S1E09

Aligning Regulation, Technology, and Geopolitics for CEE Market Integration - TEB Podcast -S1E9

with Misa Manor· Magnus Energy· 60m

TL;DR

Regulatory frameworks are crucial for integrating battery storage and demand response in CEE energy markets.

Synopsis

The podcast discusses the integration of regulatory, technological, and geopolitical aspects in Central and Eastern European energy markets. Misa Manor emphasizes the importance of defining flexibility and the role of capacity mechanisms in ensuring resource adequacy amidst the energy transition.

Key metrics

by the numbers · 5

550 g/kWh
emission limit
2026
Bulgaria euro adoption
30 minutes
cross-border trading window
3 hours
resource adequacy standard
1 hour
current cross-border trading window

Topics

5 tags

flexibility definitioncapacity mechanismsbattery storagedemand responsemarket integration

Stats

Duration: 1h 07m
Words: 11.0k
Questions: 34

Timeline

5 chapters

Regulation Introduction
The regulation defines flexibility for the first time.
Misa Manor Introduction
Misa Manor discusses her background and expertise in energy markets.
Battery Storage Discussion
The regulation emphasizes battery storage and demand response.
Intraday Market Changes
New regulations aim to improve intraday market integration for renewables.
Capacity Calculation Methods
Discussion on flow-based and CNTC capacity calculation methods.

Key insights

4 takeaways

01
Importance of Flexibility Definition
The recent regulation's definition of flexibility is crucial for market participants to understand their roles.
02
Capacity Mechanisms as Integral
Capacity mechanisms are now considered integral to electricity markets, ensuring resource adequacy.
03
Geopolitical Implications
Energy markets are influenced by geopolitical factors, particularly in CEE regions.
04
Battery Storage Incentives
Regulatory frameworks are increasingly focusing on incentivizing battery storage and demand response.

Pull quotes

2 quotes

For the first time the regulation defines flexibility the term because before that there was no definition
Misa Manor
You cannot just leave out bits and parts as you like
Misa Manor

