Anna Colucci, Head of Unit – Retails markets, coal & oil European Commission – DG ENERGY Fingrid Current 5.4. 2017. The event provided both European and regional keynote speeches on how to develop the electricity market. We also presented ideas on the electricity market roadmap for repairing the market.

1. Twitter
#FingridCurrent
Fingrid Current 5 April 2017
Presentation recordings
are published at:
www.fingrid.fi/en/news/events

2. 2 #EnergyUnion
CLEAN ENERGY
FOR ALL
EUROPEANS
Anna COLUCCI
Head of Unit – Retails markets; coal & oil
European Commission – DG ENERGY

3. CLEAN ENERGY FOR ALL EUROPEANS
3 #EnergyUnion
Unique opportunity to modernise our economy and to
WHY DO WE NEED THIS PACKAGE?
THE ENERGY SYSTEM OF TOMORROW WILL LOOK DIFFERENTLY
2030
50% of electricity to come
from renewables
2050
Electricity completely
carbon free
Thanks to the EU - ambitious energy and climate commitments
With leadership comes responsibility
create the growth and jobs we needboost competitiveness

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4 #EnergyUnion
WHAT ARE OUR GOALS?
CREATING JOBS & GROWTH, BRINGING DOWN GREENHOUSE GAS EMISSIONS, SECURING ENERGY SUPPLY
Demonstrating
global leadership
in renewables
Delivering a
fair deal for
consumers
Putting energy
efficiency first

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5 #EnergyUnion
New Electricity
Market Design
(including Risk
Preparedness)
HOW DO WE GET THERE?
THE RIGHT REGULATORY FRAMEWORK FOR POST – 2020
Energy Union
Governance
" In essence the new package is about tapping our green growth potential across the board"
Commissioner Miguel Arias Cañete (2016)
Energy

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A FAIR DEAL FOR CONSUMERS
NEW MARKET DESIGN
• Access to fit-for-purpose
smart meters
• Certified price
comparison tool
• Clearer energy bills
• Entitle individuals and
communities to generate
electricity and to
consume, store or sell it
back to the market
• Easier switching
conditions
• Reward demand-
response
• Monitoring of energy
poverty (governance)
• Information on
alternatives to
disconnection
• Sound data
management
BETTER INFORMED EMPOWERED PROTECTED

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Better informed consumers - Entitlement to a smart meter with common
functionalities
Current situation and problem
• While smart meters are key for enabling
consumer participation in the retail energy
market they are currently only widely
available in 3 Member States
Proposal
• Electricity consumers are entitled to
request a smart meter (Art 21)
• Smart meters have to meet common
minimum functional requirements (Art19,
20)
Planned roll-out of smart meters by 2020
Existing access to smart meters

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Better informed consumers - Price Comparison Tools and Billing Information
Current situation and problem
• Although comparison tools
make engaging in the market
quicker, easier and more
beneficial, consumers lack
trust in them.
Proposal
• EU electricity consumers have
free-of-charge access to at
least one certified energy
comparison tool that meets
minimum quality standards.
Current situation and problem
• Consumers report difficulties in
understanding their bills, and
bills are not effective in
providing basic information that
could facilitate effective
consumer choice.
Proposal
• Suppliers will have to
prominently display basic
information on every bill, and
report energy costs, network
charges and taxes/levies in the
same way for clarity.
PRICE COMPARISON
TOOLS
BILLING INFORMATION

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Empowered consumers - unlocking demand side response and active
consumers potential
There is a lot of untapped potential
• Only 21 GW activated today, more than 50 GW can be activated by 2030
• 5.6 bn. euro/annum benefit (¾ on the generation side and ¼ in reduced
network investments
Price based (Implicit DR):
consumers are exposed to electricity
price variations and actively adjust
their demand.
Challenges:
• Full roll out of smart meters
only planned in 17 MS
• Enabling technologies not yet
widely accessible
• Real time price signals are
not passed onto consumers
Incentive based (Explicit DR):
consumers are directly paid for
adjustments in their consumption
Challenges:
• Service providers (aggregators)
are effectively banned in some
MS;
• Many markets remain
effectively closed to DR.

