Just like the Dry-Run, the Coordinated Auction Office, CAO, project centers on the implementation of the principles of the regulation 1228/2003. Harmonisation of congestion management methods and optimisation of cross border capacity allocation stands at the centre of attention. The fundamental difference is the shift from a fictive model to a real run situation. On top of a software, there will be an office and mullti-national staff. The staff will manage auctions and load flows for the entire region of South East of Europe. In terms of operations, the principle of a one stop shop will apply.

FRAMEWORK
ACHIEVEMENTS
TASKS

Framework

A business plan by Terna and Verbund marked the starting point of the CAO project in May 2007.  Its biggest output was the determination of company form and ownership structures. Terna/Verbund proposed the establishment of the CAO as a limited liability company, owned and operated by the South East European TSOs. The participating TSOs later agreed on the approach.

As a next step, the coordination platform was created. The Implementation Group for Coordinated Auction Office brings together South East European TSOs, regulators and the European Commission. The majority comes from the SETSO task force and from the Energy Community Regulatory Board electricity working group. The Implementation Group held its first meeting in September 2007. It meets bimonthly.

As its first task, the Implementation Group drafted an Action Plan. The plan defines the necessary steps towards the establishment of the office and outlines  an indicative time plan. The Action Plan was presented at the 11th Athens Forum and approved at the 4th Implementation Group meeting in May 2008. Also, the Energy Community Ministerial Council explicitly supported the establishment of the CAO in its conclusions in December 2007. The ministers reiterated their support at the Ministerial Councils thereafter.

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Achievements

Definition on the 8th Region, Jun 2008

The most pressing issue was the pending definition of a congestion management area in the region. The need of a definition for South East Europe became evident during the Action Plan drafting process. Regulation 1228/2003 and its Congestion Management Guidelines consists of no definition for the South East European region. At the same time, the definition is essential for the project. It not only determines the future location COA office, but influences the overall establishment procedures.

The agreement on the South East European region was reached at the Ministerial Council in June 2008. As a result, common coordinated congestion management method, including capacity allocation, is to apply for the following territories:

• the seven Contracting Parties and the European Commission

• the neighbouring countries of Bulgaria, Greece, Romania and Slovenia

• Italy with regard to the interconnections between Italy and the Parties to the Treaty

The listed territories form the “so-called” 8th congestion management region of South East Europe.

Memorandum of Understanding on the establishment of CAO, Dec 2008

In the course of autumn 2008, the focus was shifted to the drafting of Memorandum of Understanding. The draft was subject to several discussions. The signing of a Memorandum of Understanding was seen as a decisive line of action, as it formalizes the stakeholders’ commitment towards the project. On the occasion of the 5th Ministerial Council, the Memorandum of Understanding on the establishment of CAO in South East Europe was opened for signature. It was signed by the majority of Transmission System Operators (TSOs); others expressing their commitment to join later.

The Dec 2008 Ministerial Council of the Energy Community also expressed its support for Montenegro as a host of the future Coordinated Auction Office. 

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Tasks

In its Action Plan, the Implementation Group bundles the future tasks in four distinct groups. These are listed in the table below. 

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