1

Regional electricity market

Belgrade,23. April 2014.

Ljiljana HadzibabicCouncil member

Energy Agency of the Republic of Serbia

Content1) The objectives and advantages of SEE Regional market

integration2) The 8th Region - SEE3) Regional and national market development programs 4) EU Target Model for Electricity Market Integration5) Regulatory role6) Development possibilities for Serbian market

• Market model and market participants in Serbia• The dynamics of the Market Openning• The legal framework for the functioning of National Market• Comparative Electricity Prices for the industry in some EU

countries

The objectives and advantages of SEE Regional market integration

The main goals are:

• Creating a competitive integrated Regional energy market – more efficient than national markets

• Efficient management of interconnection capacities: Capacity Allocation and Congestion Management (CACM)

• Attracting investments in energy• Providing a secure and sustainable supply of

customers at reasonable prices

4

9 Energy Community Treaty Contracting Parties

the neighboring countries Bulgaria, Greece, Hungary, Romania and Slovenia

Italy with regard to the interconnections between Italy and the CPs to the EnC Treaty (DC undersea cables)

+ Moldova and Ukraine are not technically in parallel synchronous operation within ENTSO-E, and thus cannot perform operationally CACM mechanisms in the 8th region

SEE 9 contracting parties

>20 borders

Population: 137 million

The 8th Region - SEE

The ultimate goal is to achieve a single platform for yearly, monthly and daily implicit auctions for the SEE region.

EU Target Model for Electricity Market Integration

Legal Basis• Directive 2009/72/EC 13 July 2009 concerning common rules for

the internal market in electricity and repealing Directive 2003/54/EC

• Regulation (EC) No 713/2009 of 13 July 2009 establishing an Agency for the Cooperation of Energy Regulators

• Regulation (EC) No 714/2009 of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003

• EU Legislation implementation within SEE Region

Contracting Parties (CP) shall bring into force the laws, regulations and administrative provisions necessary to comply with 3rd Energy

New Institutions

New EU institutions based on the 3rd Package: ENTSO-E (TSOs) ACER (Regulators)

Joint preparation of:Framework Guidelines Network Codes Target models for capacity allocation and congestion management..............

Regional and national programs /1

Energy Community joint projects:

• Wholesale Market Opening (WMO)

• Balancing Energy Market

• Market monitoring

• Supplier switching

• ……

Regional and national programs /2

National developmentRegional cooperation

Parallel development of regional and local electricity market?

• SEE local markets are underdeveloped in average - mainly bilateral markets

• Markets are largely illiquid• Dominant existing production company• Legislative changes are still ongoing• Obstacles to market development in each jurisdiction

in SEE

Parallel

Serbian National Market

BilateralBalancing MarketPower Exchange

Market Functioning - the Legal Framework

Legal Framework EU directives - mandatory baseline

The Energy Law3rd package by mid-year 2014

Transmission and Distribution Grid Codes Cross-border transmission capacities - Rules governing the allocation of rights Market Code

Power Excange Code Supplier changing Rules Methodologies for the determination of the price for access to electricity transmission and distribution system

Market Participants

ProducersSuppliers (40 BOS / 75 Suppliers)Public Suppliers (1)The final buyers (3.6 million)Transmission System OperatorDistribution System Operator (5)Market Operator - Power Exchange

Balancing responsibilities of all market participants;Relations of Market participants are regulated by agreements.

Current state of Serbian electricity market - model

Privilegedproducers

Cross-border flows

DSO

END CUSTOMERS on the free market

END CUSTOMERS

Supplierson the free Market +Last Resort supplier(tender procedure)

Legend: Electricity flowCommercial flows

Producers

Supplier Wholesaler

Retail Supplier /Public Supplier /

Last resort

Independentproducers

EPS - Holding

Power exchange operator

EMS – TSO

The Plan

(+ Organizer of bilateral and balancing Market)

2014

Serbian electricity market – data 2013

2013 2013/2012%

Generation GWh 37,537 108.6

Consumption GWh 34,043 108.6

Transmission losses % 2.45 96.1

Maximum daily gross consumption GWh 124.14 87.8

Maximum hourly load MW 5,895 89.0

Total consumption GWh 28,8 99.9

Transit GWh 8,328 101.9

The Dynamics of the Market Opening

2008 2012 2013 2014 20150%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

100 10088.7

58

11.3

42

Free market

Regulated100

2013: + losses 5.6 TWh on market (26%)

Current supplier Customer

New supplier

System operator

Application for supplier switching

Invitation for removal of insufficiencies Application

check

Sales Contract

Application copy

Forwarding the customer’s statement on canceling/rescinding the Sales Contract

Application data check

Provision of metering data

Objection to the operator Conditions for supplier

switching are not met

Supplier switching day

Submission of application

corrigendum

D

D+3

D+4

D+7

D+8

D+19

D+11

Conditions for supplier switching are not met

Non-compliance with the

invitation

Invitation for removal of insufficiencies

Notification on inaccurate data

Conditions for supplier switching are not met

Non-compliance with the

application

Submission of application

corrigendum

Certificate on settled liabilities, upon customer’s

request

No objections to the operator

Day

No cost, 21 days

Electricity quantities by trading activities during 2013

Serbian National Market

Serbian Power Exchange (SEEPEX)

• The initiator and the main support - EMS (TSO)

• Feasibility studies and an action plan - two years of analysis

• The project implementation is ongoing• Support of the Ministry, Regulator, EPS as a

market maker

Serbian Power Exchange (SEEPEX)

• Strategic partner for the financial function• In 4th quarter 2013 - the establishment of

the company• In 2015 in operation - day ahead market• Markets coupling with neighboring power

exchanges (HU-SLO-CZ+RO)

Comparasion of the Electricity Prices for the Industry (31) - The second half of 2013 -

Србија

Црна Гора*

БиХ*

Бугарска

Финска*

Шведска

Македонија*

Француска

Пољска

Норвешка

Турска*

Словенија

Холандија

Естонија

Хрватска

Чешка

Мађарска

Белгија

Аустрија

Румунија*

Летонија*

Грчка*

Португалија*

Велика Британија

Шпанија*

Литванија

Словачка

Ирска

Немачка*

Италија*

Данска

0 5 10 15 20 25

5.26

7.33

6.53

7.16

6.79

7.41

3.91

6.46

8.30

7.22

8.91

8.26

8.40

8.38

9.13

9.79

9.14

9.18

8.64

9.04

11.25

10.40

10.15

11.79

11.65

12.25

12.24

13.33

8.60

11.22

8.71

1.09

0.00

1.11

1.55

2.50

1.93

5.48

3.40

2.49

3.60

2.00

3.27

3.22

3.26

2.67

2.19

3.15

4.07

4.63

4.33

2.37

3.71

4.01

2.85

3.17

2.60

2.99

2.08

10.19

8.29

15.92

Без такси и ПДВ Таксе и ПДВ

€cent/kWh

Подаци: EUROSTAT, Агенција за енергетику

Типски потрошач: за ЕУ годишња потрошња 500 дo 2.000 MWh, за Србију 2.000 MWh и снага 500 kWКурс 1€ = 114,25 дин

* Подаци из претходног полугођа

22

Thank you for your attention!

Ljiljana HadzibabicCouncil member

Energy Agency of the Republic of Serbia

www.aers.rs