnessed sig- made towards a target market model with the nificant progress in its start-up phase in 2009. And establishment of the Ad-hoc Advisory Group of yet, a lot of important work on the code is still to be stakeholders (AHAG ). As agreed between the Euro- done throughout 2010 and until March 2011, when pean Commission and ERGEG, AHAG provides a ACER will begin work on its tasks. Early consulta- platform for advice to European energy regulators tions with the Commission and ERGEG as well as in the development of their Framework Guideline stakeholders are essential for a robust code and are on Capacity Allocation and Congestion Manage- foreseen to constitute an important part of the ment. Based on the work accomplished in the three work on the code in 2010. In this context, the market integration projects on capacity calcula- progress of work on the code is tightly bound to the tion ; intra-day trade- chaired by ENTSO-E – and on progress of ERGEG on the corresponding frame- the governance framework for day-ahead market work guideline, respecting the order of actions stip- coupling, ENTSO-E will already be starting its code ulated in the Third Package, with the objective of drafting in this area towards the end of 2010. releasing the pilot code for public consultation at the end of 2010.

42 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 43 As data transparency is a central issue in the com- The next release of the TYNDP is foreseen for 2012, plex electricity market, and essential to achieving a adding three significant aspects to the second edi- well-functioning, efficient and competitive whole- tion : sale market, ENTSO-E is publishing its first transparency policy in spring 2010. Throughout 2010, 1. updated bottom-up scenarios as well as ENTSO-E will also be closely cooperating with long-run top-down scenarios, involving ACER, ERGEG on the drafting of a guideline on fundamen- stakeholders as well as policy decision-makers, tal data transparency, which is expected to be final- ized by the end of 2010 and to go directly into the 2. regional market studies and Comitology process before it becomes binding in the first half of 2011. 3. an ENTSO-E-wide common framework for regional network studies, based on pan-European In the first half of 2010, ENTSO-E’s pilot Ten-Year scenarios and integrated medium- and long- Network Development Plan was released for public term network models. consultation for a period of six weeks. Once the feedback is collected, the document will be updated with the newly gained insights and presented to Beyond this project work and the various tools giv- the Florence Forum in June 2010. At the same time, en to ENTSO-E by the Third Package, ENTSO-E will the pilot TYNDP can become an important input also in future be heavily dependent on the expertise for the National Renewable Energy Action Plans and engagement of its stakeholders. In this context, ( NREAPs ), which are to be delivered by EU Member ENTSO-E’s stakeholder relations and consultation States by the end of June 2010. process will be reviewed regularly. ENTSO-E’s consultation process, in particular, must promote Since additional transmission infrastructure is of- openness and trust among stakeholders, encourage ten crucial to integrate additional renewable ener- their active engagement, and at all times it should gy sources into the system, it is expected that the reflect the theme “we say what we do, and we do NREAPs will make use of the TYNDP investment what we say”. projects to assess the measures that are required to attain the national targets related to the EU 2020 In addition to the high priority work presented in goals. Furthermore, the wealth of information with- this activity report, ENTSO-E’s committees and in the TYNDP – an inside look at the expertise and groups carry out many other activities, largely in know-how of TSOs – can be used as a methodolog- continuation of the work of the prior associations. ical and factual basis for policy-making on trans- Examples are statistical and technical data, net- mission infrastructure. work maps, electronic data interchange ( EDI ) standards, critical systems protection, asset implementation and management, requests for extensions of the continental Europe synchronous area, and legal and regulatory issues.

Thus clearly, in 2010 and beyond, the broader framework of ENTSO-E’s activities will continue to be constituted by the Third Package. Regulation ( EC ) 714 / 2009 sets the goals and the direction of ENTSO-E’s work. Optimal management of the electricity transmission network, providing a reliable electricity supply, enhancing the integration of the European electricity market and contributing to a sustainable energy environment will remain at the core of ENTSO-E’s interest.

To put it succinctly, ENTSO-E will also in future ensure that the European transmission system remains “Reliable, Sustainable, Connected”.

