Dª Mª LUISA HUIDOBRO Y ARREBA PRESIDENTA DE OMEL · PUBLIC SERVICE OBLIGATIONS AND CUSTOMER...

JORNADAS – DEBATE DEL CEEPLOS SERVICIOS DE INTERES GENERAL, PILARES DEL MODELO EUROPEO,

UNIVERSIDAD DE COIMBRADEBATE SOBRE EL FUTURO DE EUROPA

“GARANTIZAR LOS SIG: CONSTRUIR UN MARCO ADECUADO PARA LAS EMPRESAS; REGULACION, EVALUACION, SUBSIDIARIDAD”

Dª Mª LUISA HUIDOBRO Y ARREBA

PRESIDENTA DE OMEL

Coimbra, 6 de Marzo de 2003

CONTENT

1 Public service obligations and customer protection for the internal1. Public service obligations and customer protection for the internalmarket in electricity. Common position adopted by the council with aview of the adoption of a new Directive.

2. Member State responsibilities.

3. Security of supply.

4. Customer protection.

5. Economic cohesion, environmental protection and demand-side5 co o c co es o , e o e ta p otect o a d de a d s demanagement measures.

6. Transeuropean electricity exchanges in the single European market.

7. Role of the markets and Power Exchanges regarding public serviceobligations.

1. PUBLIC SERVICE OBLIGATIONS ANDCUSTOMER PROTECTION FOR THE INTERNALCUSTOMER PROTECTION FOR THE INTERNALMARKET IN ELECTRICITY. COMMON POSITIONADOPTED BY THE COUNCIL WITH A VIEW OFTHE ADOPTION OF A NEW DIRECTIVE (ART 3)THE ADOPTION OF A NEW DIRECTIVE (ART. 3)

PUBLIC SERVICE OBLIGATIONS AND CUSTOMER PROTECTIONPUBLIC SERVICE OBLIGATIONS AND CUSTOMER PROTECTIONART. 3 (I)

1. <<Member States shall ensure, on the basis of their institutional organisation1. Member States shall ensure, on the basis of their institutional organisationand with due regard to the principle of subsidiarity, that, without prejudice toparagraph 2, electricity undertakings are operated with the principles of thisDirective with a view to achieving a competitive and sustainable market inl t i it d h ll t di i i t b t th d t ki delectricity, and shall not discriminate between these undertakings as regards

either rights or obligations.>>2. <<Having full regard to the relevant provisions of the Treaty, in particular

Article 86 there of Member States may impose on undertakings operating inArticle 86 there of, Member States may impose on undertakings operating inthe electricity sector, in the general economic interest, public serviceobligations which may relate to security, including security of supply,regularity, quality and price of supplies and environmental protection,g y, q y p pp p ,including energy efficiency and climate protection. Such obligations shall beclearly defined, transparent, non-discriminatory and verifiable. In relation tosecurity of supply, energy efficiency/demand-side management and for thefulfilment of environmental goals as referred to in this paragraph Memberfulfilment of environmental goals, as referred to in this paragraph, MemberStates may introduce the implementation of long-term planning, taking intoaccount the possibility of third parties seeking access to the system.>>

PUBLIC SERVICE OBLIGATIONS AND CUSTOMER PROTECTION

3 <<Member States shall ensure that all household customers and

PUBLIC SERVICE OBLIGATIONS AND CUSTOMER PROTECTIONART. 3 (II)

3. <<Member States shall ensure that all household customers, and,where Member States deem it appropriate, small enterprises, (namelyenterprises with fewer than 50 occupied persons and an annualturnover or balance sheet not exceeding EUR 10 million), enjoyturnover or balance sheet not exceeding EUR 10 million), enjoyuniversal service, that is the right to be supplied with electricity of aspecified quality within their territory at reasonable prices. To thatend, Member States may appoint a supplier of last resort. Member, y pp ppStates shall impose on distribution companies an obligation toconnect customers to their grid under terms, conditions and tariffs setin accordance with the procedure laid down in Article 23(2).The first subparagraph shall be implemented in a transparent and non-discriminatory way and shall not impede the opening of the marketprovided for in Article 21.>>provided for in Article 21.

