The long-term electricity market, the so-called forward market, has an important role in allowing participants to hedge positions ahead of the day-ahead timeframe. In the Nordic region, trading and hedging in the forward timeframe is purely financial, and the foundation for the forward market is the availability of highly liquid system price products. For parties wishing to hedge area price difference, EPADs (Electricity Price Area Differentials) are available for most price areas. However, concerning the EPAD market, in some bidding areas it is put forward by market participants that they do not have the level of liquidity that is desired. Therefore, the Nordic NRAs wish to explore if and how TSOs could facilitate enhancement of the function of the financial market.

The aim of this study is to gain knowledge on alternative models for TSO involvement in the financial electricity market and the impact the models could bring along in the market.

For more information and the full call for tender document, please follow this link:

https://www.doffin.no/Notice/Details/2015-185010

NordREG publishes two reports made by the consultant THEMA on behalf of NordREG. One contains a survey of current Nordic national regulations for transmission operators (TSO) and distribution system operators (DSO) roles and responsibilities. The second report is a survey of current market design for demand response and micro-production.

The report: Mapping of TSO and DSO roles and responsibilities related to information exchange

Access to accurate and timely information is essential for customers as well as for electricity market participants. Information exchange is therefore a prioritized area for NordREG. NordREG has previously recommended that a national information point, hub, should be established as a step towards a smarter electricity market. National TSO:s has been appointed as the actor that should establish the national data hub which would mean that the TSO gets a new role as a market actor. NordREG therefore finds that the TSO:s role will change with the establishment of national data hubs. TSO:s in the Nordic region are; Energinet.dk (DK), Fingrid (FIN), Statnett (NO) and Swedish kraftnät (SE).

The report “Mapping of TSO and DSO roles and responsibilities related to information exchange”, made by THEMA, describes that the Nordic countries generally have similar rules for the electricity market. This also applies to rights and obligations of market participants in the information exchange. The DSO:s in all countries are responsible for most functions when it comes to measuring and exchange of information. Most Nordic countries are in a transition from bilateral contacts between the stakeholders towards national data hubs. The Danish hub is already in operation and the Norwegian hub is expected to begin to operate in 2016 and be fully deployed in 2019. In Finland, the responsibility for development of a hub has been given to the TSO, Fingrid. Ei has proposed that Sweden also should have a hub and that it should be run by TSO, Svenska kraftnät.

NordREG notes that the consultant, THEMA, made a good report with useful information on existing national regulatory frameworks. NordREG also notes that there is currently no reason to develop common Nordic recommendations in addition to the work previously done by NordREG concerning, for example, switching and moving processes. However, it is important that the NRA:s in NordREG continue to exchange information and experiences from the ongoing national work of creating data hubs, and continues to closely follow the work of the TSO:s.

• THEMA Report 2015-02 Mapping of TSO and DSO responsibilities related to information exchange

The report: Rules and regulation for demand response and micro-production

Nordic customers are today relatively active in the electricity market by actively choosing electricity contracts but also by taking advantage of the opportunity for flexible use of electricity that smart meters provide. Customers can also choose to be active by generating their own electricity by becoming so-called micro-producers. It is important to have suitable national regulations and NordREG therefore examined how the national Nordic regulations are designed for these two areas.

In the report, “Rules and regulation for demand response and micro-production”, made by THEMA, states that smart meters already are installed in Sweden and Finland, while the roll-out of smart meters is expected to be completed in 2019 in Norway and 2020 in Denmark. The functional requirements set for the smart metering system is similar in Denmark, Finland and Norway. The requirements include hourly metering and daily reporting of measured values as well as an open interface that enables the customer to get instant access to data. Installation of in home displays is not mandatory in any of the Nordic countries, but the functional requirements in Denmark, Finland and Norway permit the installment of these. Sweden has since 2009 requirements for monthly metering and from 2012 all customers can have hourly metering .The customer is entitled to hourly metering if the customer has a contract with their electricity that requires hourly metering. The Swedish NRA, Ei, suggested that the functional demands should be changed so that the same functional requirements can be placed on the Swedish electricity meters as in the other Nordic countries. It is noted that there are no regulations that specifically handles third-party access to data. Typically, the client provides a power of attorney to a supplier or an energy service company which gives the company the same access to information that the customer has.

The report notes that the network tariffs design not specifically regulated in order to promote demand flexibility, however, indicates all countries regulations that network tariffs must be transparent, fair and non-discriminatory. The report also shows that micro production is separated from other production and incentives to become micro producers are generally the same with reduced or no network charges, excluding taxes and levies and simplified network connection procedure.

NordREG notes that the consultant, THEMA, made a good report with useful a summary of the current national regulations. NordREG also notes that there is currently no reason for NordREG to develop Nordic recommendations in addition to the work previously made, for example, requirements for smart meters.

• THEMA_R-2015-03_Framework_for_DR_and_MP

Now is the minutes from the FCA (Forward Capacity Allocation) seminar April 20, 2015 in Stockholm Arlanda, available.

