Regional electricity market

I panel:
How to integrated electricity market in South East Europe
- Regulatory aspects Ljiljana Hadzibabic
Council member
Energy Agency of the Republic of Serbia

Belgrade,
25. April 2013.
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Content
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The objectives of SEE Regional market integration

EU Target Model for Electricity Market Integration
The 8th Region - SEE
Regional and national programs
Allocation of roles and responsibilities of relevant institutions
Regulatory role
Current state and 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 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

EU Target Model for Electricity Market Integration

Common vision for completion of Internal Electricity Market (IEM) by 2014

Electricity markets across Europe must share a set of common features and be
linked by efficient management of interconnection capacities
In order to achieve this: CACM and Balancing have been identified as priority areas
3rd Legislative Package

The 8th Region - SEE

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

The ultimate goal is to achieve a single platform for yearly,

monthly and daily implicit auctions for the SEE region.

>20 borders
Population:
137 million

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 Directive 2009/72/EC, Directive 2009/73/EC, Regulation
(EC) No 714/2009 and Regulation (EC) No 715/2009, as
adapted by the PHLG Decision (Jun/Oct 2011), by 1 January
2015

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

National development
Regional cooperation

Parallel

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 (except Hungary, Italy, Moldova and Ukraine)

Regional and national programs /2

The committed institutions:
TSOs

to develop concepts and make proposals

Consultants

to moderate and make recommendations

Regulators

to decide or approve

Supports and encourages the adopted policies and market development in line
with the EU Target Model

Approves of TSOs proposals related to organizational, commercial and legal

aspects

Verifies of compliance with national legal framework and development schedules

and with EU legal framework

Energy Community joint projects:

Wholesale Market Opening (WMO)

Balancing Energy Market

Market monitoring
Supplier switching

National Market
By the Energy Law 2011

Electricity Market
Bilateral
Balancing Market
Power Exchange

The Legal Framework

for the Market Functioning
Legal Framework
EU directives - mandatory baseline
The Energy Law
2nd package
3rd package by 2015
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
Electricity
Producers
Suppliers (60)
Public Suppliers (1)
The final buyers (3.6 million)

Transmission System Operator

Distribution System Operator
Market Operator

Balancing responsibilities of all market participants;

Relations of Market participants are regulated by agreements.

Current state of Serbian electricity market - model

The Dynamics of the Market Opening

Potentialy, 43% of market was oppend in 2008 (all non-household)

The markets will be 100% be open from 1 Jan 2015, but the households and small
consumers may choose from the market or the public supply

Current state of Serbian electricity market - data

2012:
GWh

%
100

Transmitted electricity
Transmission losses

GWh

40,197

2.55

Maximum daily gross

consumption
Maximum hourly load

GWh

141.43

MW

6,622

Total consumption
Transit

GWh

28,457

GWh

8,176

70.8

Traders activities in the 2011 and 2012

The physical flow of the interconnectors in 2012

Comparasion of the Electricity Prices for the Industry (31)

- The second half of 2012 -

The trend of electricity prices in the future

Cost of CO2

Profit

New power plants

and ecology

Renewable Energy
Cost

Costs
rationalization

Price now

Price after
2020.

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The trend of electricity prices in Serbia

Regulated / Free Market
+ Public Supply
+ Distribution
+ Transmission

Electricity production and purchase

Regulated prices approved by the Regulator

since October 2012

Thank you for your attention!

Ljiljana Hadzibabic
Council member
Energy Agency of the Republic of Serbia
www.aers.rs

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