4. <<When financial compensation, other forms of compensation andexclusive rights which a Member State grants for the fulfilment of theobligations set out in paragraphs 2 and 3 are provided this shall beobligations set out in paragraphs 2 and 3 are provided, this shall bedone in a non-discriminatory and transparent way.>>


5. <<Member States shall take appropriate measures to protect final customers,

ART. 3 (III)

pp p pand shall in particular ensure that there are adequate safeguards to protectvulnerable customers, including measures to help them avoid disconnection. Inthis context, Member States may take measures to protect final customers inremote areas. They shall ensure high levels of consumer protection,particularly with respect to transparency regarding contractual terms andparticularly with respect to transparency regarding contractual terms andconditions, general information and dispute settlement mechanisms. MemberStates shall ensure that the eligible customer is in fact able to switch to a newsupplier. As regards at least household customers, these measures shallinclude those set out in Annex A.>>include those set out in Annex A.

6. <<Member States shall ensure that electricity suppliers specify in or with thebills and in promotional materials made available to final customers:(a) The contribution of each energy source to the overall fuel mix of the supplier over the

preceding year;preceding year;(b) At least the reference to existing reference sources, such as web-pages, where

information on the environmental impact, in terms of at least emissions of CO2 andthe radioactive waste resulting from the electricity production from different energysources, is publicly available ., p yWith respect to electricity obtained via an electricity exchange or imported from anundertaking situated outside the Community, aggregate figures provided by theexchange or the undertaking in question over the preceding year may be used.Member States shall ensure that appropriate mechanisms are put in place, e.g. by thepp p p p , g ysupplier, to verify the reliability of the information on the fuel mix.>>


7. <<Member States shall implement appropriate measures to achieve the

ART. 3 (IV)

7. Member States shall implement appropriate measures to achieve theobjectives of social and economic cohesion, environmental protection, whichmay include energy efficiency/demand-side management measures and meansto combat climate change, and security of supply. Such measures mayinclude, in particular, the provision of adequate economic incentives, using,

h i t ll i ti ti l d C it t l f thwhere appropriate, all existing national and Community tools, for themaintenance and construction of the necessary network infrastructure,including interconnection capacity.>>

8. <<Member States may decide not to apply the provisions of Articles 6, 7, 20and 22 insofar as their application would obstruct the performance, in law or infact, of the obligations imposed on electricity undertakings in the generaleconomic interest and insofar as the development of trade would not beaffected to such an extent as would be contrary to the interests of theCommunity The interests of the Community include amongst othersCommunity. The interests of the Community include, amongst others,competition with regard to eligible customers in accordance with this Directiveand Article 86 of the Treaty.>>

9. <<Member States shall, upon implementation of this Directive, inform theCommission of all measures adopted to fulfil universal service and publicCommission of all measures adopted to fulfil universal service and publicservice obligations, including consumer protection and environmentalprotection, and their possible effect on national and international competition,whether or not such measures require a derogation from this Directive. Theyshall inform the Commission subsequently every two years of any changes toshall inform the Commission subsequently every two years of any changes tosuch measures, whether or not they require a derogation from this Directive.>>

2. MEMBER STATE RESPONSIBILITIES.

MEMBER STATE RESPONSIBILITIES (I)

1. Member States shall ensure that electricity undertakings are inaccordance with principles of the Directive with a view to achieving aaccordance with principles of the Directive with a view to achieving acompetitive and sustainable market electricity and not discriminatebetween these undertakings.

2 Having full regard to the relevant provisions of the treaty in particular2. Having full regard to the relevant provisions of the treaty, in particularart. 86, Member States may impose on undertakings operating in theelectricity sector, in the general economic interest public serviceobligations which may relate to security, including security of supply,g y y, g y pp y,regularity, quality and price of supplies and environmental protection,including energy efficiency and climate protection:

Clearly defined.Transparent.Non discriminatory and verifiable.

3 Universal service shall be implemented in a transparent and non3. Universal service shall be implemented in a transparent and nondiscriminatory way and not impede the opening of the marketprovided for in art. 21.

4 In case of financial compensations or exclusive rights this shall be4. In case of financial compensations or exclusive rights, this shall bedone in a non-discriminatory and transparent way.

MEMBER STATE RESPONSIBILITIES (II)

5. Security of supply:Long-term planning may be introduced by member states.Energy efficiency/demand-side management measures can be used toachieve the objective of security of supply.Adequate economic incentives can be provided, using all existing nationaland community tools for the maintenance and construction of thenecessary network infrastructure, including interconnection capacity.Information to the European CommissionInformation to the European Commission.Monitoring of security of supply.

6. Environmental Protection including energy efficiency and climatet tiprotection:

• Long term planning, taking into account the possibility of third partiesseeking access to the systems.

