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On 1 November the new Commission
has started to work in order to guarantee security of supply, to build
sustainability and in particular to boost competitiveness. In the
framework of the recently agreed 2030 targets – 40% reduction of CO2
emissions, 27% EU target for renewables and 27 % non-binding energy
efficiency - the new Climate and Energy Commissioner Mr Arias Cañete is
setting out his portfolio’s main priorities. Among
these, the achievement of the European internal energy market both for
electricity and gas which - in his own words - is not only to link “infrastructure”
investment but also to “harmonise” European energy prices and grid
tariffs to respond to Europe’s “flagging competitiveness”. “The composition of energy tariffs should
be more transparent and based on
common rules”, he said in the Financial Times. Reducing Europe’s
dependency on Russia is also among his top priorities. GEODE is
keen to work with the new Commission on
the regulatory framework which incentivises innovation but also continues
to support the networks’ ability to meet their fundamental obligations -
ensuring system security and stability at all times.
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Juncker’s Commissioners – in place since
1 November 2014
On 1 November 2014, the new European Commission led by Jean-Claude
Juncker commenced its five-year term, after approval by the European
Parliament on 22 October and appointment by The European
Council at its Summit of 23 October.
Maroš Šefčovič, Slovak Commissioner-designate, has been
allocated the portfolio of Vice-President
for Energy Union, while Spanish Miguel Arias Cañete was
confirmed as Climate
and Energy Commissioner.
Please see more information on the new members of New Collage.
President Jean-Claude Juncker has already announced a €300 billion investment plan,
but there will be many other plans that will have to be scrutinised and
voted on by the European Parliament before they can enter into force.
There are also plans inherited from the previous Commission that have to
be dealt with, from roaming charges to banking reforms.
Among the main
priorities of the new Collage are: a new boost for
jobs, growth and Investment; a
resilient Energy Union with a forward looking Climate Change Policy;
new goals for
emissions, renewables and energy savings for 2030, as
well as measures
to reduce the EU's dependency on energy imports.
The 5 pillars of the Energy Union are as follows:
1.
Security,
solidarity and trust
2.
A
competitive and completed internal market
3.
Modernization
and demand
4.
Decarbonisation
of the EU energy mex
5.
Research
and innovation
Here you can find the full list of the new
Commission’s key priorities.
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European Council - 2030 targets
On 23 - 24 October, the European Council met
in Brussels and decided upon the 2030 Energy and Climate Framework.
Here are the main findings:
- CO2
emissions target:
“The European Council endorsed a binding EU target of an at least
40% domestic reduction in greenhouse gas emissions by 2030
compared to 1990.”
- Renewable
energy target:
“An EU target of at
least 27%
is set for the share of renewable energy consumed
in the EU in 2030. This
target will be binding at EU level. It will be
fulfilled through Member States contributions guided by the need
to deliver collectively the EU target without preventing Member
States from setting their own more ambitious national targets and
supporting them, in line with the state aid guidelines, as well as
taking into account their degree of integration in the internal
energy market.”
- Energy
Efficiency target:
“An indicative target at the EU level of at least 27%
is set for improving energy efficiency in 2030 compared to
projections of future energy consumption based on the current
criteria. This will be reviewed by 2020, having in mind an EU level of 30%.”
- Internal
Energy Market:
“The European Council noted the fundamental importance of a fully
functioning and connected internal energy market. Recalling the
March 2014 conclusions on its completion, the European Council
stressed that all
efforts must be mobilized to achieve this objective
as a matter of urgency”
- Infrastructure: “The European
Commission supported by the Member States will take urgent
measures in order to ensure the achievement of a minimum target of 10%
of existing electricity interconnections, as a
matter of urgency, and no later than 2020 at least for Member
States which have not yet attained a minimum level of integration
in the internal energy market, which are the Baltic States,
Portugal and Spain, and for Member States which constitute their
main point of access to the internal energy market.”
- Projects
of Common Interest, PCIs: “Member States and the Commission will
facilitate the implementation of projects of common interest
including those identified in the European Energy Security
Strategy which link in particular the Baltic States, Spain and Portugal,
to the rest of the internal energy market, ensure that they have
the highest priority and will be completed by 2020.”
