anre romanian electricity sector evolutions of the regulatory framework nicolae opriş president of...
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ANRE
Romanian Electricity Sector Evolutions of the Regulatory Framework
Nicolae OprişPresident of ANRE
ANRE Legal Framework
Primary legislation
Electricity Act – Law 318/2003 (GEO 63/1998), to be revised in 2006
Restructuring decisions – Government Decision (GD) 365/1998,GD 627/2000 .... GD 1342/2001, GD 1524/2002
Market opening decisions – GD 122/2000, GD 1272/2001, GD 48/2002, GD 1563/2003, GD 1823/2004, GD 644/2005
Energy sector strategy – GD 890/2003 (Road Map to 2015)
ANRE The Electricity Law 318/2003
Stipulates the: – tasks and competencies of the regulator;– regulated access to the electricity transmission and distribution networks;– authorisation procedures for market participants;– unbundling of the generation, transmission and distribution/supply activities;– principles for the development of the electricity market and its gradual
opening;– main functions of the TSO, DSO’s and electricity market operator;– rights and obligations of the market participants;– tariff principles to be applied in the sector;– promotion of renewable energy sources;– sanctions and contravention.
ANRE
ANRE - public institution under the co-ordination of the Prime Minister
Mission - to create and implement fair and independent regulations to ensure an efficient, transparent and stable functioning of the electricity and heat sector and markets while protecting the interests of consumers
Appointment Power - President and Vice President of ANRE are appointed by the Prime Minister for 5 years, upon proposal of the Minister. The Commissioners are appointed for 5 years by the Minister. Financing - sources outside the state budget covered from license and authorization fees and contributions paid by sector companies.
ANRE
The main sector regulations issued by ANRE
Wholesale Electricity Market Commercial Code (revised version)
Network Codes (Grid Code – revised version, Distribution Code)
Metering Codes
Technical and commercial regulations
Tariffs methodologies
Authorizations and licenses
Rules regarding the connection to the networks
Performance standards
Secure and non - discriminatory regulatory framework
ANREINSTALLED POWER GENERATION 18.3 GW
CONSUMERS - 8537422
Total overhead transmission lines – 9000 kmSubstations – 78; Power transformers - 138
RESERVE MARGIN 2004 = 48,9 %(Available capacity – Peak demand/Available capacity)
TYPE OF FUELS USED FOR ELECTRICITY GENERATION IN 2005
GENERATORS PARTICIPATION TO ELECTRICITY GENERATION IN 2005
Total distribution lines – 310127 kmSubstations – 1296
ANRE Main steps of the reform
1. Restructuring• vertical unbundling of generation, transmission, distribution/supply activities• horizontal splitting of generation and retail supply2. Competition• wholesale market and retail competition• new entry into generation and retail supply allowed3. Regulation• establishment of an independent regulator• provision of the third party access to the grid• incentive regulation of transmission and distribution networks4. Ownership• allowing new private market players• privatizing the existing publicly owned businesses
ANRE
Present structure of the electricity sector
Transmission and system operator Market operator
8 Distribution and supply companies
12 Industrial platform distributors
104 Suppliers
14 municipal CoGen producers and other IPP and selfproducers
Hydro producer
Nuclear producer
7 Major thermal producers
RENEL
S104S1 S10 S11
Transelectrica TSO
OPCOM – Market operator
Nuclearelectrica
Hidroelectrica
Ro Cr De ElB TeTu Ga
D_1 D_2 D_12
TrNBa Ol MuS
TrSMoDo MuN
ENEL SpaApril 28 2005
E.ONApril 04, 2005
CEZApril 05, 2005
ANRE Authorizations and licenses
Rules for granting licenses and authorizations in the electricity sector approved by GD 540/2004, published in Romanian Official Gazette 399/2004
ANRE
UCTE and ETSO member Fully unbundling - independent TSO companyTechnical Grid Code in line with UCTE Operation Handbook
- full responsibility for the Power System Security of Supply
- no major incidents since unbundling (2000)
Transmission system operator
10.10.2004 – Resynchronization of the two UCTE zones
09.11.2004 – Romanian TSO member of ETSO
ANRE Evolution of the electricity market opening degree
ANRE
The wholesale electricity market
