Path to regional electricity market and integration with EU market & WB6 · Western Balkan 6 (WB6)...

Energy Community SecretariatEnergy Community Secretariat

Arben Kllokoqi

Path to regional electricity

market and integration with

EU market & WB6

Prishtina, 18 April 2017

Second high level energy forum “Energy strategy and market liberalisation“ 1

Energy Community SecretariatEnergy Community Secretariat 2

Energy

Community Map

European Union

Contracting Parties (CPs)

Candidate

Observers

Second high level energy forum “Energy strategy and market liberalisation“

Western Balkan 6 (WB6)

Energy Community SecretariatEnergy Community SecretariatEnergy Community SecretariatEnergy Community Secretariat 2

Energy

Community Map

European Union

Contracting Parties (CPs)

Candidate

Observers


Western Balkan 6 (WB6)

3Second high level energy forum “Energy strategy and market liberalisation“

Content

We‘ll go through the following:

1. Key remarks by EnCS on Energy Strategy

2. Focus on market

• EU / regional target model

3. WB6 process

• ‘Soft measures‘

• Sustainabilty charter

4. EnCS reports on implementation

5. Happy to take questions


EnCS view on Strategy document

• Comprehensive document – key workable Implementing Programs

• New TPP: strategic or competitive investment?

Long-term PPA, guaranted price => market foreclosure, state aid

Not allowed -Article 18 of the Treaty- prevents and distorts competition

But, exemptions possible: check and act in line with Article 87, Annex III the Treaty (EnC

PA to apply EC Guidelines on State Aid => State Aid Authority of CP to approve => notify

the EnCS)

• Kosovo A plans for closure linked to new TPP – what if there are delays?

• Lack of regional market assessments in particular regarding electricity prices

• Lack of ambition/assessment regarding regional market coupling

Market integration* with AL as a first step is good, but further planning is needed

* Not very clear if it is MC or bidding zone merger(?)

• Not clear goal/timeline regarding establishment of energy efficiency fund



Why regional (European) electricity market?

• Wholesale electricity price should reflect the fair interplay of supply and demand (and

other fundamentals that affect supply and demand)

• So the investment decision but in longer run

• You need diversification, different electricity products, reserves, flexibility, etc.

No market has just the right amount - it is eirther more or less – as such if

exchanged they are cheaper (optimised)

• Self-sustainability can be non-economical (expensive) - why build new asset for

specific product if it‘s cheaper in the region

Dependency on import ≠ issue with security of supply

• Import/export!? It is rather x-border capacity offering geneneration/consumption

Intuitively flowing from low to high prices


Mark

et m

echanis

m =

Rig

ht s

ignals


Regional (European) target market model


Forward Market Spot Market (Market Coupling) Balancing

Intraday implicit

Forward Market

(Long term Physical/Financial rights)

Yealry (Y+n)

Monthly (M+1)

Day Ahead Market

Daily rights

implicitely allocated

(daily rights + FTR

or unused PTRs)

LT PTRs used

Delivery of Long term and Day ahead allocated

rights

Intraday market

Delivery of intraday

Balancing

Balancing

marketDelivery of

Balancing

Real-time reserve

activation, re-

dispatch,

countertrading...

Allocation of forward rights on long-term basis

through auction as PTRs or FTR (tradable

rights)

Single allocation office for capacity.

Price coupling - auction

mechanism managed by PXs

with capacity module.

Flow-based or NTC-based

Countinous mechnsims

with complementary

auctoins (PXs+capacity)

Flow-based or NTC-

based

Exchnage of

balancing

products offered

by MPs

Delivery

ca

pa

city

time


Framework towards target model

‘Soft Measures’

• Regional – strengthening regional

cooperation and institutions

• National – removing obstacles at

national level


Network Codes &

Guidelines

Acquis on electricity

(binding)Berlin Process

(political commitment)

EU Regulations

(to come in EnC)

Regional capacity allocation

Spot market development

Cross-border balancing

Cross-cutting measures

... for regional market developement ...

Vienna Summit

(renewed impetus)

Paris Summit

(reemphesised regional cooperation)

(Sustainability Charter)


EnC Secretariat as facilitator of WB6

The Energy community Secreytariat was mandated to:

• Faciliatet the process

• Monitor the implementation

• Report on progress

________________________________________

Monitoring Reports:

1. WB6 Electricity

2. WB6 Sustanaboility Charter

... published on the EnCS website:

https://www.energy-

community.org/portal/page/portal/ENC_HOME/AREAS_OF_WORK/WB6/Monitoring


https://www.energy-community.org/portal/page/portal/ENC_HOME/AREAS_OF_WORK/WB6/Monitoring


Implementation of soft measures


Spot

market

x-border

balancing

Regional capacity

allocation

Cross-cutting

measures

- Improvement on framework

- PX with Albania (KOSTT-OST)

- KOSTT at SEE CAO

- Agreement with ENTSO-E

- Agreement with EMS

- Framework almost there

- Market based balancing needed

- x-border balancing with AL

- Market opening

- Certification of TSO

- Competation and State Aid

Authority to be strengthen

- Apply for for observer at ACER


Sustainability Charter - implementation

WB6 Summit in Pars June 16 – transition towards low

carbon and climate-resilient energy sectors

• Practical tool to implement Paris Agreement at

regional level

• Priority areas:

Improve energy efficiency governance

Develop and implement smart support

measures for renewable energy

Foster climate action and transparency of

sustainable energy markets


- Remove legal and regulatory barriers / implementation

- Market based support scheme for RES

- Align the legal/regulatory framework

- Establlish national roadmaps for measures to increase

investor confidence


www.energy-community.org

[email protected]

Thank you

for your attention!


http://www.energy-community.org/

mailto:[email protected]

Path to regional electricity market and integration with EU market & WB6 · Western Balkan 6 (WB6)...

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