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| Survey on ETSO Implementation Guides |
Date : 4-7-2007 |
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| The Task Force EDI (Electronic Data Interchange) is presently carrying on a survey on the utilisation of ETSO published Implementation Guides (ESS, ESP, ERRP, ECAN, …). A questionnaire for users (TSOs, DSOs, market participants, etc…) and a questionnaire for software providers are made available in order to contribute to this study. Completed questionnaires should be returned by the end of July 2007 to the TF EDI Convenor Mr. Maurizio Monti (maurizio.monti@rte-france.com). Results of the survey will be published on ETSO website after the summer. All market participants and software providers are very much welcome in case they can provide their feedback and contribution to ETSO TF EDI work. |
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| ETSO Assembly reelects Executive Bodies |
Date : 2-7-2007 |
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| At ETSO 7th General Assembly held in Bergen on 29 June 2007 Mr. Daniel Dobbeni (CEO Elia System Operator, Belgium) was re-appointed President of the Association for a terms of two years. Mr. Pierre Bornard (Senior Executive Vice President of RTE and vice chairman of its Executive Board) has been also re-elected Chairman of the Steering Committee for the same period of time. Cecilia Hellner has been appointed as new Secretary General of ETSO (see Press Release) |
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| Agreement on ITC Compensation Mechanism 2007 |
Date : 14-6-2007 |
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| Once again European TSO companies have reached a voluntary agreement on Inter- TSO compensation for transit flows. The new agreement covers the period April to December 2007. It was signed by TSOs from a majority of EU member countries and a number of non member countries. Nine new countries have joined the new voluntary agreement, including Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Estonia, the Former Yugoslav Republic of Macedonia (FYROM), Montenegro, Romania and Serbia. For furhter details, please see the Press Release.
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| ETSO Response to EC Strategic Energy Review |
Date : 19-3-2007 |
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| ETSO welcomes the opportunity to give its view on the European Commission’s strategic energy review (SER) and its focus on sustainability, security of supply and competitiveness. Electricity TSOs will have a central role in investment, either by reinforcing and developing their networks to meet reliability and market needs for a reliable and secure competitive market, or by facilitating new generation investment to connect to their networks. ETSO initial response to the SER is made against the backdrop of this investment requirement. Given the raft of documents underlying the SER, ETSO has focussed its comments on the documents of most direct interest to TSOs, namely ‘An Energy Policy for Europe’, ‘Prospects for the internal gas and electricity markets’ and the ‘Priority Interconnection Plan’ (full paper available Activities=>Others) |
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| European Wind Integration Study (EWIS) |
Date : 6-2-2007 |
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| The final Report of the first phase of the European Wind Integration Study (EWIS), an initiative supported by the European Commission, has been published in February 2007 (see under Activites=>Renewables).
The European TSOs Associations are aware that the support of renewable energy sources is one of the key issues in European energy policy. In order to cope with this challenge, European Transmission System Operators launched last year a European wide grid study on the integration of wind power, focusing on measures needed to be taken by legislators, regulators, grid operators and grid users, aiming at establishing a harmonized set of rules for a reliable integration of wind power as part of the future European power supply where the amount of integrated wind capacity comply with actual targets of European and national energy strategies.
The scope of work covers the extra high voltage transmission grid in all European synchronous areas (UCTE, NORDEL, UKTSOA and ATSOI) and addresses the technical, operational and market aspects related to the integration of large scale wind power all over Europe according to the installed wind capacity scenarios expected in Europe in 2008 and 2015.
The final objective of the study is to obtain the necessary information for the technical and operational measures for risk mitigation and the secure operation of the European electricity grid.
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| 4th Balance Management Report |
Date : 25-1-2007 |
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| This report represents ETSO views on balance management harmonisation and integration. However, it should be noted that the harmonisation and integration steps explored in this report have not yet been subject to the technical feasibility and economic justifications that should be undertaken before any final decision on harmonisation can be taken. ETSO envisages an evolving regional harmonisation and integration process enabled by a cooperation agreement between the TSOs in the region and supported by changes in the existing legal, regulatory and inter-TSO arrangements as far as necessary. . It is important to note as a key principle that regional balancing markets can not overlap, i.e. one market area can only belong to one regional balancing market.
The main drivers for this regional process are competition and efficiency. Depending on the regional situation harmonisation steps could drive integration steps and vice versa, therefore no priority has been given to either process. In order to achieve full benefit, all defining characteristics and costs of the services used by TSOs to balance the system need to be harmonised to facilitate competition between providers in the cross-border procurement and activation of these services. These issues include: reserve definitions, technical requirements and procurement principles such as whether reserves are procured on a longer term basis or not and whether they get a capacity payment or not.
At the same time, also all issues that define the characteristics and price of the services that the TSOs deliver to the market when balancing the system need to be harmonised in order to get comparable prices and imbalance risks and improved transparency. These issues include: gate closure time, balance responsibility, imbalance definition, settlement period, determination of imbalances and imbalance pricing principles.
Nevertheless, the balance management integration process involves implementation costs which can be quite substantial and may not be out-weighed by the economical advantages. Moreover, integration may influence operational network security and long term security of supply. Therefore, before taking any integration steps, these effects should be carefully analysed by the TSOs concerned.
The described model does not foresee nor requires the establishment of a separate organisational entity to undertake the specific role of the regional balancing (see under Activities=>Balance Management)
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| Demand Side Response Explanatory Note |
Date : 12-1-2007 |
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| The objective of this paper is to present how demand response can be used as a resource for the adequacy and operational reliability of the power systems. The paper is available on our website under Activities=> Security of Supply.
