Upload
verne
View
58
Download
0
Tags:
Embed Size (px)
DESCRIPTION
Internet: www.eh.gov.hu. HUNGARIAN ENERGY OFFICE. István Pataki Hungarian Energy Office 8th Baltic Electricity Market Mini-Forum Riga, Latvia, 24. April 2009. The „Hungarian Case ”. Internet: www.eh.gov.hu. HUNGARIAN ENERGY OFFICE. What is the „Hungarian Case”?. - PowerPoint PPT Presentation
Citation preview
István PatakiHungarian Energy Office
8th Baltic Electricity Market Mini-ForumRiga, Latvia, 24. April 2009
The „Hungarian Case”
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu
What is the „Hungarian Case”?
• Hungarian Energy Office (HEO) approved auction rules submitted by the former single buyer MVM Trade.
• Under the resolution of HEO MVM Trade was obliged to modify the auction rules
- a general price cap was ordered,
- domestic end-users and DSOs had priority.
2
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu
Contents
• Short Introduction of the Hungarian Power Market
• Antecedents
• Steps by the Office
• Statements
3
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu
.
Suppliers
MVM Electricity Trade Ltd.
(wholesaler)
Power Plants
TSO
1. Operation, maintenance and development of
transmission grid
2. Operation of system level
services
MAVIR ZRT
Universal Suppliers(USP)
Render of universal supply to
household- and other eligible small consumers
Distribution system operator
(DSO)
Operation, maintenance and development of
distribution grid
Supplier (trader)(subject to license)
Trader MVM Partner
: licenses: possession of assets: legally separate entities: unbundled accounts
Distribution assets
Power Plants•Paks
•Vértes•Gas turbines
•Power Plant shares
MVM Group
Transmissionassets
4
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EA SHORT INTRODUCTION OF THE HUNGARIAN
POWER MARKET (1)
0
10
20
30
40
50
60
70
80
90
100
Január
Mar
May
July
Sep
Novem
ber.
Január
Márc
.
Máj.
Júl.
Szept.
Nov.
Jan.
Márc
.
Máj.
Júl.
Szept.
Nov.
Jan.
Márc
.
Máj.
Júl.
Szept.
Nov.
Jan.
Márc
.
Máj.
Júl.
Szept.
Nov.
Jan.
Márc
.
Máj.
Júl.
Szept.
Nov.
%
2003 2004 2005 2006 2007 2008
months 5
A SHORT INTRODUCTION OF THE HUNGARIAN POWER MARKET (2)
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu
Antecedents (1)
6
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu
7
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu
Forward Base-load Prices for 2008• EEX forward base-load price: 55 EUR/MWh• Slovenska Elektrarne auction 400 MW Resulting Marginal Price:
2096 Sk/MWh (61 EUR/MWh)
Antecedents (2)
Changing Trading Conditions
• Polish and Romanian TSO did not allocate cross-border capacity for export for 2007 at yearly capacity auction
• The Czech and Slovakian TSO did not sign the inter-TSO compensation mechanism agreement
8
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu
Ordinance of The Government of the Slovak Republic of 317/2007• Section 6 Cross-border exchange of
electricity: The capacity allocated in the Auction is reserved as of the moment of satisfying the conditions specified by the Auction rules, in case of purchase of electricity generated in the designated area for the purpose to export, the electricity customer shall submit the electricity supplier a confirmation about the reserved capacity in the cross-border
profile. • Section 8 Conditions for supply of electricity
including supplies of balancing electricity and supply of electricity to households (7) The volume of electricity defined for export shall not threat the safety of electricity supply in
the designated area. • Section 12 Conditions for provision of
system services (9) The payment for system services shall be billed to the electricity exporter who cannot prove that the exported electricity was imported to the designated
territory.
Antecedents (3)
9
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu
Possible Consequences
• Higher than expected demand especially during the summer season might induce member states to make cross-border trading more difficult to achieve
• Deteriorating trading conditions might cause problem of security of supply
• Market integration will suffer
Antecedents (4)
-5
0
5
10
15
20
25
30
1. 3. 5. 7. 9. 11. 1. 3. 5. 7. 9. 11. 1. 3. 5. 7. 9. 11. 1. 3. 5. 7. 9. 11. 1. 3. 5. 7. 9. 11. 1. 3. 5. 7. 9. 11. 1. 3. 5. 7. 9. 11.
%
Change of Import Balance since Market Opening
2003 2004 2005 2006 2007 2008 2009
hónapok
trend
10
Antecedents (5)H
UN
GA
RIA
N E
NE
RG
Y O
FF
ICE
Internet: www.eh.gov.hu
• Hungary had a single buyer market model until 2003.
