EU Market Integration
Two significant developments have taken place in the development of the European Internal Energy Market (IEM). The first is the Third Energy Package, which came into effect on 3rd March 2011. The Third Energy Package charges the Regulatory Authorities and the TSOs with the development of framework guidelines and network codes respectively. These guidelines and codes set out the policy framework and the detailed arrangements which must prevail for cross border trade of electricity across all timeframes. These codes are referred to as the “Target Model”.
The second development was the decision at the European Energy Council meeting on 4th February 2011 that “the internal market should be completed by 2014 so as to allow gas and electricity to flow freely. This required in particular that in cooperation with ACER (Agency for the Co-operation of Energy Regulators) national regulators and transmission systems operators step up their work on market coupling and guidelines on network codes applicable across European networks” and specifically required arrangements for:
- Forward
- Day-Ahead
- Intraday
- Balancing
There are a number of important differences between the SEM market and the Target Model. In recognition of this the SEM has been given an extension until 1st October 2017 to comply with the Target Model. The Regulatory Authorities has initiated an EU Market Integration project to implement Target Model in Ireland and Northern Ireland to comply with this timeline. The new market is called the Integrated SEM (I-SEM).