Transcript1762 cuesClick a timestamp to jump

the regulation last year, they
really mentioned battery energy storage
or best and demand response in
particular
>> and they also interesting just want to
mention it because I like it. for
the first time the regulation defines
flexibility the term because before that
there was no definition and
everything is kind of defined in
regulation but nobody defined
flexibility but what is flexibility?
>> Okay, so what is it?
>> Yeah, wait I brought it. So it's
Okay. So, welcome to this new podcast
for the energy bridge. Today we have the
pleasure to have Misa Manor who was part
of the first step forum. So, we are very
grateful for that.
>> so, yeah, we are here like a
electricity market expert and regulatory
strategist. So since one of our best
friends from classmate Johanna
recommended us to make a brief
introduction of the interview. So
what can we say from you that you are a
leading expert in European electricity
market design, regulatory framework and
energy community integration with 10
years of experience driven energy policy
and now as managing consultant and
Magnus energy and this is the more
important you bridge technical
regulatory and geopolitical dimensions.
So and everything to accelerate
energy transition and to integrate more
renewables in the grid. So
>> today we're going to go deep into
energy market. You happy with the
introduction?
>> Yes. Great.
>> Bridge deep. Yeah. Okay.
>> Yeah. Okay. Okay. Tell us what have you
missed because
>> Yeah. Maybe.
>> Well, I'm also nice and friendly.
Okay. No, definitely
>> not only working but also fun outside.
No,
>> that's great. we need nice people
in energy and you're way nice. Thank
you for doing this. Hey Alisa. So
while we want to understand
from you like also from your
student path how did you get into
energy? What did you study and all of
that? Please tell us about that. Yeah.
Well, people ask me that a lot and I
guess everybody is always expecting like
I knew when I was five that I wanted to
be an energy expert and no I did not.
>> So no I always liked analytical
things at school and of course how like
the world functions. So I studied math
at technical university. So to keep it
also be more a bit more hands-on and not
only theoretical as it would probably
have been on university
like normal university and then I just
studied math and I was quite interested
into biomedical engineering. So my
master thesis is actually on biomedical
engineering just across here at
Austrian Institute of Technology
>> on Alzheimer's.
>> well
>> like modeling of brain measurements
of Alzheimer's patients..
>> so somehow I thought I would end up
in biomedical engineering but then
there was just a very nice announcement
of a job at a consultancy for gas
markets and
>> a very small one and actually just for
fun applied at first place because I
thought okay
>> what do I know?
>> Nothing.
>> Where did you do your bachelors and
master?
>> Oh technical university Vienna. Yeah,
just one Arasmos in Stockholm but
nothing nothing else.
>> So yeah, then I applied. I got a strange
case study which I thought I did not
really managed to do but in the end
they offered me the job. So thanks MCOM
and yeah and I liked it a lot. We
were like a super small team actually
like four people with our
>> manager and yeah I just got into gas
markets. We did a lot on gas market
integration at that time but also on
regulatory matters already in the energy
community. This was my first trip to
Ukraine actually at that time. So we
were supporting with gas market
development and unbundling in Ukraine
as well or in other energy community
countries and then indeed I
already there kind of ended up on the
gap between technical stuff and
regulatory stuff
>> and then just for private reasons
wanted to move to Cologne and got a job
at the bunes to then really changed to a
national regulatory authority
>> and somehow had feeling I wanted to
switch to electricity which I managed
then with the new position because there
I was in the transmission access and
crossber international affairs
section and this is where I started with
short-term electricity markets first and
then also had a secontment to Acer so
some NASA sometimes send people kind of
as a secontment to support on specific
matters and I supported on CCM 2.0 zero
first but also on some decision making
of Acer.
>>.
>> And then indeed had my station at the
energy community and now Magnus energy.
>> Wow. So from from math
>> gas
>> then connection
>> and then you changed to electricity or
you
>> No. So yeah it was gas and electricity
was directly bund
the section is on all crossber and
transmission network matters in the
section. So we did all the international
stuff and mostly markets and
calculation of capacities capacity I
mean not so much but network reserve at
that time it was also national first
intersection before we split
international and international when it
got bigger
>> so very interesting and yeah
>> and geopolitical because of the
transaction between borders
>> of course yeah it's always geopolitical
energy is a cheap political game
>> sometimes, isn't it? So, yes, it's
always and it has always been even more.
at the beginning, I sometimes
felt it's even more in gas because it's
very obvious where things flow. No, and
things are built sometimes even that
they just flow in one direction. No, and
you can kind of literally
>> feel that's kind of going from east to
west., but of course also it's a
geopolitical thing in electricity. Yeah.
>>. And was it a trigger that you
started liking this space a lot?
>> I don't know. It somehow combines
a lot of things I like.
>>.
>> I like analytical things like really
critical thinking.
>> Yeah. Numbers, but more like this like
how to approach something to make it
better.
>>.
>> Okay. And I think I like the regulatory
part because I love languages and it's
kind of sometimes it's it's like
really sticking to every word trying to
understand it to fit it together.
>> Interesting. This is where also kind of
I think bridging the gap is important
because sometimes for me my task is also
to read something
>> new regulation very complicated such a
long sentence and then like
>> kind of break it down and translate it
for a guy in system operations
>> who has no clue because
>> for him the word may and shall doesn't
make a difference for me it makes a huge
difference because it's like you have
the option or you have to do it
>> but it's just like I think
it's often very often just bridging
the gap between two things. Yeah.
>> Well, so between kind of industry
from regulation to
>> Yeah. often
>> other industry. Okay. Cool. And how
critical do you think is this
combination for energy transition like
to have this grid operational knowledge
and market regulation for other?
>> Yeah, very important. At least this is
what I what I feel and always felt from
the very beginning that indeed we
talked about this bridging the gap but
often it's just that the expertise of
course on very specific things lies for
example with system operation they have
done it for several years they would
know a lot better and then of course
you need to kind of fit that together
with maybe some theoretically
best solution because economically it's
maybe even easy to design. Yeah.
>> But on the other Exactly. But you're not
on green field. No, you have to decide
and you have to bring it together. So I
think it is very important. And also not
only I'm not a lawyer but also
then again from the very legal
perspective of course because sometimes
this is a lawyer how a lawyer
understands an article and this is how a
technical person understands an article
of a regulation. No. And I was super
lucky because I had really great
colleagues at Bundeset Sagenur. We were
a mixed section with lawyers and
technical people and I had a chance to
cooperate with them and I think it was I
hope likewise beneficial because we
learned a lot.
>> Okay. Now that's good with lawyers
in technical sectors are crucial
and someone has to interpretate them and
translate in technical. Absolutely. Wow.
>> Alisa, now you're working with Magnus
Energy, right? So mean tell us about
some key project that you're working on
currently.
>> Yeah, so indeed I joined one year ago
in the technical advisory line of
Magnus Energy and I am working mostly
