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EU IPA13/CS-02.a

2013 ENERGY SECTOR PROGRAM PHASE-2 PROJECT

Energy Market Development

Task 1E

Study Visit 1 Report [English Version]

Revision 0

December 2018

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TABLE OF CONTENTS

TABLE OF ACRONYMS ........................................................................................................................... 3

TABLES INDEX ....................................................................................................................................... 4

FIGURES INDEX...................................................................................................................................... 5

1 CONTEXT AND SCOPE ................................................................................................................... 6

2 AGENDA........................................................................................................................................ 7

3 DAY 1 (AND DAY 5) ......................................................................................................................10

4 DAY 2 ...........................................................................................................................................10

5 DAY 3 ...........................................................................................................................................12

6 DAY 4 ...........................................................................................................................................12

7 LIST OF TURKISH DELEGATES .......................................................................................................14

8 ADDITIONAL MATERIAL ...............................................................................................................14

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TABLE OF ACRONYMS

Acronym Definition

ARERA Energy and Water Regulatory Authority (Italy)

EMRA Energy Market Regulatory Authority (Turkey)

EU European Union

EPIAS Turkish MO

GME Italian Market Operator

GSE Italian RES single buyer and monitoring agency

IPA Instrument for Pre-Accession Assistance

MENR Ministry of Energy and Natural Resources (Turkey)

MIPD Multi-annual Indicative Planning Document

MRC (1) Market Coupling of Regions (Depending on context)

MRC (2) MRC Consultants and Transactions Advisers (Depending on context)

MO Market Operator

TSO Transmission and System Operator

TEIAS Turkish TSO

TERNA Italian TSO

ToR Terms of Reference

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TABLES INDEX

Table 1 – List of Participants..................................................................................................................14

Table 2 – Supporting Staff .....................................................................................................................14

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FIGURES INDEX

Figure 1 – Introduction Session (Day 1) .................................................................................................10

Figure 2 – GME’s trading room (day 2) ..................................................................................................11

Figure 3 – Meeting with K2Energy (day2) ..............................................................................................11

Figure 4 – Day 3 meetings .....................................................................................................................12

Figure 5 – Meeting at ARERA (day 4) .....................................................................................................13

Figure 6 – Meeting at TERNA (day 5) .....................................................................................................13

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1 CONTEXT AND SCOPE

The Instrument for Pre-Accession Assistance (IPA) is the means by which the European Union

(EU) supports reforms in the 'enlargement countries' with financial and technical help. The IPA

funds build up the capacities of the countries throughout the accession process, resulting in

progressive, positive developments in the region.

This project - Energy Market Development- is funded as part of the Energy Sector Program

(Phase 2) and relates to the second IPA Multi-Annual Indicative Planning Document (MIPD)

2011-2013 objective: “further alignment with and implementation of acquis on the internal gas

and electricity market”. Within this framework, the studies on the harmonization of electricity

and natural gas laws following the adoption of the EU Third Energy Package are ongoing. Within

this context, IPA funds and EU experience are crucial, in order to achieve a better functioning

internal energy market.

A crucial part of the scope of the project is to arrange a set of study visits for selected members

of Turkish institutions (MENR, EMRA, TEIAS and EPIAS) in order to decide and implement

possible improvements in Energy Exchange and BPM operations (Electricity) based on EU best

practices.

The scope of this document is to present the itinerary followed by the Turkish delegation during

the first (out of three, first out of two for the electricity part) study visit which took place in the

city of Rome, Italy from November 26 through November 30.

The document starts with the original agenda envisaged for the visit and then provides a short

description of the items discussed during the meetings at each institution.

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2 AGENDA

26 November DAY 1

Time Activity Address Notes

9:45 7 participants of the Study Visit arrive at Fiumicino Airport from Istanbul

Hotel Albani – Via Adda 45

Transfer to the hotel from the airport

Pls note that 1 delegate is in Rome already

11:15 2 participants of the Study Visit arrive at Fiumicino Airport from Madrid

Pick-up not necessary

13:35 1 participant of the Study Visit arrives at Fiumicino Airport from Istanbul

Transfer to the hotel from the airport

13.30 – 15:30 Working Lunch –

Beginning of the Study Visit

Hotel Albani Briefing with the MRC Team (Serrano / Napolitano)

Intro to Italian Power Market

Free Evening

27 November DAY 2

Time Activity Address Notes

9.30 – 9:45 Arrival at the GME HQ Viale Pildsuski Registration

10:00 – 13:00 Technical Meeting with the GME staff Viale Pildsuski

13:00 – 14:00 Lunch

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Tbc GME (continuation) Exact timing to be confirmed due to security issues of the control room

16:30-18:15 Meeting with K2Energy City Center - Piazza di Spagna/Via Bocca di Leone

Transfer to City center

Free evening

28 November DAY 3

Time Activity Address Notes

9:30 Arrival at the GSE HQ Viale Pildsuski Transport from the hotel - Registration

9:30 - 11:00 Meeting with the Ministry of Economic Development – Dept of Energy

Viale Pildsuski The Meeting will be held at the GSE

11:00 - 11:15 Coffee Break

11:30 – 13:30 Technical Meeting at the GSE Viale Pildsuski

13:30 – 14:30 Lunch

15:00 – 17:30 Technical Meeting at the GSE Viale Pildsuski Transport to the hotel