44 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 45 Appendices ENTSO-E in Brief

Who is ENTSO-E Our Activities

−− ENTSO-E, the European Network of At ENTSO-E, the TSOs cooperate regionally and on Transmission System Operators ( TSOs ), is the a European scale. ENTSO-E’s activities are organ- single TSO platform in Europe, speaking with ized into three committees : System Development, one voice on behalf of its 42 members. System Operations and Market, and are supported −− ENTSO-E was established on 19 December by a Legal & Regulatory Group. The activities are 2008 and became fully operational as of 1 July focused on : 2009 – ahead of the official schedule set by the −− reliable operation Third Energy Package. −− optimal management of the −− ENTSO-E replaces its six predecessor associa- transmission system tions ATSOI, BALTSO, ETSO, Nordel, UCTE −− sound technical evolution of the European and UKTSOA and continues and consolidates electricity grid their work. −− security of supply −− ENTSO-E’s legal raison d’être is Regulation ( EC ) −− meeting the needs of the Internal Energy 714 / 2009 on the conditions for access to the net- Market and facilitating market integration work for cross-border exchanges in electricity. −− network development plans The Regulation is part of the Third Energy Pack- −− network codes age on the Internal Energy Market, which came −− promotion of relevant R & D into effect on 3 September 2009. −− consultation with stakeholders and development of positions on energy policy issues −− promotion of the public acceptability of Our Mission transmission infrastructure

ENTSO-E’s mission is to promote important aspects of energy policy in the face of significant ENTSO-E in Numbers challenges : −− Security – it pursues coordinated, reliable and −− 42 Transmission System Operators ( TSOs ) secure operation of the electricity transmission −− 34 European countries network. −− 400 TWh of electricity exchanges between −− Adequacy – it promotes the development of member TSOs the interconnected European grid and invest- −− 525 million customers served by the ments for a sustainable power system. represented power systems −− Market – it offers a platform for the market by −− 828 GW of installed generation capacity proposing and implementing standardized −− 3400 TWh of electricity consumption market integration and transparency frame- −− 305,000 km of transmission lines managed works that facilitate competitive and truly by the TSOs integrated continental-scale wholesale and retail markets.

Our Vision

ENTSO-E’s vision is to become and remain the focal point for all European, technical, market and policy issues related to TSOs, interfacing with power system users, EU institutions, regulators and national governments. ENTSO-E’s work products contribute to security of supply, a seamless, pan-European electricity market, secure integration of renewable resources and a reliable future-oriented grid, adequate for energy policy goals.

46 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 47 The ENTSO-E Synchronous Areas ENTSO-E Members

Country Company Abbreviation Country Company Abbreviation

AT | Austria TIWAG Netz AG TIWAG Netz HR | Croatia HEP-Operator prijenosnog sustava HEP-OPS d. o. o. Verbund – Austrian Power Grid VERBUND APG IS VKW-Netz AG VKW-Netz HU | Hungary MAVIR Magyar Villamosenergia-ipari MAVIR ZRt. Átviteli Rendszerirányító Zártköru˝en BA | Bosnia and Nezavisni operator sustava ISO BiH Mu˝ködo˝ Részvénytársaság Herzegovina u Bosni i Hercegovini IE | Ireland EirGrid plc EirGrid BE | Belgium Elia System Operator SA Elia IS | Iceland Landsnet hf Landsnet BG | Bulgaria Electroenergien Sistemen Operator SA ESO NO SE FI IT | Italy Terna – Rete Elettrica Nazionale SpA Terna CH | Switzerland swissgrid ag swissgrid LT | Lithuania LITGRID UAB LITGRID EE CY | Cyprus Cyprus Transmission System Operator Cyprus TSO LU | Luxembourg Creos Luxembourg S. A. Creos LV RU² CZ | Czech Republic CEPS ˇ a. s. CEPS ˇ Luxembourg DK IE LT DE | Germany 50Hertz Transmission GmbH 50Hertz LV | Latvia AS Augstsprieguma tïkls Augstsprieguma RU² tïkls GB Amprion GmbH Amprion BY² EnBW Transportnetze AG EnBW TNG NL ME | Montenegro AD Prenos AD Prenos PL transpower stromübertragungs gmbh transpower BE DE MK | FYROM Macedonian Transmission MEPSO LU DK | Denmark Energinet.dk Energinet.dk System Operator AD CZ SK UA-W¹ UA² EE | Estonia Elering OÜ Elering OÜ NL | Netherlands TenneT TSO B. V. TenneT TSO MD² FR CH AT HU ES | Spain Red Eléctrica de España S. A. REE NO | Norway Statnett SF Statnett SI RO HR FI | Finland Fingrid OyJ Fingrid PL | Poland PSE Operator S. A. PSE Operator BA RS FR | France Réseau de transport d’électricité RTE PT | Portugal Rede Eléctrica Nacional, S. A. REN IT PT ES ME BG GB | United Kingdom National Grid Electricity Transmission National Grid RO | Romania C. N. Transelectrica S. A. Transelectrica MK plc AL¹ System Operation Northern Ireland Ltd SONI RS | Serbia JP Elektromreža Srbije EMS GR TR³ Scottish and Southern Energy plc SSE SE | Sweden Affärsverket Svenska Kraftnät Svenska Kraftnät Scottish Power Transmission plc SPTransmission

