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Press release (7)

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Czech Republic, Slovakia, Hungary, Romania and Poland signed the
Memorandum

of Understanding aiming to extend the
CZ-SK-HU Market Coupling towards RO and PL markets

On 11 July 2013, representatives of the national regulatory authorities (ERÚ, ÚRSO, HEA, URE
and ANRE), transmission system operators (ČEPS, SEPS, MAVIR, PSE, and Transelectrica)
and market operators/power exchanges (OTE, OKTE, HUPX, TGE, and OPCOM) from the
Czech Republic, Slovakia, Hungary, Poland and Romania signed the Memorandum of
Understanding
on cooperation with respect to Romania’s and Poland’s adhesion to the
integrated day-ahead electricity markets of the Czech Republic, Slovakia and Hungary.

The Czech Republic, Slovakia and Hungary have been successfully operating coupled dayahead
electricity markets (so called CZ-SK-HU Market Coupling) since 11 September 2012.
Romania and Poland decided to join the trilateral project in order to benefit from the integration
and to contribute to the development of the single European Internal Electricity Market. Coupling
the national electricity markets based on the target model – Single Price Market Coupling used
for the day-ahead electricity trading and implicit cross-border transmission capacity allocation –
should bring a harmonised approach to market organisation, more effective usage of crossborder
transmission capacities, more competition as well as more stable and convergent
electricity wholesale prices and deeper market liquidity.

This pentalateral project of market coupling is called 5Market Market Coupling (5M MC). It will
be developed in accordance with European targets and the future EU legislation taking into
account the views and demands of the affected market players as well.
The wording of the Memorandum of Understanding is attached to this press release.

Background information:

HUPX – Hungarian Power Exchange Ltd.

MAVIR Ltd. established its 100% owned subsidiary, HUPX Hungarian Power Exchange Ltd., on 9th May,
2007. Having met the requirements set in Decision No. 794/2008 of the Hungarian Energy Office, MAVIR
Ltd. submitted the license application documentation for the establishment and operation of the organized
electricity market on 11th September, 2008 through its subsidiary, HUPX Hungarian Power Exchange Ltd.
In its Decision No. 136/2009 dated 9th April, 2009, the Hungarian Energy Office issued the license for the
operation of the organized electricity market for 10 years to HUPX Hungarian Power Exchange Ltd. HUPX
has started its day-ahead market operation on 20th July, 2010. HUPX launched its physical futures market
on 19th July, 2011.
Since start (2010 July) the total traded volume on HUPX Markets was 26 TWh. The total traded volume
was 12.6 TWh in 2012, which is almost one third of the Hungarian consumption.

For more information please visit http://www.hupx.hu.

MAVIR – the Manager of Power

MAVIR Magyar Villamosenergia-ipari Átviteli Rendszerirányító Zártkörűen Működő Részvénytársaság
[MAVIR Hungarian Independent Transmission Operator Company Ltd., MAVIR ZRt.] is a young
organization with great traditions and vast experience. Tradition, experience and youth in this case are not
contradictory: before the establishment of MAVIR, the National Power Dispatch Centre had been
performing the technical tasks of system operation since November 1949. By creation of the integrated
transmission system operator (TSO) on 1st January, 2006 the transmission system operator incorporated
the Division for Network Operation from National Power Line Company Ltd. and Division for Transmission
Network from Hungarian Power Companies Ltd. A highly skilled team of experts, who love their profession
and pursue it on a high level have joined MAVIR ZRt., which is more than the old dispatch centre: today

MAVIR ZRt.’s duties, are as follows:

  • to provide for the reliable, efficient and secure operation of the Hungarian Power System including
    the required reserve capacities of generation and transmission;
  • to supervise and augment the assets of the transmission system, to perform any renewal,
  • maintenance and development works required for a proper and reliable supply;

  • to ensure the undisturbed operation and further extension of the electricity market and access on
    equal terms for system users;
  • to process the data received from the participants of electricity supply;
  • to inform the market players as not to have unfeasible contracts;
  • to harmonise the operation of the Hungarian Power System with the neighbouring systems;
  • to coordinate international co-operations;
  • to prepare the Network Development Strategy and to put forward proposals for the development
    of the generation pool.

On the basis of certification included in the Decision of Hungarian Energy Office dated of 13 March 2012,
MAVIR is operating in accordance with ITO (Independent Transmission Operator) model; thereby MAVIR
is the owner and operator of the transmission network within a vertically integrated electricity corporation.

For more information please visit http://www.mavir.hu.

MEKH (HEA)

The Hungarian Energy and Public Utility Regulatory Authority is a national public administration body with
independent powers and competence, acting under the Hungarian Parliament. The tasks of the Authority
are specified in the act on HEA, act on natural gas supply, as well as in the acts on electricity, district
heating and water public utility supply. Concerning the extension of the CZ-SK-HU market coupling project
(5M MC), according to the provisions of the acts, the main responsibilities of the Authority are the
followings:

  • issues and amends the licenses for the transmission system operation (MAVIR) and for the
    operation of the organized market (HUPX),
  • approves the general terms of electric energy market (Commercial Code prepared by MAVIR,
  • Market Rules of HUPX), as well as the business codes of the license holders,

  • determines the sphere of information to be disclosed,
  • investigates customer complaints.

