Electricity Gas Transmission in Non-EU Countries

karanovic/nikolic

/Transmission of Electricity & Transport of Gas in Non-EU Countries

ELG 3rd Energy Event, Vienna, Austria

Workshop #6: Electricity and Gas Transmission Networks and Certification

September 2013

karanovic/nikolic

2 ELG 3rd Energy Event / Transmission of Electricity & Transport of Gas in Non-EU Countries

Serbia: Electricity TSO

Company The Public Enterprise for Electric Energy Transmission and Transmission System Control ''Elektromreža Srbije'' – EMS.

Purpose/focus Transmission of electricity and management of transmission system (including allocation of cross-border capacities)

License 10 years, granted by the Energy Agency of the Republic of Serbia

Ownership 100% state-owned

Unbundling Unbundled from other energy activities since 2005 (provided that it temporary acts also as Market Operator); no ownership unbundling requirements (unlike under 2009/72EC)

Regulation Grid Code issued in 2008 (slightly amended in 2012)

Rates Tariffs for access established on the basis of the Tariff Methodology issued by the Energy Agency

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Serbia: Electricity TSO

Outstanding issues — Grid Code not in line with the Energy Law.

— Underdeveloped infrastructure.

— Even though the development of new capacities is obligation of EMS, investors in new generation capacities in practice bear costs of development .

ELG 3rd Energy Event / Transmission of Electricity & Transport of Gas in Non-EU Countries

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Serbia: Gas TSOCompany SRBIJAGAS YUGOROSGAZ

Public Enterprise for transport, distribution, storage and trade of natural gas

Joint Stock Company gas pipeline system construction, transport and distribution of natural gas

Ownership 100% state-owned 50% owned by Gazprom, 25% Central ME Energy and Gas, Vienna and 25% Srbijagas

License 10 years, granted by the Energy Agency of the Republic of Serbia

10 years, granted by the Energy Agency of the Republic of Serbia

Unbundling Legal unbundling not performed (required)

Legal unbundling not performed (pending)

Regulation No transport system rules in place No transport system rules in place

Rates Tariffs for access established on the basis of the Tariff Methodology issued by the Energy Agency

Tariffs for access established on the basis of the Tariff Methodology issued by the Energy Agency


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Serbia: Gas TSO

Outstanding issues — Legal unbundling not performed .

— No transport rules in place.

— Underdeveloped infrastructure.

— Significant losses of Srbijagas.


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Macedonia: Electricity TSO

Company Electricity Transmission System Operator of Macedonia AD – MEPSO

Purpose/focus Transmission of electricity and management of transmission system (including allocation of cross-border capacities)

Ownership 100% state owned

License 35 years, approved by the Energy Regulatory Commission of the Republic of Macedonia (ERC)

Unbundling Unbundled since 2005; transmission and distribution SO in vertically integrated undertakings need to be organised under different legal entities, however, there are no ownership unbundling requirements (unlike under the Directive 2009/72/EC)

Regulation Transmission Grid Code, approved by the ERC

Rates Determined by MEPSO, approved by the ERC based on ERC’s tariff methodologies


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Macedonia: Electricity TSO

Outstanding issues — Grid code to be further harmonized with 2011 Energy Law.

— It is not possible to reserve transmission capacity.


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Macedonia: Gas TSO

Company Joint Stock Company GA-MA AD Skopje

Purpose/focus Operation, management, balancing and long-term development of the transport system and the quality of delivery of natural gas

License 35 years, approved by the Macedonian ERC

Ownership Co-owned by the Republic of Macedonia and Makpetrol AD Skopje (ownership is a matter of an on-going court dispute)

Unbundling Account unbundling in place, as required by the 2011 Energy Law; no ownership unbundling requirements (unlike the Directive 2009/73/EC).

Regulation Transmission Grid Code, approved by the Macedonian ERC

Rates Determined by the ERC based on their tariff methodologies


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Macedonia: Gas TSO

Outstanding issues — Underdeveloped TS and DS in the country.

— Rules to be harmonised with 2011 Energy Law.

— The on-going dispute between the Republic of Macedonia and Makpetrol AD Skopje regarding the ownership of the gas transmission pipeline.

— There have been reports that GA-МА AD Skopje’s TSO licence could be revoked.


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Bosnia and Herzegovina: Electricity TSOCompany Elektroprenos – Elektroprijenos BiH"

a.d. Banja Luka (EPBH) - Transmission of electricity

Independent System Operator in BH (ISO BH) - management of electricity TS

Ownership 58,90% owned by the Federation of Bosnia and Herzegovina (FBH); 41,10% owned by the Republic of Srpska (RS)

Owners of ISO BH are both FBH and RS (no shares, ownership cannot be transferred)

License Licence for Transmission of Electricity, 10 year validity

Licence for Independent System Operator, 7 year validity

Unbundling Since 2006. Transmission and distribution is organized in different entities, no ownership requirements (unlike under the Directive 2009/72/EC)

Regulation Grid Code adopted by ISO BH and approved by the SERC

Rates Adopted and calculated in accordance with SERC rules


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Bosnia and Herzegovina: Electricity TSO

Outstanding issues Current legal framework on both state and entity level is not entirely harmonized with EU law and therefore it is not possible to achieve effective development of wholesale market.

