NordREG has commissioned VaasaETT to study the competitive conditions in the national Nordic markets in Denmark, Finland, Norway and Sweden. The study looked into the market entrance and the market operation processes under which suppliers and energyservicecompanies(ESCOs) act. VaasaETT interwieved a number of new suppliers and ESCOs in depth and also carried out an online questionnaire during the spring, summer and fall of 2014. The report was out on public consultation during the fall of 2014. The report together with the results from the public consultation was presented at hearing held at Vaanta airport, Helsinki on the 17^th of November.

The results presented in the final report gives an in depth look at each countries market processes and in which degree these processes are similar between the Nordic countries. NordREG is pleased to see that quite a lot of the entry- and market operations processes are very similar in the Nordic countries. Quite a few stakeholders expressed that up to almost 28% processes were the same across the markets, see picture below. The stakeholders also expressed an overwhelming support for the speedy implementation of a supplier centric model and that the establishment of a national data hub. These two issues would strengthen the possibilities for the competitive stakeholders to start up and stay in business for the long term.

Below you can find links to the report “Market Entrant Processes, Hurdles and Ideas for Change in the Nordic Energy Market – the View of the Market” and a report summarizing the public consultation answers.

• VaasaETT Report Market_Entry_Barriers
• Summary of public consultation

The Network Code on Forward Capacity Allocation Network Code stems from the Third Internal Energy Market package. The Network Code will be put to comitology by the European Commission during 2015.

The Nordic Regulators (NordREG) have under the umbrella of the Agency for the Cooperation of Energy Regulators (ACER), raised several issues concerning the draft code during its development in 2014. Now when the Code has been handed over to the Commission, NordREG has presented a common position paper which has been sent to the Nordic Energy Ministries.

The paper addresses our main concerns related to the NC, specifically concerning the chosen path to make Long Term Transmission Rights the preferred instrument of intervention even in situations where other instruments could provide a better solution.

NordREG shares a concern that, in the current draft, the overall objective of the Code to make markets work better and provide market participants with sufficient hedging opportunities, seems to be subordinate to the preference of having Long term transmission rights (LTTR) introduced. Although LTTR have potential to bring benefits to cross border trade between national electricity markets, NordREG identifies a substantial risk that they would instead be detrimental to the functioning of the Nordic market due to a splitting of liquidity between instruments already existing in the financial market and LTTR.

We are of the opinion that the network code should not have LTTRs as the default solution, but should allow for any measure that contributes to reaching the objective of the regulation. We propose a structural rewrite of the code, which will allow a stronger commitment for all NRAs to achieve the final goal of having a well-functioning and efficient EU internal energy market (IEM) and to finding the appropriate measures to facilitate this.

• 3_2 b Nordic NRAs proposal for NC FCA improvements

Monday the 17th of November the NordREG Retail Market Working Group hosted a hearing at Helsinki airport. The focus of the hearing was the report “Market Entrant Processes, Hurdles and Ideas for Change in the Nordic Energy Market – the View of the Market” made by Dr Philip Lewis, VaasaETT. The report reflects the view of new entrants on the electricity retail market and is based on both interviews and a questionnaire made during the summer and autumn 2014. The report describes a mapping of all processes, including the differences and similarities between the Nordic countries, that new entrants enter encounter.

The working group was happy to see so many participants at the event, about 25 people at the event, and quite a few participants via the web – about 10 people. Dr Philip Lewis presented the findings of the study and the responses that were given during the public consultation of the report which took place during the fall 2014. The participants discussed the contents of the reports and this resulted in interesting and fruitful discussions.

NordREG would like to thank all participants and Dr Philip Lewis for a successful hearing.

• Hearing 17 November Helsinki (Powerpoint from the hearing)

A public hearing will be held at Helsinki Airport in which the report will be presented and discussed. You are most welcome. The event will also be available via the web for those who cannot travel to Helsinki.

Place: Helsinki Airport Congress T2 (terminal 2)

Finnish time: 13.00-16.30

Agenda hearing 17 November

Register for attending the meeting

Please note that places are limited. Please register with:

Marie.kjellen@nordicenergy.org

Register for the Accompanying Webinar

The event will also be available via online streaming webinar for those who cannot travel to Helsinki. You will be able to see the PowerPoint presentation and listen to the presentation, panel discussion and questions. You will even be able to post questions live.