- Energy
Security:
Recalling its conclusions of June 2014, the European Council endorsed further actions
to reduce the EU's energy dependence and increase its energy
security for both electricity and gas. Moderating
energy demand through enhanced energy efficiency will also
contribute to this objective.
A
special "flexibility clause" was added to the final text, making it
possible for the European Council to return to the targets after the UN
summit taking place in Paris in December 2015.
For more
information, please click here
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EC Communication on “Progress towards
Completing the Internal Energy Market – 2014”
On 13 Oct, the European Commission adopted the
Communication on “Progress
towards Completing the Internal Energy Market – 2014”.
The Communication acknowledges the important
progress achieved in completing the internal energy market.
A well-integrated internal energy market is a fundamental pre-requisite
to achieve three
main objectives of EU energy policy: competitiveness, security of
supply and sustainability.
The Communication states that energy market
integration in the EU has already delivered many positive results:
- wholesale
electricity prices declined by one-third and wholesale gas prices
remained stable between 2008 and 2012
- consumers
have more
choice choosing between energy suppliers
- many
missing infrastructure
links between EU countries have been built or are
under construction
- cross-border
trade in gas and electricity between EU countries has
increased. Gas pipelines are also being used more
efficiently thanks to common rules applicable to the use of gas
networks
- EU
legislation makes sure that energy companies cannot exclude
competitors from access to pipelines or withhold the construction
of important infrastructure.
- EU
rules also guarantee fair trading on wholesale markets and
prevent price manipulation
However the Communication admits that still
more needs to be done and new
challenges need to be addressed - in particular:
- More
investments in infrastructure needed, including Smart Grids.
The Commission has proposed in May 2014 to extend the current 10% interconnection target
to 15% by 2030.
- In
gas,
these investments should focus on ending the isolation of the
Baltic States and diversifying suppliers for countries in Eastern
Europe.
- In
electricity,
investments should focus on linking the grids of the Iberian
Peninsula, the Baltic region, and Ireland to the United Kingdom.
- By
2020, three quarters of the EU's infrastructure projects of
common interest (PCI) should be completed.
- The
implementation of a
set of simple and harmonised rules across Europe
for gas and electricity trading – Network Codes.
- A stronger
emphasis on regional cooperation to bring faster
results and to better address local needs
- Consumers
should become more active players in
the energy market
- A
close monitoring of electricity and gas prices that rose significantly
between 2008 and 2012 i.a. as a result of increasing energy taxes
and levies which represent a significant part of the retail energy bills
- Retail
and wholesale markets
should be
better linked so lower wholesale prices lead to
lower consumer prices.
- Investments
in smart meters and local generation need to be accompanied
by investments that enable DSOs to manage the grid in a smarter
and more efficient way.
- DSOs need to get
adequate incentives through tariff regulation.
The new Climate Action and Energy Commissioner,
Mr Miguel Arias Cañete will be in charge of developing further the
recommendations the Communication sets out.
For more information please click here
Please read another staff working documents
that were published together with the EC Communication:
Annex I .- Trends and
Developments in European Energy Markets 2014: interesting overview
of energy markets across Europe, with lots of figures and graphs.
Annex II.- Country Reports:
28 country-specific reports have been adopted containing individual
assessments of the state of play of the Member States’ energy markets -
Regulatory framework (NRA & Unbundling), Wholesale markets, Retail
markets, Consumers. Infrastructure, Security of Supply for each
country. We encourage you to read the chapter with your national energy
market assessment!
Annex III.- Unbundling - Report on the ITO
Model: shows progress on TSOs’ compliance with unbundling
provisions of Third Energy Package
Annex IV.- Investment Projects in Energy Infrastructure:
on
- Oil (refining, transport and storage).
- Gas (transmission, LNG terminals and storage).
- Electricity (generation and transmission).
- Biofuels (production).
- Carbon Capture and Storage (transport and storage).
Annex
V.- Implementation
of TEN-E, EEPR and PCI Projects
Annex VI.-
Enforcement of the
Third Internal Energy Market Package
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Launch of ACER/CEER Annual Report on
results of monitoring the internal electricity and natural gas markets”
On 22 October, the ACER (Agency for the Cooperation of Energy
Regulators) & CEER (Council of European Energy Regulators) published
its Annual Report on the results of Monitoring the internal
Electricity and Gas Markets in 2013 .
