Client Earth and RAP Winter Package Symposium 1 March 2017, Brussels - PowerPoint PPT Presentation

Regulatory Perspective on Security of Supply Andrew Ebrill, CEER Secretary General Client Earth and RAP Winter Package Symposium 1 March 2017, Brussels

Agenda • The Regulators’ Trilemma? • European Electricity Market Context • What Can Assist Security of Supply? • Clean Energy and Next Steps 2

CEER: Fostering energy markets, empowering consumers • Independent platform for cooperation Putting consumers at the between 35 European NRAs heart of energy policy: • Promotes competitive, secure and CEER-BEUC 2020 Vision sustainable markets in the interests of consumers • Champions sound energy regulation with stakeholders, incl. policy-makers • Supports NRAs and encourages best practices: ► Training Academy ► Workshops, e.g. international events on security of supply ► Papers, reports, benchmarking 3

Regulators’ Trilemma? Security of Supply: “The lights must stay on”! Renewables Competitive / Sustainability / Low Prices

European Electricity Market Context Competition Consumer choice Liberalised Smart Meters Demand-side and Markets prosumer growth Smart Grids at DSO level Smart Heating New Electric Vehicles Technology Internet of Things Dispersed and Variable Data Management Cybersecurity Renewables Low marginal Growth cost Often small-scale at DSO level

European Electricity Market Context • Renewables are now central, often subsidy-driven • A market, technical and security of supply challenge: ► Lowers conventional generator output and spark-spreads => less revenue ► Intermittent generation from solar / wind 6

European Electricity Market Context • Energy wholesale market integration progressing ► A single day-ahead spot price- auction (algorithm) • Currently one single coordinated Day-Ahead Market for NWE Region + ES/PT and IT • Covers around 75 % of EU demand • With networks + interconnection, market integration assists security of supply and competitive prices 7

European Electricity Market Context • Retail competition and consumer empowerment still mixed, with industry benefitting more than households • ACER/CEER MMR: retail prices falling again, except for elec HH ► Subsidies and levies are an issue! 24 8 22 Electricity price (euro cents/kWh) 7 Gas price (euro cents/kWh) 20 6 18 5 16 4 14 3 12 10 2 2008 2009 2010 2011 2012 2013 2014 2015 Electricity HH prices Electricity IND prices 21 8 20 7 19 18 6 17 5 16 15 4 14 3 13 2 12 1 11 10 0 Gas HH prices Gas IND prices 8 2008201020122014

European Electricity Market Context • Many retail markets still price regulated and not v competitive • More choice for consumers where prices have been liberalised for longer • We recommend price de- NHH regulation once the market is competitive NH H • We support facilitating new Cyprus supplier entry by reducing Malta barriers Non-regulated prices • We advocate consumer Regulated prices for the household segment protection and empowerment Regulated prices for the entire retail market

What Can Assist Security of Supply? • Fully implement the 3 rd Package • Appropriate investment in networks and cross-border interconnection • Enhanced functioning of EU wholesale electricity markets: • Fully implement / extend European day-ahead market coupling • Enhance European intra-day (XBID) and balancing markets • Implement efficient bidding zones • Reward generator flexibility: scarcity pricing • Enable and reward demand-side flexibility • Integrate RES into the market / have robust carbon pricing • Assess system adequacy at EU level, with any CRMs compatible with efficient cross-border trade • Improve retail competition, innovation and consumer engagement 10

Clean Energy Package • Regulators' Overview Paper of 23 January broadly welcomed the CE Package, highlighting issues for consideration • More detailed regulatory papers expected in the coming months 11

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