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Empowered consumers - unlocking demand side response and active
consumers potential
Enable price based demand response
• Accelerated smart meter deployment
• Entitlement to a dynamic electricity price contract
Enable incentive based demand response
• Remove market barriers for aggregators
• Introduce additional rules for flexible markets (electricity regulation)
Enabling tools for active consumers and energy communities
• Entitlement to all consumers to generate, self-consume, store or sell self-
generated electricity while ensuring non-discriminatory network tariffs

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Empowered consumers – Switching fees
Current situation and problem
• ~20% of consumers currently face a €5 to
€90 fee for switching
• Existing provisions: Annex I of
2009/72/EC → legal uncertainty
Proposal
• Switching related charges prohibited.
• MS may choose to allow early termination
fees on fixed term contracts, but these
must be limited in size and contracts
containing them must provide consumers
with tangible advantages in return.
Real-life examples
- €27.90 'service fee'
- €27.16 'start up' fee
- €27.59 'admin. cost' on first bill
- €70 security deposit
- €25 yearly charge for new
contracts
- €20.54 unexplained charge on
first bill
Other examples
- 'activation fee'
- fee for contracts of less than
one year

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Proposal:
All consumer prices shall be freely set by the suppliers after the entry into force of
the Directive, but
Transition period for vulnerable and energy poor consumers
• A sufficient timeframe (5 years after entry into force) to allow a smooth
transition from regulated prices to an adequate protection
Permanent exception in case of extreme urgency
• Price regulation for vulnerable household
• Subject to scrutiny by the Commission
Key market reform – Phase out of regulated prices
Current situation and problem
• 17 Member States still have some kind of price regulation
• Non regulated MS perform better in terms of number of suppliers, market share
of new suppliers, switching rates, consumer satisfaction

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Protected consumers – Energy Poverty
SHARE OF HOUSEHOLD INCOME SPENT ON DOMESTIC ENERGY
Proposal:
• Member States to define criteria
for the purpose of measuring
energy poverty, monitor energy
poverty and report to the
Commission every 2 years.
• Energy Poverty Observatory to
support Member States
• Customers in arrears to be given
adequate information on
alternatives to disconnection.
Current situation and problem
• Growing levels of energy poverty
EU wide
• Lack of clarity of the term energy
poverty and lack of reliable data
to assess the scope of the
problem
Energy Efficiency
measures required
to target energy poor
households under
Energy Efficiency
and Energy
Performance of
Buildings
Directives

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Protected consumers – Sound data management and level playing field for
access to data
Current situation and problem
• Smart metering systems, in 19 Member States  more granular consumption
data and new services
• Existing provisions in Electricity Directive not fit for new developments
Proposal
• Define responsibilities for parties involved in data handling
• Set principles for granting access to consumer data, with the explicit consent of
the consumer, including non-discrimination, transparency and easy access.
Smart meters generate
roughly 3000 times as
much information as the
analogue meters

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Distribution Networks
Problem
• Current framework at EU or national level does not allow DSOs to be flexible
and cope with variable RES and new loads and does not focus on specific
tasks of the energy transition.
• In most cases DSO remuneration favours network expansion solutions
• Diversity of distribution tariffs create different market conditions for distributed
resources across EU
Proposal
 Enabling framework for DSOs to procure and use flexibility
 DSO tasks in storage, EVs infrastructure and data management
 Cooperation between DSOs and TSOs alongside a EU DSO entity
 EU-wide principles for distribution network tariffs
 DSOs to prepare multiannual development plans

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Improving the institutional framework – EU DSO entity
Current situation and problem
• Distribution networks are gaining importance; however, DSOs are not formally
represented in the EU institutional framework
• Cooperation of DSOs and TSOs on a voluntary basis; however, a closer
cooperation also in the context of network codes is required
Proposal
• Adapt the institutional framework to the new realities, including the
establishment of a EU DSO entity
• EU DSO entity to work in specific areas and cooperate with ENTSO-E