This report focuses on
retail markets and consumer issues, on the main developments in gas and
electricity wholesale market integration and on network
access issues. It also points out the remaining barriers to the
completion of a well-functioning internal electricity and gas markets. It
is a summury of data provided by national regulators (NRAs),
European Commission, ENTSOE and ENTSOG.
The report is
divided into four chapters:
- The
electricity and gas retail market
- The
electricity wholesale market
- The
gas wholesale market
- Consumer
protection and empowerment
Here is the
brief summary of the main findings:
I) The
electricity and gas retail market
In the paper, ACER / CEER analyse the evolution of retail prices
by relevant factors such as market concentration and consumer switching
behavior.
- Energy
retail prices' increase for both household and industrial consumer in
the majority of MS from 2012 to 2013.
- Household
energy prices are strongly influenced by non-contestable charges (i.e. tax & network charges) which
usually make up for 50% of the total energy bill. These charges
have significantly increased since 2008, due to the costs
related to support RES, causing retail price competition to become weaker.
Consumer choice
/ switching
- Majority
of electricity and gas household consumers do not actively participate
in the market by switching supplier ( except GB,
Belgium and Portugal).
- Suppliers are
innovating very little in offering different products linked to:
- the
dominance of the incumbent electricity or
gas suppliers
- The
absence of competitive pressure.
Barriers to
entering retail energy markets
- The
lack of harmonisation
of MSs regulatory frameworks
- The
lack of reliable web comparison tools in place
- Lack
of transparency
in energy invoicing
- The
persistence of regulated prices – still exists in 15 out of 29 MS in electricity
and 15 out of 26 in gas
- Low
liquidity of
wholesale markets – in particular in less developed markets
- High
uncertainty
concerning future regulatory developments
Demand Side
Flexibility – DSF
- There
is a significant variation in the penetration of DSF across MS.
- -DSF
is more common for electricity than for gas
- Countries
that have schemes already in place or are currently planning to
implement such measures have a relatively high level of energy
consumption
- These
products are used more frequently by large and medium consumers than
for residential consumers
III) The
electricity wholesale market - overview
- The
efficient use of interconnectors
continued to increase due to market coupling reaching a level of
efficiency of 77% in the day-ahead timeframe
- Urgency to finalise the implementation of the
Electricity Target Model (ETM)
- Substantial
benefits could
be achieved from the exchange of balancing services and therefore
Europe should continue to harmonise and integrate balancing markets
- In
view of integrating RES into EU power systems there is an increasing need
for flexible resources in the system.
- Flexibility in wholesale electricity markets(inc.RES
balancing) requires
efficient & well-integrated gas markets.
III) The gas
wholesale markets - overview
Despite significant progress barriers to full integration of
wholesale gas markets persist, including:
- The
lack of liquidity in many wholesale markets
- The
lack of transparency in wholesale price formation;
- The
lack of adequate gas transportation infrastructure
- The
presence of long-term commitments for gas supply.
IV) Consumer
protection and empowerment
The report assesses how provisions for consumer rights in 3rd
energy package have been transposed into national legislation:
- Supplier
of last resort and restrictions
to disconnection
- Availability
of adequate and accurate information on prices as well as on changes to other components of the
energy costs ( network tariffs, taxes etc.) and consumer's bills
- Progressive
smart meter development.
- Complaint
handling and dispute resolution are
also part of this chapter.
Vulnerable
consumers:
Majority of countries have defined vulnerable customers however
using different approaches for their protection
- Social
policies
- Special
energy prices – social tariffs
- Certain
amount of free energy
Conclusions
& Recommendations:
Improvments that still need to be made at national level by
regulators
- Better
management and analysis of complaint data & implementation
of statutory standards for handling complains
- Monitoring
the number & practicalities around the issue of disconnection
- The
information provided in bills about switching options
- The
frequency of informing consumers on their actual consumption
For futher information please read here.
