Presentation is loading. Please wait.

Presentation is loading. Please wait.

ANRE Romanian Electricity and Heat Regulatory Authority TRANSITION STEPS IN THE ENERGY SECTOR ION LUNGU PRESIDENT OF ANRE.

Similar presentations


Presentation on theme: "ANRE Romanian Electricity and Heat Regulatory Authority TRANSITION STEPS IN THE ENERGY SECTOR ION LUNGU PRESIDENT OF ANRE."— Presentation transcript:

1 ANRE Romanian Electricity and Heat Regulatory Authority TRANSITION STEPS IN THE ENERGY SECTOR ION LUNGU PRESIDENT OF ANRE

2 ANRE Romanian Electricity and Heat Regulatory Authority KEY PRINCIPLES OF THE ROMANIAN ENERGY POLICY creating an electricity market based on transparency, fairness and non-discrimination; establishing a regulator to regulate monopolies (where they remain), and to foster competition; unbundling the activities of generation, transmission, distribution and supply; gradual introduction of competition in generation and supply; licensing the new market participants; non-discriminatory, regulated access for third parties to the electricity network

3 ANRE Romanian Electricity and Heat Regulatory Authority GENERAL RULES FOR THE ORGANIZATION OF THE ELECTRICITY SECTOR Electricity Law 318/2003 Government Decisions regarding the restructuring of electricity sector

4 ANRE Romanian Electricity and Heat Regulatory Authority INSTALLED POWER GENERATION 17.9GW CONSUMERS Total overhead transmission lines – km Substations – 76; Power transformers RESERVE MARGIN 2003 = 46,9 % (Available capacity – Peak demand/Available capacity) TYPE OF FUELS USED FOR ELECTRICITY GENERATION IN 2003 GENERATORS PARTICIPATION TO ELECTRICITY GENERATION IN 2003 Total distribution lines – km Substations – 1296

5 ANRE Romanian Electricity and Heat Regulatory Authority EVOLUTION OF ELECTRICITY GENERATION

6 ANRE Romanian Electricity and Heat Regulatory Authority Government Decision no. 365/1998 RENEL Nuclearelectrica GovoraRomag CONEL Electrica Hidroelectrica Termoelectrica RENEL FROM AN INTEGRATED MONOPOLY TO A COMPETITIVE ELECTRICITY MARKET (1)

7 ANRE Romanian Electricity and Heat Regulatory Authority Government Decision no. 627/2000 Nuclearelectrica GovoraRomag Electrica Hidroelectrica Termoelectrica Transelectrica OPCOM FROM AN INTEGRATED MONOPOLY TO A COMPETITIVE ELECTRICITY MARKET (2) Nuclearelectrica GovoraRomag CONEL Electrica Hidroelectrica Termoelectrica

8 ANRE Romanian Electricity and Heat Regulatory Authority FROM AN INTEGRATED MONOPOLY TO A COMPETITIVE ELECTRICITY MARKET (3) RENEL S53S9S10S11 D_S1D_S2D_S3D_S8 Transelectrica Nuclearelectrica Hidroelectrica T2T3T4 T5 T6T1 Transmission and system operator Market operator 8 Distribution and supply companies (two of them will be privatized in the second quarter of 2004) 45 Suppliers Almost 20 municipal CoGen producers and IPPs, other producers Hydro Producer Nuclear producer 7 Thermal producers T7

9 ANRE Romanian Electricity and Heat Regulatory Authority DISTRIBUTION SYSTEM OPERATOR function fulfilled by the 8 distribution and supply companies created following the restructuring of SC Electrica SA MARKET OPENING – 40% ACCESS TO THE NETWORK - REGULATED GENERATION - the construction of new capacities for electricity generation, cogeneration, transmission and distribution and the refurbishment of the existing ones are subject to authorisation TRANSMISSION SYSTEM OPERATOR function fulfilled by CN Transelectrica SA, member of UCTE from May 2003 MARKET OPERATOR function fulfilled by CN Transelectrica SA subsidiary SC OPCOM SA The restructuring process and the development of the regulatory framework followed the European Directive provisions:

10 ANRE Romanian Electricity and Heat Regulatory Authority May 8, 2003 – UCTE membership Fully unbundling - independent TSO company ( legal, management, ownership) Neutral toward electricity market arrangements (not allowed to be involved in electricity business) Technical Grid Code in line with UCTE Operation Handbook Cross border capacity over 15 % - complying with Barcelona target - full responsibility for the Power System security of Supply - no major incidents since unbundling (2000); facing very tough operational conditions in 2003 (severe drawn, NPP outage) TRANSMISSION SYSTEM OPERATOR

