International Co-operation of Regulators Energy Regulators

International Co-operation of Regulators

Energy Regulators Regional Association (ERRA) Objectives

Renewable Support Schemes of ERRA Members

dr. Gábor Szörényi Chairman of ERRA

Banska Bystrica, 12 October, 2010

ERRA

Voluntary, not-for-profit organization of independent

energy regulatory bodies of the Central Eastern Europe

(CEE), South East Europe (SEE), the Commonwealth of

Independent States (CIS), Baltic States (Estonia, Latvia,

Lithuania) and Other Countries including (Jordan,

United Arab Emirates and Saudi Arabia)


What is ERRA:

dr. Gábor Szörényi, ERRA

ERRA Objectives

To improve national energy regulation in member countries and foster development of stable energy regulators with autonomy and authority → stable investment climate

To improve cooperation among Energy Regulators and facilitate the exchange of information, research, training and experience among members and other regulators around the world → harmonized regulatory framework → more chance for regional market building

Objectives:

Banska Bystrica, 12 October, 2010dr. Gábor Szörényi, ERRA

ERRA Members

Currently24 Full Members:

Albania, Armenia, Azerbaijan, Bosnia & Herzegovina, Bulgaria, Croatia, Estonia, Georgia, Hungary, Kazakhstan, Kyrgyz Republic, Latvia, Lithuania, Macedonia, Moldova, Mongolia, Montenegro, Poland, Romania, Russia, Serbia, Slovakia, Turkey, Ukraine

4 Associate Members:National Regulatory Authority for Municipal Services (Romania), UNMIK

Kosovo, Regulatory Commission for Electricity in BiH, Regulatory Commission for Energy of Republik of Srpska (BiH)

5 Affiliate Members:Electricity Regulatory Commission of Jordan, Regulation and Supervision Bureau of United Arab Emirates, Electricity & Co-Generation Regulatory Authority of Saudi Arabia, NARUC (USA), Nigerian Electricity Regulatory Commission (NERC)

ERRA Members:


ERRA Members - Map

EU market: ~3000 TWh

ERRA market: ~2000 TWh

ERRA Electricity Market

ERRA Main Activities

Standing Committees with detailed work plan and deliverables: Licensing/Competition Committee Tariff/Pricing Committee Legal Regulation Working Group Chairmen meetings

Deliverables: discussion papers, case studies, issue papers Energy Investment & Regulation Conference (since 2001) Technical Exchange Programs Peer Reviews Website (library – former papers as background material for

training and self-development) Tariff Database Newsletter Training programs


• Monitoring Activities of Energy Regulatory Commissions

• Price Regulation & Tariffs

• Renewable Energy Regulation

• Electricity markets

• Introduction to the Regulation of Natural Gas Markets and District Heating

• Regulatory Information & Public Participation

• Introduction to Energy Regulation (ERRA Summer School)

• Training Course for New Commissioners

ERRA Training Courses


Electricity Residential Prices (excluding taxes) for Q4 of 2009 in € cents/kWh [Tariff Database]

•9•2010.10.22.

Natural Gas End User Prices (excluding taxes) for Q4 of 2009 in €/GJ [Tariff Database]

•10•2010.10.22.

ERRA Training Courses

ERRA Trainings 2005 – June, 2010Total Number of Trained Participants from 2005 to

June 2010: 1,162• Number of employees from the ERRA Member

organizations: 792;• Commissioners: 62Advantages:• Lecturers: Present and/or former Regulators• Case studies, group work• Certified Energy Regulator Programme by ERRA


Programme

dr. Gábor Szörényi, ERRA

•12

Dates and Location:May 16- 17, 2011, Saint Petersburg

For references of past ERRA Energy Investment and Regulation Conferences please visit:

http://www.erranet.org/InvestmentConferences

You are welcome !

10TH ERRA INVESTMENT & ENERGY REGULATION CONFERENCE

http://www.erranet.org/InvestmentConferences�

ERRA – 2009 Comparative Survey for 2008

Objectives

• To monitor the implementation of RES energy policies in ERRA countries

• To continue the discussions on support schemes for RES

• To increase the involvement of national and foreign investors

• To develop recommendations for governments on improvements and coordination of RES policies

ERRA Position on Renewable Energy Support Schemes


RES Support Systems in EU Countries

•RO

EU-15 EU-10 & BULGARIA, ROMANIA

•Source: FORRES 2020 – Analysis of the renewable energy sources’ evolution up to 2020

Electricity from renewable sources delivered to the grid in 2008 in ERRA CountriesMWh

16907

11210

1016

10041

830

8279

5317 5009

3190 2892

90

6447

3563

1771

3520

8274 149

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

18,000.00

Rom

ania

Ucr

aine

Turk

ey

Serb

ia

Mac

edon

ia

Jord

an

Geo

rgia

Cro

atia

B-H

Latv

ia

Esto

nia

Bulg

aria

UN

MIK

Pola

nd

Alba

nia

Hun

gary

Slov

akia

Mol

dova

Solar Wind Hydro =< 10MW Hydro < 1 MW Hydro > 10 MW Biomass Biogas, landfill gas or sewage treatment Other TOTAL RENEWABLES

Electricity from Renewable Sources [MWh]

Electricity generation from Renewable Sources in 2008 in ERRA Countries

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Rom

ania

Ucr

aine

Turk

ey

Serb

ia

Mac

edon

ia

Jord

an

Geo

rgia

Cro

atia

B-H

Latv

ia

Esto

nia

Bulg

aria

UN

MIK

Pola

nd

Alba

nia

Hun

gary

Slov

akia

Mol

dova

TOTA

L

Solar Wind Hydro =< 10MW Hydro < 1 MW Hydro > 10 MW Biomass Biogas, landfill gas or sewage treatment Other