• Information and transparency about the environmental impacts.• Energy efficiency/demand side measurements.• Specifications in the bills of the contribution of each energy source by the

fsupplier of by the power exchange.

MEMBER STATE RESPONSABILITIES (III)

7. Customer protection.• Public service obligations may relate to regulatory, quality and price of supplies• All households customers and where Member States deem it appropriate, small

enterprises, enjoy universal service: right to be supplied with electricity of a specifiedquality at reasonable prices.

• It is possible to appoint a supplier of last resort.• Member State shall impose on distribution companies an obligation to connect

customers to their grid.P t ti f l bl t• Protection of vulnerable customers.

• Transparency regarding contractual terms and conditions, general information anddispute settlement mechanisms.

• The eligible customer is in fact able to switch to a new supplier.g pp• New supplier.

• Minimum specifications in the contracts.• Information of any intention to modify contractual condictions.• Information about applicable prices and tariffs.• Wide choice of payment methods.• The consumer shall not be charged for changing supplier.• Transparent, simple and inexpensive procedures for dealing with complaints.p , p p p g p• Information about the rights regarding universal service.

3. SECURITY OF SUPPLY.

SECURITY OF SUPPLY (I)

Issues that contribute to the security of supply at the sameIssues that contribute to the security of supply at the sametime favour deregulation and energy market development incompetition

Building new power plants and an appropriate treatment of thecapacity reserveDevelopment of the transmission and distribution networkDevelopment of the transmission and distribution networkIncrease the commercial capacity through the internationalinterconnections

Infrastructure constraints hinders security of supply and are an obstacle for the energy market

SECURITY OF SUPPLY (II)

An energy market that works properly give appropriateAn energy market that works properly give appropriatesignals to their market participants

New investments in Power plantsNetwork development planning guidelines, in transmissionregulated systemsN i t t i t k l t if th t i iNew investments in network elements, if the transmissionsystem is not regulated

The organized market have to provide the same accessg pconditions to all participants to the different tradingcontractsA t i f ti i th i d k t iA correct price formation in the organized markets require

Market liquidity and transactions with different horizonsSufficient high number of buyers and sellersSufficient high number of buyers and sellers

SECURITY OF SUPPLY (III)

Are investment decisions in power plants and transmissioni t i d d t ?equipment independent ?Both activities organized in competition

Vertically integrated companies A power plant and a transmissionVertically integrated companies. A power plant and a transmissionline do not substitute each other in many casesNon integrated companies. Could this model work in a highlymeshed network system?meshed network system?

Production organized in free competition and transmission systemregulated in access tariffs and development planning

Vertically integrated companies. How will the interrelation betweentariffs and competition be solved ?Non integrated companies. Market signals will provide power plantd l t d th l t d l i h ld id f thdevelopment and the regulated planning should provide for thenecessary transmission lines

Do very long term power supply or capacity reservationcontracts guaranty supply or capacity ?

UNDERSTANDING REMAINING OFFER

Hypothesis 2Thermal remaining offer

(Discounted hydro offer not matched)(Discounted hydro offer not matched)

Total remaining offer

Hypothesis 1Thermal remaining limit offer

PRI

(Discounted hydro offer not matched+ maximum historical price offer)

gICE

Hypothesis 3S

REMAINING OFFER

20 25.000

PRECIO DEL MERCADO Y OFERTA RESIDUALHIPÓTESIS 1

18

15.000

20.000

13

15

kWh) 5.000

10.000

orar

ia (M

Wh)

8

10

Prec

io (c

Euro

/k

-5.000

0

Pote

ncia

ho

3

5

-15.000

-10.000

0

3

/07/

99/0

7/99

0/08

/99

0/09

/99

0/10

/99

0/11

/99

0/12

/99

0/01

/00

9/02

/00

/03/

000/

04/0

0/0

5/00

0/06

/00

0/07

/00

0/08

/00

9/09

/00

0/10

/00

9/11

/00

0/12

/00

9/01

/01

/03/

01/0

3/01

/05/

01/0

5/01

/07/

01/0

7/01

0/08

/01

0/09

/01

0/10

/01

0/11

/01

0/12

/01

0/01

/02

/03/

02/0

4/02

/05/

02/0

6/02

/07/

02/0

7/02

/08/

020/

09/0

2/1

0/02

0/11

/02

/12/

02/0

1/03

-25.000

-20.000

01 31 30 30 30 30 30 30 29 31 30 31 3 0 30 30 29 30 29 30 29 01 31 01 31 01 31 3 0 30 30 30 30 30 01 01 01 01 01 31 31 3 0 31 30 31 31