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CEER advice on quality distribution
services
On 21 October, the Council of European Energy
Regulators (CEER) published the Advice on improving the quality
distribution services, which was presented in Brussels with the
occasion of the first stakeholders meeting on the CEER-BEUC 2020
Vision, attended by national regulators, representatives of consumers
associations and the supporters of the CEER-BEUC Vision 2020 -17
organisations representing the industry, DSOs, suppliers, TSOs and
Ombusman. This paper had been submitted to Public Consultation at the
end of 2013 followed by a workshop that was held in April
2014.
The document sets out 16 recommendations to improve
the quality of electricity and gas distribution
services from the household customers' perspective
on the energy market. The report focuses on key aspects around the connection, disconnection
and maintenance of the supply of energy. It also sets ambitious targets for the
timeliness and quality of the following key functions:
- Connection
to the grid
- Disconnection
of energy supply
- Disconnection
due to non-payment
- Planned
energy interruptions
- Information
during un-planned energy supply interruptions
- Customer
information about connection, activation and disconnection
procedures
- Installation
handling
With regard to DSOs, an important point has
been made by CEER that states: “Implementation of
the recommendations should take account of the costs and benefits
incurred by DSOs or other market players which ultimately will be
passed through to customers”.
For a full list of the recommendations please click here.
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CEF - Energy infrastructure
On 29 October 2014, Member States voted in
favour of allocating €647 million to key energy infrastructure
projects. The money will go to 34
actions selected after a call for proposals under the
Connecting Europe Facility (CEF). CEF has a €5.85 billion budget for
supporting trans-European energy infrastructure until 2020.
These actions will advance projects from a list of 248 key energy
infrastructure projects published in October 2013 under
the new guidelines for trans-European energy infrastructure. Carrying
the label "projects of common interest" (PCI) they benefit
from faster and more efficient permit granting procedures and improved
regulatory treatment.
A PCI has to have significant benefits for at
least two Member States; contribute
to market integration and further competition; enhance security of
supply, and reduce CO2 emissions. The list of PCIs is
updated every two years. The
European Commission has started preparation of the second PCIs list.
Special focus is being put on getting Smart Grids projects into the
list.
For
further information, please see here
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Madrid Gas Forum – Conclusions
On 15 & 16 October the 26 edition of the EC Gas Regulatory Forum
took place in Madrid. The meeting was chaired by Dr Klaus-Dieter
Borchardt, Director for Electricity and Gas at DG-ENER and attended by
representatives from ACER, CEER, ENTSOG, GIE, Member States, Easee-gas,
CEN and the industry Eurogas, EFET, OGP, Eurelectric, CEDEC, GEODE and
large Consumers CEFIC and IFIEC.
Here are the
main conlusions:
·
Ukraine crisis and security of
supply: the presented
Commission´s Stress Test Communication underlines that some countries would be
experiencing significant shortfalls in case of a Russian
gas supply or Ukrainian transit disruption in the coming winter. While the EU´s overall exposure to
security of supply risks has reduced since 2009, there
are still important challenges to be tackled. The strategic role storage and
LNG can play for EU security of supply and the current
historically high
levels of storage was pointed out.
·
EU internal Energy Market: the Commission presented its Communication on the Internal
Energy Market while ACER did the same with the regulator paper “A bridge to
2025”. Dr Borchardt informed that second selection of
PCIs (projects of common interests) has started and that the Commission
will ensure that second year, a
second PCIs list is established. He also mentioned that
an infrastructure Forum might be needed.
·
Regional
Initiatives, presentations showed the continued efforts undertaken in the Gas Regional Initiatives
on market
integration and early implementation of network codes.
However Commission and ACER will work on a new geographical set up of the gas regions,
which includes also Energy Community Contracting Parties, to guarantee
the necessary cooperation and flexibility for the regions.
·
Network Codes:
o
Congestion
management and transparency guidelines, TSOs compliance with transparency guidelines is not
yet fully achieved. ENTSOG was requested to achieve these
as soon as possible. Data
close to real time an hourly updated is absolutely needed,
Mr Borchardt said. Also compliance with CMP is still lacking.
o
Capacity Allocation Mechanism NC, efforts are being done by TSOs and NRAs for an
earlier implementation of the NC (binding on 1 November 2015).
o
Balancing NC, this NC is shown as an important one for the
development of an efficient and competitive wholesale gas market.
