Presentation given by Sophie De Baets, European Regulatory & Public Affairs Advisor at Elia, during the EU Briefing on Energy organised by Amcham Belgium on 7/7/2014.

1. The European Long Term vision
… and the Elia Group challenges
AmCham Belgium
EU briefing on energy
7/07/2014
By Sophie De Baets – The Elia Group

2. • 41 TSOs from 34 countries
• A trans-European network
• 534 million citizens served
• 910 GW generation
• 305,000 Km of transmission lines
• € 104 bil ten year investment plan
• 3,400 TWh/year demand
• 400 TWh/year exchanges
• A legal mandate
• Regulation (EC)714/2009
About the European Network of TSO for
Electricity (Entso-E)
Introduction
07/07/2014 AmCham Belgium - EU briefing on energy - By Sophie De Baets (The Elia Group) 2

3. • Among the five largest transmission system
operators in Europe
• Frontrunner in grid integration of renewables
• Listed on Stock Exchange since 2005
• 1,950 employees
• 380 kV and 220kV (down to 30kV in Be)
• 870 substations
• Fully unbundled
• World experience in RES integration
The TSO missions :
 Operation of the electricity system
 Operation of the infrastructure
 Market facilitation
About the Elia Group
Introduction
07/07/2014 AmCham Belgium - EU briefing on energy - By Sophie De Baets (The Elia Group) •3

4. European Objectives
07/07/2014 AmCham Belgium - EU briefing on energy - By Sophie De Baets (The Elia Group) 4
EU objectives Challenges for TSO’s

5. The challenges for the TSOs
Given that :
A single energy market is being built
RES increased very rapidly
Security of Supply in Europe is to be
re-inforced
The challenges for TSOs are:
 Build the right market platforms for
the single energy market
 manage huge flows
 operate the grid evolving from a
centralized production system to a
decentralized
 Urgent need for transmission grid
development: +17% till 2020
 Support the public authorities in
monitoring national security of
supply, taking the European grid
into account
Thousands of small units
Flexible gas fired power plant
being less profitable
Huge flows all over Europe
Possible EU scenario for 2020
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High variability and
unpredictability
of RES
E.g. Belgium
Winter in 2020

6. How can we meet those challenges ?
Market platforms to facilitate the single energy market – Target model 2014
Last development : the Day Ahead North West Europe region coupling :
This regional market coupling is facilitating the optimal utilization of interconnectors between the NWE
power markets as well as Poland*
Source : Epex Spot 06/2014
1.8%
4.1%
2.2%
7.5%
11.5%
14.3%
18.3%
17.1%
16.7%
16.9%
15.7%
12.6%
13.3%
7.5%
7.7%
4.9%
4.5%
13.0%
9.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Before After
Overall price spread
(118 days before vs 118 days after NWE go-live)
≥ 50
< 50
< 45
< 40
< 35
< 30
< 25
< 20
< 15
< 10
< 5
* the coupling has been extended to SWE (Spain and Portugal) in may 2014 (results not yot on chart)
NWE
07/07/2014 AmCham Belgium - EU briefing on energy - By Sophie De Baets (The Elia Group)

7. How can we meet those challenges ?
Flexibility
- More flexibility is needed due to
- Massive increase of renewable production
 higher volatility
 less predictability
- Decrease of gas fired power plants availability
- Flexibility should come from:
- the demand side (industries, aggregators etc.)
- flexible production plants (including wind and
solar)
- Storage: need to find innovative solutions
- from “smarter grids” : incl. direct current cables
combined with phase shifters
Example of a Flexibility Demand Side
Service
Higher volatility, less predictability
Flexible gas fired power plant
being less profitable
CO2 price
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E.g. Belgium
Winter in 2020
European Coal Price

8. How can we meet those challenges ?
Operational coordination
- More operational coordination
accross Europe is needed to anticipate
and mitigate the operational risks
- It requires day and night actions and
cooperation, not only plans, rules or
agreements
- Regional cooperation is a must.
Example: in specific situations, the loss
of a double line in France causes
overload in Switzerland that can be
solved by grid topology actions in Italy
and an increase of export by Slovenia
to Italy!
- Security of Supply requires more and
more close to real time cooperation
between TSOs.
-
April 3rd , 2013 - Due to unexpected misty weather
conditions: 9000 MW shortage on German Solar
infeed !
4th Nov 2006 :
near blackout :
10 seconds to react !
07/07/2014 AmCham Belgium - EU briefing on energy - By Sophie De Baets (The Elia Group)

9. How can we meet those challenges ?
Infrastrucutres : interconnections – aeging infrastructure – RES connections
- A common European plan for developing grid
infrastructures:
Ten-Year Network Development Plan
developed by Entso-E
(European Network of Transmission System
Operators for Electricity), including a scenario
outlook and adequacy forecast
- Financing these infrastructures
(~€104 bn investments, to be compared with
≈ 2% of the bulk power prices and less than
1% increase of end-users’ E-bills)
- Getting the public acceptance:
on the average, it takes 12 years to build a
new transmission line…
100 main bottlenecks in Europe in 2020
Market integration – between price zones
Market integration – within price zones
Generation integration
Security of supply
Main power flow trends
Source: ENTSO-E TYNDP 2012
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10. How can we meet those challenges ?
The need for harmonized rules
Enabling
renewables
Creating clear
connection rules
Providing
harmonisation to
benefit
manufactureres
Creating markets
to reduce risks
Ensuring
security of
supply
A coordinated
approach to
system
operations
Greater
optimisation to
enhance
efficiency
More flexible
markets (e.g.
balancing)
Enhancing
competition
A single market
design across
Europe (in all
timescales)
Promoting cross
border trade &
enhancing
liquidity
Reducing risk for
all market
players
Grid
Connection
Related Codes
Requirements
for Generators
Demand
Connection
Code
HVDC
Connection
Code
System
Operation
Related Codes
Operational
Security
Network
Operational
Planning &
Scheduling
Load
Frequency
Control &
Reserves
Market Related
Codes
Capacity
Allocation &
Congestion
Management
Forward
Capacity
Allocation
Balancing
Network Code
The Network Codes
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