FechaPRECIO MERCADO OFERTA RESIDUALLínea de tendencia precio mercado Línea de tendencia de oferta residual

20 25.000

PRECIO DEL MERCADO Y OFERTA RESIDUALHIPÓTESIS 2

18

15.000

20.000

13

15

o/kW

h) 5.000

10.000

orar

ia (M

Wh)

8

10

Prec

io (c

Euro

-5.000

0

Pote

ncia

ho

3

5

20 000

-15.000

-10.000

0

01/0

7/99

31/0

7/99

30/0

8/99

30/0

9/99

30/1

0/99

30/1

1/99

30/1

2/99

30/0

1/00

29/0

2/00

31/0

3/00

30/0

4/00

31/0

5/00

30/0

6/00

30/0

7/00

30/0

8/00

29/0

9/00

30/1

0/00

29/1

1/00

30/1

2/00

29/0

1/01

01/0

3/01

31/0

3/01

01/0

5/01

31/0

5/01

01/0

7/01

31/0

7/01

30/0

8/01

30/0

9/01

30/1

0/01

30/1

1/01

30/1

2/01

30/0

1/02

01/0

3/02

01/0

4/02

01/0

5/02

01/0

6/02

01/0

7/02

31/0

7/02

31/0

8/02

30/0

9/02

31/1

0/02

30/1

1/02

31/1

2/02

31/0

1/03

-25.000

-20.000

0 3 3 3 3 3 3 3 2 3 3 3 3 3 3 2 3 2 3 2 0 3 0 3 0 3 3 3 3 3 3 3 0 0 0 0 0 3 3 3 3 3 3 3


20 25 000

PRECIO DEL MERCADO Y OFERTA RESIDUAL HIPÓTESIS 3

18

20

15.000

20.000

25.000

13

15

Wh) 5.000

10.000

ria (M

Wh)

8

10

Prec

io (c

Euro

/k

-5.000

0

Pote

ncia

hor

ar

3

5

-15.000

-10.000

0

3

/07/

99/0

7/99

/08/

99/0

9/99

/10/

99/1

1/99

/12/

99/0

1/00

/02/

00/0

3/00

/04/

00/0

5/00

/06/

00/0

7/00

/08/

00/0

9/00

/10/

00/1

1/00

/12/

00/0

1/01

/03/

01/0

3/01

/05/

01/0

5/01

/07/

01/0

7/01

/08/

01/0

9/01

/10/

01/1

1/01

/12/

01/0

1/02

/03/

02/0

4/02

/05/

02/0

6/02

/07/

02/0

7/02

/08/

02/0

9/02

/10/

02/1

1/02

/12/

02/0

1/03

-25.000

-20.000

01/

31/

30/

30/

30/

30/

30/

30/

29/

31/

30/

31/

30/

30/

30/

29/

30/

29/

30/

29/

01/

31/

01/

31/

01/

31/

30/

30/

30/

30/

30/

30/

01/

01/

01/

01/

01/

31/

31/

30/

31/

30/

31/

31/


DEMAND SIDE MANAGEMENT?

Objective:Consumption decrease inpick hours.Increase of consumption in

E

Increase of consumption invalley hours -

Consequences:Reduction of the demandfor capacity +o capac tyBigger supplies ofgeneration capacity in pickhours

+hoursProduction cost decreasesPrice decreasesEnvironmental protectionadvantages

t

RELACIONES ENTRE ENERGÍAS Y PRECIOS

8

cEur/kWh

30.000

MWh

P i i l

30/07/02

6

25.000

Precios marginales

DEMANDA + BOMBEO

6.436 MW (32,5%)6

20.000

4 15.0003,236 c€ (120%)

2

5 000

10.000

0 0

5.000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

HORAS


6

cEur/kWh

30.000

MWh28/08/02

25.000

Precios marginales

DEMANDA + BOMBEO

4 20.0005.508 MW (30,2%)

2 10 000

15.0002,593 c€(145,9%)

2

5.000

10.000

01 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

0

HORAS


8

cEur/kWh

30.000

MWh

P i i l

07/10/02

6

25.000

Precios marginales

DEMANDA + BOMBEO

6

20.0008.436 MW (50,9%)

4 15.0004,533 c€(258,0%)