11 ANRE Romanian Electricity and Heat Regulatory Authority PRIVATIZATION OF THE ENERGY SECTOR - the most important target of the Romanian Government ELECTRICITY DISTRIBUTION Electrica Dobrogea and Electrica Banat Finalization of the negotiation and signature of the contract: end of June 2004 Electrica Moldova and Oltenia Receiving letters of interest from investors: 31 May 2004 Short listing of the investors: 30 June 2004 Continuation of the privatization for 4 distribution companies N.B. Transparency of the process based on the by the public tender procedures Basic principles, the investors have to comply: Full compliance with EU Directives Non discriminatory access to the grid based on regulated tariffs Investors will operate based on clear regulatory framework published by A.N.R.E. Opening of the market is mandatory Legal unbundling of the supply from distribution by 2007

12 ANRE Romanian Electricity and Heat Regulatory Authority POWER GENERATION Promotion of two green field projects by private equity participation with a total capacity of about 500 MW - Selection of the investors: June 2004 Promotion of the privatization on the lignite based on energy complexes: - Turceni – negotiation with the 5 candidates and selection of the qualified bidder till the end of 2004; - Rovinari and Craiova Isalnita – selection of the consultant till the end of September 2004 Hydro power generation: Equity participation in more than 100 small hydropower generation with a total production of 300 – 400 GWh. Process has started for the first group Privatization will continue based on a monthly fixed schedule till the end of 2004

13 ANRE Romanian Electricity and Heat Regulatory Authority 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.

14 ANRE Romanian Electricity and Heat Regulatory Authority THE MAIN FUNCTIONS OF ANRE AS A REGULATORY BODY Issue and withdraw authorizations and licenses Regulate the access to the T & D grids Draw up the pricing methodology and set the tariffs and prices for the activities with monopoly characteristic Issue technical and commercial regulations, supervise the functioning of market mechanisms Pre-contractual disputes resolution Protect the interests of investors and energy end-users

15 ANRE Romanian Electricity and Heat Regulatory Authority ORDERS AND DECISIONS ISSUED BETWEEN There were cases when several licenses or authorisations were granted, withdrawn or modified through a decision. - The number of orders and decisions diminished in 2002 due to the take over by ANRSC of a part of ANRE activity. Orders and decisions on:YearTotal Licenses, permits and authorisations Commercial regulations Resolution of pre-contractual disputes Prices and tariffs Technical regulations Other regulations regarding the electricity and heat sector and the in-house organisation of ANRE Total

16 ANRE Romanian Electricity and Heat Regulatory Authority THE MAIN SECTOR REGULATIONS ISSUED BY ANRE Wholesale Electricity Market Commercial Code Network Codes (Grid Code, Distribution Code) Metering Codes Technical and commercial regulations Tariffs methodologies Authorizations and licenses Rules regarding the connection to the networks based on the Romanian legislation and the Aquis Communautaire for the electricity sector provisions

17 ANRE Romanian Electricity and Heat Regulatory Authority The objectivity and transparency of the regulatory process is ensured by: permanent consultations with the parties involved by means of surveys, public and bilateral discussions as well as through mediation meetings to accommodate divergent viewpoints, the ANREs orders and decisions may be appealed in Court within 30 days from the notification of the parties or, if of general interest, from the date of their publication in the Romanian Official Monitor the annual reports regarding ANREs activity and budget the regulators code of ethics

18 ANRE Romanian Electricity and Heat Regulatory Authority AUTHORIZATIONS AND LICENSES licenses: authorisations: 22 establishment authorizations and 5 operation permits 365 operation authorizations No.Type of license ElectricityHeatElectricityHeatElectricityHeatElectricityHeatElectricityHeat 1Generation Transmission Dispatch& Market operation Ancillary services Distribution Supply TOTAL

19 ANRE Romanian Electricity and Heat Regulatory Authority WHOLESALE TRADING ARRANGEMENTS Generating Companies Eligible Consumers TRANSELECTRICA Transmission System Operator Electricity Suppliers Captive Consumers Import/Export Import/ Export LEGEND: Power Purchasing Contracts Transmission & System Services Contracts Ancillary Services Purchasing Contracts Power Purchasing over the Spot Market Distribution Contracts ELECTRICA Distribution & Supply Companies The Spot Market Operator (OPCOM)

20 ANRE Romanian Electricity and Heat Regulatory Authority Portfolio contracts for the sale and purchase of electricity, with set quantities and regulated prices Long term must run/PPA contract for the sale and purchase of electricity, with regulated prices (Nuclearelectrica) Framework contracts for electricity purchase from independent power producers and autoproducers Framework transmission contracts, ancillary service provision contracts and market administration Framework distribution contracts Framework supply contracts. Bilateral contracts for the sale and purchase of electricity between the market participants, with negotiated quantities and prices The day-ahead market to ensure a balance between contracted quantities and actual consumption. TRADING ARANGEMENTS ON: CAPTIVE MARKET COMPETITIVE MARKET

21 ANRE Romanian Electricity and Heat Regulatory Authority Electricity market opening degree

22 ANRE Romanian Electricity and Heat Regulatory Authority

23 ANRE Romanian Electricity and Heat Regulatory Authority CONTRACTS ON WHOLESALE ELECTRICITY MARKET – 2003

24 ANRE Romanian Electricity and Heat Regulatory Authority

25 ANRE Romanian Electricity and Heat Regulatory Authority Transelectrica responsible for transmission and system operation service (TSO) Transmission network is robust and well developed No congestion due to sufficient transmission capacity and severe reduction of industrial consumption during the last decade REGULATED TRANSMISSION TARIFFS (1)