Commission encouraged all parties to work together for an early
implementation of this NC.
o
NC on Tariffs, still in consultation process. ENTSOG said it
is a very complex and difficult code. ACER expressed its concerns whether
the Code is in line with the Framework Guidelines while stakeholders
asked for a robust impact assessment. Next 31/12 is deadline for ENTSOG to submit a draft
NC to ACER. Commission announced the deadline will not be
extended.
·
Standardisation of Gas Quality, CEN presented its study on a gas quality
standard applicable for all gas transported, distributed, stored and
used. CEN aims for the adoption of a gas quality standard that never
impedes safety of gas appliances and operations for gas users. The
standard could be published in Q4 2015.
Next Madrid Forum will take place on
21/22 April 2015.
Here is the
full list of conclusions.
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Finnish Energy Industries’ position on
the roles of different parties in services of demand response
GEODE
Member Finnish Energy Industries (ET), an organisation for the energy sector,
representing companies that produce, acquire, distribute and sell
electricity, district heat and district cooling and offer related
services, has published on 23 October 2014 its views regarding the roles
of central parties as the providers of demand response services.
A
well-functioning and fair balance settlement is vital for a functioning
electricity market and for guaranteeing operational and economical
preconditions of electricity market parties. In Finland, Fingrid - the Finnish
TSO - is responsible for maintaining continuous power balance between the
production and consumption of electricity, i.e. balance management.
Finland is already in an uniquely good position, as
the remotely readable hourly registering meters are in use in over 97% of all the
points of electricity consumption. Nearly every
customer’s electricity consumption can already be followed hourly and
this information produced by the DSOs is used in balance settlements
between suppliers.
The supplier, the
DSO and the customer play a central role when implementing demand
response, and also the
aggregator - which is
chosen by the customer - can act as an executor of the customer's demand
response. For Finnish Energy Industries it is important to have the
different actors’ roles clearly set and broadly known.
Regarding
the customer,
Finnish Energy Industries strongly
supports the principle of demand response always being voluntary for the
customer and that the customer is duly compensated for the response. The
role of the DSO in demand response is to act as an enabler, creating a
neutral market platform for electricity. The DSO is responsible for
metering and balance settlement and can also offer its customers technical management solutions
as a service.
The
role of the aggregator, other than of a supplier of electricity, is rather an enabler of
technical execution of demand response. If the aggregator
were to take the customer’s demand response directly to the electricity
market, they should have the same balance responsibilities as a supplier.
Dividing the demand response offers and the actual
procurement of electricity into two separate actors on the market would
require that the
balance management structure and the balance settlement model would be entirely
reorganized. If the
present balance responsibilities were to be changed, the imbalance,
caused to the open supplier by the demand response actions offered to the
market by the aggregator should somehow be compensated.
As
alternatives,
either the TSO or the aggregator should compensate the effects caused by
the aggregator’s actions monetarily to the customer’s open supplier
according to a prior agreement. Both models can however become very
complicated and cost-inefficient. For these reasons Finnish Energy
Industries does not endorse this model and therefore does not see it as a
practical alternative.
For more
information please click here.
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ENA Annual Low Carbon Network Innovation
Conference, Aberdeen, 20-20 October 2014
The Low Carbon Networks & Innovation,
LCNI took place on 20- 22 October 2014, in Aberdeen organized by
GEODE Member, Energy Newtorks Association on behalf of the UK Electricity
and Gas Network Operators. The LCNI Conference is the largest innovation
conference for the industry and it’s the only event dedicated to
showcasing the breadth of engineering work taking place across the
networks.This year's event focused on how the developments for a smarter
network will help to maximise renewables, enable community energy and
deliver value for money from infrastructure.
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ENA on “Embracing innovation within
energy networks”
Please find below a press release, by courtesy of Energy Networks
Association, ENA GEODE UK Member, on “Embracing innovation
within energy networks” by David Smith, ENA Chief Executive,
published in a monthly journal of the Energy Institute “Energy World”
(November 2014 issue).
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GEODE at Energy Utility Week, 4-6
November, Amsterdam
GEODE participated in the Energy Utility Week Conference taking
place on 4-6 November in the heart of Amsterdam. The EUW is
the annual landmark event of the European energy calendar bringing
together all significant market forces and stakeholders under one roof.