2

5.000

10.000

01 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

0

5.000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24HORAS


6

cEur/kWh

30 000

MWh06/01/036

cEur/kWh

30 000

MWh06/01/036

25.000

30.000Precios marginales

DEMANDA + BOMBEO

6

25.000


DEMANDA + BOMBEO

4 20.0007.648 MW (48,29%)

4 20.0007.648 MW (48,29%)

15.0003,700 c€

(1245 79%)

15.0003,700 c€

(1245 79%)2 10.000

(1245,79%)2 10.000

(1245,79%)

0 0

5.000

0 0

5.000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24HORAS

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24HORAS


cEur/kWh MWh14/01/03cEur/kWh MWh14/01/036

25.000


DEMANDA + BOMBEO

8 640 MW (40 4%)

6

25.000


DEMANDA + BOMBEO

8 640 MW (40 4%)

4 20.000

8.640 MW (40,4%)

4 20.000

8.640 MW (40,4%)

15.0003,473 c€ (545,2%)

15.0003,473 c€ (545,2%)

2 10.0002 10.000

0 0

5.000

0 0

5.000

01 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

HORAS

001 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

HORAS

0

4. CUSTOMER PROTECTION.

CUSTOMER PROTECTION

As far as security standards and quality of supply areconcerned, both activities subjected to regulations. Thisconcerned, both activities subjected to regulations. Thisregulations should be harmonize at the community level.The right to connect to the network is a crucial issue both forconsumer protection and development of the competition in theelectricity market.Markets can produce price references important enough toMarkets can produce price references important enough toprotect all customer if the number of supply undertakings andthe quality of competition in the market are reasonable.A complete separation between wholesale markets and retailmarkets is inefficient for a proper protection of consumers.

ELECTRICITY PRICE COMPONENTSELECTRICITY PRICE COMPONENTS

CUSTOMER PROTECTION

Domestic consumer tariffs in the EU have importantdifferences.differences.Access to liberalized contracts is not the same in the membercountries.

Consumers can only establish contracts with retailers.Consumers can establish contracts also with producers or throughpower exchangespower exchanges.

Ga st o D i a r i o d e El e c t r i c i d a d a 1 d e e n e r o d e 2 0 0 2 ( I n f o r m e Eu r o st a t d e m a y o d e 2 0 0 2 )

C o n su m i d o r e s D o m ést i c o s d e 3 . 5 0 0 k Wh / a ño

2 , 5 0

€ / d í a

2 , 0 0

1 , 5 0

1 , 0 0

0 , 5 0

0 , 0 0

(*) P aís es nór di c os : 10-20% han c ambi ado de sumi ni s t r ador

(**) A us t r i a y A l emani a: 5-10% han c ambi ado de s umi ni s t r ador

(***) Rei no Uni do: 30-50% han c ambi ado de s umi ni s t r ador

Fuent e: Comi s i ón E ur opea (I nf or me de oc t ubr e de 2002)


C o n su m i d o r e s D o m ést i c o s d e 7 . 5 0 0 k Wh / a ño

4 , 5 0

€ / d í a

3 , 5 0

4 , 0 0

2 5 0

3 , 0 0

2 , 0 0

2 , 5 0

1 , 0 0

1 , 5 0

0 , 5 0

0 , 0 0

(*) P aís es nór di c os : 10-20% han cambi ado de s umi ni s t r ador


(***) Rei no Uni do: 30-50% han c ambi ado de sumi ni s t r ador



C o n su m i d o r e s D o m ést i c o s d e 2 0 . 0 0 0 k Wh / a ño

1 2 , 0 0

€ / d í a

1 0 , 0 0

8 , 0 0

6 , 0 0

4 , 0 0

0 , 0 0

2 , 0 0





Ga st o M e d i o D i a r i o d e El e c t r i c i d a d a 1 d e e n e r o d e 2 0 0 2I n f o r m e Eu r o st a t d e m a y o d e 2 0 0 2

3 , 5 0

€ / d í a

2 5 0

3 , 0 0

2 , 0 0

2 , 5 0

1 , 5 0

1 , 0 0

0 , 0 0

0 , 5 0





5. ECONOMIC COHESION, ENVIRONMENTALPROTECTION AND DEMAND-SIDE MANAGEMENTPROTECTION AND DEMAND-SIDE MANAGEMENTMEASURES.

ECONOMIC COHESION, ENVIRONMENTAL PROTECTION AND DEMAND-SIDE MANAGEMENT MEASURES (I)

The electric power industry plays a critical role in our societyon many levels

AND DEMAND SIDE MANAGEMENT MEASURES (I)

on many levels.

