TSO & DSO collaboration:

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1 TSO & DSO collaboration: The growing need for seamless information exchange between TSOs and DSOs Lisbon, May 10-11, 2017

2 cgi.com 2 cgi.com 3 Table of Contents Executive Summary Executive Summary...03 Interpretation of The Clean Energy Package and The Implications for The Collaboration Between TSOS and DSOS...04 An Appeal in Favour of DSO and TSO Collaboration in Data Exchange...05 The Council of European Energy Regulators (Ceer) Position On the Future of the DSO and TSO Relationship...06 TSO and DSO Cooperation and Data Exchange in the Context of the Network Codes...07 Developments of The Data Hub by OTE...08 TSO-DSO Cooperation in Extracting Distributed Flexibility in zelgium...08 What Do We Need to Be Successful in DSO-TSO collaboration?...09 The Datahub Solution for Energinet - Facilitating The Danish Retail Market Reform...10 EDSO View on the role of DSOs in The Energy Union...10 The energy market has never been more dynamic than it is today. The increase of less-predictable renewable energy sources such as wind and solar energy is transforming the energy system. This change will complicate the balance of supply and demand, impacting market facilitation and the way Transmission System Operators (TSOs) and Distribution System Operators (DSOs) interact with each other. This has sparked a dialogue in Europe on the need for better collaboration between TSOs and DSOs to ensure the security of supply and balance in the grid. CGI s annual Central Markets Debate event explored and discussed questions around this topic, including: What essential information should be shared between TSOs and DSOs and how will this impact their role as market facilitator? How can central market operators support the exchange of information? What kind of support or system is needed to facilitate these changes? Cybersecurity is another topic that was covered during the debate. As energy markets across Europe handle increasing amounts of consumer data, the potential for cyberattacks rises and data becomes more vulnerable. A critical question that remains is which approach will be most effective in minimizing security risks, while at the same time, ensuring the data is available for market facilitation purposes? The Impact of the Changes in The Privacy Legislation On the Energy Sector...11 Panel Discussion On Innovation for Market Facilitation and Customer Involvement...12 The growing need for seamless information exchange between the TSOs and DSOs: Creating a smart energy future...13 Meet the real challenges a regulator s perspective...14 Panel Discussion On Security and Privacy Aspects with Respect to Datahubs...15 Conclusion...15

3 cgi.com 4 cgi.com 5 Interpretation of The Clean Energy Package and The Implications for The Collaboration Between TSOs and DSOs Manuel Sánchez-Jiménez, PhD. Team Leader Smart Grids, EC, DG ENERGY The need for better collaboration between TSOs and DSOs is not a new idea. Various authorities, including the Agency for the Cooperation of Energy Regulators (ACER), Council of European Energy Regulators (CEER) and the European Commission (EC) have been working on this topic for many years. In fact, the network codes, which are necessary to ensure a secure and competitive energy ecosystem, have already been adapted to address this market need. The Energy Union strategy, an initiative of the EC to create an internal energy market in Europe, is based on five pillars that form the basis of an interconnected energy market, namely: energy efficiency, decarbonization, a fully integrated energy market, energy security, and research innovation and competiveness. The Smart Grids project has laid the foundation to create the framework for the EU strategy. Boosting the existing bear market through volume and price flexibility, and integrating the wholesale market is necessary to link the flexibility and make the energy market more effective. There is a trend toward a market-based approach to provide clear price signals and facilitate the integration of renewable energy into the grid. In this scenario, DSOs are faced with the new task of integrating a network structure into a single system and investing in grid services. There is a need to reduce operational costs and draw up improvement plans for the short and long term to promote regional cooperation and ensure the security of supply. Besides the optimization of the TSO-DSO relationship, investments in the grids that drive a vertically-integrated energy system are also needed. Mr. Sánchez-Jiménez noted that the energy market requires a new design in which the consumers are protected and empowered to actively participate. The EC s viewpoint is that there isn t one, single system that covers all these requirements and it is critical to look across one s borders to learn and be inspired. A good example is the Czech Republic, a country that utilizes flexibility in the activation of ancillary services. An Appeal in Favour of DSO and TSO Collaboration in Data Exchange Ben Voorhorst, Vice President, ENTSO-e (European Network of Transmission System Operators) and