SI | Slovenia Elektro Slovenija d. o. o. ELES GR | Greece Hellenic Transmission System Operator HTSO CY MA¹ DZ¹ TN¹ S. A. SK | Slovak Republic Slovenska elektrizacna prenosova SEPS sustava, a. s. Continental European synchronous area British synchronous area ¹ synchronous with the continental European system ² synchronous with the Baltic system Baltic synchronous area Irish synchronous area ³ from September 2010 planned trial parallel inter- Nordic synchronous area Isolated systems of Cyprus and Iceland connection with the continental European system

48 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 49 ENTSO-E Staff * ENTSO-E Work Program 2009 / 2010 Indicative Schedule

The following schedule tables set carefully chosen, but still ambitious goals : However, these target dates may not be detrimental to the primary transparency goals to be achieved via a close consultation of stakeholders following the requirements especially of Art. 10 of the Regulation 714 / 2009.

Upon

Activity Goal Work start Deliverable & completion Committee / Interaction with Consultation with ( start Secretary General ( quarter / year ) date ( end of quarter / year ) Group in charge other groups quarter / year ) Konstantin Staschus Connection of Development of the Q 3 / 2 0 0 9 Some draft pilot codechap- System Develop- System Operations Com- All stakeholders ; in partic- generation pilot code for grid ters ( Q2 / 2010 ) ; input to ment Committee mittee ( SOC ), Market ular ERGEG regarding their connection with framework guideline con- ( SDC ) Committee ( MC ), Legal & pilot framework guideline special focus on sultation ( Q3 / 2010 ) ; pilot Regulatory Group ( LRG ) on connection ( Q2 / 2010 – Executive Assistant Communication Advisor wind generation code proposal ( Q1 / 2011 ) Q 3 / 2 0 1 0 ) Carine Lemaire Michael Mieszczanski Other Development of re- Q 2 / 2 0 1 0 Q3 / 2011 SDC SOC, MC, LRG All stakeholders ( 2010 ) generation maining chapters of connection generation connec- Finance Manager Office Support Assistant specificities tion network code Arnaud Scaramanga Jaqueline Wauters Transparency −−Development of Q3 / 2009 1. position paper / transpar- MC Data Expert Group, LRG All stakeholders transparency poli- ency policy ( Q1 / 2010 ) ( on position paper : cy as input to EC 2. update of entsoe.net beginning early in 2010 ) Guideline platform ( Q2 / 2010 ) −−entsoe.net Q 3 / 2 0 0 9 3. continuous input to Senior Advisor Senior Advisor Senior Advisor IT Manager & ( ETSOVista ) ERGEG and EC for Guide- System Developement System Operations Market Transparency Advisor development line ( until Q4 / 2010 ) Dimitrios Chaniotis Jakub Fijalkowski Cecilia Hellner Karl Schobel