Electricity is more a necessity for the end-users than many other commodities. However, the flexibility in using electricity is smaller. Utilisation of the price elasticity will contribute to a market-oriented equilibrium between
supply and demand and mitigation of market power. As electricity is a commodity that cannot be stored the price follows the instantaneous physical balance especially in the power systems dominated by the thermal power
stations. The higher the price the more strained the power balance is. High price spikes indicate possible critical periods for the adequacy of the power system. The end-users of electricity can ask themselves whether they
really need to be 100 % supplied in all situations and how much they are willing to pay for electricity at each moment. If this consideration results in a voluntary adjustment in the demand, that reaction is called demand
response (DR). When reducing their demand the end-users contribute to the balance between supply and demand and thus also to the market price of electricity and the security of supply. The end-user benefits from lower
procurement costs.
Utilisation of demand response as a power resource is a complex issue. The objective of this paper is to contribute to the discussion and common understanding of DR as a resource by presenting the TSOs´ experiences
and views on the DR potential, pre-requisites and obstacles in activating demand resources.
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| Generation Adequacy Report 2006 |
Date : 31-5-2006 |
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| This report sets out the results of the generation adequacy studies over the European electricity system for the period 2008 to 2015. It considers the potential development of electricity demand
and installed generation capacity in the countries that are members of the European
Transmission System Operators Association (ETSO) and assesses, on this basis, the extent to which generation capacity is adequate to meet demand in the short and long term.
The aims of the report are:
- in the short term to provide an overview of generation adequacy and more generally of system reliability;
- in the medium long term to provide an appreciation of the amount of new generation investments required or demand side management initiatives that need to be developed to provide equivalent capacity relief. This information is early warning signals to decision makers and indicate business opportunities for the market players.
The analysis of adequacy is carried over two scenario of generation capacity evolution:
• Scenario A “Conservative”: only new generation projects known as firm are integrated. In this case, confirmed investment decisions seem sufficient, at ETSO level, to allow a reasonable level of adequacy from now to 2012. After 2012, if further investments are not decided in due time, the reliability of the whole system cannot be considered as achieved.
• Scenario B “Best estimate”: it takes into account future power plants whose commissioning can be considered as reasonably probable according to the information available for the TSOs. Scenario B gives a more optimistic view of the situation. Estimated possible plants commissioning would allow fulfilling the Adequacy Reference Margin criteria and keeping a reasonable level of risk for the whole ETSO system until 2015. The full report is available on our website under Activities=> Security of Supply.
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| Facilitating Trading Tertiary Reserves |
Date : 31-5-2006 |
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| Balance management is the keystone in the well functioning of electricity markets in
Europe. Each member state has designed a different keystone in this respect. The
objective of ETSO is to analyse the consequences of steps in the integration of these
markets if the differences (or incompatibilities) in balancing mechanisms are kept, in
order to identify measures needed to allow these integration steps.
The potential benefits of increasing opportunities for System Operator Balancing
activities across borders relate primarily to the procurement of Tertiary Reserves in an
efficient manner by the possibility of using internal and external reserve resources in a
competitive environment across a wider area. This is likely to have associated benefits in
relation to plant loading efficiency (with associated environmental benefit) and a
decrease in balancing costs, which are ultimately borne by consumers.
This report examines the commercial, market design and relevant technical issues
including security of supply associated with facilitating an increase in cross border trading
of Tertiary Reserves for System Balancing purposes. The full report is available on our website under Activities=> Balance Management.
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| ETSO position on EC Comm. RES & Biomass |
Date : 17-3-2006 |
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| As regards the assessment made by the Commission on the existing support schemes ETSO considers that the “investment support” should have also been taken into account since many countries in the EU use them. Moreover, ETSO finds that a marked-based system, such as the green certificate system, could - when appropriately designed - be the most cost-effective and non-distortive system if such is needed after possible investment support. A requirement would be that a harmonised approach was adopted across Europe or as an interim possibility the setting up in all countries of a premiums system.
ETSO agrees with the Commission that the internal electricity market and support of RES-E
are intimately linked together. In that regard it is important that grid reinforcements are based on social economical calculations and that RES-E producers are treated on equal terms with other producers regarding the costs of the system. Further ETSO finds it necessary to stress that an unlimited priority dispatch for RES is a significant distortion of the market.
ETSO fully supports the suggestions s made pecially as regards the appointment of one-stop authorisation agencies, responsible for co-ordination of all administrative procedures using standard forms and requirements.
It is nevertheless unfortunate that the EC has not taken the opportunity already now to propose a community framework for the support schemes. Moreover, ETSO considers essential to stress the need for harmonised grid access rules in the EU.
As regards the Biomass communication, ETSO finds that in order to fully obtain the potential, a harmonised market based and cost-reflective Community approach could be more effective than e.g. encouraging Member states to take action. Moreover, ETSO finds that an important benefit not mentioned in the Communication is that biomass generation is easy to forecast, and contributes therefore to the balance of the system. The full document is availalbe under ´activities´.
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| TSOs set to launch European Wind Integration Study |
Date : 30-1-2006 |
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| TSOs repeatedly addressed in recent years the necessity of a thorough examination of RES - and especially wind power- integration on European level, taking into consideration that:
• more than 70 % of the wind energy produced worldwide is in Europe
• wind energy conditions load flows also into neighbouring transmission systems;
• connection of further large offshore wind farms to the transmission systems are still requested;
• no dynamic and stability calculations were done so far.