You can read the minutes here.

 

NordREG held a well attended hearing for market participants on NC FCA on the 20^th of April in Stockholm, Arlanda. A brief summary of the presentations and discussions will be published shortly. Here you find the agenda and all presentations made at the hearing:

• Draft agenda for NordReg hearing on the NC FCA_update
• Danske Commodities
• DONG
• EI background
• ELFI
• Energy Norway
• Fortum
• NAET
• Norsk industri
• NVE background
• Oberoende elhandlare
• SCA
• Summary
• Svensk Energi

Market participants who were not able to attend the hearing, or otherwise would like to clarify their positions, are welcome to post their views on some of the current topics by using an online questionnaire.

Follow this link to answer the questionnaire

Answers to the online questionnaire should be completed by May 10th.

NordREG hosted a hearing on the current state of TSO’s and DSO’s roles and responsibilities and the current market design for enabling energy services. NordREG has decided to commission a mapping exercise covering the current legal framework for information exchange, energy services, micro-production and demand response. During the hearing which took place at Gardemoen, Oslo on the 8th of April, the consultants Pöyry and Thema presented their findings.

Åsmund Jenssen, Thema:

– The regulatory frameworks in the Nordic countries are generally similar, but both historical and current differences can be observed, for example regarding the ongoing development of data hubs.

Kristine Fiksen, Thema:

– Smart meters are enablers of demand response, but are not sufficient to achieve it.

Richard Nilsson, NordPoolSpot:

– Hourly metering is necessary to enable demand response, and delayed implementation of smart metering is therefore a barrier to a common Nordic retail market.

NordREG would like to thank all the participants at the hearing both the ones present in Oslo and the ones that joined us via web-streaming. Please find the presentations from the hearing below.

• Fortum Markets
• Hearing TSO-DSO roles_RN NPS input
• Pöyry_Energy Services
• Thema Information exchange
• Thema Micro production demand response

At the NordREG Board Meeting, on February 26, the NordREG Work Program for 2015 was decided.

The work and cooperation of the Nordic Energy regulators will be significantly influenced by the European cooperation and the drive towards an internal European energy market in the coming years. This is reflected in the work programme 2015.

In 2015, NordREG’s work will be conducted through four main working groups:

• Retail Market Working Group will continue the work from several years to work towards a harmonized Nordic retail market for electricity.
• Wholesale and Transmission Working Group will pay special attention to the European development, especially the upcoming network codes and guidelines, towards developing and improving the functioning of the wholesale electricity market.
• Network regulation Working Group will focus on sharing experiences etc. on the regulation of network companies in electricity transmission and distribution between the Nordic regulators and stakeholders.
• Ad hoc Working Group on demand flexibility is a new working group, which will focus on the many aspects and challenges of demand flexibility as one of the ways to cost-effectively maintain and increase market functionality.

Read more on the specific tasks and goals of the working groups and NordREG in the Work Programme 2015.

For more information on the Work Programme 2015 please contact:

Henrik Gommesen, Danish Energy Regulatory Authority, +45 41 71 54 00

The TSO’s role is changing with the establishment of national data hubs run by the TSO. The TSO takes on a role as a market facilitator in a way. In the near future it will became increasingly important to provide the customers with energy services. The retail market needs to be designed in a way enable energy services providers to enter the Nordic market. The DSO’s, TSO’s etc should give these new actors the possibility to manage the customers’ electricity consumption and/or balance. It is important to provide a market design and a regulatory framework that clearly states the roles and responsibilities for energy service providers. The work on rules for energy services focuses on market rules for DSO’s and unbundling.

With regards to the energy efficiency directive, demand response is given a bigger role in the electricity market in dealing with network constraints as a result of more renewables in the grid etc. How much should the customer be able to choose and what should be “controlled” by other parties?  In order to reach European climate goals of increasing amounts of renewable energy it is important to have rules that enable customers to become producers. Therefore rules regarding access to the grid needs to be transparent and reduce entry barriers. Since the micro-producer needs contracts with suppliers it is important that rules are harmonised on a Nordic level.

Therefore NordREG has decided to commission a mapping exercise covering the current legal framework for information exchange, energy services, micro-production and demand response. NordREG would like to welcome stakeholders to the hearing where the mapping results will be presented.

The hearing will take place at Gardemoen, Oslo on the 8^th of April 10.00-14.30. If you want to participate send an e-mail to marita.grimberg@ei.se before the 24^th of March. The number of seats is limited. We will confirm your participation.

If you are unable to travel to Oslo it will also be possible to participate via web-streaming.

The following three reports will be presented and discussed at the hearing together with the agenda:

• Agenda hearing 8 April
• Mapping of TSOs and DSOs role and responsibilities_v200
• Data exchange in the Nordics – Final Draft Report
• Draft_report_framework_for_DR_and_MP

Welcome!

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)