26 ANRE Romanian Electricity and Heat Regulatory Authority REGULATED TRANSMISSION TARIFFS (2) 14 zonal tariffs with two components: injection component extraction component Transmission charge is USD 5.0/MWh on average and does not depend on the electric paths and distances Nodal pricing REI-DIMO network reduction technique Based on SRMC including losses and congestion to establish efficient price signals

27 ANRE Romanian Electricity and Heat Regulatory Authority REGULATED DISTRIBUTION TARIFFS 5 different tariffs for the use of: 110 kV network MV network LV network 110 kV/MV transformers MV/LV transformers Distribution charge does not depend on the electric paths and distances Rate of return regulation

28 ANRE Romanian Electricity and Heat Regulatory Authority ELECTRICITY - AVERAGE PRICES PER ACTIVITIES

29 ANRE Romanian Electricity and Heat Regulatory Authority STRUCTURE OF ELECTRICITY AVERAGE PRICE TO END-USERS

30 ANRE Romanian Electricity and Heat Regulatory Authority

31 ANRE Romanian Electricity and Heat Regulatory Authority AVERAGE ELECTRICITY TARIFFS (EXCLUDING TAXES)

32 ANRE Romanian Electricity and Heat Regulatory Authority Consumer protection Ensured through: License conditions requesting the holder to be responsible to provide dependable services Monitoring of license holders by enforcing a standard content for the Annual Activity Report and Financial Reports submitted by companies to ANRE on a yearly basis Market mechanisms to prohibit deceptive and anti-competitive market practices Solving pre-contractual disputes in the sector and between suppliers and consumers Monitoring compliance of suppliers with the guaranteed performance standards Information and counseling for consumers in order to be able to make appropriate choices.

33 ANRE Romanian Electricity and Heat Regulatory Authority EVOLUTIONS ON MEDIUM AND LONG TERM Bilateral contracts market with self-scheduling of generators, supplemented by a voluntary power exchange (day-ahead market) and a balancing market. Physical Notifications by unit BILATERAL CONTRACTSDAY AHEADON THE DAY SETTLEMENT System Operator Balancing Market MP P Q S S GG Q Day Ahead Market Simple Bids Firm Volumes by Company Simple bids by unit Metered Volumes Meter data Imbalance volumes by company Adjustments to Day Ahead schedule BM Volumes Market Operator G- generators S - suppliers

34 ANRE Romanian Electricity and Heat Regulatory Authority Principle of the Day Ahead Market all generators and suppliers (consumers) submit bids for the amount of energy they are willing to produce (consume) for a certain price in each hour (trading participants may also submit export and import offers) the market clearing price is set as the intersection between the supply and demand curve bidding on portfolio/company basis generators decide themselves how to allocate total production on individual generation units, physical notifications to System Operator establishment of balance responsible parties Bilateral contracts

35 ANRE Romanian Electricity and Heat Regulatory Authority Principle of Balancing Market (BM) TSO contracts reserves before day ahead (on a company basis) the balancing market starts on the day ahead, following the acceptance of physical notifications by the TSO the BM operates on a unit basis, producers have to offer all remaining capacities (price, quantity) all accepted offers establish an obligation for the unit to deliver the corresponding type and amount of balancing energy

36 ANRE Romanian Electricity and Heat Regulatory Authority Allocation of cross-border interconnection capacity Technical interconnection capacity (ATC) established by TSO Commercial allocation through auctions: yearly, monthly, daily Use it or lose it principle. The mechanism should be agreed with neighboring countries.

37 ANRE Romanian Electricity and Heat Regulatory Authority Market Operator Auction Participants Balancing Market Participants BRP Settlement Administrator TSO Trading Participants Scheduling & imbalances Ancillary services Balancing Market DAM Cross-Border capacities Determine & publish ATC Offer Operate Auction capacities Settle Market splitting Physical notifications (for DAM) Submit physical notifications Pay for imbalances Settle Offer Determine needs Use for system operation Check and approve Determine needs and procure Participants to the new trading platform

38 ANRE Romanian Electricity and Heat Regulatory Authority Evolutions of transmission and distribution price control Transmission price control Revenue cap regulation in order to improve efficiency and increase incentives Transmission connection service (i.e. connection charges) regulated as excluded service and not part of the caps Transmission caps supplemented by quality monitoring Distribution price control Tariff-basket approach Multi-variant network tariffs with multinomial parameters Regulatory periods length: 3 years Building blocks approach Real, risk-adjusted pre-tax WACC Price control supplemented by quality regulation


Download ppt "ANRE Romanian Electricity and Heat Regulatory Authority TRANSITION STEPS IN THE ENERGY SECTOR ION LUNGU PRESIDENT OF ANRE."

Similar presentations


Ads by Google