Free Evening

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29 November DAY 4

Time Activity Address Notes

8:30 – 11:15 Meeting with the Authority Via de’ Crociferi Transport from the hotel

12:00 – 13:30 Technical Meeting at the TSO (Terna) Via Palmiano Transport to TERNA

13:30 – 14:30 Lunch

14:30 – 18:00 Technical Meeting at the TSO (Terna) Via Palmiano Transport to the hotel

18:30 – 20:00 Free time

20:30 – 22:00 Dinner Provided by MRC. Visit De-briefing

30 November DAY 5

Time Activity Address Notes

08:00 End of the Study Visit Check-out and Transfer to the airport from the hotel for 7 pax

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3 DAY 1 (AND DAY 5)

The Terms of Reference (ToR) require the study visits to last for 5 days, of which the first and the last are expected to be reserved for travel purposes.

While during the last day (Day 5) of the visit there was no time for other arrangements due to the early flight departure times, on Day 1, a short introduction session was organized for the benefit of the delegates. This session, delivered by Mr. Luca Napolitano from MRC provided a high-level overview of the Italian electricity market in a holistic manner, this is, regulatory framework, market structure and participants, market design and historical figures of the main indicators (demand, supply, concentration, retail, etc.).

Figure 1 – Introduction Session (Day 1)

4 DAY 2

Day 2 had planned two events for the delegates, the first one was the visit to GME headquarters (Market Operator) and after that to the main office of K2Energy, a specialized consulting company that gathers information from EU market and system operators (among other stakeholders) in order to provide price and production forecast to utilities.

Meetings with GME took place during the morning until lunch time and included a detailed explanation of the electricity exchange design including products, timelines and all sorts of operational details that were discussed via a Q&A between the participants. The delegates also had the change of visiting the exchange’s operations room, particularly at the time on which the operators were performing the day-ahead European market coupling with the rest of the MRC members.

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Figure 2 – GME’s trading room (day 2)

After GME’s visit (which was kindly extended by the presenters in order to answer all the questions), the delegation departed for lunch.

After lunch and a short break, the delegation was received by K2Energy, which presented the company profile, the type of products offered and provided their views about the Italian and wider EU market design issues.

Figure 3 – Meeting with K2Energy (day2)

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5 DAY 3

On day 3 the participants had meetings scheduled at GSE (entity in charge of promoting sustainability supporting renewables and energy efficiency premises), where they would meet firstly with a delegation from the Ministry of Economic Development (MED), in particular the Department of Energy and after that with GSE staff.

MED staff provided insights about the linearization process followed by Italy and its integration into EU markets beside presenting the roles and functions of the Department of Energy and the Ministry as a whole in the sector.

The afternoon and evening session that followed were led by GSE staff. They showed how they monitor energy efficiency and renewable development, in order to satisfy EU RES targets and assist policy makers and also how they act as a sort of “single-buyer” for RES facilities.

Figure 4 – Day 3 meetings

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Finally, on day 4 the delegation kicked-off the day with a visit to the energy and water regulation authority (ARERA) where they could discuss first-hand with the Italian experts about EU regulations, market coupling, European codes and other topics that fall under the scope of the regulator including demand side managements and electric vehicles integration.

After that, during the evening, the delegation was taking to the city’s outskirts to meet with TERNA (TSO) staff at their training center1, placed beside the largest substation in the country. TERNA staff presented their role as TSO, focusing on EU integration and the balancing and

1 Although the original plan was to go to TERNA’s control centre and visit the control room this was not possible as it is under maintenance, this was informed by TERNA to the consultant at the very last minute.

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ancillary services market (and products) offered. The discussion was very interesting when the description of the very unique (at EU level) Italian market design characteristics for balancing services started. A lot of questions regarding balancing prices, Balancing Responsible Parties (BPR) and Balancing Service Providers (BSP) were made and explained by TERNA regulatory affairs’ experts.

Figure 5 – Meeting at ARERA (day 4)

Figure 6 – Meeting at TERNA (day 5)

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7 LIST OF TURKISH DELEGATES

Table 1 – List of Participants

Name Institution Yunus SEZER EPiAS Hasan SILAHTAROGLU EPiAS Yusuf Sinan AKINCI EPiAS Emre KORKMAZ EPiAS Zafer KAMiLOGLU TEiAS Emrah SOLAK MENR Onur Alican KURTAR EMRA Engin BOSTANCI MENR

Table 2 – Supporting Staff

Name Institution Zehra Tuncay MRC Luca Napolitano MRC Andrea Marroni MRC Arnaldo Orlandini MRC Daniel Serrano MRC

8 ADDITIONAL MATERIAL

Apart from this document and alongside with its delivery, the consultant has shared:

1. Photos of the delegation at each meeting, available for 45 days on the following link:

https://mrc2014-my.sharepoint.com/:f:/g/personal/dserrano_mrc-consultants_com/ErO6EPhnF75Jvz1Ogvpn5gEB4fdDPOMzZFIWTN43NuGoQw?e=1Ic0Ko

2. Presentation shared by the stakeholders. Sent directly to the project coordinator for internal distribution among stakeholders. These cannot be shared outside the scope of the Turkish delegation members not reproduced in any form due to confidentiality issues.