CEEP' members present their point of view on The Clean Energy for All Europeans legislative proposals released by the European Commission back in 2016, 30th of November, and assess its impact on Central and Eastern Europe energy sector.

This first edition of the CEEP Report for 2017 addresses the newly proposed electricity market design and it is opened by the interview with the Chairman of the Board of Directors, CEEP, and President & CEO of Management Board PSE S.A., Eryk Klossowski, who explains the need for NRAs and TSOs toapply locational pricing on their balancing markets, why scarcity prices will not work if the market architecture does not take into account the physics constraints of the grid.
Further on, the two keywords of the Clean Energy Package are discussed: liquidity and scarcity. The interview ends with the three conditions to be met when speaking about how to achieve security of electricity supply and the first one is coordination of cross-zonal capacity calculation and allocation.

The director of Internal Energy Market Directorate (DG Energy), Klaus-Dieter Borchardt, explains in its introductory text the European Commission's views on the Clean Energy Package, underlining that if we do all the steps right, we will be ferrying Europe towards an ever more competitive, secure and clean energy future.

Marco Giuli from EPC argues that the Clean Energy Package incrementally introduces elements of flexibility and Europeanisation, updating the software and fixing the details rather than working on the big picture. In the long term, further adaptation might be required as decarbonisationadvances.

Wardynski & Partners analyses the overall proposals done by the Commission, focusing on the revised rules for RES, underlining the targets, ways to get there, estimated impact and required adaptation to a new market design. It remembers that The Commission believes that direct financial support is no longer a primary way of stimulating growth in renewables.

As a complement to this, CEEP’s analyst looks into the impact the integration of RES will have on the wholesale and retail market emphasizing that the real challenge posed by massive deployment of RES lies in the necessity of development of a new, sustainable and reliable market model which will reflect cross-cutting changes.

EPSO-G’s CEO, Rolandas Zukas writes about the reaction states have as soon as power or gas supplies become limited, meaning countries are tempted to protect their national interests first. Some refuse to export power in order to secure the day-to-day operation of their own power systems and uninterrupted process of consumption, and only afterwards, if there are supplies leftover, help the others. This highlights the importance of the pan-European effort to remove national barriers for power and gas and integrate the markets. Concrete positive examples to illustrate it in his article.

Almost two hundred distribution system operators (“DSO”) currently operate on the Polish energy market. While defining the new role of DSOs, PGE’s expert asks for the proposed modifications of principles of elaborating and amending the grid operation rules and guidelines to take into account the important consultative role of energy regulatory authorities and of the member states in the process of elaborating the grid operation codes and guidelines, at least to the extent currently in force in the comitology procedures.

In EC's opinion, in areas where fragmented and uncoordinated national actions could negatively affect the market and consumers, mandatory cooperation should be imposed. EC proposes that such cooperation should be accomplished as common platform of Regional Operational Centres (ROC). A close-up on their role, the main concerns and a comparison with voluntarily created Regional Security Coordination by the TSOs, is analysed by PSE’s specialist in his article.

Introducing capacity market allows creating conditions for long term investments by limiting the market risk argues PGE’s, Poland, director of strategy department.

A lengthy contribution from Arcelor Mittal, Poland, explains the role of the energy intensive industry as a consumer. Many different factors make energy one of the most important cost items in balance sheets of industrial consumers of electricity in Poland. A happy medium has to be found, in order to reconcile ambitious political agenda with industrial (empirical) reality, otherwise not only the new role of energy intensive recipients, but existence of industry in general would be threatened.

Technology neutrality is the best way to boost innovation as it creates space for research thus increasing the desire to search for novel solutions. What stands behind this concept is analysed by CEEP’s executive director.

Last but not least, three trends are keen to produce a game-changing disruption in the electricity system: electrification, decentralisation and digitalisation. A sum-up of the World Economic Forum’s report is to be found in this publication.