Electricity from Renewable Sources [%]

Installed Capacity in Renewable Energy in 2008 in ERRA CountriesMW

6507

5072

14282

2862

550

3512

20871552 1648

44

1678 1440

514

11033

168274

2008

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

Rom

ania

Ucr

aine

Turk

ey

Ser

bia

Mac

edon

ia

Jord

an

Geo

rgia

Cro

atia

B-H

Latv

ia

Est

onia

Bul

garia

UN

MIK

Pol

and

Alb

ania

Hun

gary

Slo

vaki

a

Mol

dova

Solar Wind Hydro =< 10MW Hydro < 1 MW Hydro > 10 MW Biomass Biogas, landfill gas or sewage treatment Other TOTAL RENEWABLES (MW)

Installed Capacity in Renewable Energy [MW]

Installed Capacity in Renewable Energy in 2008 in ERRA Countries

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Rom

ania

Ucr

aine

Turk

ey

Ser

bia

Mac

edon

ia

Jord

an

Geo

rgia

Cro

atia

B-H

Latv

ia

Est

onia

Bul

garia

UN

MIK

Pol

and

Alb

ania

Hun

gary

Slo

vaki

a

Mol

dova

Solar Wind Hydro =< 10MW Hydro < 1 MW Hydro > 10 MW Biomass Biogas, landfill gas or sewage treatment Other

Installed Capacity in Renewable Energy [%]

Percentage of RES in National Gross Electricity Consumption in 2008 in ERRA Countries

0

10

20

30

40

50

60

70

80

90

100

Rom

ania

Ucr

aine

Turk

ey

Serb

ia

Mac

edon

ia

Jord

an

Geo

rgia

Cro

atia

B-H

Latv

ia

Esto

nia

Bulg

aria

UN

MIK

Pola

nd

Alba

nia

Hun

gary

Slov

akia

Mol

dova

%

Renewable Energy Ratio [%]

Average RES Electricity Prices in ERRA Countries in 2008 by Technology -support included-

0

50

100

150

200

250

GEO

RG

IA

SLO

VA

KIA

CR

OA

TIA

HU

NG

AR

Y

BU

LGA

RIA

MA

CED

ON

IA

UN

MIK

AV

ERA

GE

ALB

AN

IA

JOR

DA

N

TUR

KEY B-H

POLA

ND

RO

MA

NIA

ESTO

NIA

LATV

IA

EUR

/MW

h

AVERAGESOLAR WINDHYDRO <10MWHYDRO <1MWHYDRO>10MWBiomassBiogasOther

Renewable Electricity Prices by Technology [Eur/MWh]

ERRA Survey Findings (1)

• 10 out of 28 have operational RES support systems in place: Turkey, Hungary, Macedonia, Croatia, Latvia, UNMIK, Estonia, Poland, Romania

o 8 out of 28 have operational RES support systems in place based on feed-in tariffs: Turkey, Hungary, Macedonia, Croatia, Latvia, UNMIK, Estonia, Slovakia

o 2 out of 28 have operational RES support systems in place based on green certificates: Poland, Romania

⇒Note: Based on feedback given by 19 out of 28 countries


• Various reasons why countries are behind in the implementation RES support schemes:

o members without any provisions on RES promoting in national legislation E.g. Saudi Arabia, Armenia, Azerbaijan, Arabian United Emirates

o members having passed primary legislation but no further regulation has been passed or proposed, no proper RES support system is in place. E.g. Albania

ERRA Survey Findings (2)


Renewable energy support schemesCommonly used methods

• Obligatory purchase by a central agent + Feed-in tariff system for electricity produced from renewable sources (RES-E)

– Not market based method (no market price signals)

– Rigid, if there is no special adjustment for different technologies

– Predictable (preferred by investors and financial institutions)

• Tradable Renewable (Green) Energy Certificate system

– Market based method (real market price signals)

– Less predictable (less preferred by investors and financial institutions)


• New financial situation:– Less money is available from the financial institutions– Higher cost of capital (financial market changed dramatically)– Higher cost of Bio fuels– Potential regulatory reaction: deep investigation of „necessary”

regulatory comfort; adjustment of renewable support scheme (feed in tariff level, supported time-period, more selective support)

• Complicated, time-consuming licensing / permit giving procedure (authorization):– Potential regulatory reaction:

• Simplification of licensing procedure of Energy Regulator• Harmonisation of licensing/authorization procedures of different authorities

• Unpredictable wind generation:– TSO is responsible for system integrity (more reserve capacity required)– Potential regulatory reaction:

• Regulatory analysis on limitation of system risk• Requirement of wind generation forecast• Possible limitation of wind generation capacity (if needed)

Challenges of renewable investment; possible regulatory actions


Renewable energy support schemesGeneral recommendations for ERRA Members

• Basic surveys on:• Renewable potential, • Different cost of technologies and fuels• Profitability of different technologies• System effect of technologies

• Analysis of commonly used renewable support schemes:• Pre-requisites (conditions) of market based methods (e.g.: liquid

market, indicative price signals)• Opinion of investors and financial institutions

• Start with predictable support scheme, which should be maintained (price, support period) based on evaluations!Avoid over-support!

• Be pragmatic (not too sophisticated)!


Thank you for your attention!

dr. Gábor Szörényiwww.erranet.orgwww.eh.gov.hu


http://www.erranet.org/�

http://www.eh.gov.hu/�

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