In spite of several investigations performed in different sectors and/or at national level no reference study at a pan-European level exists so far. The EWIS (EWIS: European Wind Integration Study) project made by TSOs will fill this gap as unique project gathering both technical and market / legal aspects in the four main synchronous electricity systems in Europe.
The overarching goal of the present study project is to address especially the network issues arising from large scale wind power plants, particularly relevant to European TSOs and to make proposals for a generic and harmonized European-wide approach towards wind energy issues.
The scope of work covers all the technical, operational and market / regulatory aspects related to the integration of wind power in Europe at a large scale. The final objective is to set up a model for the integration of the capacities of RES, and more specifically wind power within Europe, as forecasted in different scenarios to be covered by the study. The objective for the short term (2008) is to bring solutions to the problems identified in each synchronous power system. For the longer term the goal is to bring common pan-European recommendations in order to avoid that the present concerns appear in other Europeans areas whenever wind power is introduced at a larger scale.
The project launched by ETSO and UCTE involves also European Regional Associations of TSOs, NORDEL (Nordic TSO Association, UKTSOA (United Kingdom TSO Association), ATSOI (Association of TSOs in Ireland). A Consortium of 16 Transmission System Operators (TSO) from 14 countries, (one TSO acting as a coordinator) representing the four main synchronous electricity systems in Europe, will provide a specific support. External stakeholders will also be invited to join an Advisory Board based in the needs of the study and the respective commitments about an active participation (European Commission, ERGEG, EURELECTRIC, EWEA, EFET, IEA…).
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| EEI Review of European Energy Markets |
Date : 13-1-2006 |
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| ETSO informs that the European Energy Institute has published the first Review of European Energy Markets. This review focuses on regulatory & legal, economic, technical and environmental issues relevant to Europe’s rapidly evolving energy markets.
In addition to an introductory Article by Professor Willam D’haeseleer from KU Leuven, this edition contains a key note Article by Andries Piebalgs, Commissioner for energy of the European Commission. Additional contributions are from André Merlin, CEO of RTE and former President of ETSO, Fatih Birol, Chief Economist of the International Energy Agency, Jorge Vasconcelos, former Chairman of the European Regulators Group, Hans Haider, President of Eurelectric, Enrique Locutura, President of Eurogas, Geert Joosten, President of GIE and Jacques Chabanier, Senior Executive Vice-President of Arcelor.
The European Energy Institute is a non-profit organisation, bringing together some of Europe’s leading energy academics. It has been established to meet the need for better co-ordination between the existing academic expertises in Europe on energy issues and to ensure a real academic input into both Community and national decision-making on energy issues. ETSO is EEI sponsor since its creation in 2004.
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| ETSO implements the current CBT mechanism for 2006 |
Date : 22-12-2005 |
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| ETSO members adopted by consensus on December 16, 2005 and for the 5th consecutive year the inter-TSO compensation mechanism for transit in 2006. Following the conclusions of the Regulator’s Forum of 1st and 2nd September 2005, the mechanism will be implemented from the 1st of January 2006 and will last the entire or part of 2006 in function of the availability of the future mechanism to be decided in accordance with the European Regulation. The 2006 compensation fund of 395 M€ will be financed through the national grid tariff of participating countries, sharing the cost among all network users. This is the last year the concerned ETSO members implement, on a voluntary basis, such mechanism in its present form (see Press Release and ETSO 2006 CBT proposal under ´Activities´).
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| Trading Tertiary Reserves across Borders |
Date : 29-11-2005 |
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| The objective of this new ETSO report is to explore the state of affairs for establishing or increasing cross border trading of Balancing Services. It examines in particular the commercial, market design and relevant technical issues associated with facilitating an increase in such activity.
The potential benefits of increasing opportunities for System Operator Balancing activities across borders relate primarily to the procurement of balancing services in an efficient manner by the possibility of using internal and external reserve resources in a competitive environment across a wider area. This is likely to have associated benefits in relation to plant loading efficiency (with associated environmental benefit) and a decrease in balancing costs, which are ultimately borne by consumers.
The issues and potential benefits are similar to those that could result from increased facilitation of energy trading between markets, particularly in respect of intra-day energy trading. Many of the issues associated with the facilitation of energy trading relate to the harmonisation of market and trading rules across Europe, which will be addressed in later work.
The remit of ETSO is to consider the management of processes and services associated with active power (MW) balancing and frequency control, which are a subset of overall power system operation requirements. There are two broad categories of balancing service that relate directly to Balance Management: Frequency Control (automatic delivery) & Tertiary Reserves and Energy Balancing (manually instructed delivery)
Whilst both categories of service are important in Balance Management activities, the trading of automatically delivered Frequency Control services (primary and secondary control) is not considered due to the much more complex nature of these services. Additionally, it is believed that there is potentially more economic value in developing arrangements related to Tertiary Reserves and Energy Balancing. (Full document availalbe under Activities=>Balance Management).
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| TSO role in balance between supply & demand |
Date : 7-10-2005 |
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| The purpose of ETSO Positon Paper is to set out ETSO’s views of the role of TSOs in respect of maintaining the balance between supply and demand in a liberalised electricity market. The provision of adequate generation and of demand that is price responsive is the result of market incentives on and individual responsibilities of generators and suppliers working in a competitive market environment. While TSOs have a role to play in contributing to the establishment of the rules and structure of such markets by Governments and regulatory authorities and to facilitating their operation, it is not generally the role of the TSO to be involved in the provision of generating plant or of price responsive demand arrangements, except to the extent that they are required to meet operational requirements. The role of the TSO in balancing supply and demand should be, in general, limited to acting in operational timescales.