on regulatory and let's say policy
matters. several projects so far. I
mean some maybe interesting ones for
CE as well is we had a project in one
of the CE countries also in terms of how
like really from a innovative but
like theoretical perspective for now how
the capacity mechanism could look like
also to of course bridge the gap
or have the gap filled on adequacy
but also in terms of to attract
non-fossil so to attract also battery
or demand response and to make it fit
for the future I would say.
>>.
>> Because yeah I in this country
also coal still plays a significant
role. So this is something which is
definitely important and then I also
worked on some hydrogen matters
lately which is getting as also
more and more important for everybody
interested in hydrogen we will also come
up with a new paper on the regulatory
matters when
>> and we'll share it
>> I guess over summer yeah but as I
think I said that in the panel as well
we sometimes just publish papers and
lately we had one on battery
attractiveness and I heard from a lot of
people at the conference that it was of
high interest to them because colleagues
of mine assessed some member states
mostly western Europe but also
Hungary in terms of
>> market maturity what are the
support schemes for behind the meter in
front the meter what are your revenue
streams so kind of
>> an short assessment for some countries
and this is indeed free for download as
well
>> interesting Okay. And for demand
respond also are
>> no this was for battery attractiveness.
demand response we
>> can talk about it as well later but I
mean it plays a role also in terms of
the latest amendments of the regulatory
framework in terms of kind of
strengthening also the
incentives for demand response. So
indeed we kind of cover it of course
when we talk about flexibility
>> you have
>> but we don't have like the specific
paper but for battery we did
because we think it's it's super
important but also interesting and what
I hear from my colleagues it's kind of
>> it was a lot of work to bring the
puzzles together because you need to get
into the national subsidy schemes but
also the revenue possibilities and
assess and there is a lot of information
of course around but sometimes it's also
of course like to condense it to make
really a statement. Yeah. Or to
really kind of the outcome was
really to have like a graph on how
attractive we think this country is for
battery installment. So that's
kind of a condensed number.
>> Yeah. Could we share the
>> Yeah, we can I can share the link. Yeah.
Yeah. Amazing. Just one more thing about
Magnus is a Dutch company and then
they also have another office in Vienna.
So why this region is important for
them?
>> yeah well I think it's also of course
the grow because in the sense of a
European consultancy firm for the
energy transition so energy
transition is one of our main topics and
we support it with all the projects we
do
>> and yeah I think there is a lot of
experts around and it's also kind of
depicted by the offices we have we are
growing in several dimensions
>> and I think from my personal
perspective of course It's great to have
the chance to do something I like but
also live in a country which I like. So
opens up a lot a lot of opportunities I
think for people as well and probably a
nice chance to get also experts which
were probably not interested into
moving. No.
>>.
>> But is it also some regional
focus that
>> Yeah. Of course in Vienna we have
several German speaking people. So we
also cover a lot of the Austrian and
German market and of course as well
for we actually have two colleagues
now here very much focused also on
the energy community. So myself and
Gorgi so he joined recently and he's
from Bulgaria but he now also lives in
Vienna. So yeah in terms of
traveling Vienna is also easier access
to the east and southeast. Yes. And
actually we were reading just news about
the region and Bulgaria will be part of
European Union or it was
>> Yeah. Yeah. It's but it's I think
it's about euro. No.
>>.
>> I think they will introduce the euro as
well from 1st of January 2026. I think
they kind of managed to get all their
checkpoints. No.
>> Yeah. Yeah. And does it influte somehow
in energy market or is
>> well I think the euro yeah they
then don't have to kind of translate the
currency for market cult but it's
not I think it's not going to be like
super huge change in terms
>> they are integrated already
>> exactly they are integrated so it's it's
fine and I think my colleague Georgie
was working a lot on that because he was
at the Bulgarian TSO working
>> okay
>> so he was leading on this integration
project as well.
>>. Okay, great. now in more
maybe technical side just to understand
more about energy market, it's the
the challenge of to implement capacity
mechanism in the EU regulatory
framework
to address the decarbonization goals.
How what is it
>> a capacity mechanism and how do you
think that they can be implemented?
>> Well, yeah, that's a it's a very on voke
topic.
>> So people are talking about it even more
so after the energy crisis no because
in the previous so we have this
so-called electricity regulation and I
will probably mention it a lot. So it's
one of the main parts of the of the
legal and regulatory framework and it
sets out a lot of principles
>> besides the electricity directive. So
you have directive and regulation and
the regulation is really on the market.
>> Okay. And in the latest one in
in 2019, the capacity mechanisms were
there but really as transitional
measures. And what changed now in the
latest amendment of this regulation last
year in summer 2024,
>> it they are now considered to be more
like integral parts of electricity
markets. And what they actually try to
do or or the goal of capacity mechanisms
is to ensure
I would say a necessary level of
resource adequacy and resource adequacy
means that there is always like very
broadly speaking there is always enough
supply to satisfy demand in a member
state
>> in any moment even moment
>> that's the question indeed what is the
necessary level no
that's the rain light. Okay.
>> Yeah. But yes, I think even
the definition in the electricity
regulations says necessary level
>> but then of course there is also rules
on how to assess this level. So
reliability like what is your what is
your standard reliability standard and
the member states set it and it could
for example be that I don't know 3 hours
a year
>> is fine but
>> 20 is not.
>> okay okay but
>> it's a bit on it's a bit a national
decision as well there is methodologies
also by aser on how to approach this
question of necessary level but what is
important and what is done on EU
level is that so the association
of the transmission system operators
they do a yearly assessment of resource
adequacy which really comes to I would
say the adequacy gaps per member
state so really how much is missing also
in terms of energy because you might
also to have 3 hours with like
>> yeah exactly
>> nothing or huge and so it depends not
only on how often but also how much of
course
>> how much
>> so they do the resource adacy
assessment on a national level then some
member states also complement it on an
on a really only national level they
follow the same methodology they add
some specificities because of course
they might know and can cover a bit more
on I don't know for example Austrian
specificities even
Austria currently doesn't have a
capacity mechanism but just as an
example and then of course if there is
really a gap identified then member
states are allowed to have those
capacity mechanisms put in place so to
kind of
put money up on the table to really
support generation to be there in times
of scarcity
>> and there are the principles also in
the regulation obviously it
should be market based no technology
neutral. So you do not only want
to have old coal but also
>> but there are requirements.
>> Yeah. Yeah. They are very much laid out.
Yeah. Then proportionate which is a
famous question and probably you can
have a lot of studies about it but
yeah and then of course also in terms of
technology neutral. Yeah. be open to
different new technologies because in
setting your requirements of the
capacity mechanism you could of course
intentionally kind of rule out some
technologies.