COO, TenneT In the electricity market, all system operators are interconnected. This is true for TSOs and DSOs as well, who are inextricably linked. Currently they are dealing with the challenges of keeping the grid stable in case of RES (renewable energy sources) production, particularly when the production drops to <10% in winter time. This phenomena, called Dunkelflaute has occurred in Germany, when the production dropped below 10% due to insufficient sun and wind for 10 days. In some situations, the complete opposite occurs, when high winds and intense sunlight combined with an electricity load can seriously complicate the security of supply. These scenarios are evidence that off-grid power is not an option. What the market needs is an one system approach for data exchange to enable market facilitation and unlock distributed flexibility from the various parties. At a larger EU level, a lot of work has already been done in this area. Although each country has its own system, the ENTSO-e rules and codes are adaptable to the whole of Europe and it is important to look at the bigger picture to arrive at a common understanding. The eight codes to be enforced this year are divided into three main domains: markets, operations and connections. The aim is to achieve a pan-european integration of power systems and internal energy markets. The challenge extends beyond just the integration of the wholesale market and focuses on providing guidelines to enable consumer participation in the energy supply. TenneT s strategic priority is to enhance the resilience of the grid and promote the advanced use of data analytics to improve operations and better respond to the needs of society. TenneT s activities in Germany and the Netherlands are focused on balancing the system, which includes interconnectors with the Nordics for supplying hydro power. Mr. Voorhorst stated that with the system of price incentives, the imbalance can be effectively managed. The market has all the required information and by publishing the imbalance prices for bidding, the market will be fully transparent. TenneT organizes roundtables to discuss the needs of the future grid with all its stakeholders. This has resulted in initiatives for congestion management in cooperation with a grid operator and an energy trading platform. The platform offers intraday bids and includes information on the location and ramp speed to identify the level of granularity. The TSO and DSO are privy to the bid information and warnings of constraints in the grid. Another initiative that TenneT participates in is the Showcase Smart Energy Digital Agenda for the Energy Transition or SINTEG program in Germany. As part of the program, TenneT invests in pilots for photovoltaic (PV) measuring, optimization of renewables forecasting and ancillary services.

4 cgi.com 6 cgi.com 7 The Council of European Energy Regulators (CEER) Position On the Future of the DSO and TSO Relationship Vítor Manuel Ferreira Marques, Head of Cost and Profit Division, ERSE In September 2016, CEER published a position paper on the future of the DSO and TSO relationship to explore how their relationship and the regulatory arrangements between them may need to evolve to ensure efficient system solutions (either conventional or flexible) that can be implemented to accommodate the needs of a sustainable energy system. Europe s energy landscape is in a period of significant change. It is critical that DSOs and TSOs work together constructively and cooperatively to address the needs of their mutual customers. The paper elucidates the overarching principles that CEER believes should underpin the relationship, and examines governance arrangements, network planning and system operation, addressing both electricity and gas sectors. Mr. Marques said that decentralization, decarbonization and digitalization are changing the way electricity is generated and consumed. These changes are introducing more unpredictability in the system, which may require increased investments, unless innovative and flexible solutions that leverage new technologies are used to their full potential. Providers and solutions of these technologies already exist. This will drive changes in energy and economic flows along the value chain, namely increasing interactions between electricity and other sectors, such as gas (variable gas flows being driven by electricity intermittency) as well as between distribution and transmission networks. In the paper, CEER talks about the effective implementation of the principles and obligations of the existing Third Energy Package, which are a basic necessity to avoid market distortion and achieve sufficiently unbundled and neutral DSOs. Furthermore, it reveals that from a governance standpoint, regulatory frameworks and DSO representation at the European level is crucial. In terms of network planning, under and over investment, both in transmission and distribution must be avoided through DSO/TSO cooperation for mutual planning. This cooperation is also key to operating the system efficiently and at the lowest cost to customers. From CEER s perspective, the next step