ENTSO- E Initial Response to the EC Communication on 'Delivering the IEM and making the most of public intervention'

ENTSO-E welcomes the EC communication entitled 'Delivering the IEM and making the most of public intervention' as timely guidance

(PresseBox) ( Brussels, )
ENTSO-E recognises that public intervention may be necessary, to develop a more competitive single electricity market for Europe; in addition to completing market integration and a strong European grid. ENTSO-E agrees that it is necessary to reduce inconsistencies and improve the coherence of different measures and instruments. The Commission communication raises interesting proposals for that, but needs to further address the following challenges:

Any market redesign must review the nature and need for support for given technologies, particularly RES, which primarily due to its support has significant effects on market and grids. As a minimum, RES producers should be incentivised to act in accordance with rules on ‘balance responsibility’. Further, priority dispatch arrangements should be reserved only for emerging RES technologies as they limit the system operator’s ability to respond in emergency situations.

On system adequacy, it is ENTSO-E’s view that TSOs remain best placed to evaluate adequacy-related threats to security of supply. Furthermore, generation adequacy is not the only measure of system security; increasingly, balancing and flexibility characteristics are as important, and are required to meet power system needs.

ENTSO-E notes the EC’s view that public intervention can be useful and effective as long as it is well-designed and market-oriented. However, given the heavily interdependent topics covered by the Commission’s communication, Member States should strongly increase their cooperation to avoid inconsistencies.

On capacity mechanisms, ENTSO-E agrees that, if introduced, they must be well-designed, market-based, non-discriminatory, technology-neutral, and cost-effective.

ENTSO-E supports demand side response (DSR) as a tool to increase system and market efficiency. The electricity network codes will provide provisions to allow this, both for technical requirements and market rules. However, a clear and transparent regulatory framework is needed to support these provisions. This will allow market participants to financially benefit from providing this flexibility to the market, based on their genuine contribution.

ENTSO-E and its member TSOs look forward to assisting European and national policy-makers by contributing to the evaluation of the different market design and public intervention solutions suggested, as necessary to meet Energy policy goals.

Related links:

EC Communication: ‘Delivering the IEM and making the most of public intervention'
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