>>.
>> that's hard because on one
side you have your technical needs
>> and they have to be fulfilled on the
other side of course there is options to
make it as open as as possible. No. And
then maybe as you mentioned
decarbonization
what is also actually defined in the
regulation are emission limits.
>> So you cannot just support whatever
generation you want to support but they
have emission limits.
>>.
>> And you have to fulfill them and they
are getting stricter. No it's really
like I think 550 g of carbon dioxide
per kilowatt like there is really limit.
>>. And also Acer puts forward
recommendations on how to even calculate
that because it's also not
straightforward.
>> I'm not an expert in that but I can say
it's it's I think it's not
straightforward. Yeah.
>> So maybe to put it all together. So
it's currently there are already
capacity mechanisms in place in a lot of
member states. So
>> and there is different styles of doing
it. So for example in Germany you have
what is called a strategic reserve and
that's really generation completely out
of the market
>> and auctioned of course you
have an auction in the first place and
then they are kept out of the market and
only used if demand would be or supply
would not be enough to satisfy demand.
So if the market is not clearing
>> and then on others it's more like a
centralized market in a sense that for
example the TSO or the public entity
would would auction investments
into new capacity but they are not
kept outside of the market but they are
required to be there in terms in times
of system stress. So when the TSO would
call them, they would need to be
there. But it's more like u sometimes
it's like a reliability option. No, you
kind of buy an option to call them if
needed. If the price is higher than an
agreed strike price on the market
because then you kind of have a
scarcity.
>> So it's not mandatory for the and
every country can make it as they want.
>> Well, no, no, no. I think it's very
strict. Exactly. And it's also not that
you can just choose to have it. You need
>> so either the EU assessment or your
national assessment has to show the gap.
>> Okay.
>> So if you don't have a gap, you
cannot have it because also we could
talked about proportionality. If your
gap is zero, it's not
proportionate to have it.
>> And you need you also need some
precepts. You have so-called
implementation plan. Also the member
states first try to address the barriers
in different matters. Is there any
market distortion which might lead to
the gap which I can maybe easier
>>.
>> address first and you need an opinion of
the commission also approval of the
commission because it's in the end it's
state aid. No you are paying
generation extra money.
>> yeah so let's say it's not it's it is
not harmonized in this sense. So indeed
there is options but I would say the
framework is still limiting you to some
options.
>> No it's just that now nowadays it's
on the table the discussion with nuclear
again.
>> Yeah.
>> So what do you think about implementing
more of this technology with this
mechanism? Do they fit or not in the
current framework
like decarbonates
>> with the low emissions or
>> yeah I don't know how they calculate the
it would be interesting if they have to
calculate also how they get to the I
mean like any pre emissions or
not I don't know so
>> that would be one of my first questions
embedded yeah and on the other side I
mean
>> I would rather see the intention
And I would like to add on that later
as well, but I see the intention with
the last regulation that and this is
what they really mentioned specifically
is battery energy storage and demand
response and you should rather make your
capacity mechanism fit
>> to
address non fossil like really non
fossil and more flexible.
>> So I would rather read this intention
and that would also personally be my my
preferred one but that's another
discussion.
Okay, going into battery energy storage
system. So, how do you see them fitting
into how how can they can be addressed
and how how do we best support in terms
of advocacy?
>> Yeah. Yeah. Exactly. So, that would be
indeed
what I already mentioned now shortly is
indeed that the regulation last year
they really mentioned battery energy
storage or best and demand response
in particular.
>>. And they also interesting just want
to mention it because I like it.
for the first time the regulation
defines flexibility the term because
before that there was no definition and
everything is kind of defined
in regulation but nobody defines
flexibility. But what is flexibility?
>> Okay. So what is it?
>> Yeah wait I brought it. So it's and it's
very broad. This is why I'm like the
ability of an electricity system to
adjust to the variability of generation
and consumption patterns and to grid
availability across relevant time
frames.
>> Okay.
>> Exactly. Relevant. Yeah. Exactly. So you
stumble upon some words and you're like
okay.
So we looked at that as
well. and it's it's
interesting relevant market time frames.
you can actually read that very
broad and in this sense
Yeah. Or two days. Seasonal. No,
flexibility is seasonal, isn't it? It's
a,
>> so in this sense I would say it
really establishes a link between adacis
and flexibility. No, because at some
point they overlap somehow because
adequacy is also a flexibility. No
>> and the other way around. Of course
will never be the seconds of balancing
but
>> but yeah. So I and this actually fits
to the regulations intention that member
states having capacity mechanisms should
also kind of rethink them to see if they
can better integrate battery energy
storageages and demand response. So
they kind of also put on the member
states to reassess if they are fit for
purpose also for the future. And I think
that's that's a relevant and
interesting question and let's see
what what member states do with that.
>> Wow. So how old is this definition or
>> that's from last year 2024. So with the
with the la last amendment of the
electricity regulation. Yeah. And this
is also where they where they introduced
this non fossil flexibility support
schemes. So it's kind of a additional
support scheme.
Okay. I don't know if we have okay I
will take on yeah two three go
>> sorry but it's it's interesting
because it really defines even a
process on
also finding out what is your
flexibility gap in a member state
because now we talked about a dequis but
you might also wonder how much
flexibility do I need
>> and the regulation tries to address that
by defining the entities to develop a
methodology and this is currently
happening. It will be approved by Acer,
developed by NSOE and EU DSO entity.
>> Then NASA are supposed to publish by
annual reports on flexibility needs. So
you have national flexibility needs
>> and then the member states are
>> obliged to define so-called
indicative targets for non-fossil flex.
So how much do I need? And then indeed
you are again like like with capacity
mechanisms you're at the place to check
okay this is what I need will it be
enough if I do not intervene like
because you might have barriers you
might have market you can still
do something to make markets generally
more attractive to best or whatever
>> and if not you are allowed to support
them with the so-called non fossil
flexibility support schemes
>> and again there is the principles in the
regulation like how should it be done
>> but interestingly It's it's competitive
but it doesn't explicitly like it does
for capacity mechanisms mention market
based so it could probably non market
based
>> but it's again a capacity payment so you
pay for capacity not for the energy
produced
>> okay just to for being there kind of
>> yeah yeah yeah just to support
into new investment into to non fossil
flex
>> in infrastructure
>> yeah in new capacity but to fill
your flexibility gap but also and this
is probably the first step you should as
a member state try to do is to see okay
but is my capacity mechanism
>> also fit no kind of because as we said
flexibility and equity somehow
>> overlap or at least together kind of
span the whole system needs
>> and is it the public information
>> the flexibility needs
>> well it's not yet there because last
year 2024 they just defined this process
And now what is
>> currently happening is that the
methodology was submitted to ASER