will be for National Energy Regulatory Authorities (NRAs), DSOs and TSOs to consider how these principles can best be applied in the context of their own countries to deliver maximum benefits to customers. In this context, the package of legislative proposals presented by the EC in November 2016 is particularly crucial, as it is aimed at keeping the European Union competitive as the clean energy transition is changing the global energy markets : The Clean Energy Package covers energy efficiency, renewable energy, design of the electricity market, security of electricity supply and governance rules for the EU. The proposals for more TSO/DSO coordination, a new EU-wide DSO body and for DSOs to produce network plans that feed into TSO plans were particularly wellreceived by energy regulators. About CEER: The Council of European Energy Regulators (CEER) is a voluntary association of Europe s NRAs. CEER s main functions are to foster a sound European regulatory framework and to support NRAs by developing good practices in energy regulation and facilitating the sharing of experiences. European energy regulators also work actively within the working groups of the Agency for the Cooperation of Energy Regulators (ACER). TSO and DSO Cooperation and Data Exchange in the Context of the Network Codes Francisco Reis Head Engineer, R&D Nester / REN Network codes are the foundation upon which the European Internal Electricity Market (IEM) is being built. The IEM aims to meet Europe s low carbon target and in order to do so has to overcome major challenges such as system stability, resource variability, uncertainty, new connections, as well as large and altered power flows all over Europe. Therefore, infrastructure, system operation and market are the three pillars to deliver the IEM with a fit-for-purpose network, coordinated schemes to ensure operational security of the pan-european power system and well-designed pan-european markets. They will need to be supported by a set of grid connection requirements, common operational rules and market rules, which constitute the network codes that become legally binding and have the same status as any other regulations. Getting TSOs and DSOs to interact and cooperate with each other is of upmost importance to ensure more efficient operation of the power system, address the common challenges arising from the growing complexity of operational and planning activities, and seize the various benefits and synergies at different levels. Across Europe, there are significant differences between TSOs and DSOs as well as the distribution systems which differ widely in terms of voltage levels and installed capacity of Distributed Renewable Energy Sources (DRES). Therefore, increasing the system s observability and controllability is key, which in turn requires a framework for data exchange between the system operators. System operation-related codes define both the minimum data exchange requirements between TSOs and DSOs as well as the types of data to be exchanged, which range from real-time data, scheduled and forecast data to structural data. There are, however, challenges in mapping requirements to specific geographical contexts, and defining the scope of data to be exchanged between TSOs and DSOs. This includes outlining the observability area, establishing data exchange rates and defining the type of data, as well as addressing issues such as confidentiality, scalability and neutrality, and the standards for communication and security. There are already examples of good cooperation and data exchange, like in the case of Portugal where they are moving beyond the existing practice of SCADA-exchanged data according to operational procedures. Improvements have been made in the Operational Protocol between REN (TSO) - EDPD (DSO), in the cooperation on RES curtailment and in the mapping of the Network Code on Operational Security s (NC-OS s) requirements to the Portuguese context of the REN-EDPD border, where the gap analysis identified non-compliances with the NC-OS, but also few requirements that are not applicable to the Portuguese case. Following the implementation of a pilot project to enhance REN-EDPD data exchange levels, there has been significant improvement in compliance levels with the Network Code. About Nester: A research and development center created by REN and the State Grid Corporation of China, Nester focuses on research, development, innovation and demonstration in the power transmission area, consulting services in the scope of R&D activities, as well as education and training services. About REN: The Portuguese mainland TSO, REN is responsible for the transmission of high-voltage electricity and the overall technical management of the National Electricity System. It is also in-charge of the transport of high-pressure natural gas and overall technical management of the National Natural Gas System, guaranteeing the reception, storage and regasification of LNG and underground storage of natural gas. About Energy Services Regulatory Authority (ERSE): The ERSE is responsible for regulating the electricity and natural gas sectors in Portugal.