Bilateral Contracts Centralised Market
ANRE
Trading platforms on the wholesale electricity market (1)
Bilateral Contracts Market
regulated contracts - between producers and 8 DISCOs (suppliers of captive consumers)
negotiated contracts – between market participants
Bilateral Contracts Centralised Market - starting with December 2005
ANRE
Centralised Markets:– DAM (voluntary)– Balancing (mandatory)– Ancillary System Services (mandatory) – Cross Border Capacities (explicit auctions)
Priority productions• Renewable energy: supply quota & green certificates market• Cogeneration: capacity payments
Trading platforms on the wholesale electricity market (2)
To support investments the development of a capacity market is envisaged
ANRE
ANRE Day-ahead electricity market reform
The Integration of the Romanian Electricity Market into the European Electricity Market
Mandatory Voluntary
Day-ahead Market
Bids per Dispatchable Unit
Day–ahead Market
Portfolio bids
Unilateral Bidding Bilateral Bidding
Centralized Scheduling Self scheduling
Cogeneration will continue to be prioritized in the market, based on specific bid validation
ANRE
ANRE
OPCOM Day-Ahead MarketJuly 2005-December 2006
Registred participants: 65 Average number of active participants: 30
Maximum number of active participants: 38 Average price [RON/MWh]: 125,51 Average price [EURO/MWh]: 34,94
Electricity traded volume [MWh]: 1.717.891,411Average electricity traded volume: 388,927 MWh/h
DAM trading cota: 6,72%
Average prices December 2005 on European Marketplaces
Source: OPCOM
ANRE Regional Power Exchange
OMEL
EEX
PowerNext
GME
NORD
POOL
APX-Group
BorzenEXAA
OPCOM
PPX
OTE
Source: OPCOM
ANRE Support schemes for priority production
0
.70
%
0.7%
2.2
0%
1.4%
3.74
%
2.2
%
5.26
%
2.9%
5.7
8%
3.6
%
8.3
0%
4.3%
8.3
0%
8.30
%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
2005 2006 2007 2008 2009 2010 2011 2012
HG 1829 modificata
HG 1829
• Green certificates trading: -bilateral or - centralized market organized by the market operator (operational from November 2005)
• Max and min limitation for green certificates values set up by ANRE: -minimum value 24 Euro / MWh, - maximum value 42 Euro / MWh
Renewable sources
•Generators received green certificates•Mandatory supply quota for suppliers
November – December 2005
7241 green certificates traded on centralized market
ANRE
Support schemes for priority production
Cogeneration units
• Capacity payments for efficient qualified units
• Contracts between TSO and generators with efficient qualified units
• Contract prices: ancillary services tariffs
ANRE
Technical requirements –
• Grid Code – ANRE Order 20/2004 – Official Gazette 828/2004• Distribution Code – ANRE Decision 101/2000 – Official Gazette 276/2000
Rules for connecting to the networks - GD 867/2003 – Official Gazette 559/2003
Tariffs for connection to the networks – – ANRE order 29 /2003 – Methodology for establishing the connection tariffs to the
medium and low voltage networks – ANRE order 28 /2003 - Methodology for establishing refunds among consumers
connected at different stages to the distribution networks – ANRE order 15/2004 and 32/2005 - regarding the approval of the connection
tariffs for the medium and low voltage networks
Regulated access to the transmission and distribution networks
ANRE
Network tariffs
Transmission and Distribution – regulated activities Applied regulation - incentive regulation
Transmission:
revenue cap;
zonal Gs & Ls based on marginal costs
Distribution:
price cap (price basket)
ANRE
Transmission tariffs
• revenue cap, CPI minus X formula;
• Xefficiency=1% from controllable OPEX (without depreciation);
• regulatory period 5 years, except for the first period which lasts for 3 years;
• Correction Factors: quantity, new investments, losses, congestion and quality.
ANRE
Distribution tariffs
• price cap (price basket)
• regulatory period 5 years, except for the first period which lasts for 3 years
• efficiency increase of 1% applied only to OPEX
• correction factor on complying with the required minimum level of quality
ANRE
The License Holder shall make sure of the fact that there is full independence at the management and operational level between:
• the distribution and supply to captive customers activities • any other activity carried out (in the electricity sector or in other field) by the License Holder and by the affiliated and associated enterprises.