While it is recognised that in some countries TSOs have roles to play in respect of the balance between supply and demand that extend beyond operational timescales, these roles are either transitory in the countries in question, reflecting the need for market arrangements to reach maturity and particularly the development of demand side response, or are seen as only being operative in extreme circumstances of imminent market failure.
After gate closure the TSOs are physically responsible for securing power system operation and maintaining balance between supply and demand by having access to operational reserves. However, market players remain economically responsible for individual imbalances after gate closure (Full document availalbe under Activities=>Security of Supply).
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| ETSO Position Paper on Market Power Monitoring |
Date : 7-7-2005 |
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| The 11th Florence Regulatory Forum concluded that market power issues were a key horizontal question yet to be solved in the framework of the IEM and asked ETSO and other stakeholders to make proposals in this regard. This paper aims at explaining how the success of the ambitious challenge of establishing a sound pan-European market design is tightly linked to the process of monitoring the market and more specifically to the monitoring of market power. It also provides the position of the ETSO members regarding the possible roles of the TSOs in this complex process taking into consideration that they are naturally involved in it.
Market monitoring is recognised as one of the key issues of ensuring that the market design can be adapted and improved over time.
Due to physical constraints, electricity cannot be freely transmitted all over Europe. Therefore, a potential scope for the exercise of market power within certain regions with a limited number of active electricity generators/suppliers does exist. As a consequence, markets affected by the exercise of market power would potentially experience higher electricity prices and a deliberate prevention of competition. Hence, a quick mitigation of the exercise of market power is beneficial to most market participants and the TSOs. A guarantee of such a quick mitigation would bring confidence in the market. Actions to address the exercise of market power include prosecuting abusive behaviour and making desirable changes to the market rules including commercial and technical issues that may be involved. Whilst Regulators and/or Competition Authorities have the responsibility to minimise the exercise of market power, the TSOs can have a significant role to support this activity through market monitoring and progressing changes. In ETSO view, a common European approach of market power monitoring is necessary and clear roles and responsibilities and distinct areas of collaboration have to be defined.
Regulators and/or Competition Authorities should be the only institutions in charge of market power exercise detection and sanction. Nevertheless, due to the complexity of Power Systems, other institutions have a role in market power monitoring, especially TSOs and Power Exchanges (because they both own some key data sets). (see Paper under Activities=>Congestion Management)
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| Generation Adequacy Report |
Date : 10-5-2005 |
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| This report sets out the results of a study of the European electricity market for the period to 2015. It assesses the extent to which generation capacity is adequate to meet demand in the short and longer term in the European countries that are members of UCTE, NORDEL, UKTSOA and ATSOI. It does not include assessments of the systems of countries that are members of the European Community but have no interconnection with any of the above Associations.
TSOs, while not being responsible for generation developments, are, nevertheless, best placed of all market actors to monitor and assess current trends and future developments. It is for this reason that ETSO has undertaken this analysis.
In the short term generation adequacy assessments have been based on existing capacity and capacity that is either currently under construction or at an advanced stage of planning. For the longer term however, the assessments reflect the extent to which new, additional generating capacity may be required to achieve generation adequacy rather than reflecting an inadequate level of capacity. In order to put these longer-term requirements in perspective, two scenarios are included in the analysis.
The first only includes new generation developments that are considered by the Transmission System Operators (TSOs) to be certain or almost certain of going ahead. The second scenario includes the TSOs’ best estimates of the level of future generation based on the information that they have available to them of generation schemes that may be only at a very early stage of development.
The approach adopted in this study is to consider generation adequacy in each of the synchronous areas and the contribution that interconnections between synchronous areas can make to generation adequacy through providing assessments of potential imports and exports. However it has to be recognised that the provision of interconnection capacity with another area does not by itself give rise to increased generation adequacy, unless surplus generation is available in the exporting area.
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| ETSO Paper on Preventive Countertrade |
Date : 27-4-2005 |
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| At the Eleventh Meeting of the European Electricity Regulatory Forum1 it was expressed that market based allocation mechanisms were expected to be only implicit auctions and explicit auctions. In order to maximise and guarantee the available transmission capacity these allocation mechanisms may be combined with countertrade and re-dispatch.
This paper evaluates these mechanisms with respect to functioning of the electricity market and economic efficiency. Special attention is given to extensive preventive countertrade as a mean to increase and/or guarantee firm transmission capacity.
The designations ´countertrade´ and ´re-dispatch´ are often perceived as synonyms, but in this context a distinction is appropriate. Countertrade means TSO-initiated trade between two adjacent price areas relieving the congestion caused by trade between these two areas with an amount equal to the countertraded quantity. Re-dispatch is a countermeasure where the TSOs change the generation and/or load pattern to redistribute the physical flows in the grid.
This paper mainly deals with a particular form of countertrade designated as ‘preventive countertrade’. In this way, countertrade is primarily regarded as a preventive measure that normally takes place day-ahead. Re-dispatch is primarily regarded as a curative measure employed during day of operation.
The benefit for the market functioning of firm and possibly increased transmission capacity is impossible to assess in a detached professional way. Due to this, market players express very different views on this subject. This paper does not try to assess these benefits in details.
