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President of the Energy Regulatory Office attended the 11th ERRA conference

Mr Marek Woszczyk, President of ERO, took part in a panel discussion on regulatory risks and necessary support (comfort) in energy infrastructure development, organised during the 11th ERRA Energy Investment and Regulation Conference held on 15 and 16 October 2012 in Izmir, Turkey. Mr Woszczyk participated also in two meetings, organised alongside the conference, i.e. a meeting of the ERRA Presidium as well as the ERRA Chairmen meeting.

The key issues debated during this year’s meeting, divided into four plenary sessions, included: infrastructure development to support cross-border trade, regulatory tools for sustainable development of the energy industry and creation of regional energy markets. Moreover, the discussion centred on issues related to prospects for the development of energy market in Turkey.

The first plenary session of the conference covered the subject of "Energy Market in Turkey: Development, Investments and Perspectives”, during which the current results and further plans for liberalisation and privatisation of the Turkish market were presented. Attention also was drawn to private investments in the energy sector. The session’s summary pointed out to the most important conditions for realisation of foreign direct investments, which included: long-term view on policy priorities, attractive rate of return on investment, stable economic and political situation, likewise an increase in demand.

The second plenary session, chaired by Mr Alberto Pototschnig, Director of ACER, concerned “Infrastructure development to support cross-border trade”. This session focused on the ways of using the existing transmission networks and the possibility of establishing new interconnections. At the same time, some examples showing a positive impact of efficient allocation of cross-border capacity (market coupling mechanisms) on the cross-border trade were given, which enhance the social welfare. Session participants had a chance to learn about the current results of work on developing the network codes, i.e. common rules for functioning of the energy systems in EU. During this part of the meeting, the concept of the European Ten-Year Network Development Plan (TYNDP) and the European Infrastructure Package was presented, along with the process of assessing future Projects of Common Interest (PCI). While discussing the existing and expected tendencies in shaping the energy mix, a representative of ENTSO-E emphasised the impact of investing in renewable energy sources on new directions and volumes of power flows across different borders.

The panel discussion, in which Mr Marek Woszczyk, President of ERO participated, was an important item on the second plenary session’s agenda. It focused on the regulatory risk and strong support for energy infrastructure development. The discussion centred on issues related to investment risk at the same time pointing out to available regulatory incentives that would eliminate potential threats. Panel participants acknowledged that merchant interconnections could potentially be a way of financing the development of new energy infrastructure in Europe.

The third plenary session focused on presenting regulatory tools important for sustainable development of the energy sector. The participants of this part of the conference tried to answer the question how to connect renewable generators to the grid, preserving at the same time the current level of competition and security of the system. Since at present, the national support schemes were recognised as disadvantageous, session participants endorsed the European-wide harmonised support systems for electricity produced from renewable sources. According to session participants, the aforesaid solution could be more effective, especially as regards better location of renewable generators taking into consideration geographical and climate conditions of specific regions. Moreover, during the session its participants discussed conditions for renewable energy integration, among which the following were listed: energy markets integration, increased role of the interconnections, smart grid system development or responsive demand.

The last, fourth plenary session concentrated on the process of regional energy markets creation. In this context, the need of having harmonised cross-border capacity allocation rules and supporting new grid investments was highlighted. Also an important role of new gas transmission systems was emphasised. These systems were recognised as the main condition for creating regional markets and ensuring security of supply in Europe. In their message addressed to governments and regulators, investors that participated in the session called for creating stable, predictable and secure conditions for investments in the energy sector.

Pictures gallery of the 11th Energy Investment and Regulatory Conference ERRA 2012 is available at www.erranet.org.

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Annual ERRA Conference is an important meeting of the representatives of the energy sector from Central and Eastern Europe, Asia, Africa and the United States, organised by the Energy Regulators Regional Association (ERRA). The main objective of this year’s edition was to discuss current needs of the energy sector, paying special attention to the regulatory environment and different conditions for investments. The conference was co-hosted by EMRA, Turkish regulator.

ERRA is an association of energy regulators from Central and Eastern European countries as well as Asia, Africa, Middle East and the United States. It was founded in 2000 when the representatives of 15 Central and Eastern European countries signed a document under which a new association of regulators in Europe was established.

05.11.2012

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