It advances the European economic growth and promotesIt advances the European economic growth and promotesbusiness development and expansion.

It provides solid employment opportunities to Europeanworkers and it enhances the quality of life for its users, andmost importantly, it powers Europe.

It is a robust industry that contributes to the progress andit f Eprosperity of Europe.

ECONOMIC COHESION ENVIRONMENTAL PROTECTION ANDECONOMIC COHESION, ENVIRONMENTAL PROTECTION AND DEMAND-SIDE MANAGEMENT MEASURES (II)

There is room for making compatible incentives to renewableenergies with market mechanismsenergies with market mechanisms.

Regarding Demand side management measures, the demandf fi l t t l h l i d i d fresponse of final customers to real hourly prices derived from

the market, provide an excellent incentive for saving energyand to move it from peak hours.

SOCIAL EFFECTS OF LIBERALIZATION

An efficient energy system is a big incentive to accelerateAn efficient energy system is a big incentive to accelerateefficiency in other economic sectors and thus for employmentincrease.

However it is well known that for reaching this objective never theenergy sector should be considered as a direct source foremployment increaseemployment increase.

The liberalization promotes efficiency and gives new opportunitiest t i i i th f th ll d dito create service companies in the area of the small and mediumsize companies.

M it ld b t k i t t th t li i tiMoreover, it could be taken into account that eliminatingconstraints, be very positive for increasing efficiency and reachingthe full benefits from liberalization.

6. TRANSEUROPEAN ELECTRICITY EXCHANGES INTHE SINGLE EUROPEAN MARKETTHE SINGLE EUROPEAN MARKET.

RELATION BETWEEN COMMERCIAL CAPACITYAND PEAK DEMAND (%)( )

60

70

50

60

30

40

10

20

0

S DGTREN ETSO N d l d REESources: DGTREN, ETSO, Nordel and REE- Morocco interconnection has been disregarded- Capacities from Italy to Austria and to France and Switzerland, from Switzerland to Austria and from Switzerland to France are unknown.

COMMERCIAL CAPACITY VERSUS PEAK DEMAND

3.4%

3.5%

3.4%

2.8% 11.0%

Sources: DGTREN and ETSO

BENEFITS TO THE WIDENING OF COMMERCIAL CAPACITY

The widening of commercial capacity increases the security to be able tosupply and at the same time increase the competition.

The reserve capacity increases because there is more availablecapacity in the system.

All d i i ff d d d i th k t i thAllows and increase in offer and demand in the market, in otherwords the dimension of the system

Allows other agents to participate in the market and helps avoid anyAllows other agents to participate in the market and helps avoid anyabuse in the European market.

The size of each electrical area advises to have international commercialcapacity of around 20% of the peak load.

The exclusive rights over commercial capacity eliminate the benefitsmentioned above independent of the allocated method usedmentioned above, independent of the allocated method used.

Impedes the necessary diversification to guarantee supply.

Li it titiLimits competition.

TOWARDS AN INTEGRATED EUROPEAN NETWORK

Free international transactions and transits require that agentscan freely and efficiently use an integrated European network.

Free international trading increases also security of supply anddiversification of energy sources.

Market operators should be considered as importantinstitutions for the purpose of fulfilling the Directive objectives.

7. ROLE OF THE MARKETS AND POWEREXCHANGES REGARDING PUBLIC SERVICEEXCHANGES REGARDING PUBLIC SERVICEOBLIGATIONS.

ROLE OF ORGANIZED MARKETS IN EUROPE

The organized markets are suitable organizations for makingpossible and increase transactions between producers, traders,p p , ,distributors and consumers of electricity in equal and objectiveconditions as an alternative, together with bilateral contracts.

These markets should provide the necessary liquidity andThese markets should provide the necessary liquidity andconditions to allow transactions with the appropriatecharacteristics and horizons for participants.

Also organized markets can promote international transactionsAlso organized markets can promote international transactionsand they could potentially operate over multiple states.

Cooperation between market operators can also contribute tocreate more trading opportunities along Europe, to solvecongestions in an efficient way for price formation in theEuropean single market.

Organised markets are suitable places to connect wholesaleprices and retail prices by allowing access to the market to allconsumers, producers and retailers. These will protect prices ofb th t f d i ti b t thboth segments from deviating between them.

Dª Mª LUISA HUIDOBRO Y ARREBA PRESIDENTA DE OMEL · PUBLIC SERVICE OBLIGATIONS AND CUSTOMER...

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