Recent Trends in Energy Regulation IEA-FTS of Russia Workshop on Global Energy Market Scenarios Paris, 28 May 2009 Kieran McNamara Country Studies Division.
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Presentation on theme: "Recent Trends in Energy Regulation IEA-FTS of Russia Workshop on Global Energy Market Scenarios Paris, 28 May 2009 Kieran McNamara Country Studies Division."— Presentation transcript:
Recent Trends in Energy Regulation IEA-FTS of Russia Workshop on Global Energy Market Scenarios Paris, 28 May 2009 Kieran McNamara Country Studies Division
Regulation- the building blocks SustainableStableUnambiguous PredictableMonitoredEnforcement Transparent
Electricity Market Design Market designs differ but all share common features; Regulatory oversight Network unbundling Regulated third party access Competitive generation and retail markets Comprehensive trading arrangements Demand participation Consumer protection
What’s a generation market?? Get the structure tight first time – Single buyer – Bilateral contracts market – Centralised Pool Net pool Gross Pool – Trading and Balancing Mechanisms – Capacity Schemes
What are ancillary services? Ancillary Services are products, other than energy, that are required to ensure the secure operation of the transmission system. – Operating reserve – Reactive power – Frequency control – System support – Black start
The Final Frontier- Competition in Supply to Domestic and Small Consumers
Electricity Market Design No short cuts, liberalisation is not a one off event Strong and sustained political commitment required – a long-term vision Thorough and extensive preparation required Consultation with all stakeholders Process of continuous evolution No one there yet!
Issues - When to benchmark.. How to determine the maximum allowable revenues ? How to determine the tariffs that yield these revenues? Operating costs – asymmetry of information The benchmarking challenge
Issues - Licensing Market Players Generation, transmission, distribution, supply, metering Potential market participants must demonstrate: – Capital resources – Management and technical skills – Relevant environmental and planning consents – Relevant connection and use of system agreements – gas and power systems – financial codes (T&S) Administrative burden should proportional Right to appeal
The EU as a driver for change - Electricity and gas directives Third energy package Unbundling debate Still a long way to go Competition policy the real tool – it delivers results
European Competition Policy 2005 Energy Sector Enquiry Vigilant when controlling mergers Controlling State aid to energy companies Anti-trust activities Challenges long-term supply contracts May 2010 – E.ON settlement Many other successes