It is not ensured real independence of SERC.

Despite the fact that both RS and FBH are performed revision of rates, there are still below the market prices.


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Bosnia and Herzegovina: Gas TSO

Company BH-GAS Ltd. Sarajevo (FBIH) Gas Promet a.d. (RS)

Purpose/focus Production and transport of gas Import, supply and transport of natural gas (Gas Promet)

Ownership 100% owned by the Government of FBIH

RS Share Fund 65 %, Zif Aktiva Invest Fund 16 %, PREF a.d. Banja Luka 10%, other

Unbundling No ownership unbundling requirements with respect to the TSO and distribution/supply activities

Regulation Decree on Organisation and Regulation of Gas

Rules on Work of Natural Gas Transport Network

Rates The tariff system is still not introduced

Determined by TSO, approved by RCERS in accordance with Tariff Methodology


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Bosnia and Herzegovina: Gas TSO

Outstanding issues Passing gas law in FBiH (in May 2013 the Federal Government adopted the Draft Law on Gas, which will supersede the current decree once this law is enacted).

Establishment of an independent regulatory agency for gas.

RS and FBH adopted different rules on market organisation, unbundling, third party access and market liberalisation. Additionally these rules are not harmonised with EU Law.

Connecting the gas network of BiH to the systems of the neighbouring countries in order to provide new routes and sources of supply.


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Montenegro: Electricity TSO

Company “Crnogorski elektropenosni sistem” AD Podgorica – CGES

Purpose/focus Transmission of electricity and the operation of the transmission system

License 15 years, granted by the Energy Agency of Montenegro

Ownership State of Montenegro: 55 %; Terna S.p.A. Italy: 22,0889 %; natural persons: 8,6707; Funds and Companies: 14,2404 %

Unbundling Unbundled since 2010; transmission and distribution SO in vertically integrated undertakings need to be organised under different legal entities

Regulation Rules on Functioning of Transmission Grid, approved by the Energy Agency of Montenegro in 2012

Rates Determined by CGES and approved by the Energy Agency of Montenegro, based on tariff methodologies prepared by the Energy Agency.


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Montenegro: Electricity TSO

Outstanding issues Procedural rules are currently not entirely clear as a result of the failure to harmonise all regulations governing connection to the grid with the 2010 Energy Law

The connection of power plants to the transmission grid involves several steps and usually involves significant costs.

Generators usually have to finance the revitalisation/development of the parts of grid, obtain licences and approvals from different public bodies, etc.


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Montenegro: Gas TSO

No TSO in Montenegro

¾ Gas TS is not yet developed in Montenegro. There is no infrastructure, nor any legislation, apart from general rules set out in Energy Law

¾ By-laws are expected to be passed during autumn of 2013. Potential development of gas TS depends on Southern Stream Project (if Montenegro is to be connected to the pipeline)


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Russia: Electricity TSOCompany The Federal Grid Company of Unified Energy System (FGC).

Purpose/focus Electricity transmission services provided to the participants of the wholesale market of electricity and owners of the electrical energy equipment connected to the unified energy system

License Not subject to licensing (however contracts for providing electricity transmission services must be concluded only by FGC, in accordance with law)

Ownership 79,55% is owned by the Russian Federation; 20,45% is owned by the minority shareholders.

Unbundling Unbundled since 2008

Regulation Rules on non-discrimination access to electricity transmission services and rendering of such services

Rates Determined by the authorities of constituent territories of the Russian Federation on the basis of the Resolution of the Russian Government


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Russia: Electricity TSO

Outstanding issues Prices for technological connection to the transmission system are not fixed and are different in different subjects (constituent parts) of the Russian Federation. The connection prices in Moscow are multiply higher compared to other networks of medium-voltage system (from 6 to 20 kilowatt) in inner Russia.

In case of insufficiency of power, absence of transforming substation or electricity transmission lines technical connection to grid is very time-consuming and complex.

Additional expenses related to building or modernizing of transforming substations or electricity transmission lines - are borne by the customer.


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Russia: Gas TSOCompany Russian Joint Stock Company “Gazprom”

Purpose/focus Federal Unified Gas Supply System comprised of unified gas transmission system, regional transmission system, gas distribution systems and independent organisations.

License No license requirements (gas transport may be carried out only by the owner of the system - Gazprom).

Ownership 50,002% owned by the Russian Federation, 49,008 % owned by other shareholders (including private investors).

