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REGIONAL ELECTRICITY MARKET IN SEE Are we ready?

REGIONAL ELECTRICITY MARKET IN SEE Are we ready?. Vienna Economic Talks – Sofia Meeting Liberalisation of the Energy Market. Assoc. Prof. Vesna Borozan, PhD. EU – The 3 rd Energy Package.

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REGIONAL ELECTRICITY MARKET IN SEE Are we ready?

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  1. University "Sts. Cyril and Methodius“ Faculty of Electrical Engineering and Information Technology, Skopje REGIONAL ELECTRICITY MARKET IN SEEAre we ready? Vienna Economic Talks – Sofia Meeting Liberalisation of the Energy Market Assoc. Prof. Vesna Borozan, PhD

  2. EU – The 3rd Energy Package • Promotion of the goal to reduce GHG emissions trough series of measures, popularly named as “20-20-20 by 2020” • Technical precondition for fulfilment of this goal - high voltage Trans-European Super Grid to transmit amount of intermittent production of electricity from renewables • Backbone of the new energy policy is establishment of functioning integrated Internal Market for energy • The European electricity market design is not based on one single concept, but has rather evolved from different regional designs, all fulfilling the requirements of the energy acquis • To boost integration in a single market, EU is developing 7 Regional Markets for electricity

  3. The Energy Community • Energy Community Treaty signed in 2005, with the main objectives: • Short term - Create a single and stable regulatory space coupled with a stable market framework attracting investment • Medium term - Integrated regional energy market that increases cross-border trade in energy, guarantees energy supply and takes into consideration climate and social aspects • Long term - The regional energy market should be fully integrated in the EU internal energy market • Status of development

  4. Energy Community- The 8th Region Source: Web-site of the Energy Community Secretariat

  5. Countries of the SEE and their specific indicators • According to economic conditions/development: • LDC – Low Developed Countries (GDP 3000 ) • MDC – Medium Developed Countries • HDC – High Developed Countries Source: Prof. Kocho Angjushev, PhD, EFT Group

  6. Electricity balances- past trend, breakdown by countries - Countries of the SEE – Electricity balances

  7. Energy potentials in the Region • Low utilization of hydro potentials (<45%) • High proven reserves of lignite (over 23 000 million tons with annual consumption of slightly more than 220 million tons) • Natural gas supply (cost of gas and pipelines to be constructed) • Nuclear option – not viable with existing technology and funds

  8. Generation investment needs • 15.3 GW of new TPP: • 12.1 GW due to increase in demand • 3.2 GW due to decommissioning • 3 GW of new HPP • 1.4 GW of new RES

  9. Electricity balances forecast Actual technical import limit Source: Prof. Kocho Angjushev, PhD, EFT Group

  10. Regional Electricity Market Study • Study on the “Integration of South East Europe into the Internal Market for electricity under the specific aspect of the TSO’s role”, July 2011, contracted by SECI, Vienna Office • Study objectives: • Addressing the urgent request to clear the way for development of SEE Regional wholesale market for electricity • Giving an overview about the actual status and providing essential findings and advises • Identifying the main road blockers concerning the technical means of the TSOs’ functions under market conditions

  11. Summary - current state of play • Formal transposition of the ECT acquis in the national legislations without effective implementation measures • Declarative market opening which satisfies legal obligations under the ECT, but in practice minimising the exposure of the customers and the state owned utilities to market conditions • Low economic prospects of the jurisdictions resulting in keeping non cost-reflective tariffs • Resistance to regional initiatives (political conditions and struggle for regional leadership) • Opening of the SEE regional market can only happen through a bottom-up development of the local markets and their phased coupling

  12. Proposed measures • Legal and regulatory requirements • Technical and organisationalpreconditions for access of competition to the customers • Socio-economic and political measures - besides cost-reflective tariffs, as a basic measure, it would be very helpful to establish : • Removal of price distortions • Effective social schemes for vulnerable customers • EU incentive measures • Eased access to the EU funds • Human capacity building

  13. A Way Forward • Unbundling and transposition of the second packageon energy • Implementation of regulatory and other measures to achieve fair competition in electricity supply • Urgent need for investments in energy efficiency and new capacities • Phased coupling of local markets Main challenges still ahead – to be managed only by regional coordination of resources!

  14. Thank you for your attention! • Assoc. Prof. Vesna Borozan, PhD • Faculty of Electrical Engineering and Information Technology • University "Sts. Cyril and Methodius", Skopje • vesna.borozan@feit.ukim.edu.mk

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