Additional information is available on http://www.mekh.hu.

OTE, a.s.

OTE, a.s., the Czech electricity and gas market operator, (OTE) is a joint stock company established in
2001. OTE provides comprehensive services to individual electricity and gas market players in the Czech
Republic. OTE commenced organizing trading in the day-ahead electricity market in 2002 and the intraday
and block electricity markets in later years. OTE has been the market operator on the gas market
since 2010 including operation of day-ahead gas market and intraday gas market. Continuous data
processing and exchange required for the accounting and settlement of imbalance between the
contractual and actual volumes of electricity and gas supplied and received are among services offered by
the OTE to players in the Czech electricity and gas markets, as well as administrative procedures
associated with a switch of supplier. The OTE also administers the National Register of Greenhouse Gas
Emissions. OTE is the holder of the license for market operator´s activities, which includes activities in the
electricity and gas market in the Czech Republic.

Additional information is available on http://www.ote-cr.cz.

ČEPS, a.s.

ČEPS, a joint stock company, is the sole Czech Transmission System Operator and holds an exclusive
licence to that effect granted by the Energy Regulatory Office under the Energy Act.
The Company is responsible for the maintenance and upgrading of 41 substations comprising 71
transformers, which allow electricity to be supplied from the transmission system to the distribution
network, as well as 400kV lines with a total length of 3508km and 220kV lines with a total length of
1910km.
ČEPS is a member of relevant European international organisations. The Company is responsible for
maintaining the balance of electricity supply and demand within the Czech power system in real time
(system services) and for organising cross-border power exchanges including transits.
ČEPS has traditionally been closely involved in the creation of liberalised electricity markets both in the
Czech Republic and Europe.

Additional information is available on http://www.ceps.cz.

ERÚ

The Energy Regulatory Office (‘ERÚ’) was established on 1 January 2001 by Act No. 458/2000 of
28 November 2000, on the Conditions of Business and State Administration in the Energy Industries and
Changes to Certain Laws (‘the Energy Act”) as amended, as an administrative authority for regulation in
the energy sector in the Czech Republic. The ERÚ is mainly responsible for support for competition on
energy market, support for the use of renewable energy resources and protection of consumer interests in
the areas of energy industries, in which competition is not feasible.

Additional information is available on http://www.eru.cz.

OKTE, a.s.

OKTE, a.s. is the Short Term Day-Ahead Market Organizer in the Slovak Republic. OKTE, a.s. was
registered as an independent legal entity on 11 August 2010. The main business of the company is
regulated and selected types of services provided are subject to price regulation by Office for Regulation
of Network Industries. Organization of Short Term Daily Market operates according to the Operating Order
of OKTE, a.s. The organized short term daily market allows the market participants to offer or request
electricity, to increase the option of having a balanced business position before the supply/off-take a
decrease the probability of having a differences between planned and real value of supply/off-take of
electricity. Other responsibility of OKTE, a.s. is settlement of imbalance in the Slovak Republic. OKTE, a.s.
is also the holder of the license for market operator´s activities.

Additional information is available on http://www.okte.sk.

Slovenská elektrizačná prenosová sústava, a. s.

Since 21 January 2002 the company Slovenská elektrizačná prenosová sústava, a.s. operates
transmission system in the SlovakRepublic as an independent legal entity. Mission of the Company is to
reliably operate the transmission system, ensure dispatching control of the system, its maintenance,
renewal and development so as to ensure a sustainable and quality supply of electricity to all users of the
transmission system and its parallel operations with adjustment transmission systems. At the same time it
is essential for the Company to adhere to transparent and non-discriminatory principles of accessing the
network with a minimum impact on the environment. It is also essential to respect the requirements
proceeding from the national and EU legislation, national regulatory authority´s decisions, pertinent rules
for operations and international co-operation within the synchronized inter-connected electricity network of

EU. Additional information is available on http://www.sepsas.sk.

URSO

The Regulatory Office for Network Industries is a state administrative authority established in 2001.. The
Office fulfils the function of the regulatory body, together with the Regulatory Board, in the electricity, gas,
heating and water management sectors with the aim to create and support the competitive-like
environment, to protect both the consumers and the interests of licence holders to achieve reasonable
return rates on investments, and provide for reliable, economic and good quality supplies of goods and

services related to regulated sectors. http://www.urso.gov.sk.

TGE

Towarowa Gielda Energii SA (Polish Power Exchange) was established in December 1999, and it has
been active in Polish electricity market, since then. TGE was the first and so far the only power exchange
to obtain a license from the Financial Supervision Commission to operate a commodity exchange in
Poland. TGE is at present exclusively owned by Warsaw Stock Exchange.
TGE plays a key role in the process of liberalisation of the electricity and gas markets in Poland. Since
December 2010 TGE and Nord Pool Spot have been successfully operating the day-ahead market
coupling on Swe-Pol Link cable connecting Sweden and Poland. The gas trading platform was
inaugurated by TGE in December 2012.