Operational Scoping work on Q1 / 2010 1. Continuous input to SOC As needed All stakeholders ; in partic- network codes operational frame- ERGEG framework ular ERGEG, EURELECTRIC Coordinator Coordinator Coordinator IT Coordinator work guideline and guideline ( until ( beginning in Q1 / 2010 ; in- network codes Q 3 / 2 0 1 0 ) tense on the different top- Thanh-Thanh Le Thi Kamila Pujan Paola Testini Philippe Lagarrigue ics during different quar- Development of 2. Terminology ( Q2 / 2010 ) ters in 2010 ) operational network 3. Comparison analyses on codes : operational rules in syn- Modeling Advisor Regional Group Advisor Market Advisor Data Advisor 1. load flow Q4 / 2009 chronous areas management ( Q 2 / 2 0 1 0 ) Chavdar Ivanov Iwona Biernacka Antonio López-Nicolás Baza David Chury 2. use of balancing Q4 / 2009 4. Network codes tools and of ancil- ( Q 4 / 2 0 11 ) lary services Information Coordinator Data Planning Advisor Operations Code Advisor General Counsel 3. standardized Q4 / 2009 ( DTP ) coordination Irina Mihaela Minciuna Ramunas Bikulcius Florence Melchior Vacant methodology / procedures

Compliance Monitoring Market Network Information Coordinator Market Design and imple- Q 1 / 2 0 1 0 Ultimate deliverables are ERGEG’s Ad-Hoc Advisory Planning Methods Advisor Advisor Code Advisor ( User Administration ) integration mentation of market network codes whose Group involving all stake- Francisco Reis issues integration through number and scopes depend holders ( through at least Lasse Konttinen Vacant Vacant contributions to Ad- on the framework guide- Q 1 / 2 0 1 0 ) Hoc Advisory Group line, the implementation ERGEG during develop- and 3 implementation projects and EC priorities : ment of ( input to ) Network Development Transparency Product projects Operations Code Advisor Intraday code MC SOC, LRG framework guideline Advisor Management Advisor Code development After Q3 / 2010 ( Q2 – 3 / 2010 ) Vacant Day-ahead code MC SOC, LRG Mihai Paun Vacant All stakeholders for code Capacity calculation code MC intensely LRG development ( starting coordinated with Completion dates depend Q 4 / 2 0 1 0 ) SOC on priorities and availability of experts, possibly as early as Q4 / 2011

Network Preparation of a pi- Q 3 / 2 0 0 9 Report ( Q2 / 2010 ) SDC All SDC WGs and RGs ; All stakeholders ; development lot TYNDP ( the first EWIS project, LRG in particular ERGEG, and planning draft early 2010 ) EURELECTRIC, EFET, * As of quarter 2 / 2010 EWEA ( Q3 – 4 / 2009 ), public consultation (Q1 – 2 / 2010)

