“Understanding the SEE Power Market” M.Sc.E.E. Elton B. Radheshi Director of Market Operation dept. Tirane 21/04/2016
Infrastructure and regulatory development The Albanian Power Sector Main Players and Roles Albanian Power system key figures during last years Stepwise liberalization of the wholesale market Main legislative and regulative developments on the Power Sector Power Sector developments OST developments Power exchange initiative
THE ALBANIAN POWER SECTOR MAIN PLAYERS AND ROLES Political Level ALBANIAN PARLIAMENT Prime Minster’s Office MINISTRY OF MINISTRY OF INDUSTRY AND ENERGY ECONOMY Institutional Level NATIONAL REGULATOR NATIONAL AGENCY FOR NATURAL RESOURCES Operational Level OST KESH DSO accountable to counselling to controlled/owned by
THE ALBANIAN POWER SECTOR MAIN PLAYERS AND ROLES CONT. Independent body organised based on the Energy sector Law in late 1995. Board of commissioners appointed from the Parliament. Responsible mainly for tariffs methodology as well as licensing procedures. Safeguard of the Energy Sector Incumbent generator. Joint stock company state owned. Responsible for production of electricity mainly Hydro. Covers around 86% of Albanian generation sources OST sh.a. is a joint stock company registered in July 2004, which shares are owned 100% from the Albanian Govt. OST is responsible for (i) Transmission (ii) System operation, (iii) Market operation Joint stock company 100% state owned, after ri-nationalisation from CEZ a.s. in 2014. Responsible for distribution system operation as well as wholesale supply. Covers around 90% of supply.
THE ALBANIAN POWER SECTOR MAIN PLAYERS AND ROLES CONT. Independent Power Producers, only Hydro. In 2015 the IPP connected to the HV grid more were more then 21. Majority IPP have PPA with OSHEE for 20 years. In 2015 overall production was around 0.9 TWh. Suppliers As of 2012, after amendments to the PSL, all consumers connected to the HV network are obliged to be supplied from eligible suppliers. Actual size around 10% of the overall load, in 2015 their consumption was around 0.6 TWh. In 2015, 20 suppliers registered and licensed, only 4-5 active. Traders Mainly responsible for cross border trade or trade of electricity to OSHEE for the losses and surpluses from KESH. In 2015, 25 traders registered and licensed, only 4-5 active in the market.
Power system key figures during last years Production Exchange Consumption GWh 8.000 7.000 2013-2015 Albania is a net importer of electricity 6.000 (20-30% of its demand depending on 7.610 7.411 6.874 5.000 inflows) and will continue in the near 6.712 5.475 4.343 4.000 future with such assumption. Exception 3.000 is made for 2010 with 0.7 TWh of 3.067 exports. 2.000 898 1.399 1.000 - Last year key figures; 2013 2014 2015 Imports ~ 1.4 TWh Demand ~ 6.8 TWh Production, Consumption and Import/Export by Years TWh Generation ~ 5.4 TWh 8.800 6260 6593 6924 7271 7344 7610 7411 7.800 6874 898 A demand decrease in the last 2 years is 6.800 5819 5931 5933 6121 5768 5446 5754 5739 5431 5430 3067 1399 3181 2895 1428 evident (last year drop was ~7%), mainly 5.800 926 479 524 605 379 358 1002 2465 due to (i) drastic measures from the Alb. 4.800 1750 2227 2827 Government to increase collections and 3.800 6924 6712 efficiency, reduce of non-technical losses 2.800 4894 5452 5409 5516 5068 5396 4737 5475 5165 4090 4449 4343 3795 as well as (ii) economic situation in the 1.800 3681 3204 2940 country and (iii) climatic changes. 800 Anyhow previsions are for an increase of -200 -732 the load for 2016, and 2017, respectively -1.200 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ~ 7 TWh and ~ 8 TWh. Production Exchange Consumption
Power system key figures during last years Import vs. Generation 120% 111% 100% 88% Generation structure in 2015 Generation 80% 78% 80% IPP 61% 14% 60% 59% 55% 60% 40% 45% 41% 40% 39% Importi 20% KESH 22% 20% 86% 12% 0% -11% -20% The curve, being a sinusoid shows that predictions for 2017 are for higher imports The share of the IPP in the and lower generation, even assuming that generation structure will increase some medium HPP will start production. year by year.