Register for the webinar here

Sign up link for the webinar

There is also a link to the webinar from Vaasaett´s website

The Nordic Energy Regulators, NordREG, now publishes three documents that summarize the past four years of work towards a Nordic retail market for electricity. NordREG simultaneously looks forward and suggest that the Nordic energy ministers should endorse a continued ambitious collaboration between the Nordic countries in order to continue the development of the electricity market.

In recent years NordREG has focused on how the Nordic electricity market can be more customer friendly. NordREG has agreed upon guidelines on how it can achieve a common Nordic end-user market. This has resulted in a common understanding of the design of the market; the electricity market should be supplier centric.

NordREG has made recommendations for processes where the customer interacts with the market: moving process, switching process and invoicing. These recommendations have since then been partly implemented in the Nordic countries. Efforts to develop a common Nordic electricity market will therefore continue after 2014. The continued Nordic work will focus on information management, how the DSO-role can be developed, the development of smart grids and how we can increase demand flexibility.

Read all reports here:

NordREG status report to EMG on the Nordic End-User Project

NordREG’s work towards a harmonised Nordic retail market

Strategy for a harmonised Nordic retail market

The European Commission has as part of the draft Guideline on Capacity Allocation and Congestion Management (hereinafter the Guideline) suggested rules that should lead to competition between Nominated Electricity Market Operators, NEMOs. The Guideline outlines a structure that can be characterised as a development of the newly-launched NWE market coupling for the day-ahead markets. In order to facilitate competition within this setup, the Guideline allows for more than one NEMO in a specific bidding zone, given that these NEMOs are designated in at least one Member State. In this setup all NEMOs shall also be responsible for developing, implementing and operating the joint MCO (Market Coupling Operator) functions.

The Nordic Regulators have taken an united position on the matter. Our position will also be communicated to the Nordic Ministries.

NordREG welcomes any effort to make markets in general more competitive, given that this also increases overall efficiency and does not entail decreased system security or additional costs. As regards the market structure described in the current draft, NordREG is concerned that it does not present a market structure that will prove to be efficient over the long term, in the sense that it will not lead to efficient competition. The current version proposes a structure that makes it possible for existing Nominated Electricity Market Operators (NEMOs) to enter each other’s home markets and thus offer some kind of competition. The current guideline is far from sufficient for providing the necessary means to also open the market to new entrants.

NordREG believes that one of the keys to designing a structure that actually would open the market for NEMO services to real competition is to make a clear distinction between natural monopoly functions and functions/tasks that can be provided by competitive companies. The potential shortcomings that we have identified in the structure currently proposed stem from this basic principle not being applied.

NordREG encourages Member States to suggest to the Commission to issue an impact assessment on alternative governance structures required when introducing competition between NEMOs. Similarly one should make an assessment and define, which functions should be included under the MCO and which functions would naturally be suited for competitive NEMOs.

• Read the position paper

 

What are the obstacles for suppliers and energy service companies in the national Nordic electricity markets?

NordREG encourages currently active as well as previously active electricity suppliers and energy service companies to respond to the questionnaire made by the consultant VaasaETT made on the behalf of NordREG. The questionnaire closes 30 September.

• Please answer the questionnaire

 

Wednesday the 25th of June the NordREG Retail Market Working Group hosted a hearing at Arlanda airport. The focus of the hearing was the task Work beyond 2014 – what should be the focus for NordREG future work so that a harmonized retail market is truly accomplished. The working group was happy to see so many participants at the event, about 30 people, and quite a few participants via the web, about 10-15 people.

NordREG would like to thank all participants for a fruitful hearing.

Documents

• Lennart Söder, Presentation_Nordic_regulators_140625
• Introduction NordREG

NordREG believes that the technical work cannot stop at this point because it’s crucial in order to implement already issued Nordic recommendations. It is also important to continue the good cooperation between the TSOs, DSOs and suppliers and keep the process ongoing. NordREG believes that this is necessary in order to avoid a situation where the stakeholders may continue to develop own technical solutions. concludes that there are three main areas which need to be addressed: The development of a Nordic technical handbook which in detail describes harmonized back-office processes, maintenance of documents, such as XML schemas and finally the development of use-cases by the industry. NordREG encourages the industry to continue this work and suggests that this work is led by the industry, NordREG therefore welcomes initiatives from the TSOs and the industry and intends to facilitate when necessary and incorporate tasks of that nature in the upcoming workprogramme for NordREG.

• Continuation of technical work after BRS