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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
Second high level energy forum “Energy strategy and market liberalisation“
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
Energy Community SecretariatEnergy Community Secretariat 4
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
Second high level energy forum “Energy strategy and market liberalisation“
Energy Community SecretariatEnergy Community Secretariat 5
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
Second high level energy forum “Energy strategy and market liberalisation“
Mark
et m
echanis
m =
Rig
ht s
ignals
Energy Community SecretariatEnergy Community Secretariat 6
Regional (European) target market model
Second high level energy forum “Energy strategy and market liberalisation“
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
Energy Community SecretariatEnergy Community Secretariat 7
Framework towards target model
‘Soft Measures’
• Regional – strengthening regional
cooperation and institutions
• National – removing obstacles at
national level
Second high level energy forum “Energy strategy and market liberalisation“
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)
Energy Community SecretariatEnergy Community Secretariat 8
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
Second high level energy forum “Energy strategy and market liberalisation“
Energy Community SecretariatEnergy Community Secretariat 9
Implementation of soft measures
Second high level energy forum “Energy strategy and market liberalisation“
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
Energy Community SecretariatEnergy Community Secretariat 10
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
Second high level energy forum “Energy strategy and market liberalisation“
- 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
Energy Community SecretariatEnergy Community Secretariat 11
www.energy-community.org
Arben.Kllokoqi@energy-community.org
Thank you
for your attention!
Second high level energy forum “Energy strategy and market liberalisation“
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