>> and ASAR will approve it. So we are just
at the very first step
>> and then I think if I remember correctly
NAS have like or they have one year to
come up with the report and then member
states have another 6 months to come up
with the target. So let me see.
>> Yeah, more or less.
>> Lisa when you talk about the member
state and then you also have the
non-member states. Okay. And
>> so yeah, yeah, the energy community.
Yeah.
>> Yeah. Yeah. That's where energy
community.
>> If I say member state, EU member
state.
>> Member state. And that's where energy
community comes around. And then
let's say if for the member state is
taking 6 months, how long it takes for
the non-member state?
>> Well, so then okay, so let's make it
like this. No member state and I will
say contracting party if it's a energy
community contracting party.
>> So they did not yet adopt this
regulation. So it's not even there. So
they're still on the 2019 version
>> and they're still transposing the 2019
version. So yeah, you have this gap. I
think I mentioned it in a panel. No,
it's and I can als I can explain
that later as well, but it's really
>> by the mayor setup of how it works that
you always have this kind of
>> delay in getting the same legal
framework in place there. But of course
it's also important there and I think
also from a from a regional perspective
the cold phase out also in the
balkcans and then especially Serbia or
Kosovo or Yeah.
>>.
>> one of the thing that you
everyone was addressing also during the
panel and we had GD mut especially for
that was about renewable integration
into the grid and how does the it affect
the intraday market. Oh well yeah in
>> let's start with member states or
contracting parties. member states
okay
>> I think we can start with the member
state and what reform do they need and
>> yeah I think look in the EU I think a
lot of things have happened. So maybe
just quickly so if we talk about
intraday in the EU we mean that there is
three auctions and in between there is
continuous trade. So intraday starts
in 3 hours for midnight. So it's
actually starts 3:00 B minus 1 for all
the delivery hours of the next day. No.
>> And so you have one auction at 3:00,
then there is continuous trade, another
auction at 10:00 and another auction on
10:00 the next day.
>> And this is what we call intraday
markets because it's kind of this
combined solution now. And it's also
implemented. And what is important in
today's markets is that you have kind of
small granularity know it's like to
trade 15inut products because this just
better fits renewables.
>> and this has been implemented nearly
everywhere. So you it was a
really big effort. It is still missing
in day ahead..
>> they delayed it now the TSO and
Neimos it should have been now in June
but I think it's in September but it's
close to be there in day ahead as
well. And then also a new thing of
the of the regulation of last year is
that the intraday crossal gate closure
time. So the closer you get to delivery.
So currently it is 1 hour ahead of
delivery. So until 1 hour 60 minutes
before actual delivery
>> you can
>> you can trade crossal across the EU
which is important because the
merging of the markets know it gives you
liquidity.
>>.
>> And the idea is to better integrate
renewables that this regulation mandates
that this should be moved to 30 minutes.
So to give the renewables another 30
minutes for their forecast. it
just gets better in terms of forecasting
know and balancing
>> only for renewables.
>> No no no just the market. No, but the
intention is of course to better
accommodate for renewables, but of
course it's just that the market will
close half hour later for everybody.
>> Yeah.
>> No, and this is should be done by 1st of
January 2026, but there are options for
deroggations and as far because I
quickly checked the public information
available is that a lot of TSO are
opting for the derogation. So it might
still be some some years.
>> Okay. And on the contracting parties of
the energy community, it's of course
still a longer way because we yeah a lot
of them do not even have intraday
markets. So we are not yet talking about
like improving intraday markets but like
having them in place. So Serbia does
have they did that on 25th of July
two years ago I think now because
it's my birthday. This is why I remember
the date. I would not if it's not my
birthday.
and Ukraine and the others in especially
in the balkcans they are still working
on the internet markets but it's also
tricky they are small small in
terms of size no so they also rely
a bit then on the integration to have
the liquidity
>>
>> so this is why the coupling is even more
important than if if your own size is
rather small
>> but of course it would be very important
for them to have the intraday markets to
allow the renewables to balance their
portfolio but also to just have they had
and intraday integrated to have stable
prices know also for all kinds of
investments.
>> Okay, this is a
>> theorical question that just to
understand the region the west
balkcans
>> they are interconnected among them but
do they have intraday market or do they
have market among them? No, they don't
have coupling except not to forget
Albania and Kosovo. They have the same
kind of functioning as the EU does. So
they are coupled.
>> Albania and Kosovo are coupled
>> because they are operated by the same
power exchange, Alpex.
>> Okay.
>> and yeah, it's somehow kind of
natural for them to couple it. The
others are not yet coupled. So there is
what we call explicit capacity
allocation. So you buy energy and
electric and transmission capacity is
still separate
>> but they can sell energy.
>> Well you can on your market then you
need to transport it you sell or buy on
another market.
>> Yeah. So this is of course more
inefficient
and that would of course be important
but I think it was discussed like to
first integrate them and then with the
EU like okay make it first
among them this is your question no and
then go to the EU. No, it's it's a valid
question. I think for now also with
the latest amend this electricity
integration package and everything I
think the idea is really that everybody
just directly goes goes to the EU.
>> Okay. And then to make
>> then it's anyway if if so
the EU is already coupled no and if for
example I don't know Montenegro would
join Montenegro is automatically coupled
with all EU member states. No. So if
another contracting party would join
they are also directly connected with
everybody already in
>> okay through them. We have a question
over there but and which is about
>> the role of energy community in terms of
easing or complicating the market
coupling between EU and non-EU
markets but while how you were
explaining it's definitely comp how
>> yeah it's not easy it was also
not easy in the EU no you have several
players you have a lot of things which
have to be done
>> interest involved
>> you always have interest.
naturally energy comes with different
interests of different parties
>> and maybe even someone who doesn't like
competition. I
>> why not? You might also find companies
who do not like competition incumbents.
No, but
I personally I think it's super
important that the energy community gets
integrated because I think the energy
transition will only function if Europe
>> entirely.
>> Exactly. And goes towards energy
transition because you cannot just leave
out bits and parts as you like. I would
that's just my personal
personal in interest as well but
also what the commission underlines with
what they are currently doing no because
they are supporting the integration and
I think it's indeed valid because the EU
will only be able to reach our targets
if we are also doing it with our at
least immediate neighbors no
>> at least
>> so I think on the scale of
importance I think it's it's very high
but of course it's it's not easy
you have the energy community. you
have the treaty, you have the whole
system of how they adopt regulations.
So you it's like a two-step thing. We
always call it adapt and adopt. So you
take the EU regulation. You adapt it to
the institutional setup and to the let's
say specificities of the energy
community.
>>.
>> Then you put it forward to voting in the
energy community. The ministerial
council has to vote on it.
>> Yeah.