5 cgi.com 8 cgi.com 9 Developments of The Data Hub by OTE Michal Ivánek Vice-Chairman of the Board and CFO, OTE More than 15 years of operation of OTE as Independent Energy Market Operator prove its role as a key entity for both the electricity and gas markets in the Czech Republic. From beginning as a wholesale electricity market operator organizing short-term markets and processing imbalance settlement to supporting the retail energy market with its Central Data Hub solution for both electricity and gas market participants to also providing related services such as the support for renewable energy sources and issuing of Guarantees of Origin, OTE has consistently expanded its role in the energy ecosystem. OTE is also strongly involved in European market integration activities like spot market integration or intraday market coupling. At the moment, OTE can be considered the most developed central energy market operator in Europe and most probably worldwide. OTE is looking to the future and to upcoming challenges which come not only from new European legislation and strategies (Network Codes, Winter Package) but also from the need to develop a clear strategy on how to follow current trends on energy markets such as smart grids and increasing non-predictable production from renewable energy sources in the grid. TSO-DSO Cooperation in Extracting Distributed Flexibility in Belgium Hans Vandenbroucke, Head of Belgian Market Structure, Elia Elia Group comprises of two major TSOs in Europe Elia in Belgium and 50Hertz in Germany. This combination, along with high renewables production in the 50Hertz territory, puts Elia in a unique position to address the changing context and challenges of Europe s energy system. Elia s response is ambitious, but involves pragmatic solutions that are implemented in a step-by-step manner. This includes investing in the forecasting and development of flexibility products to enable Balance Responsible Parties (BRPs) react quicker to restoring imbalance. Elia believes that decentralizing the power system provides a win-win situation for the TSO, DSO and end users. A key principle of integrated flexible data exchange (i.e. balance management) depends on the BRPs being empowered to balance within the day-ahead and intraday markets. If this does not remove the imbalance, then Elia steps in with real-time measures, but this incurs costs and leads to imbalance tariffs being charged by Elia. To address these balancing needs, Elia has developed two types of products: Pre-contracted volumes (reserves): Frequency Containment Reserves (FCR) Manual and automatic Frequency Restoration Reserves (mfrr and afrr). mfrr products include R3 Standard and R3 Flex Free bids free bidding for mfrr. Elia is launching a new BidLadder pilot project for tertiary control reserves. It is aimed at creating a platform to allow free bids for energy balancing from TSO-connected generation and load offered to Elia by a Balancing Service Provider (i.e. independent aggregators, grid users or BRPs). This will allow flexibility to be offered in 15-minute intervals, complementing the existing mechanisms. How is TSO-DSO cooperation in extracting flexibility being accomplished? Elia has designed some building blocks for flexible data exchange: Flex Register that contains structural data per delivery point Flex Data Register that comprises metering data Flex Activation Register, which includes activation data from the balancing platform Calculation module that calculates delivered energy per delivery point Linked to locational and prequalification data from the Flex Register, a filtering module will qualify bids against grid constraints and assign traffic light colors depending on whether or not constraints exist. If constraints exist, red is assigned and the bid is removed. By publishing the traffic lights, bids can be reviewed and adjusted depending on what is happening in the grid. Key conclusions There is a need to be agile and to collaborate with other parties such as aggregators. Grid volatility is increasing as renewables production ramps up, which in turn increases the need for flexibility. Balancing and congestion product portfolios need to be adapted to the new context. Evolution not revolution. This means taking pragmatic steps forward, while ensuring pivotal roles remain intact. Coordinated access to distributed flexibility, integrated at a higher (e.g., national) level, is needed to ensure proper active system management. Coordinated data exchange will support efficient market functioning, especially once smart meters are rolled out en masse. What Do We Need to Be Successful in DSO-TSO Collaboration? Gerda de Jong, Electricity Market Developer, TenneT TSO and Marcus Merkel; Office of the Board of Directors, EWE NETZ GmbH with support of Peter Hermans, CTO at Stedin The TSO-DSO management report provides recommendations on common European principles and benchmarks for data and information exchanges. The biggest challenge is finding ways for TSOs and DSOs to work with each other and to understand the fears related to matters such as demand side response and congestion management. The EG3 report has been published only three years ago and the market is shifting to a hybrid and decentralized grid. According to the report, the DSO is needed for active system management and mitigating measures in congested areas. The processes should be aligned for operating one system. Building trust between the TSO and DSO begins with both a top-down and bottom-up approach. The EC supported the initiative of the working group to provide guidance on the TSO-DSO data exchange principles and role models. Five use cases were identified and described to initiate discussions, reach a common understanding and reduce any obstacles to collaboration. To make this possible, the group aimed to obtain a deeper understanding by identifying the hurdles behind the overarching issues. This deep dive resulted in eight recommendations for data management and advice on a new approach for congestion mitigation and balancing, market facilitation and access to flexibility for the TSO and DSO.

