Working on investment climate in the NW-region

UpdateBy projectleader Investment I1

GRI North-WestInvestment workstream

29.09.2009

Contents

1. Update - Investigating path to enhancing regional Investment Climate

- Based on Stockholm workshop 24.09.09 outcomes- Milestones/planning

2. Questions for discussion

Regional climate: sharing risks and planning together

To build or not to build?Who knows and when?

No ‘ready’ answer.

Co-ordination seems under way,

But no practice is inplace

For regional cost-sharing of

Investments (and its risks).

border

border

Shippers

TSOs

End-consumers

? Innovative solution ?

? Innovative solution ?

Main direction supported at Stockholm:what ’sticks’ and ’carrots’ do we need?

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• Projects differ (large projects require a very secure process, eg nord stream related flows in EU),– Large investment will happen because of ’nimby’ only once in 5 to 15 years.– This VT helps even more with incremental investments; adress quick and long term wins

• Clarity on tariff derivation• Periodical, centralized´, competitive bidding processes for regional demand

– Insight in aggregated shipper demand (as part of investment trigger)• Improve risk sharing mechanisms at regional level via 3-fold approach:

i) Financial solutions (like eg described in Journal of findings)ii) Commitment

• Shippers• Neighbouring tso’s and regulators and governments• In some rare cases, EU fund support

iii) Qualitative arguments to support investment (studies)• SOS (security of supply)• Competition• View on readyness to take risk (market growth, flow views)

Milestones and progress project so far ?

1. Gathering stakeholder support for work on investment climate (2008)

2. Development of manual on the regulatory investment environment for 9 national frameworks in the region

3. Delivered a Regulatory model for assessing investments4. Ran a virtual test5. Ran an experiment on bidding with ‘Tilburg’6. Draft Journal of Findings in production7. Tangible policy advise by end of 2009

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Planning q409

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• 29 September RCC/IG updates• Friday 2 october telco coregroup• 16 october model final and frozen• By 16 october first draft policy paper discussed and decided if

round 3 to take place• Last week October round 3, if any• 12 november PB update presentation• November: finalize policy advise (by 18.11.2009)• 25/26 November at Min. IG/SG policy advise presented • December- advise sent to relevant policy makers, signed by

executive representatives of stakeholders (eg PB’members)

Question(s) for discussion

• Views on turning outcomes in VT-findings to practical advise ?– E.g. Change to organisational set-up, ideas like

common approach to depreciation to shorten stranded asset risks.

• Resource support for required (legal) national check of potential enhancements (RCC granted support)– I.e. check if proposed ideas are compatible with

current law (=quick wins) or require legislative change (=long term wins)

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Background slides

Other remarks and decisions on 24.09.09 workshop

• Significant lessons emerged, JOF and Manual are at large supported– Subject to discussed in workshop

• No round 3, unless policy advise requires it– 16 october decision by core group, based on core and reference

group remarks– describe in JOF the caveats of round 2– investment triggers will not become more transparent as they are

• National systems, need to especially improve nra-cooperation in the area of agreeing on common investment trigger in relation to integrated open seasons

• Fuel price volatility - a point of attention (at high loadfactor of regional transit lines it can be up to 30% of transport price)

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Core group formed, reference group same – status 24.09.09

Core group• Old group minus Ariane Kruijtzer (EK/NMa),

Martijn van Gemert (EnergieNed/Nuon).• New members: EGT, WGT, GUD, BNetzA. Reference group• No changes.

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1. Broader context (2):

New European Regulatory Frameworkrequires more Coordinated Investment Planning

Third EU-liberalisation package – now in implementation - foresees:

• European wide 10-year network development plan, including supply adequacy outlook to be developed by ENTSO Gas, reviewed by the Agency

GTE+ is working on 10-YNDP

ERGEG recommendations on the 10-YNDP

ERGEG is doing a study on model-based analysis of gas infrastructure in order to prepare for the future role of ACER to evaluate the 10-YNDP

• Regional investment plan every two years by ENTSOG / regional Group within ENTSOG

• National/TSO 10-YNDP every 2 years: detailed procedural requirements and review by NRA

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