Overall conclusion is that preventive countertrade may be beneficial for the well-functioning of the market when employed in limited extent to guarantee a relatively constant virtual transmission capacity, thus giving more predictability and stability to the market. On the contrary, extensive preventive countertrade to create increased virtual transmission capacity is not recommendable neither for the function of the market nor the socioeconomic efficiency.
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| Integration of RES in the Electricity System |
Date : 11-4-2005 |
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| At European and national level mid-term plans exist to increase the share of electricity produced by renewable energy sources (RES) significantly. They shall contribute to meet the targets of the Kyoto protocol and support the security of supply with respect to limited energy resources in Europe.
One major topic in this discussion is the grid integration of Wind. ETSO as an Association of the European Transmission System Operators addresses the issues related to this subject from the TSO’s perspective.
The introduction of new RES in the European generation scenario is a complex issue embracing grid extension and system stability requirements, balancing mechanisms development and their overall impact on cross border electricity transits.
ETSO looks favourably at the introduction of RES plants in the power system (generation and grid infrastructures), recommending that its development is correctly taken into account from the legal, administrative and technical point of view, so that security of supply is not disrupted.
Still now, however, further analysis has to be carried on, accounting a European perspective, about the influence which unlimited priority dispatch for RES and non-harmonised support schemes have, and what is the impact of the integration on the electricity system (see under Activities=>Renewables).
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| Conclusions of Security of Supply Conference |
Date : 24-3-2005 |
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| Security of supply is fundamentally based on two pillars: adequate generation in relation to the level of demand and an adequate transmission system to meet the requirements of the market for the transfer of energy. As regards generation, there was general agreement at the conference that it was primarily the role of the market to provide sufficient generation capacity. The assessments presented of future generation adequacy indicated a satisfactory position in Europe in the short term (2007) and a requirement for substantial new generation to be constructed in the medium and long term (2010 and 2015).
In the case of the transmission system, TSOs have to provide an adequate level of transmission capacity and ensure its availability in order to fulfil their obligations in respect of security of supply. However, an appropriate level of transmission capacity and a high degree of reliability will only result from regular investment and maintenance. For regular investment activities TSOs need a stable regulatory framework, which provides them with an incentive to invest. Furthermore processes and procedures that can help overcome the existing high administrative barriers to developing their networks are necessary. Steps towards better co-ordination and the co-operation among transmission system operators work have been made both in the operational and investment time-scales, but new challenges in the light of system security are emerging.
One particular example of these new challenges, which was discussed at the conference, is the effect of large power flows that come from the bulk capacities of intermittent generation. Renewable energy systems alone and even more in combination with bulk trading of energy between systems can lead to unpredictable power flows within grids and between countries and regions. A harmonized European programme of development, taking into account infrastructural conditions, would be of great value and contribute to maintaining a high degree of security of electrical supply. It is simply wrong to believe that a few additional interconnection lines are enough to face the challenges arising from the large scale development of intermittent energy sources concentrated in specific geographical areas: widespread infrastructure developments are required within and between countries to handle the resulting transit flows.
It is therefore clear that the different tasks on security of supply should be clearly left to those who can fulfil them best:
• Generators should build power stations in response to market signals given by efficiently designed and operated markets;
• Transmission system operators should define investments and co-ordinate their infrastructure development within their associations, and
• Regulators should incorporate investment costs into tariffs in order to create sufficient incentives. They should also listen to the words of Commission President José Manuel Barroso, who stated that the economy should have “first priority”, requiring “business-friendly policies, not rhetoric”.
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| SEE CBT Mechanism 2005 |
Date : 4-2-2005 |
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| TSOs of South-East Europe (SEE), under the umbrella of ETSO (the Association of European Electricity Transmission System Operators), adopted by consensus an Inter-TSO compensation mechanism for transit for 2005 following the principles of 2005 ETSO mechanism applied in the European Union. Preliminary approval of the main details of this agreement was given by the Regulators, Ministries and the European Commission during the last Athens Forum at the end of October 2004. This mechanism, the second applied in this European region, is operated from the 1st of January 2005 by the TSOs of Albania, Bosnia-Herzegovina, Bulgaria, Macedonia, Montenegro, Romania and Serbia. This mechanism has removed all existing border and transit fees among the signatories while an injection fee of 1€/MWh is applied from perimeter countries. The Inter-TSO compensation fund for induced transits in neighbouring networks will be financed through the national grid tariff of the participating countries sharing the cost among all network users.
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| ETSO Proposal for 2005 CBT Mechanism |
Date : 6-1-2005 |
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| The new cross-border trade (CBT) mechanism is being implemented since 1 January 2005. As for 2004, this system has no export fee, maintains the injection fee of 1€/MWh from perimeter countries and its funding is solely based on national socialized contributions on physical net flows, in import and export direction. Except for UK, Ireland and Baltic countries, all EU counties are participating in the new system, together with Switzerland and Norway. |
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| Conference on Security of Supply |
Date : 16-12-2004 |
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| ETSO - The European Electricity Transmission System Operators Association, in co-operation with UCTE (the Union for the co-ordination of transmission of electricity), NORDEL (the Nordic electricity system), UKTSOA (the United Kingdom transmission system operators) and ATSOI (the association of transmission system operators in Ireland) are organising its ´Conference on Security of Electricity Supply´ in Brussels on 15 March 2005.
The events of the summer and autumn 2003 in Europe and North America highlighted the importance of security of electricity supplies in the consciousness of Governments, Regulators and the European institutions. These resulted in, amongst others things, numerous investigations and reports by TSOs, governments and Regulatory Authorities and a draft Directive from the European Commission.