Unbundling The Unified Gas Supply System is owned by Gazprom, a bundled vertically integrated company.

Regulation Federal Law On Gas Supply of 1999, Federal law on Natural Monopolies of 1995.

Rates Established by the Federal Tariff Service, in accordance with resolutions and methodologies issued by the Russian Government.


http://www.gazprom.com/

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Russia: Gas TSO

Outstanding issues Since Gazprom not only provides gas transport services but also produces gas, there is conflict of interests (satisfy its own demand in transport and only in the second place demand of other gas producers).

Independent organisation may get access to the gas transmission services only if Gazprom has enough gas transport capacity (in case of a lack of such capacity, the services should be provided in the first place to organisation satisfying public needs; second in the row are organisations that intend to transport gas for a longer period; services to other organisation are provided in the third place);

Information about gas transport services is not sufficiently transparent (it is hard to figure out what is the transport capacity at a moment).


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Switzerland: Electricity TSOCompany Swissgrid Ltd.

Purpose/focus Transmission of electricity and the operation of the transmission system

License Unlimited in time. Granted by the Swiss Federal Electricity Commission (ElCom)

Ownership Axpo Power, Alpiq, Alpiq Suisse, BKW, Axpo Trading, CKW and other

Unbundling Fully unbundled since 2013. Transmission and distribution SO in vertically integrated undertakings need to be organized under different legal entities with independent decision-making mechanisms

Regulation ¾ Swiss Federal Electricity Supply Act (StromVG)¾ Swiss Federal Electricity Supply Ordinance (StromVV)

Rates Defined by Swissgrid according to legal requirements. Swissgrid submits the cost calculation on which these tariffs are based to the Federal Electricity Commission ElCom on an annual basis


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Switzerland: Gas TSO

Company Swissgas AG

Purpose/focus Transports of gas for third parties; provided that this is technically feasible and if the third party offers an appropriate consideration

License No license requirements

Ownership Gasverbund Mittelland Ltd. (26%), Erdgas Ostschweiz Ltd. (26%), Gaznat Ltd. (26%), Verband Schweizerische Gasindustrie (16%) Erdgas Zentralschweiz Ltd. (6%)

Unbundling No ownership unbundling requirements

Regulation Federal Law on Pipeline Installations for the Transport of Liquid or Gaseous Heating or Motor Fuels, Pipeline Act (RLG)

Rates Rates are determined by the involved parties. There are no specific principles determined by public law and no regulatory body is obliged to review or approve the rates.


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Switzerland: Gas TSO

Outstanding issues Access to the grid is regulated legally only in rudiments and only with regard to the high pressure grid.

The gap was closed by voluntary agreements of the gas suppliers. In this way, free access to the entire gas grid is available.


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Albania: Electricity TSOCompany Operatori i Sistemit te Transmetimit SH.A. (OST)

Purpose/focus Public enterprise operating in the transmission of electric power, power system dispatching and operation of electricity market

License 25 years license on transmission of electricity and the operation of the transmission system. License issued by the Energy Regulatory Entity (ERE)

Ownership 100% owned by the Republic of Albania

Unbundling Unbundled since 2004. Transmission and distribution system operators are organised in two different legal entities, licensed by the Energy Regulatory Entity (ERE) respectively for their sectors of operation, in compliance with the European Union requirements

Regulation Transmission Grid Code, approved by ERE

Rates Tariffs proposed by OST and approved by ERE, in accordance with established methodology


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Albania: Electricity TSO

Outstanding issues Significant costs occur during the connection of power plants to the transmission grid.

Producers of energy have to finance the revitalization/ development of parts of the grid to be connected to.


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Albania: Gas TSOCompany No Gas TSO in Albania

License No granted license at this point (ERE is authorised to grant license to future TSO for 30-years period)

Focus/Obligations TSO owns, operates, builds and maintains the transmission system and assures in accordance with the economic conditions, sufficient capacities aiming at fulfilling reasonable demand for transmitting of natural gas in a given territory

Unbundling TSO is set to be independent from other activities which are not connected with the transmission activity (organizational, decision-making point and accounting prospective)

Regulation The Gas Law is the main piece of legislation, while there is no Transmission Network Code approved yet (the Code is to be proposed by TSO and approved by ERE)

Rates ERE will establish the tariffs applicable to the Gas Market; balancing tariffs are defined by TSO and approved by ERE


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Albania: Gas TSO

Outstanding issues The Gas Law is relatively new and in a continuous process of completion and development aiming to create a favourable climate for investment in this area.

Trans Adriatic Pipeline natural gas pipeline project (starting in Greece, cross Albania and the Adriatic Sea and come ashore in southern Italy, allowing gas to flow directly from the Caspian region to European markets).


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/Thank you

Electricity Gas Transmission in Non-EU Countries

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