6 cgi.com 10 cgi.com 11 The Datahub Solution for Energinet - Facilitating The Danish Retail Market Reform Signe Horn Rosted, Head of Department - Retail Market Development, Energinet.dk Energinet is the Danish TSO that owns and operates the Danish DataHub. DataHub supports the Danish energy retail market reform by placing consumers at the center of the market, centralizing data and market processes, and supporting competition through clear roles and processes to ensure a fair and liberalized market. Energinet supports innovation in the electricity market by providing access to data in three different ways: controlled access (consumers, market players and third parties e.g., ESCOs), research access and open access. In June 2017, Energinet launched its open data platform (Energy Data Service), which provides easy and automated access to aggregated DataHub market and technical data. Energy Data Service and other such initiatives are seen as important steps in accelerating innovative new business models in the electricity market. EDSO View on the role of DSOs in The Energy Union João Torres, Chairman of EDSO for Smart Grids and CEO of EDP Distribuição The Energy Union faces significant challenges in achieving a carbon-free, digital and electrified society that relies on resilient, secure and enabling distribution systems. Consumers want to benefit from the upcoming opportunities and the electricity industry realizes that the sustainable transition to a secure, resilient and digital smart grid has to be achieved. DSOs have already done a significant amount of work and are at the forefront of the energy transition, leading the innovation effort from the industry side, especially through Deactivation & Decommissioning (D&D) projects. They are transforming to improve efficiency, quality of service, and embrace the progressive implementation of RES. Smart networks are pivotal to meet EU climate and energy goals. In most countries, DSOs are rolling out and operating standard smart meters, advanced metering solutions, network control and automation, and integrated IT frameworks, which are the pillars of smart grid functionalities and market facilitation. DSOs as data managers of technical and commercial data, is a common model in Europe. Here they handle key data for grid observability and controllability, and for neutral market facilitation, within the current unbundling rules and framework of the Third Energy Package (TEP). DSOs feel ready for what comes next to bridge past accomplishments with future ambitions, acknowledging the growing relevance of the distribution system and the evolving roles needed to support the Clean Energy Package. There is growing consensus that flexibility use by DSOs is critical for the efficient, safe and secure functioning of the energy system. One key challenge for DSOs is to fulfil their neutral market facilitator role, while accessing the flexibility needed for active management. From the DSOs viewpoint, coordination with commercial parties is crucial to encourage the market to adopt flexibility products and services, while having DSOs oversee the impact on distribution systems. Furthermore, coordination with TSOs is key to enable direct or indirect flexibility provision of system services. At the institutional level, the inclusion of a formal place for DSO representation at the larger European level the EU DSO Entity will be a crucial step to enhance EU-level DSOs/TSOs cooperation, develop new technical rules and clarify roles with market actors and regulatory frameworks. About EDSO-SG: The European Distribution System Operators Association for Smart Grids (EDSO-SG) leads the cooperation for the electricity distribution networks of the future and is aimed at smarter electricity grids, driving the energy transition and empowering consumers. EDSO consists of 34 leading electricity distribution system operators (DSOs), including three associations, supplying more than 350 million customers from 18 European countries. Through its work in electricity distribution-related technologies, policies and projects, its members collaborate to ensure the reliability of Europe s electricity supply for customers and enable their active participation in the energy system. About EDP Distribuição: The Portuguese mainland DSO distributes electricity to 6 million households and is a European reference with its InovGrid programme and digital transformation agenda. The Impact of the Changes in The Privacy Legislation On the Energy Sector Bart Baars, Risk Officer at EDSN With the implementation of the General Data Protection Regulation (GDRP), the EU s new data protection law, customers have more rights. Virtually every company that gathers and processes data from consumers will be impacted by this law. The law doesn t focus on privacy but on personal data, which is data that can directly or indirectly be identified with the person. Mr Baars stated that the protection of personal data should be standardized within Europe. Currently, there is no common definition for personal data in Europe. For instance, who is considered the owner of smart meter data? This will differ depending on the perspective from which it is considered legal, consumer or from an energy standpoint. Data standardization in Europe will enable future developments such as the possibility of a Dutch consumer buying energy from, for example a Portuguese supplier in Mr Baars viewpoint is that the current metering values can be categorized as personal data. With this data, a consumer s energy usage can be identified and is unique, and will enable suppliers to proactively submit offers to consumers, helping them to save on energy costs. Another question that arises is about where the data is stored and how safe its storage is? For example, in the Netherlands, it is possible for a supplier to provide a switching offer directly to a consumer s tablet or mobile phone. To enable such a service, the supplier needs to have real-time access to personal data or be able to provide access to another party. Currently, ID authentication is done by providing a DigID or an IDIN number, which automatically links the person to their personal data. Another option that suppliers provide their clients with is that of a unique web-access code which provides an ID link in the most flexible way. DSOs aspire for the right conditions that allow them to move faster. Their competence is key to ensure a cost-effective and successful transition to a secure, resilient and digital smarter grid. One of the aspirations is that short-term costefficiency must not hamper innovation in the long run and there should be a comprehensive set of investments toward the fully digital DSO to enable a consumer-centric and greener digital sharing economy.