• After market opening the contractual structure remained the same. Former single buyer MVM Trade contracted the majority of domestic generation capacities.
• Hungary introduced the so-called SIGNIFICANT MARKET POWER (SMP) regulation in the beginning of 2008.
• By SMP regulation former single buyer was obliged to sell domestic generation capacities via public capacity auction.
11
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu
Short History of the Hungarian Power MarketShort History of the Hungarian Power Market
Antecedents (6)
PRESENT MODEL
12
Green arrows show possible, but at
present non-operating
relationship
Generators (domestic)
Import - Export
MVM
Wholesale trader
Successor Organizations of Public Utility Suppliers
Universal suppliers
Traders )
Household and for
universal supply eligible
consumers
Free market consumers
Traders
Organized
Market
AuctionAuction
Co
ntr
oll
ed p
rice
Power Procurement
Contracts
Long-term Contracts
Antecedents (7)H
UN
GA
RIA
N E
NE
RG
Y O
FF
ICE
Internet: www.eh.gov.hu
• June 2008: DG COMP issued a negative decision against Hungarian long-term PPAs.
• Legal uncertainties while starting purchase and sale for 2009.
• In average 10 EUR/MWh higher wholesale prices than EEX price level.
• In 2008 retail traders used price margin above wholesale-cost reason.
• Decreasing net import – from 6-7 TWh/year to 4 TWh/year
- narrowing sources,
- export-restriction in the north.
• Reduced contracted capacity at MVM Trade. 13
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu
Unexpected DevelopmentsUnexpected Developments
Antecedents (8)
14
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu
Unexpected developmentsUnexpected developments
Antecedents (9)
15
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu
Unexpected developmentsUnexpected developments
Antecedents (10)
16
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu
Expected Position of MVM Trade for 2009Expected Position of MVM Trade for 2009
• Despite of its reduced portfolio MVM Trade remains the most important wholesaler in Hungary.
• With the cheapest nuclear and coal power plants MVM Trade is the most competitive wholesaler in Hungary.
• All demand of Universal Service Providers (USP) will be met by MVM Trade at controlled tariffs.
• For lack of a power exchange MVM Trade auction price is the main price signal for Hungarian market players.
Purchase Sale
Domestic generation: 21,5 TWh USP: 13 TWh
Import: 0 TWh Auctions: 8,5 TWh
Antecedents (11)
What we didWhat we did
• With SMP regulation and auction obligation we ensured access to MVM Trade contracted domestic generation capacities.
• We did not put obstacles in the way of free cross-border trading (export).
• With priority rules we equalized chances of customers and traders of buying electricity at the auction.
• With general price cap on MVM Trade (dominant market player) we avoided unjustified wholesale price increase. It is used only for MVM Trade sales not for the total wholesale market.
• With priority rules we might have avoided some unjustified retail price increase.
• With priority rules we gave chance DSOs to cover some parts of 2009 network losses (network loss tenders were unsuccessful).
17
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu
HEO HEO resolutionresolution
Steps of the Office
• To protect transparent, clear market competition and to ensure secure supply for domestic users, HEO insisted on holding the auction against the legal steps promised by power plants with long-term contracts. HEO made this step in spite of the fact that the licensee, MVM Trade obliged could have concluded bilateral contracts with users and distributors.
• Under MVM Trade (calling for the auction) bidding guarantee the traders with larger capital most likely would have cut out domestic users and later would have sold the energy purchased at a higher price than the Leipzig (EEX) price with a significant profit to Hungarian users, to distribution companies or to southern suppliers outside EU with capacity shortages. The conditions in the relevant resolution issued by HEO ensured the same chances to access to energy offered at the auction for the different market groups (users, distributors, traders).
• To our evaluation, the Office, in accordance with EU and Hungarian regulations, took the interest of market players and users into account, settling with them repeatedly before issuing the resolution.
Statements (1)H
UN
GA
RIA
N E
NE
RG
Y O
FF
ICE
Internet: www.eh.gov.hu
HEO analyses market situation very carefully and uses regulatory tools to promote competition and
protect customers’ interest.
By resolution of the Office MVM Trade Zrt. held another (quarterly) energy and capacity auction on March 18, 2009. Considering the significant change regarding market conditions (due to financial crisis domestic and regional demand decreased significantly, while reference prices of the German Exchange dramatically fell) the market players could participate with the same conditions and the approved Auction Code did not include any clauses as to the use of purchased energy.
19
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu
FurtherFurther AuctionsAuctions
Statements (2)
20
Thank you for your attention!
István [email protected]+36-1-459-7850
HU
NG
AR
IAN
EN
ER
GY
OF
FIC
EInternet: www.eh.gov.hu