Currently TGE runs the following markets:

  • Day – Ahead Market and Intraday Electivity Markets
  • Electricity
  • Property Rights Market (RES certificates of origin)
  • Emission Allowance Market (spot only)
  • Gas markets: spot and forward with physical delivery

The liquidity of TGE markets increases: the volume of traded electricity was 19,1 TWh on day-ahead
market and 112,9 TWh on forward market with physical delivery.

Additional information is available on http://www.tge.pl.

PSE S.A.

PSE is a power transmission system operator in Poland and is a company of crucial importance to the
national economy, which has been entered into the register of enterprises of special significance for the
economy and defense. The core business activity of the Company involves the provision of services of
electricity transmission network in accordance with the required criteria for secure operation of the Polish
Power System and abiding to objective and transparent principles that ensure equal treatment of parties,
as well as with due respect to the natural environment.

The main objectives of the PSE S.A. activity are:

  • providing electricity transmission services and ensuring secure and cost-effective operation of the Polish Power System whilst meeting the conditions of synchronous operation with other European systems,
  • ensuring the necessary development of the domestic transmission grid and cross-border interconnections,
  • making transmission capacity available on market based methods for cross-border exchange purposes, creating the technical infrastructure for the operation of the domestic wholesale electricity market.

Additional information is available on http://www.pse.pl.

URE

The President of the Energy Regulatory Office is the central body of state administration nominated on the
basis of an act of 10 April 1997 Energy Law, for the realization of tasks in the scope of fuel and energy
management control as well as promotion of competition.
The duties and competence of the ERO President are strictly connected with the state policy in terms of
energy, i.e. economic conditions of energy enterprises operations, ideas of market operations, as well as
requirements coming from the obligation of adjusting Polish law to the European Union law. The activities
undertaken by independent regulatory body are addressed at fulfilling the aim given by the legislator, and
heading towards the creation of balanced economic growth of the country, ensuring energy security,
economical and rational use of fuels and energy, development of competition, fighting with negative
effects of natural monopolies, taking into consideration environmental protection, obligations resulting
from international agreements as well as balancing the interests of energy enterprises and consumers of
fuels and energy.

OPCOM SA

The Romanian Power Market Operator – Opcom SA was established in 2000 as a joint stock company
and subsidiary of CNTEE Transelectrica SA. The responsibilities derive from its role as organizer and
administrator of the centralized electricity markets and settlement operator in the wholesale electricity
market according to in force ANRE regulations and Conditions of the License no. 407. Main activities
deployed by Opcom: spot trading of the electricity in the day-ahead market (DAM) and intraday market
(IDM); term contracting through the centralized market for electricity bilateral contracts (CMBC and
CMBC-CN); environmental certificates trading on the green certificates market as well as on the trading
platform for greenhouse gases emission certificates; settlement of the transactions concluded on Day-
Ahead Market, Intraday Market and Centralized Green Certificates Market; settlement of the electricity
transactions concluded on the Balancing Market organized by CNTEE Transelectrica SA and the
Imbalances of the Balancing Responsible Parties; market surveillance and reporting to ANRE; providing
relevant information to market participants, mass-media and general public. OPCOM was nominated to
organize the gas market in Romania.

Additional information is available on www.opcom.ro.

Transelectrica

Transelectrica was founded by the Government Ordinance No. 627/July, 31, 2000 further to unbundling
the former Romanian Electricity Authority (CONEL).
Transelectrica is the Romanian Transmission and System Operator (TSO) which plays a key role in the
Romanian electricity market.
It manages and operates the electricity transmission system and provides the electricity exchanges
between the central and eastern European countries as an ENTSO-E member (European Network of
Transmission and System Operators for Electricity).
Transelectrica is responsible for electricity transmission, system and market operation, grid and market
infrastructure development ensuring the security of the Romanian power system. It also serves as the
main link between electricity supply and demand, matching all the times power generation with demand.
Since 29 August 2006, Transelectrica is listed to the Bucharest Stock Exchange.
Mission: Transelectrica ensures the Romanian Power System (RPS) reliable and stable operation at
quality standards, while providing the national electricity transmission network under transparent, nondiscriminatory
and fair conditions to all market participants; http://www.transelectrica.ro.

ANRE

Romanian Energy Regulatory Authority was established in 1999. It is organised as an autonomous
administrative authority with legal personality and own patrimony, under Parliamentary control, entirely
self-financed and independent as regards its decision-making process, organisation and functioning.
ANRE issues, approves and monitors the implementation of the national-wide binding regulatory
framework required for the proper functioning of the electricity, heat and natural gas sectors and markets
in terms of efficiency, competition, transparency and consumer protection. The responsibilities and
competences of ANRE are stipulated by Electricity and Gas Law no. 123/2012.

Additional information is available on ANRE’s website: http://www.anre.ro

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