>> It's once a year. it's the ministers.
there is specific rules on how big
the impact is like how much anonymity or
that's a bit too complex for here
but in general you vote on it and only
then it's part of the so-called energy
community aki so of the rule set.
>> Yeah.
>> And then and here is the big difference
which also makes it more complicated.
They have to transpose every legal act
because in the EU you have regulations
and directives. Directives you
transpose. So you put it into your
national law and only then it's
applicable.
>>.
>> And in regulations you don't have to.
They are directly applicable.
>> Okay.
>> They just translated. So this is
that's basic legal system in the EU
>> but it doesn't apply to them. So they
have to transpose everything and that's
a lot. So it's a lot more effort in
putting everything into a national law.
>> Sure. And just that you mentioned the
>> competition. So how do you think that
energy community could address this
state ownership for utilities and
increase competition in energy market?
>> Yeah. Well, yeah, that's
I would say not only in the energy
community
>> because also in some member states. I
mean, you definitely have big companies
playing a major role or having a major
share. No.
>> Yeah. I, first of all, the
unbundling and it's not yet fully
implemented, I think, in all energy
community contracting parties. So, I
mean, that's obvious because it just
guarantees the separation of the
businesses. Yeah. Generation
transmission and this
>> exactly and then of course
I would say what I at least my but
that's my personal perception but I
think what is very important also when
we look around all what is happening
politically around the world is
share information and knowledge because
I have the feeling that often energy
is also used to drive political
discussions or you make people afraid of
something cuz you I don't know you
could even frame it you lose your
sovereignity you lose your
self-sufficiency I don't know
>> but I think in this sense it's it's very
important for example what you are doing
what what the energy community
secretariat is doing like to share
knowledge to make people aware of what
is happening to explain the pros and
cons openly because there are pros and
cons of everything and in that kind
of regard trigger the discussions
and also provide the wider public with
the information necessary to make their
political decision and they it might be
>> completely
>> on my side on another side we
don't always have to agree no but
>> to provide this information because
if it's just you strongly I think yeah
you can trigger very wrong messages and
then people feel kind of overruled
and just dragged behind the EU and this
is not not the idea, you don't
want to make people just feel, yeah, I
I always have to run after the EU and
implement something which I actually
don't like, but I do it.
>> But also explain why and what do you
think is the benefit for everybody on
it? No.
>> Exactly.
>> So, so communication.
>> Yeah. I would say communication,
transparency also in the sense of like
giving the same set of information to
everybody. because as a
incumbent or as a company very well
aware of the country you also have
probably more information just on the
history.
>> Exactly.
>> yeah
>> you meant transparency and giving
the same set of rules. So these are the
some of the barriers that non non-EU
members are facing to get
>> integrated. They are of course now
transposing everything and this this is
great and they are doing fine. I just
think of course always the
implementation just takes time no and it
also comes with time that things are
changing. I think we cannot just
magically expect that from one day to
the other the energy sector structurally
changes.
>> No, we say that it's a marathon.
>> Exactly. You just have to go for a long
one and it doesn't even mean that some
is doing something wrong. It just takes
time by default. No.
>>. I don't think there is anyone to
blame for doing something wrong. It's
rather that yeah you change your
legal setup you start to implementing it
and then slowly it will also
be more trusted by the public.
it's just a long run. Yeah. Could you
could you tell us like steps that
that energy community party that they
need to take to so that they can get
into integrated
>> to the market coupling. Yeah. Yeah.
Well this one is actually rather
clear defined. So because they of
course they need to transpose. I think
this was also on the first panel a lot.
No you need the same set of
rules because if not things are not
functioning. just not so
transposition of course obviously
but then and here it gets also of course
more complicated is that market coupling
so this whole integration of short-term
markets it's also based on a lot of
contracts between TSOs and Neos and
Neimos are the power mostly power
exchanges
>> okay
>> designated to operate the coupling
>> and they have contracts between each
other they have contracts only with TSO
goes only with Nemos and in this regard
yeah it's just also signing a lot of
contracts getting ready to sign them but
also then of course on the contracting
party side local readiness you
have to have your systems to connect no
just like IT wise your service providers
your soft train
>> very b it's a lot of
investment and effort no to get ready
locally
>> and then on the EU side of course they
you parties have to accommodate them in
the planning to book the slots for the
testing because all these things always
come with the testing first and this
then requires all the EU parties already
in and the new ones so they test their
systems together and this of course
needs like scheduling and at least in at
the adenth forum there was also the
co the co-chair of market coupling
steering committee so the steering
committee of the market coupling as it
says in the name and from from Nemo
and Tos Andrean and Gossimo Capidol
I think if I pronounce his name
correctly Italian and they both stressed
again that from their perspective from a
EU perspective it will take more or less
like 18 months after like transposition
and contract to really implement and
test the systems and in this sense the
EU parties are kind of assigning go live
windows so they would always kind of
open up a window at the end of the year
and the ready ones can kind of sign up
to. No, because if it's also for more
than one, it's also easier again because
then at least you do not do the testing
for one but already for three.
>> So they of course also trying to get
that fixed in the road map for
everybody.
>> Wow.
>> So it's it's not like yeah I couple
tomorrow.
>> So that is from the EU side. did what
called CACM capacity allocation and
capacity management.
>> So where what is the progress of EU so
far? So that
>> on CCM yeah well yeah we discussed it
shortly on the panel as well. So indeed
that the CSCM guideline as capacity
allocation congestion management it's
another regulation
so it's directly applicable in the
member states and it has been there
since 2015
and there were a lot of lessons learned
and this is actually why I was at
that first place seconded to Acer
because we were at that time already
working on an updated draft like how can
we improve it improve it
>> that it be again
adopted it in the EU as a new version
as an amendment to it. then the
energy crisis happened. There were other
priorities of course and now it's on the
table again. people are expecting
that it might be still adopted this
year. So there would be a new version of
the regulation addressing some of the
challenges which were seen with the
previous implementation
>> learnings also new regulatory
requirements. In the meanwhile we had
two regulation electricity regulations
which are actually in like a higher
hierarchy. Yeah.
>> and then indeed that would be adopted
and again directly applicable in member
states but as we now learned in the
energy community it still takes adaption
and adoption by ministerial council.
>>. So if we are optimistic it might be
then one year later the adoption and
then the transpositional
>> okay
>> so we still need them to get then the
same legal basis again into the national
laws because currently they are
transposing but the version of course
currently in place because they also
don't this is what they agreed to