This Conference will provide a unique and pertinent opportunity for all interested parties to debate and exchange views on security of supply. Besides the emerging issue of generation adequacy across Europe in relation to transmission, the Conference will debate the challenges TSOs are facing in meeting the requirements of an increasingly liberalised and competitive market.
Speakers will include representatives from the European Commission, European Parliament, TSOs, regulators, generators, market operators, traders and consumers. Invitations are expected to be sent together with the programme and further practical information at the beginning of January 2005. The Conference will be held in English and participation will include all concerned parties.
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| A Review of the Monitoring of Market Power |
Date : 9-12-2004 |
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| The experience of countries that have liberalized their electricity markets has shown that the assumption that markets will naturally produce a competitive result is not always justified. Part of the problem derives from the difficulty of defining the relevant market.
Transmission system operators (TSOs) are concerned with the secure and efficient operation of the electricity system. Market power adversely affects this objective. First, it can induce generation companies to withhold output and lead to short-term supply shortages. Second, it results in distortions of price signals, resulting in inefficient dispatch and investment decisions. Such inefficiencies increase system costs and may induce regulators to impose further controls that risk further inefficiencies.
Transmission system operators are well-placed to provide the main data required for market monitoring. They also have the expertise to analyze that data. That suggests that where they are truly independent of other market participants, they may provide a home for a market monitoring unit (full document available under ´Activities=>Congestion Management´).
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| Proposal Flow-based Market Coupling |
Date : 13-9-2004 |
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| The ETSO-EuroPEX Joint Working Group has reached agreement on an approach to cross-border congestion management, called Flow-based Market Coupling (FMC), which in their view best meets the needs of both the market and system operation. In so doing, they have achieved a balance between the requirements for effective congestion management (notably an accurate transmission model) and those for efficient energy trading (notably market liquidity). The result is a model with regional price areas, with inter-regional trading facilitated by market coupling subject to simplified transmission constraints.
The FMC model describes arrangements for day-ahead trading. This needs to be part of a broader set of arrangements including, on one side, effective opportunities for participants to hedge price risk and, on the other side, complementary adjustment and balancing arrangements. FMC is compatible with price risk being hedged via a variety of forward physical or financial markets
The work is not yet complete. This is an interim report designed to expose ideas at an early stage to enable Regulators, Users and other interested parties to join the debate and provide feedback. In particular, it does not attempt to put forward a prescriptive ‘blueprint’ for a particular market model, but rather to signal a general direction. It is assumed that implementation of changes in practice would proceed through a series of regional initiatives, governed where necessary by the EU Regulation on Cross-border Exchanges of Electricity, together with the associated Guidelines.
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| Overview Congestion Management Methods |
Date : 13-9-2004 |
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| For the first time ETSO publish an extensive report illustrating the current situation on the congestion management techniques adopted in Europe.
This document has the three following main objectives: beyond the already mentioned intention of presenting an overview of the methods and processes currently in application in the European interconnections for transfer capacity allocation and congestion management, the report aims also to analyze the main features of each one of those methods, namely whether they comply or not with the criteria expressed in the Regulation 1228/2003 of the European Parliament and the Council of 26 June 2003 and its Guidelines and, in the end, to provide the available information regarding the works (in progress or foreseen) for modifying or substituting the methods currently applied, especially those not complying with the Regulation 1228/2003 and/or its Guidelines to some extent.
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| CBT in SEE region |
Date : 3-8-2004 |
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| The TSOs of South-East Europe (SEE), under the umbrella of ETSO (the Association of European Electricity Transmission System Operators), adopted by consensus on July 30, 2004 a cross-border trade mechanism for 2004 following the principles of 2004 ETSO mechanism applied in the European Union. This mechanism, the first ever applied in this European region, is operated from the 1st of July 2004 by the TSOs of Albania, Bosnia-Herzegovina, Bulgaria, FYR of Macedonia, Romania and Serbia. This mechanism has removed all existing border and transit fees among the signatories while an injection fee of 1€/MWh is applied from perimeter countries. The inter-TSO compensation fund for induced transits in neighbouring networks will be financed through the national grid tariff of the participating countries sharing the cost among all network users. |
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| ETSO discussion paper on locational signals |
Date : 6-7-2004 |
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| ETSO discussion paper on locational signals in network tariffs presents discussions and arguments raised on the issue, some of which have been supported and others universally rejected. ETSO has debated locational signals both in terms of theoretical principles and in terms of an overview of the practical implementation of locational pricing. The complexity of the issues involved and the interrelationships with other issues, such as investment in interconnectors and congestion management, were also explored.
ETSO considers at this stage that it should be left open to each Member State to assess their requirement individually via subsidiarity, given the principles stated at the beginning of the paper. For the discussion of harmonisation, ETSO should refer to the basic G and support the introduction of market based congestion management as a priority in the internal market. It is important to leave the flexibility to regional and/or country-specific decision makers in the field of national tariffs. There may be a risk that tight EU guidelines on locational signals become counter productive.
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| Comments Security Supply Directive Proposal |
Date : 1-6-2004 |
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| ETSO welcomes the opportunity to comment on the proposed directive concerning security of supply and infrastructure investment. ETSO believes that the IEM directive, which only comes fully into force in July 2004, covers many of the issues that are also dealt with the current proposal. ETSO members have some concerns about the current draft, since it is extending, qualifying and partly contradicting the existing IEM directive on different issues. Furthermore, it is not clear how the proposals actually contribute to security of supply in general or the contribution that network investment can make to it. Indeed, in some instances, the proposals could be counter-productive compared with the position as set out in the existing directive. A final concern is that in a number of instances the proposed directive is not clear in what its intention is and, potentially, misconstrues the responsibilities of certain industry participants, including TSOs. As a consequence, it is in danger of developing inappropriate policy instruments.
