1. Potential of Montenegro Energy Development and outlook for the SEE region as a whole
Milka Mumović, Energy Community Secretariat
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Budva, 1 December 2016
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2. The Energy Community – Extending the EU internal energy market
Ratification
The Energy Community – Extending the EU internal energy market
Where?
South East Europe and Black Sea Region
Why?
Creating single regulatory and market framework to:
attract investments,
enhance security of supply,
improve environmental situation and
increase competition in the energy market
How?
By the Rule of Law
European Union
Contracting Parties
Candidate Parties
Observers
Candidate Observers
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3. The Energy Community for the Future
The Energy Community Treaty (ECT)
1st decade – (1 July entered into force)
2nd decade – 2016 – 2026 (extended in 2013)
Ongoing discussion on amendments to the ECT
EU Acquis communautaire adapted and adopted in the Energy Community:
Electricity, gas, environment, competition, renewables, energy efficiency, oil, statistics, infrastructure
Network Codes and Guidelines in the EnC
No direct applicability of Regulations in EnC
Procedure for adoption in the EnC adopted
Still some open issues…binding reciprocity?
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4. Electricity balance in the Energy Community
The Energy Community is mainly net importer of electricity
2015
Net exports:
13.6 TWh
- Bosnia and Herzegovina
- Serbia
- Ukraine
Net imports:
17 TWh
- Albania
- Kosovo*
- FYR of Macedonia
- Moldova
-Montenegro
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5. Production, consumption, import and export of electricity
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6. Consumption structure 2015
SEE CPs
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7. Sales in the competitive retail market
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8. Interconnection capacities for cross-border trade in the Energy Community
(Barcelona rule:The target agreed in the conclusions of the March 2002 Barcelona European Commission for MSs to have a level of electricity interconnections equivalent to at least to 10 % of their installed production capacity )
Annex IV Regulation No 347/2013:
Projects contributing to reaching the minimum interconnection capacity of 10 % installed production capacity
Interconnection capacities exceed 10% target (EU)
Underground DC cable Montenegro-Italy under construction
New interconnectors to be co-financed under Western Balkan 6 initiative
ENTSO-E member
Part of ENTSO-E CE synchronous area;
not ENTSO-E member
Not part of ENTSO-E synchronous area CE;
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9. Western Balkan 6 initiative well under way…
Vienna WB Summit 2015 – process kicked-off
Paris WB Summit 2016 – commitment reiterated
Rome WB Summit 2017 – forthcoming stopover
Towards 2018 implementation targets
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10. Western Balkans 6 (WB6) Initiative – political support to the regional electricity market development
The heads of government, foreign and economic ministers of both EU Member States and the WB6 in cooperation with the European Commission decided to take steps to improve energy connectivity in the region and for that:
agreed to a short list of four investment projects in the area of energy
Interconnection Serbia-Montenegro (Trans Balkan corridor)
Interconnection Albania-FYR of Macedonia
decided to establish a regional energy market
agreed on the priority list of ‘energy soft measures’
invited the Energy Community Secretariat to take the lead
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11. Spot Market Development
Organised day-ahead markets started to emerge in the WB6:
in operation
SEEPEX in Serbia
in the making
Albanian Power Exchange (APE)
Montenegro (project company to be set-up)
 Institutional set-up for organized day ahead-market needed as a precondition for market coupling (adhering to the already established day- ahead markets would be an optimal solution for small markets in WB6)
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12. Cross-border Balancing
Balancing mechanisms operational in:
Bosnia and Herzegovina
Montenegro
Serbia
Cross-border exchange Montenegro and Serbia
Montenegro and Serbia - exchange of balancing energy
 National reform of balancing mechanism needed for cross- border cooperation
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13. Regional Capacity Allocation
Regional Capacity Allocation through SEE CAO, except:
Macedonia – joined in 2016, MK- GR border as of 2017
Serbia in the admission process
Regional Capacity Calculation
SCC – BA, ME, RS - members
SEE – AL, KS, MK – MoU signatories
 Regional coordination and cooperation through RSCs needs to be strengthened
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14. Memorandum of understanding
Memorandum of Understanding of Western Balkan 6 on Regional Electricity Market Development and Establishing a Framework for future cooperation signed on 27 April 2016 in Vienna
Implementation targets for WB6 MC and XB until mid 2018
Signatories: WB6 TSOs, NRAs, PXs and Ministries for energy
Framework for cooperation with EU MSs  Italian NRA signed the MoU
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15. Memorandum of Understanding : Topics covered
Day-ahead Market Integration
July 2018 – integration with at least one neighbouring WB6 or EU country
Cross-border Balancing Cooperation
31 December 2018 – cross-border balancing cooperation
MoU is open for future annexes on regional market development and security of supply
This MoU is open for signature by additional WB6 and EU neighbouring stakeholders which are willing and expected to assume a role in the market integration projects
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16. A bit about prices
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17. Price components: costs of energy
Year Avarage Prices (EUR/MWh) 2015: HU 40,60 SK33,57 CZ 32,32 RO 36,42 EUR/MWh
PEP (wholesale) baseload IVQ 2015
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18. Wholesale prices in EU 2015-2016
European Market Observatory for Energy
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19. Revisit the relevant legislation
Business undertaking and incorporation
Public Procurement
Value added tax
Market and trade
Financial control …
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20. Technical assistance – list of potential projects
Spot market
SEE WB6 MoU Implementation Project
Institutional set-up for DA market (BA, MK, ME)
Capacity Building of State Producers
Cross-border balancing
National balancing market development (AL, KS*, MK)
Regional balancing market integration
Regional capacity allocation
CCC creation based on the RSC(s)
Cross-cutting measures
TSO unbundling (KS*, ME, RS)
DSO unbundling (AL, BA, ME)
Price deregulation (KS*, MK)
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21. Thank you for your attention!
Milka Mumović, Energy Community Secretariat
En.trading 016 Seminar