>> and Lisa this is very highly because
every whatever we are talking is a
highly political subject and
especially in the countries non on EU
states. how does how does not just
energy community but how how does that
affect what what's happening politically
in the country that does that put them
on hold or sometimes
>> well no I don't think that CSM
2.0 Z would not put anyone on hold. It
just it on the EU side brings
forward new obligations for all parties.
So they also need to do something new
and they need efforts to do it. On the
other side in the energy community you
have this gap. So they will need to
transpose it and rather quickly of
course to be on the same on the same
regulatory frame. But nevertheless I
mean the implementation the local
readiness this this can go on.
you can put on you can continue with
your implementation at least locally.
Also the EU part is of course getting
ready for them to be integrated.
>> So I do not think it will put it on
hold. of course it doesn't make
it easier. that's probably
obvious from the setup but no I'm
confident and optimistic that it will
still at least not be an additional
barrier. if everybody then really
quickly reacts I think there is a chance
it does not really a lot delay but
>> has to be addressed
>> quite quickly and good
>> and now we move to Daniel's favorite
part which is about synergy between
technical and regulatory.
>> Yeah. Yeah. That's
>> that's your favorite part. Okay.
>> Yeah nerds. So I always been wondering
how you calculate this capacity
available to cross border just to
have a view how is calculated.
>> Yeah. Okay. So that's a
interesting one and I'm saying hi to
Ranhhat our capacity calculation guru
and he will then assess if I did him
if I did well. No, but so this is
also in CCM. So it also line sets out
how these capacities shall be calculated
because they are like the basis for
market coupling. No, if you have zero
capacity, you can also not
>> and first of all what is the most
important it has to be done regionally.
>> So you don't do it alone, you do not do
it bilaterally. You do it in a region
which is defined
>> which are the region
>> exactly. So let's say the
biggest is currently is core capacity
calculation region is like continental
most of continental Europe let's say
>> okay
>> it will integrate soon also Italy north
then it will be called continental
Europe
>> because Italy has like seven
>> it's now not yet there so it's currently
there is a separate capacity calculation
region called Italy north okay
>> and maybe important to mention so these
regions what they do is they
>> define the sets of the bidding zone
borders in each region. So you do not
say you're not saying like Germany is in
the region but rather the borders from
Germany with
>> are in the region because for example
Germany is in more than one
>> because with the with the HVDC's or most
HVDC's on the north
>> they are in another capacity calculation
region.
>>. And then the latest amendments in
the energy community they also define
regions for them actually. So you have
Eastern Europe it's Ukraine Moldiva and
the neighbors. So all the borders from
Ukraine Moldova.
>> Then you have itma Italy Montenegro
because there is one HVDC.
>> It's actually it's a region with one
border. Yeah. But it's some
>> and then you have
what is called shadow se
it is actually it was defined as all the
balcon six balcons with actually all the
interconnections to the EU.
>> Okay.
>> But they are currently discussing to
splitting this one up to make it
implementable from from their also
political
>>.
>> few. Let's see if if this will be
happening. it would be approved by
Acer to change those regions.
>> Okay. So is defined
>> exactly we first define the regions.
>>.
>> and then there is two ways of doing
it. You have like let's say the more
the easier one which called it's called
CNTC and CNTC is more like boiling it
down to let's say bilateral capacities
per border and direction. So you would
get one number per border and direction
and you normally use it in rather radial
grids
>> like for a HVDC line or for something
which is not meshed because as you can
see it is not that much taking into
account how the borders actually affect
each other. No because electricity can
have different
>> path
>> and the more complicated one is
flow-based where you take account of
a simplified grid model. So you define
what is called critical network
elements. elements which are sensitive
to crossono trade but not only the
borders.
>>. And you check for all these
critical network elements and their
interactions. How much can be
transported? Because for example,
>> if you
take account of the interdependencies,
this also actually allows you to let's
say have a bigger what we call domain.
So kind of solution space of capacities
because it would take account of if if I
I don't know export a bit less to this
country, I can export more to this..
>> And the others is really one number.
>> So you have to decide beforehand or take
the lesser off which is always safe.
But if you really also
accomplish to mimic the
interdependencies you can increase here,
go back here but like give it more room.
No.
>>.
>> and this is the more complex one and
it takes a lot more time to implement.
You need more data. it's a lot
more computational effort of course but
this is what is implemented in the core
CCR and it really increased also the
exchanges and possible exchanges and
also in the Nordics but then of
course for some it also just doesn't
make sense to take this additional
effort if you anyway have a very radial
grid or not not so interconnected one
>> so between each region they can have
different mechanism how to calculate
>> yeah Yeah. No, it's you. So if I say
core capacity calculation region
calculates flowbased, it means that all
the borders assigned to this region
they would calculate together. So this
would mean for example all borders
between France, Netherlands, Belgium,
Germany, Austria, Poland like all
of them all the borders. But Hanza CCR
would for example be all the borders
between Germany, Poland, Denmark,
Sweden. Okay.
>> So those borders. So you as you always
assign borders in the end nothing should
be left. No.
>>.
>> Yeah.
>> So every border has to be assigned
currently to exactly one region. So you
cover all of them.
>> Yeah. Wow. So super. is that the
most efficient way to do?
>> Yeah. This is considered to be the most
efficient way for now in the sonal model
and with the with the available let's
say possibilities but indeed it is
still of course a simplified grid but I
mean it has to be no you have to
linearize and yeah
>> true
>> Elisa you mentioned Ser
how does that interact with the other
non-EU or member states and how
does they differ from what energy
community do.
>> Yeah, that's that's very interesting
because so Acer in the agency for the
cooperation of energy regulators seed
did in Ljubljana. This is where I
worked.
>> they are coordinating the cooperation of
NAS in the EU and they have very unique
>> also obligations and rights in terms of
market integration. For example, they
also take binding decisions on all TS
toos or all NEMOS
>> with the voting of the NAS of course
in the back monitoring very
a lot of obligations in terms of
monitoring
and
with the energy community amen or the
the package in the energy community they
also got some powers assigned towards
non EU or contracting parties in terms
of whenever there is a region for
example if the capacity calculation
region would include not only EU but
also contracting parties so both then
ASA would be mandated for example to
take at some at some points decisions
>> if the NAS could not agree for example
if it's only contracting parties then
it's not ACER having the power but the
kind of pond in the energy community
which is the ECB the energy community
regulatory report. So it's the NAS of
the energy community,
>> but do they work like a referees or kind
of sound like okay, let's go see the
bar.
>> No, no. Yeah. So it's it's in
the electricity we have so we have
the electricity regulation we have then
for example the CCM guideline but then
what is even coming after that it's the
so-called terms or conditions and
methodologies. So based on obligations
in the guidelines, specific parties
still have to adopt for example the