The published comments first illustrate each of these points by reference to individual articles in the proposed directory; the document then proposes areas that should be positively included in a revised Directive (see ETSO Comments under Activities).
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| Electricity Exchanges on Meshed AC Power Systems |
Date : 13-5-2004 |
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| The short paper on cross-border electricity exchanges on meshed AC power systems aims to describe the relationship between two views of large AC interconnected electrical systems: the “physical” dimension (the operator’s view) and the “commercial” dimension (traders’ view). Operator’s tasks are the balance of the system, managing positive and negative imbalances, and the control of flows, determining the optimal load flow respecting the system security. Trades are operating with tradable products not corresponding to physical items, most commonly “energy blocks” corresponding to a certain amount of energy, which can be fixed simply “on paper”. The relationship between flows and commercial exchange is not unique and, in general, they are not coinciding. In order to describe this, concepts like “parallel” and “loop” flows have been used to summarize the above situation, but they are introducing some elements yielding a picture not corresponding to the physical reality. An approach to differently characterized flows is therefore suggested. In the end, to cope with the difficult problem resulting from the relationship of the published transmission capacities and the generation scheduling, a possible approach is suggested, as well as with an improved definition about the term “netting”, which should be referred only to flows and commercial exchanges, but not to capacities.
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| ETSO Report on RES |
Date : 8-4-2004 |
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| The report presents the Position of European TSOs on the appropriate measures to be achieved to fulfill the indicative targets of the European Commission Directive on the promotion of electricity produced from renewable energy sources in the Internal Electricity Market (RES Directive). How to ensure the issuing of Guarantees of Origin (GoO), how to implement support schemes aiming to the integration of renewable sources in market based systems and how to manage the increased balancing costs induced by the integration of a growing number of renewable power plants (in particular wind farms) in the European Power system are the main topics on which comments are expressed from the TSOs point of view. A detailed statistical appendix shows in detail the status of Renewable Energy Sources in Europe. ETSO report on RES is availalbe on ETSO Website at Public Document page. |
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| Comments on EC Security of Supply Directive |
Date : 8-4-2004 |
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| ETSO welcomes the initiative of EC, pointing out once more the basic need of security within the definitions of market rules. The attribution of the highest level of priority to this initiative will hopefully create better financing conditions by the private sector for priority projects, like those needed to increase the reliability of supply. Without supply, there is no market. ETSO comments are mainly focused on those aspects of the EC proposals that ETSO considers will harm instead of improve the present situation concerning investments in the electricity sector: the confusion of roles and responsibilities between TSOs and Regulators, overlapping with the scarce involvement of local communities and regional authorities in European projects, can lead in the end to inefficient results. ETSO preliminary comments on the coming EC Package concerning Security of Supply are availalbe on ETSO Website at Public Document page. |
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| Report Balance Management |
Date : 8-4-2004 |
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| The report deals in particular with a detailed definition of all the Balancing Services contributing or affecting the Balance Management both for Active and Reactive power. Focusing on the sole Active Power Balancing, further issues are identified, such as the organizational structure needed by any party in charge of balancing functions, and how these services are presently provided and/or traded within each TSO’s area of competence. Broadening this latter market-related overview, the report analyses the trade opportunities of these services and how to implement tools for facilitating their trade. The resulting framework can provide market based signals to the Balancing Services providers but also for market participants and final users. On the ETSO Website, at Public Document page, the Report on the Balance Management in Europe is available in its final release. |
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| New 2004 CBT mechanism |
Date : 8-4-2004 |
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| The new cross-border trade (CBT) mechanism is being implemented since 1 January 2004. This system has no export fee and maintains the injection fee of 1€/MWh from perimeter countries. All countries except for the UK and Irish TSO are participating in the new system. The Polish TSO will join the mechanism from 1st July 2004. |
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| ETSO Conference 02/10/2003 |
Date : 8-10-2003 |
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| The EC/ETSO Conference on ´Market Power and Congestion Management´ (Brussels, 2 October 2003) has opened a new investigation field for the IEM integration target. The complexity of these topics, considered in the still undefined field of their possible interactions, does not allow any simple technical solution but embraces as well legal and power systems economical aspects, as all the conveners have clearly pointed out in their presentations. Even if Market Power is a legally and economically well defined process, crucial for improved market efficiency, its relation with Power Systems Congestion Management topic still requires a clear identification of its use as a profitable mean for any competitor exercising Power Market and of its misuse, as Market Power Abuse. The increase of interconnectors can be a solution to mitigate conditions of Market Power Abuse of incumbent companies, but rules for accessing Cross Border Trade solutions have to be efficiently designed to grant a fair competition among all market participants. Once more, as primary source of data on transmission systems physical use, TSOs are playing a central role, since they’re able to analyze complex relations between grid and market indicators, designing opportune efficient congestion management mechanisms and Power Market monitoring means. |
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| DESMIE joins CBT mechanism |
Date : 3-7-2003 |
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| At the ETSO Steering Committe meeting of 25 June unanimous agreement was reached that the 2004 cross-border trade mechanism to be proposed will have no export fee. ETSO strongly requires now from the EC and the Regulators that market-based mechanisms for congestion management are implemented at all borders following the requirements of the newly adopted Regulation on conditions for access to the network for cross-border exchanges in electricity. The 2004 mechanism will maintain the injection fee of 1€/MWh from perimeter countries so that the latter also contribute to the costs of using the network of the CBT area. NORDEL TSOs as well as CENTREL TSOs will all participate in the 2004 mechanism. The Greek TSO has joined the 2003 mechanism from 1st July. |
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| ETSO Assembly - 25/06/2003 |
Date : 26-6-2003 |
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| At ETSO 3rd General Assembly held in Stockholm on 25 June 2003 Mr. André Merlin (Director RTE, France) was re-appointed President of the Association for a terms of two years. Mr. Daniel Dobbeni (Manager Power System Operations ELIA, Belgium) was nominated Chairman of ETSO Steering Committee for the same period. |
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| Interconnection Investments |
Date : 7-2-2003 |
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| The draft Directive on the Internal Energy Market and the associated draft Regulation concerns, inter alia, the basis on which new electricity interconnections between member states may be financed, constructed and remunerated. Under certain circumstances, interconnections may be financed by private investors rather than by a TSO as part of its regulated activities and remunerated through charges on users of the interconnection. Long-term contracts are also important in this respect.