It included a market leading conference programme, featuring
over 300 high level speakers and covering all the major value
streams.This year EUW's agenda focused on the global energy industry from
Renewable Integration to Smart Metering to Smart Cities. GEODE was
represented by our Chariman Reinhard
Brehmer who participated in a panel on a parallel workshop on local
DSOs issues together with our members Paul Fidler and Santi Martinez from
ENA and Estabanell Energia respectively members from Wiener Netze GmbH,
Estebanell Colleagues from EVME aslo attended the event. We look forward
to next year's EUW in Vienna!
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Salzburg AG - Smart Meter Roll-out on
the track!
Salzburg AG, one of Austria’s largest energy
providers, has commissioned European IT services expert Atos to lead a
470,000 smart electricity meter roll-out. The smart meter roll-out is
carried out on behalf of
Salzburg Netz GmbH. Atos confirmed that it will also
draw expertise from its subsidiary Atos Worldgrid based in Italy,
France, Germany and Austria to fulfil 13 of the total 17 individual
projects that will form part of the transition from analog meters to
advanced meters. The 95% deployment to the Salzburg AG’s service area
is due for completion by 2019 in line with the EU Directive 2020.
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EDITORIAL
EUROPE
- Juncker’s
Commissioners – in place since 1 November 2014
- European
Council - conclusions toward 2030, 23-24 October 2014
- EC
Communication on “Progress towards Completing the Internal Energy
Market – 2014”, 13 October 2014
- ACER/CEER
Annual Report on results of monitoring the internal electricity and
natural gas markets”, 22 October 2014
- CEER
advice on quality distribution services, 21 October 2014
- CEF
- Energy infrastructure, 29 October 2014
- Madrid
Gas Forum – Conclusions, 15-16 October 2014
ZOOM ON
- Finnish
Energy Industries - Position Paper on the roles of different parties
in services of demand response
GEODE MEMBERS - UPDATE
- GEODE
at the EUW
- ENA
- Salzburg
AG - Smart Meter Roll-out on the track!
GEODE EVENTS
- GEODE Autumn Seminar, Barcelona, 27 November 2014
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GEODE WG Retail
Barcelona, 26
November 2014
GEODE Autumn Seminar
Barcelona, 27
November
GEODE Board Meeting
Barcelona, 28
November 2014
27th European Electricity Regulatory Forum
Florence, 27-28
November 2014
ENTSO-E Awareness System Demonstration Event
Brussels, 2 December
2014
EC Smart Grids Task Force - Steering Committee
meeting
Brussels, 3 December
2014
GEODE WG Smart Grids
London, 10 December
2014
IEA/CEER Workshops
Paris, 14-15 January
2014
ACER's Launch of its updated Gas Target Model
Brussels,16 January
2015
GEODE - European Parliament Breakfast Event
Brussels, 21 January
2014
CEER’s 2015 Annual Conference
Brussels, 29 January
2014
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CEER's Position on the European Commission
Communication: European Energy Security Strategy
3 October 2014
CEER's Recommendations on generation adequacy
assessment in European countries
8 October 2014
EC Communication on “Progress towards Completing
the Internal Energy Market – 2014”
13 October 2014
CEER's Advice on the quality of electricity and gas
distribution services
21 October 2014
CEER's Report on the Implementation of the 2020
Vision by its Supporters
21 October 2014
CEER’s views on the Energy Security Strategy and on
generation adequacy
22 October 2014
ACER/CEER Annual Report on results of monitoring
the internal electricity and natural gas markets”,
22 October 2014
CEER's Public Consultation on draft “CEER Vision on
Regulatory Arrangements for the Gas Storage Market”
23 October - 12
December 2014
CEER's Status Review on Monitoring Access to LNG
Terminals in 2009-2013
23 October 2014
ACER's Study on "Regulatory implications of
new developments in the gas supply chain"
30 October 2014
ACER's Public Consultation on on the provisional
REMIT list of organised market places
14 November - 11
December 2014
ACER's monitoring report 2013 on the
Inter-Transmission System Operator Compensation mechanism
14 November 2014
ENTSOG's deadline to submit its draft NC to ACER.
31 December 2014
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