7 cgi.com 12 cgi.com 13 Panel Discussion On Innovation for Market Facilitation and Customer Involvement Panel: António Vidigal, President, EDP Inovação, Nuno Souza e Silva, Executive Board Member, R&D Nester and Eduardo Teixeira, Head of Markets and Consumers Division, ERSE The panelists included market players whose responsibilities along the electricity value chain range from generation to transmission, distribution and supply. The discussion covered the market players perspectives on innovation to drive market facilitation and customer participation as well as their views on regulations concerning the transformational role of sustainable innovation. EDP s business ranges from generation and distribution to supply, in both regulated and liberalized markets, across various geographies. To keep pace with a rapidly-evolving market and the accelerated implementation of a digital transformation roadmap, EDP has strategically aligned its innovation priorities to the following areas: clean energy generation, smarter grids and energy storage for distribution, client-focused solutions for supply and data leap for enterprise IoT, big data, advanced analytics and cloud computing. During the panel discussion, Mr Vidigal reflected on what it takes for the energy business to face the challenges of modernity in the fourth industrial revolution. This is an era where most people have traded their privacy for better convenience and comfort, which has enabled the creation of a new generation of services, namely comfort and energy efficiency at home. These services are characterized by cyber-physical systems that seamlessly integrate computational algorithms and physical components, advanced analytics, big data and artificial intelligence, massive physical sensing of real space of objects and networks, processing on the cloud in cyber space, and generating controls, information and knowledge. This transformational process will lead to power systems and energy businesses embarking on the journey toward decarbonization, decentralization and digitalization. It is a journey that will be led by a transactive energy model, Energy 4.0 smarter grid, flexibility, responsive demand and distributed generation, storage and control of energy. Things are slated to change, but not necessarily in the present way. There are many questions that continue to arise, namely how the Energy Web plug and play and peer to peer vision will be achieved, whose cloud will be utilized for it, how the trading processes will evolve in a blockchain-based system, and the full extent of the responsibility and role of DSOs/ TSOs as providers of software-defined smart grids. The growing need for seamless information exchange between the TSOs and DSOs: Creating a smart energy future Nuno Souza e Silva, Executive The new real life situations faced by the Portuguese TSO, REN and by its European peers, arising from the changing generation mix profile and increasing level of renewables, and the anticipation of the future challenges, has led to its strong involvement in R&D and innovation activities as well as in sharing initiatives with the international innovation community. There are periods where Portugal s electricity generation comes almost entirely from renewable sources, with some periods where renewables energy production outstrips the demand. In such a scenario, having hydro pump storage and interconnections assure full energy usage. Wind power extremes in power and in energy, wind power ramp extremes and consecutive days with all dispatchable thermal power stations (coal or CCGT) out of grid are new situations that have become more frequent. As an active member of the ENTSO-E, REN is involved in various committees and working groups aimed at providing optimized instruments and modalities to improve the coordination between the grid operators at the national and local level (TSOs and DSOs respectively) and the exchange of information to monitor and acquire ancillary services, namely coordination schemes for an integrated flexibility market model and a shared balancing responsibility model. There is special effort to focus on the following: Future use of data exchanged between TSOs and DSOs Cooperation required to address the problem of optimal wind power curtailment Ways to overcome network congestion problems caused by high wind power penetration levels Development of methodologies for power system operation (short-term) and planning (medium-term) Enabling system operators to better identify day-ahead TSO-DSO operational conditions of the network About R&D Nester: It is the research and development center created by REN, the Portuguese electricity and gas TSO, and the State Grid Corporation of China. It focuses on research, development, innovation and demonstration in the power transmission area, on consulting services within the scope of R&D activities, as well as on education and training services. Mr. Vidigal made the point that our lives will change and to understand where things are headed, we have to learn to think bigger and more collaboratively. EDP participates in the Free Electrons consortium, the world s first global energy startup accelerator that is backed by major utility companies. The consortium is intended to explore the next generation of ideas in clean energy, energy efficiency, electric mobility, digitalization and innovative customer solutions. About EDP Inovação: EDP Inovação coordinates innovation across the EDP Group. EDP is a verticallyintegrated utility company, as generator, distributor and supplier of electricity, and plays an important role in the world energy outlook, being present in 14 countries, with more than 10 million electricity customers. As the fourth largest worldwide wind operator, EDP is a renewables market leader.