Such entrepreneurial interconnectors would be, in effect, constructed and financed in a way in which the financial and commercial risks associated with them would be borne by those financing the project rather than by electricity consumers in a particular country or countries in contrast to regulated interconnectors where these risks are borne by consumers of electricity.
In the framework of the ongoing discussions on these issues, ETSO has prepared its “Position Paper on new Electricity Interconnection Investments”(see Position Papers).
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| Underground Cables |
Date : 6-2-2003 |
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| Following the request from the EC-DGTREN, ETSO has prepared its “Position on Use of Underground Cables to develop European 400kV Networks”(see Position Papers). The aim of this document is of introducing the vision of ETSO members about burying new extra high voltage transmission links and of comparing underground cables with overhead systems.
A large part of the new 400 kV lines to be constructed in Europe in the future concerns cross-border and related internal flows in order to enable increased cross-border trade and support the creation of a large electricity market in Europe providing a high level of security of supply.
While technology for extra high voltage underground cables and their accessories is now available, over distances of some kilometres, the question of burying trans-European networks could become relevant. The decision whether to bury a line takes into account the balance between the need to transmit electricity at minimum cost using a proven technology and the environmental conditions and concerns along the route.
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| EC Energy & Transport Forum |
Date : 21-10-2002 |
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| During the 1st meeting of the European Energy and Transport Forum on 8 October 2002 the European Commission appointed the 34 members of the Forum and their 34 alternates. The President of ETSO, André Merlin, was appointed President of the Forum.
The Commission will rely on the Forum to obtain opinions and advice from professionals in the areas concerned when formulating European energy and transport policies. ´The wealth of expertise and experience within this Forum will help to enhance our energy and transport policies on the basis of consultations with interested parties. This Forum is part of the Commission´s initiatives to improve European governance through increased public participation, transparency and dialogue between the Commission and those involved in public life´ said Loyola de Palacio, Vice-President responsible for energy and transport.
The role of the Forum is : - to provide opinions on Commission initiatives in the field of energy and transport policy; - to act as a monitoring centre for energy and transport policies; - to assist the Commission in following up the debates and actions launched in the Green Paper on the security of the EU´s energy supply and the White Paper on the common transport policy. |
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| ETSO 2003 CBT proposal |
Date : 15-10-2002 |
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| ETSO members adopted by consensus on October 11 a new proposal for a cross-border trade mechanism for 2003 as was requested at the 8th Regulators Forum in Florence in February. Its purpose is to compensate the use of national transmission systems by cross-border flows in 2003. The proposal is intended to further facilitate electricity trade in Europe. It is based on a harmonised payment scheme that could be implemented also in some non-EU countries. The new proposal presents some major differences compared to the first ever CBT mechanism put in place this year. It applies a uniform model and criteria for the identification of the horizontal network (part of network affected by cross-border trade) of each country, and harmonises the costing scheme for the relevant horizontal network. Moreover, the current fund of 200 million € will now most likely be reduced. Due to the lack of locational signals being in place in 2003, the mechanism maintains the Transit component but reduced from 1€ to 0.5€/MWh to be charged to those market participants responsible of export flows. The rest of the fund will be financed through grid tariff sharing the cost among all consumers. This proposal for 2003 is in accordance with the ETSO vision of a step-by-step approach envisaging further development in years to come (see Press Release) |
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| Austria joining CBT Agreement |
Date : 19-4-2002 |
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| ETSO is very pleased to inform market users that the Austrian TSOs, VKW, TIRAG and VERBUND APG, will join the CBT transitory mechanism as from 1st May. The entry of all three Austrian TSOs will take place under the following Austrian tariff regulations guaranted to be in place by the Austrian regulatory authority on May 1, 2002: - export fee of 1€/MWh for exports; - injection fee of 1€h for imports from perimeter countries. For the handling of inner-Austrian deliveries a solution has been found with the authorities which does not encounter any constitutional barriers in the implementation. |
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| ETSO Foundation |
Date : 5-4-2001 |
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| Thirty two Transmission System Operators Association have established in Brussels on 29 june the international European Transmission System Operators Association as a legal entity with a permanent secretariat. The objective of the Association is to continue to ensure the development of EU internal electricity market while maintaining the security of the European Network. |
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