50 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 51 Upon Abbreviations Activity Goal Work start Deliverable & completion Committee / Interaction with Consultation with ( quarter / year ) date ( end of quarter / year ) Group in charge other groups ( start quarter / year ) AC Alternating Current ACER Agency for the Cooperation of Energy Regulators R & D Preparation of a con- Q 3 / 2 0 0 9 R & D plan ( Q4 / 2009 ) SDC lead, with SOC, MC, LRG EC, ERGEG, DSOs solidated TSO R & D MC and SOC ( start Q1 / 2010 ) AHAG Ad-hoc Advisory Group Plan, contributions to ARM Adequacy Reference Margin EC’s Strategic Energy CEFIC European Chemical Industry Council Technologies Plan CMP Compliance Monitoring Program COR Compliance Oversight Report Operational Preparations for Q 4 / 2 0 0 9 1. Operational experience SOC – None issues common operational exchange forum DC Direct Current tools ; coordination of ( Q 1 / 2 0 1 0 ) DSO Distribution System Operator regions for operation- 2. Congestion forecasting EC European Commission al issues improvements EEGI European Electricity Grid Initiative ( Q 4 / 2 0 1 0 ) EEM European Electricity Market 3. Actions aiming at harmo- EFET European Federation of Energy Traders nization of regional Net- work Codes ( Q4 / 2010 ) ENTSO-E European Network of Transmission System Operators for Electricity EP European Parliament Network Development of From Position papers ( from SDC WG R & D, MC, EC, EP, ERGEG ( Q3 / 2009 ) ERGEG European Regulator’s Group for Electricity & Gas development position papers on Q3 / 2009 to Q1 / 2010 to Q4 / 2010 ) SOC, LRG EWEA European Wind Energy Association and planning future transmission Q 4 / 2 0 1 0 EWIS European Wind Integration Study technology, EMF and licensing procedures ICT Information & Communication Technology IEC International Electrotechnical Commission Network Formulation of long- Q 4 / 2 0 0 9 System extension strategy SDC SDC, MC, LRG EC and other stakeholders IEM Internal Energy Market development term strategy / vision ( Q 4 / 2 0 11 ) ( beginning in Q2 / 2010 ) IFIEC International Federation of Industrial Energy Consumers and planning for the extension of LCP Large Combustion Plant the Europ. network, possibly with a view MC Market Committee to effects on mkt NGC Net Generation Capacity integration NREAP National Renewable Energy Action Plan RGCE Regional Group Continental Europe TSO Development of Q 4 / 2 0 0 9 1. Comparison analyses SOC MC, LRG ERGEG, EURELECTRIC, SAF System Adequacy Forcast cooperation technical document EFET ( Q1 / 2010 ) 2. Proposed common prin- on operational on operational SDC System Development Committee ciples for methodology issues reserves for reserves’ determina- SOC System Operations Committee tion ( Q4 / 2010 ) TSO Transmission system operator WG AIM Working Group Asset Implementation & Management Operational Development of Q 4 / 2 0 0 9 1. Criteria for incident clas- SOC None None WG AS Working Group Ancillary Services issues technical document sification WG CSP Working Group Critical System Protection on determination of 2. Methodology of incident incident classifica- WG EDI Working Group Electronic Data Interchange analyses tion and methodolo- WG EF Working Group European Framework gy of incident analy- ( both Q4 / 2010 ) WG EH Working Group Electronic Highway ses WG EOS Working Group European Operational Standards WG EPS Working Group European Planning Standards Ancillary Ancillary services – Q 3 / 2 0 0 9 Document ( Q4 / 2010 ) MC SOC, LRG All stakeholders; in partic- services definition of com- ular EURELECTRIC ( 2010 ) WG MI Working Group Market Integration mercial products and WG MIT Working Group Market Information & Transparency standards WG NM & D Working Group Network Models & Data WG RES Working Group Renewable Energy Sources Economic Economic framework Q 4 / 2 0 0 9 Position papers : MC SDC, LRG All major stakeholders WG SAMM Working Group System Adequacy & Market Modelling framework positions ( Q4 / 2009 and later ) market issues WWT With & Without Transit −−ITC ITC ( Q4 / 2009 ) −−investment Others ( Q4 / 2010 ) incentives −−tariffs

RES 1) Roadmap for the Q3 / 20 09 Roadmap and paper MC, intensely – EC, ERGEG, European integration development of ( both Q2 / 2010 ) coordinated with coordinator ( Q3 – 4 / 2009 ) offshore wind SDC, SOC and generation LRG 2) Overview of policies on RES support and grid connection

52 | ENTSO-E Annual Report 2009 ENTSO-E Annual Report 2009 | 53 Imprint

Publisher : ENTSO-E AISBL Avenue de Cortenbergh 100, 1000 Brussels – Belgium

Editor-in-Chief : Konstantin Staschus, Ph. D.

Managing Editor : Michael Mieszczanski

Design & Layout : Oswald und Martin Werbeagentur, Berlin

Printed by : Kehrberg Druck Produktion Service, Berlin

P h o t o s : ENTSO-E ( p. 6, 7, 13 ), 50Hertz ( p. 14, 25, 33, 37, 45 ) istockphoto.com ( p. 1, 8, 16, 19, 21, 26, 30, 34, 39, 40 42, 44, 46 )

54 | ENTSO-E Annual Report 2009 Contact

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