8 cgi.com 14 cgi.com 15 Meet The Real Challenges A Regulator s Perspective Eduardo Teixeira, Head of Markets and Consumers Division, ERSE Mr. Teixeira discussed the EU climate and energy policy, its implementation challenges and issues, and the associated regulatory contributions. The challenge for the European Energy Policy is to tackle three major restrictions in a balanced and efficient way: prices and affordability, fuel scarcity and environmental impacts. The current situation is complex for all parties, including consumers, market parties and regulators. The increasing role of automation and mobility that will change the world that we live in. The Fourth Energy Package (FEP) is about adapting market and regulatory structures to make them ready for the energy system of the future, moving toward more regional and EU-wide frameworks, as well as embracing approaches for research, innovation and competiveness. The challenge of the EU policy is to combine the different pillars of the FEP into the market. In the Winter Package, the main goal is to inform and empower consumers. Renewables and new technology trends, the increasingly important role that the consumer will play, the rise of the prosumer and the need for structured demand side decisions for new system balance bring with it the challenge of embracing a consumer-centric model in which data and information play a central role. Using data and information to foster consumer engagement and to decode the new consumer mindset is a key to breaking the circular reference of disengagement and distrust. It is also critical to enable an efficient public policy decision-making process. Using data in innovative ways can facilitate new market models, new business cases and support regulatory and monitoring activities. The main challenges faced by regulators is bringing together the various pieces of the regulatory puzzle, to make the different axes of sector development (technological, social, economic, ) compatible, using new trends and innovation to promote competition and transparency in the energy market and providing a catalyst for the current development of RES generation and sustainable energy system. Regulations need to identify a model that is balanced and sustainable for all stakeholders, enabling real innovation opportunities. About ERSE: The Energy Services Regulatory Authority is responsible for regulating the electricity and natural gas sectors in Portugal. Panel Discussion On Security and Privacy Aspects with Respect to Datahubs Panel: Manuel Sánchez-Jiménez, PhD, Team Leader Smart Grids at the EC, DG ENERGY, Bart Baars Privacy and Security Officer at EDSN and Andy Norton Risk Officer, EMEA at SentinelOne As the relationship between DSOs and TSOs deepens, the information exchange between them as well as the other parties in the value chain also increases. In this scenario, privacy and security becomes increasingly relevant and was included as a sub-topic at the event. During the panel discussion the speakers shared their perspectives on the security and privacy aspects related to datahubs. Mr. Baars highlighted the challenges and opportunities of the EU GDPR that will come into effective in May The regulation focuses on how to deal with citizens personal data, but Mr. Baars pointed that right now the definition of personal is open to interpretation. He elucidated his point by saying that while a name, an address and a telephone number are certainly personal information, how will a meter identifier be categorized? There is a risk of being overprotective, which will increase costs and limit the ability to share information. Mr. Norton made the point that the long lifetime of devices presents a risk to privacy and security. For example, during the life of a device, the encryption might become easy to decode with ever-increasing computing abilities. The solution, in this case, is enhance the computing power of the device, making it upgradable. Mr. Sanchez explained that the EU recognizes three questions regarding security: Are cybersecurity and security of supply two sides of the same coin? How can the energy network be secured? What are the standards or certifications needed to achieve this? The clean energy package acknowledges that cybersecurity and its impact on the security of supply need to be addressed. It proposes putting in place measures and revised regulations for the gas sector include cybersecurity as well. Conclusion CGI s central markets debate is an annual event that provides a unique opportunity to meet, discuss and debate future developments of the energy market with peers from multiple countries in similar roles across Europe. Previous attendees have emphasized the importance and value of networking, exchanging best practices and working together to come up with new and innovative ideas. CGI s central markets debate event provides a platform for industry-shaping dialogue. This year brought a myriad of experts together from across Europe on the topic of TSO and DSO collaboration and the growing need for seamless information exchange between the two. It is clear that there is no simple answer to achieve this, but by bringing together the key experts, countries and influencers of the energy transition, we can get closer to ensuring effective and competitive energy markets that are flexible in nature.

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