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Balti Elektrituru Foorum 2010

Foorumi järeldused (inglise keeles)

Conclusions of the 10th Baltic Electricity Market Miniforum

4th June 2010, Kuressaare, Estonia

1. The 10th Baltic Electricity Market Mini-Forum took place in Kuressaare on 4th June 2010. It
was organised by the Estonian Competition Authority (Estonian Energy Regulator).

2. The presented updates of the electricity sector included the implementation of the 3rd energy
package in the Baltic States and Norway and revealed the main regulatory issues related with the
real market opening and monitoring, the promotion of the renewable energy and new investments.

3. Ms Anne Dønnem from Norway Water Resources and Energy Directorate introduced the
history of Nord Pool Spot (hereafter NPS) emphasising the company’s important role in market
opening. As NPS has started its operation also in Estonia and indirectly in Lithuania, Ms Dønnem
presented a comprehensive overview of the regulation of NPS, the market surveillance and
cooperation between the supervisory authorities and Nordic regulators.

4. Mr Juha Hiekkala, the representative of Fingrid Oyj, presented the new ITC mechanism (2010).
Though it seems to be a never ending story however a compromise has been reached after ten
years' hard work. For edge countries the ITC 2010 is not bad as contributions are based on
scheduled flows instead of real flows and due to the edge country reduction there are no double
payments at the perimeter country border. It was also pointed out that ITC Guidelines are the first
step when creating a common EU position on non-EEA third country border.

In addition the explanation regarding perimeter fees for Finland’s export/import from/to Russia
border has been given upon the request of Mini-Forum participants.

5. Ms Lina Skrabutenaite from BaltPool UAB (operating from January 2010) presented the main
changes and conditions in Lithuanian electricity market covering the work of market operator
(BaltPool UAB), trading tendencies and prices at the Lithuanian power exchange. Trade through
the power exchange has increased to more than 55 percent of all electricity trading volumes.
Overviews of future plans in line with ambitious timeline towards the common EU electricity
market have been presented. According to the BEMIP the Baltic electricity market would be
integrated in the EU market by 2015.

6. Mr Hando Sutter gave a short overview of NPS power exchange concept and detailed
presentation on ESTLINK price area started on April 1st, 2010. As the price area is young no
extensive conclusion could be made but the beginning was successful. The trading volumes are
growing and the price dynamics reflect the Nordic power market and congestions at Estlink 1. It
was also mentioned that there is an interest from financial markets in the Baltic region. However,
trading of energy derivatives seems to be premature as gaining more extensive market experience
is required.

Mr. Pasi Kuakkanen (NPS) explained the meaning of Market Maker and it was proposed to invite
the NPS Market Surveillance representatives to the next Baltic electricity Market Mini-Forum to
present the rules of NPS.

7. Ms Ingrid Arus from Elering OÜ and Giedrius Radvila from Litgrid UAB presented the
situation and future plans regarding the congestion management on the Baltic States
interconnections including to-do list and conclusions following issues covered in the Congestion
Management workgroup (thereafter WG). Three Baltic countries are aiming implicit auction from
the 1st January 2011.

The method on calculating the Transmission Reliability Margin (TRM) on Estonian-Latvian
interconnection was also explained.

8. The Baltic TSO-s introduced the work of Baltic Energy Market Interconnection Plan (hereafter
BEMIP) WG. The indication of future plans; status and timeline of new interconnectors were
given.

9. The discussion between market participants on market situation in the Baltic States was invited.
The power traders pointed out that there is a need to synchronise the licensing in the Baltic States.
They expressed the hope that in future the license issued in one country would be valid in all
Baltic States (or even in the EU). The Regulators stated that although these decisions should be
made on the high-level (Ministries) we should speak-up. Also it is important to keep in mind that
on one hand licensing gives some certainty for consumers but on the other hand in a small market
like Baltic even modest but different requirements on licensing may hold outer market players at a
distance.

10. Meetings of four working groups took place before the Forum. The conclusions on BEMIP
implementation WG and Congestion Management WG was included in previous TSO-s
presentations.

The Transparency WG prepared the Report on Transparency in the Baltic Electricity Market. The
public consultations process with stakeholders was finished and the final report will be published
on ERGEG home page.

The Monitoring WG held its 1st meeting in order to prepare the Common Baltic electricity market
monitoring and surveillance rules until 2011-2013. The summary table on present situation
regarding the market monitoring and legal framework of the different Baltic countries was
drafted. It was agreed that primary principles/ concept of common market monitoring rules for
Baltics will be prepared by the Estonian regulator and sent to other participants for additional
remarks and corrections. The next Monitoring WG meeting will be held together with the next
Baltic Electricity Market Mini-Forum.

11. In order to improve the cooperation between the Regulators and the outcome of the Baltic
Electricity Market Mini-Forum suggestions for changes were discussed.
It was proposed to bring in action Regional Coordination Committee (RCC) meetings which
would be held before Mini-Forum to handle ERI specific issues.

The market participants pointed out that the Mini-Forum should not be only for presenting the
issues in the Baltic electricity market, but it should also seek and find solutions.

As it is more important to open the market for outer market players the information on Mini-
Forum should be presented and advertised more widely so that it would be obtainable for all
interested parties.

12. It was agreed that the next Baltic Electricity Market Mini-Forum will be held in autumn 2010
in Latvia.