Starting from the 01.01.2006, the License Holder shall also make sure that there is administrative unbundling between:
• the distribution activity and• the activity of supply to captive customers
Conditions of distribution license
ANRE
• Full pass through
• Regulated margin of 2.5% of the acquisition costs
• Semestrial ex-post adjustments
• NUT ensured by ANRE
Captive end-user tariffs
End-users average electricity price (without taxes) 74 Euro/MWh
ANRE
Average Electricity Prices 1997 - 2006
- Without Taxes -
1.6
4.6
4.2
4.54.4
3.8 3.8
3.1
3.83.7
3.3
4.54.7
4.1
4.7 4.8
5.6
4.7
5.2
4.94.7
5.6
5.2
5.7 5.7
6.06.1
7.0
7.4 7.4
7,3
2.9
3.7
3.8
5.0
4.24.2
127
1410
1760
23102428
2540
2722
1787
1607
1019
618
499
387
403
640 861
951
365 365
2097
1631
2672
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
EU
Rct
/kW
h
50
550
1050
1550
2050
2550
3050
3550
4050
4550
lei
/ kW
h
ANRE
Average end-users electricity prices
1997-2006
- without taxes -
ANRE Supply activity
Electricity Labeling
Obligation according to Directive 2003/54
Regulation for electricity labeling issued by ANRE - 2005
First labels issued in April 2005, corresponding to year 2004 acquisitions.
ANRE Privatization of Distribution Companies
Privatisation degree (programmed)
Electrica’s branches
Current privatisation situation
Strategic investor
% of total shares
% of initial shares
Cash injection through equity increasing
The value of transaction (Mil. Euro)
1 Electrica Banat
Signed agreement
ENEL SpA 51% 24.62% Yes
2 Electrica Dobrogea
Signed agreement
ENEL SpA 51% 24.62% Yes
112
3 Electrica Moldova
Transaction approved by government
E.ON Energie A.G. 51% 24.62% Yes 100
4 Electrica Oltenia
Transaction approved by government
CEZ, a.s. 51% 24.62% Yes 151
5 Electrica Muntenia Nord
Shortlist notice was published on PHARE website
- - - -
6 Electrica Muntenia Sud
Privatisation strategy was issued by government Privatisation announce was published, offers were received
67.5% 50% Yes -
7 Electrica Transilvania Nord
Shortlist notice was published on PHARE website
- - - -
8 Electrica Transilvania Sud
Shortlist notice was published on PHARE website
- - - -
ANRE Undergoing privatisations (1)
• "Muntenia Sud" - S.A. - 2006;• Remaining three distribution/supply companies – 2006 - 2007;• Complexul Energetic Turceni - S.A. – integrated electricity&mining;• Complexul Energetic Rovinari - S.A. – integrated electricity&mining;• Complexul Energetic Craiova - S.A. – integrated electricity&mining• "green field" cogeneration capacities in Iernut, Palas, Bucuresti Sud power plants, as
new IPP’s• Borzesti;• TERMOSERV branches individually or together with the power plant;• selling of "Termoelectrica“ shares to "Termoserv Galati" - S.A. and "Electrocentrale
Galati" - S.A.;• Selling of the MEC’s shares to "Termoelectrica Midia" - S.A.
ANRE Undergoing privatisations (2)
SC "Hidroelectrica" - S.A. Bucuresti • Private capital increase for finalising some hydro objectives under construction (public
privat partnership).
• For microhydro power plants– new companies with mix capital (private and public);– other forms of partnership;– Sell of assets.
"Transelectrica" - S.A. Bucuresti• Sell of shares for branches/services;• Sell of assets;• New joint-venture companies.
ANRE Investments projects•Pump-storage Power Plant Tarnita-Lapustesti
• Units 2 and 3 of Cernavoda Nuclear Power Plant • 400 kV Interconnection Lines with Hungary and Serbia & Montenegro
• Black Sea DC link cable
Reasons to enforce regional cooperation and trade:
•Increase communication, exchange of information, rules
harmonization
•Promote opportunities for investment developments
•Generation cost savings
• Macroeconomic benefits
ANRE
Thank you for your attention !
Romanian Electricity and Heat Regulatory Authority
Phone: (+ 40 21) 311 22 44Fax : (+ 40 21) 312 43 65www.anre.ro