capacity calculation methodology because
it's so detailed that you end up with
another 30 pager of how you calculate
the capacity.
>> This is done by the TSOS but hand it in
to the regulatory authorities for their
approval.
>> So you make the rules applicable by
decisions
>> and if they cannot agree in a region
then Acer takes the mandate to Yeah. But
the TSO can propose then
>> they are even obliged to propose at
certain timelines certain things. Yeah.
Exactly. And the same thing kind of
applies in the energy community only
that if the region consists only of
contracting parties you have to go
to ECB to there
>> and if member states are involved then
it goes to Acer because it also affects
a member state.
>> Yeah.
>> Lisa you have worked with market design
for Georgia as well right?
>> Georgia. Yeah. a bit.
>> Yeah. How would you how would you
experience that?
>> Well, that's super it's super
interesting. They are also
transposing but of course also exempted
from some parts because they do not have
direct interconnection
>> also in the EU. if you do not
have direct interconnection you
were not calculating capacities you're
not in market cobbling
>> but still they are getting ready because
they are planning the under sea cable.
No
>> the black sea. Yes exactly
>> with Romania. Yes, I think it's Romania.
And so I don't know where this is.
I think it was in the status of being
assessed and having investments secured,
but of course there is quite some
pre-analysis to be done also on just on
the building and of the cable. no, it
was very interesting. They yeah they
tried to open the markets but on
on Georgia you really see the
political dimension of energy. No, I
mean they
>> Yeah. Russia, Turkey,
>> they were in the middle. Yeah.
>> Yeah. And they are of course
>> Yeah. They even have to balance no
between political interest security
of supply and also we can see no on
the news and on the TV that sometimes
the government is more pushy towards
Russia and the people then demonstrating
for rather being closer to the EU. So
>> yeah,
>> a tricky one and of course energy
>> highly used for messaging and for
>> different interests.
>> Now I think we kind of covered
what we wanted to ask and it's so
extensive it will take us some time to
process
>> but we want to ask you one thing it's
about
>> I'm sure you are a dreamer right? Do you
like dreamers? people who dream of
things. So, what's your dream of a
perfect European market?
>> Perfect European market. Well, green
>> green like your couch.
>> Green light your couch.
>> Yeah.
>> Integrated.
>> -.
>> And united and in peace.
>> United.
>> Okay. That's
>> I would say
>> and more electrified or
>> Yeah. Well, yeah. Green. Green in the
sense of we accomplished a major share
of energy transition. Yeah. Yeah. I
make the note because in other
interviews we
>> we want to talk about energy in
general like energy bridges not only
electricity because now we are in 22 23%
of electrification
>> but there is a more electrified. Yeah.
So we are pushing also and promoting
electrification for sure but not
forgetting that there is a
>> sure there is part of hydrogen or yeah
>> no no but yes
agreed.
>> Yeah and yeah maybe to talk about the
latest electricity
market designs that you have seen and
what is next. Well, yeah, there is
always something happening. No. So,
>> well, now everybody's waiting for CCM
2.0 obviously because it will probably
give a lot of new drive or new
obligations to the parties.
>> what was also very much discussed in
the energy crisis and things are going
to happen later after season 2.0 Zero is
forward capacity markets because it's
where so the long-term trading so which
happens because when we talk about
market coping it's day ahead and intro
know so it's for tomorrow or even during
the day
>> but forward is like what you buy a year
in advance a month in advance a quarter
>> kind of to hedge no because you hated
your prices because you will not know
what it is
>> and
let's say there were challenges
identified with The current design of
forward markets especially in the energy
crisis and this is also why the latest
electricity regulation
mandates the commission to do an
impact assessment. They also already had
a public consultation to see the
stakeholders views and what might come
out of it is a amendment to the forward
capacity allocation guidelines. So it's
kind of to pond off CCM in the
forward markets. so probably after
CSM 2.0 we will have FCA 2.0. There is
also currently the commission is
working on a network code called demand
response. You might like it.
>> Okay.
>> So they are trying to also make
yeah introduce it's not only it's not
only demand response but it's in general
local services for transmission system
operators
>> but some incentives or what is
>> no yeah also how to how to procure it.
what are the services?
>> so to define
>> yeah exactly but they there there
is different things also to do
cooperation is very high on the agenda.
to get the corporation better
also in terms of
>> system needs and
>> like infrastructure like investment.
>> No but rather on a corporational part on
how they procure their services and
how they
>> more information.
>> Yeah. Exactly. Exactly. At least most of
the people who come here especially the
policy makers we ask them about the
legacy because they're almost about to
retire
>> but with you we want to ask you
what do you aim to do in
>> next next decade.
>> Okay thank you I'm not I'm not yet
turning to stone., yeah.
Well,
I think I would love to continue what
I'm doing now., I really like to
be at the spot and the intersection of
technical and regulatory things. And
also I love to I know people always
claim that regulation is like super dry
and nobody likes it but I sometimes have
the feeling that I succeed in making it
like interesting for people and I would
love to
>> continue and yeah of course also
working on yeah on these happenings. I
mean future market design, I
like to put my brain around new things
and also then of course finding
solutions on a regulatory perspective,
finding solutions for our clients on how
to then approach it.
>> I think there is so many things to
do.
>> Amazing. And your communication skills
also we could see it in the panel in the
forum like
>> there is always room to improve.
>> Yeah. No, super good. Super good. But in
general, yeah, that's that would be it
more or less.
>> It's very important with especially with
the complex work that you're doing to
being able to make sure that the other
people understand.
>> Yeah. Boil it down., you have
noticed I talk a lot. So, sometimes I
need to get my things really to the
point. But, yeah.
>> No, but it was amazing. I think that we
could make it again with some updates in
>> Yes. CM 2.0. zero.
>> Sure. Sure. No, when it's out, we can
discuss things. So,
>> Oh, I need I still want to do one
thing. I normally don't, but I'm I'm
super happy because we just published a
book.
>> Okay.
>> And you might like it.
>> Okay. Which one?
>> It's open access. we were working
on it for quite some time or your own
project. a collection of authors across
the europe on market coupling and it
explains market coupling from really
from A to Z
>> like for and could you tell for the
community what it is it's regulatory
framework it's capacity calculation it's
all the players my chapter is about
the energy community
>> it's about the contracts it's
like it's how the algorithms work it's
every author has
>> yeah exactly it's it's a practitioner
's guide on market coupling and it's
we published under Springer Nature as
an open access book. It's quite huge
>> but you can of course see the
different chapters and just read the
ones which you're interested in but I
thought maybe the audience would be
interested.
>> No, sure
description and with the articles that
you mentioned also no
>> no all included because yeah it has been
super insightful conversation. Thank you
very much.
>> Thank you very much, Lisa.
>> Thank you guys.
>> Thank you. And we hope to have you
again. And
>> ciao.
>> Cheers to the community and see you next
episode.

Aligning Regulation, Technology, and Geopolitics for CEE Market Integration - TEB Podcast -S1E9

Importance of Flexibility Definition

Capacity Mechanisms as Integral

Geopolitical Implications

Battery Storage Incentives