Power system key figures 1,8 1,6 Load Duration Curve - Series 1,4 1,2 LDC-Series 1,0 0,8 LDC-2015 0,6 LDC-2017 0,4 peak load 0,2 1,560 0,0 1,542 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 1,540 1,520 1,489 1,486 1,500 1,485 MW 1,480 1,453 1,460 1,440 1,420 1,400 2011 2012 2013 2014 2015
Cross border capacities Albania actually has 3 interconnections to neighbourhood countries. Kosovo – Albania 250MW* (LT split auctions by EMS and OST) Montenegro – Albania 400 MW (NTC allocated in explicit auctions in SEE CAO) Greece – Albania 250 MW (NTC allocated in explicit auctions in SEE CAO) * Line 400 kV Tirana – Prishtina will be in operation by mid of this year, and will increase NTC. FYROM – Albania interconnection is under financial preparation of the Project, will be in place in 2020. Alb. part will be financed by KfW and FYROM part from EBRD. Will increase NTC to other 400MW.
Stepwise liberalization of the wholesale market Provisions concerning the stepwise liberalization and phase out of the wholesale and retail supply are already set in the Power Sector Law 43/2015. Liberalization has started with the amendment of the Power Sector Law in 26/11/2011, defining the provision that clients (around 9) connected to the HV network (110 kV and Higher) or have a consumption more then 50 Million MWh/year are obliged to be supplied on the free market Stepwise liberalization in the next two years as per PSL, 43/2015 Deadlines 2015 for phase out Clients Consumption Clients on liberalized in MWh Clients on MV market 01.07.2016 HV 36,509 Clients in 35 kV 11% 10% 01.01.2017 10% 271,881 Clients in 20 kV 01.01.2018 508,079 Clients ne 10/6 kV 816,469 Total MV DSO DSO 90% 79% 01.01.2018
Main legislative and regulative developments on the PS DAM ERE est. and Non-household independence Customers Supply liberalization as per PSL liberalization 2004 2008 2015 ? 2018 2012 2002 1995 Power Utility Unbundling Other secondary regulations approved: Transitory Market Model approved on 2008, still in force. Market rules, approved in 2009, revised almost every 2-3 times per year until now, always transitory measures. Transmission and distribution as well as metering code approved already in 2008. New NC and Guidelines as per ENTSO-e, under preparation and submission to the ERE for approval. CACM under internal procedures for elaboration, acceptance and proposal to ERE.
OST developments, a bit of history OST is a joint stock company created and registered in July 2004, which shares are owned 100% from the Albanian Govt. OST at the beginning was part of KESH Holding, which was unbundled in the Generation, Transmission and Distribution activities. OST become independent from KESH and owner of TSO assets from August 2008. The first Transmission tariff was approved by the Regulator on May 2006. Under provisions of third energy package which were embraced from the Energy Sector law 43/2015, OST is under the further process of total unbundling from Supplier and Generation, provision stipulated on the law 08/2016. The process of certification from ERE as well as EnCS is also underway. It could be predicted that the process should be finished by June 30. OST has signed the MLA with ENTSO-E for full membership. The certification is the remaining issue for full membership in ENTSO-s
OST developments a bit of history - 2 Provisions stipulating the complete separation of the Market Operator from the TSO are set in the Power Sector Law, which predicts the full financial and legal separation to be finished by 31/12/2017. Market operator will be in charge, as set in the law, for the settlement of imbalances as well as bilateral contracts excluding the provisions for selling and buying of electricity. o In this context OST is in the process of Market Operator corporatization inside OST o Structural division including functional operations of the Market Operator has already been established starting from April 01, 2016. o MO tariff application, outside TSO tariff, will be made by mid of this year for approval by the ERE o Legal separation will be made as per Alb. Govt. decree provisions also for full DSO unbounding are set with deadline within 31/12/2017
Power Exchange Kick off meeting, July April 2016 2015
Power Exchange way forward Original HL plan, already shifted for at least 8-10 months, most of dates have already expired Secondary legislation in place - only the Govt. Decision regarding the PSO, was approved at the end of March 2016, in our view it’s still temporary.
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