Trading Experiences in the Albanian Market Ermela Hoxha Future - - PowerPoint PPT Presentation

Trading Experiences in the Albanian Market

Ermela Hoxha Future Energy Al AAES

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INDEX Wholesale Trade Factors Retail Supply Factors Legal Basis Market Model Balancing Mechanism/ Market Future Challenges

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Wholesale Trade Factors

• A subject must be established locally and licensed by the Energy Regulatory

Authority in order to participate on the CBC auction and perform transits.

• There are no import – export – transit fees in Albania.
• KESH and OSHEE have the right to participate to CBC auctions but they have

chosen to be passive players.

• Main active players in Albania: Future Energy, AXPO, GEN-I, AYEN, EFT, GSA,

DANSKE, KURUM International

• With the establishment of APE both KESH and OSHEE shall become active

players in the market which will also provide transparent and efficient procedures through electronic platform.

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Wholesale Trade Factors

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KESH (Optimization) OSHEE (Losses) AYEN (110MW) KURUM (76 MW) Bilateral Contracts

KESH – OSHEE : KESH surplus is firstly destined to OSHEE for the coverage of DSO system losses at average HUPX price. AAES proposes for both KESH and OSHEE to participate to each others tenders as a means of transparent and non-discriminative procedures.

a) KESH Gen

The generation unit to continue the supply to OSHEE for tariff customers (families) (1,58 TWh) and trade the difference (2,2 TWh) on the deregulated market.

b) TSO

The market operator to auction the energy for the coverage of transmission system losses from the deregulated market (0,16 TWh)

c) OSHEE (DSO)

The DSO to tender the energy for the coverage of distribution system losses from the deregulated market (2,6 TWh).

d) OSHEE (UPS)

The UPS to purchase hydro energy from small HPPs for the purpose to supply to tariff customers (families) at regulated price (0,92 TWh). RPS to purchase the differences for the supply to tariff customers on the deregulated market (1,8 TWh).

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2,5 TWh * 3 lek = 7,5 lek From KESH 1,58 TWh * 0,32 lek =0,505 lek From HPP 0,92 TWh * 7,6 lek = 6,992 lek Total 7,5 LEK 4,3 TWh * 3 lek = 12,9 lek In the market 2,22 TWh * 5.6 lek* = 12,43 lek To OSHEE 1,58 TWh * 0,32 lek = 0,505 lek Total 12,9 LEK

OSHEE KESH

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Retail Supply Factors As of January 3rd, 2012, all customers connected to HV and/or with yearly consumption above 50 GWh, are considered as Eligible

• Customers. Actually 7 Eligible Customers are purchasing the energy

from the market, with estimated annual consumption ~ 8.760 GWh (~ 11% of the overall consumption). Law No. 43/2015 specifies that the MV and LV industrial customers shall be also liberalized but this has not been adapted yet.

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Steel Industry Cement Industry Chrome Refinery Oil Refinery

Retail Supply Factors

• The opening of the market in 2017, is expected to reach the level of

40%, i.e. 2.2 TWh (based on the current data).

• Customers connected to the 35kV line are estimated to be 102

subjects with an estimated annual consumption ~ 40 GWh. They are expected to be liberalized on June 2016.

• For 2015, ERE has approved for the first time the DSO tariff for

accessing the customers connected to the 35 KV voltage level.

• It is expected from the ERE to establish different access tariffs for

different voltage levels based on the system losses.

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Legal Basis The electricity sector is regulated by Law No. 43 / 2015 which entered into force on June 2015. 1. Secondary legislation has not been adapted yet by the Energy Regulatory Authority; 2. The New Market Model has not been adapted based on the new law; 3. Retail market has not been liberalized based on the new law; 4. DSO-Supplier agreement in regard to the distribution services have not been drafted; 5. Balancing market is has not been established; 6. Rules for the switching of suppliers have not been drafted; 7. Distribution fee for all voltage levels have not been drafted.

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Balancing Mechanism

• Balancing mechanism was approved on February 2012, and is based on hourly

basis, when the calculations for the imbalances costs are based on the KESH import price with the addition of 10%, and in case of no KESH imports, on the price of small HPP with the addition of 20% (for the negative imbalances), and on the price of the KESH (for the positive imbalances).

• The imbalances within the frame of ±1%, are compensated physically within next

week.

• The price of the small HPP for the year 2016 is 70.07 EUR/MWh, and the price of

KESH is 10.40 EUR/MWh.

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Balancing Market

• TSO is responsible for the balancing mechanism as per the market rules in force.
• In its quality of generator, KESH is the provider of the physical balancing.

The current mechanism is unfair and discriminatory! The current balancing mechanism does not follow the price trend. It is not calculated

• n hourly basis, not even on HT or LT basis, but rather on monthly basis and

calculated annually. 1. IPPs are not allowed to provide ancillary services to TSO. 2. Retail customers through a virtual power pool are not allowed to provide ancillary services to TSO.

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Future Challenges Decision of Council of Ministers No 244 date 30.03.2016 approved the terms and conditions for the public service obligation for the companies licensed in generation, transmission, distribution and supply of electrical energy. This act defines that KESH shall provide to DSO the whole quantity of energy required to fulfill the electricity bill to tariff customers. In case KESH does not have the required quantity, OSHEE (UPS) shall buy it on the deregulated market and require financial compensation from KESH based on the monthly average HUPX price for the period. In case of surpluses, KESH shall cover the quantity required by UPS for the system losses at monthly average HUPX price for the period.

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Current Market Model – 2015 data

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OSHEE

• 4500 GWh

TSO Losses

• 176 GWh

DSO Losses

• 2035

GWh

Regulated Market

• 4676 GWh

Deregulated Market

• 3145 GWh

New PSO– 2015 data

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OSHEE

• 4500 GWh

TSO Losses

• 176 GWh

DSO Losses

• 2035

GWh

Regulated Market

• 5135 GWh

Deregulated Market

• 1670 GWh

THANK YOU

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