1. Kosova’s Electricity Market Development
Energy Trading Seminar
Kosova’s Electricity Market Development
14 September 2017
Tirana

2. Content
1. Data about power sektor 2. Development of transmissin network & benefits 3. Market Opening 4. Regional integration 5. Why Common market KS-AL

3. KOSTT Role and Responsibilities
Provide Transmission service under regulated tariff
Provide non-discriminatory third party access to the grid
Maintain security , reliability and balancing of the system
Planning, development and maintenance of transmission network
Provide services to market parties for transmission use of the system

4. Kosovo power sector Small size and non liquid national Market
Deficit in generation capacities and adequacy
Existing old power plant which worsen the situation
Chronic shortage of energy to meet its customer demands
Dependent on electricity import
Faces obstacles in regional integration

5. Market Participants Trading Parties Non Trading Parties
Market Operator: KOSTT
Transmission System Operator: KOSTT
Distribution System Operator: KEDS
Trading Parties
KEK Generator
TPP Kos B (2x270 MW)
TPP Kos A (3x 140 MW)
HPP Ujmani (2x 17MW)
HPP Lumbardhi (2x4 MW)
RES Generators
KESCO Supplier& trader – (supplying Eligible and USS Customer)
HEP –Supply & trade
GSA–Energy
Importers and Exporters
36 cross border traders

6. Kosovo Power System Main Data
Power Balance
Kosovo generation capacities-2016
TPP capacities/ available capacities:
Kosova B+Kosova A= /1550MW/790 MWav
HPPs= 63 MW
Total available capacities = 853 MW
Peak Load 2016:
1160 MW - +
-307 MW
Electricity Energy Balance
Consumption 2016
5426 GWh
Electricity production (2016)
TPPs=5736 GWh
HPPs= 183 GWh
Total electricity production = 5919 GWh - +
+493 GWh
Imports during the peak load=571GWh
Exports during light load and summer=1064 GWh!

7. KOSTT assets Substations 2007 2016 Number of substations Switchyard
Transformers (n.)
Transmission capacity (MW) 4 1 8
650 34 1 79
2046
50 projects
Lines
181.4 km
231.8 km
643.5 km km
279.7 km
231.8 km
841.8 km km
400 kV
220 kV
110 kV
Total
218 mil euro
Total assets (EUR 000)
26,345
244,269

8. KOSTT Interconnections
BOSNIA AND HERCEGOVINA
SERBIA No kV
NTC =600MW
Interconnections lines
with 1 2
400
220
110
Serbia
Montenegro
Macedonia
Albania
KOSOVO
NTC= 400*W
MONTENEGRO
NTC=400MW
NTC=210MW
MACEDONIA
NTC=600W
ALBANIA
Interconnections
400 kV
220 kV
110 kV

9. Investments in Transmission system supports
security and reliability of transmission system
economic development of the country
market development and regional integrations of KOSTT
N-1 criterion
objectives set by Kosovo Energy Strategy regarding integration of :
TPP New Kosova, 450 MW
150MW Wind Turbines
240 MW small HPP’s
10 MW Solar
Peak demand of 1600MW
stable transit flows through KOSTT network for regional market

10. Phases of market opening
Liberalization
(Third package)
Unbundling process
(Second package)
2016- Primary Legislation in Energy Sector in Kosovo Updated
Ownership unbundling
TSO certification
From April 2017 wholesale Market Deregulated
Retail Market deregulation in steps
Market based Balancing mechanism (June 2017)
RES support scheme
MO manages RES energy found
Customer switching
There actually 3 licensed suppliers
Establishment of Day ahead market
Participation on Regional Market (WB6-initiative)
Regulated Market
Primary Legislation in Energy Sector in Kosovo and Updated in 2010
Establishment of Energy Regulatory Office
Establishment of Ministry of Energy & Mining
Establishment of KOSTT
2010 – Started process of unbundling of distribution , Supply and Generation
Vertical integration
From
KEK-company composed of:
Mines
Generation
Transmission
Distribution
Supply

11. Balancing mechanism (BM)
Operates as a contract between TSO and Trading Parties for delivery of power (not energy)
From 1st October st May was implemented as dry run with no financial impact.
From 1st June 2017 BM is in real operation
There are no national balancing reserves
Procedures for cross border procurement of services are developed . Waiting for ERO approval

12. Energy cost recovery –Single Imbalance Price
If there are no bids and offers the HUPEX price is applied for calculation of Imbalance price
System imbalance
NEGATIVE (short)
injections < off-takes
TSO will buy
POSITIVE (long)
injections > off-takes
TSO will sell
Party Imbalance
Contracted < metered
Single Price
based on weighted average price of accepted offers (WAP )
based on weighted average price of accepted bids (WAP )
Contracted > metered

13. RES Energy Found From 1st Jun 2017 KOSTT MO manages RES energy Found
RES Generator Sells to MO their production regulated incentive price (finding tariff)
MO Sells to Suppliers proportionally to their demand with referent market price.
MO charges Supplier to cover price difference RES tariff
RES generator are charged for 25% of imbalances for both direction (being long or short)
RES generator nominates their production at D-1. they have the right to re nominate every three hours in advance

14. Grid Losses
From 1st April Transmission and distribution Grid losses are purchased with deregulated price in market
Part of grid losses are purchased from KEK generation – USS supply has priority
KOSTT signed with traders who are operating in Kosovo market the framework contract for purchasing grid losses
From 1st September 2017 KOSTT is organizing auction on D-1 for purchasing part of losses not covered by KEK generation
Grid loses (T+D) are 25% of national demand

15. KOSTT political obstacles in Market Opening
KOSTT is the designated Transmission system operator of Kosovo
KOSTT has no proper representation within /outside ENTSO-E
KOSTT is not yet operating as independent Control Area
Two different jurisdictions – contracting parties to the EnC
different legal framework
different governing institutions
different designated operator (TSO)
different market and technical framework
different price zones – market
different tariff framework - regulated
…etc.
This status disables KOSTT in regional integration

16. KOSTT’s regional integration
Not yet member of ENTSO-E
Observer in Regional Group of SEE for Market Issues under MC of ENTSO-E
Observer of Regional Subgroup CMMI and RBM under RG SEE
Member and share holder of SEE CAO
Due to political obstacles is not getting services from CAO
Member of SECI – investment & maintenance harmonization
Member of WB6 taskforce and SC for regional market integration and SC for regional balancing
Kosovo didn't sign WB6 MOU

17. Position of KOSTT toward ENTSO-E
KOSTT has signed Inter TSO Agreement with neighboring TSO-s
On KOSTT has signed Connection Agreement(CA) with 30 TSO-s of Continental Europe
Implementation of CA is blocked by Serbian Side (By not registering supply company in north of Kosovo in line with Brussels Agreements)
EMS is continuing unlawfully and contrary to energy community treaty to collect incomes from capacity allocation.
KOSTT is a part of ITC mechanism on ENTSO-E from January 2016
KOSTT is member of Regional Group SEE, SEE CAO, WB6 initiative

18. Non implementation of CA KOSTT-ENTSO-E
The consequences of non implementation of connection agreement are:
Non operation the new interconnector/ 400kV Line Kosovo- Albania
Non operation of LFC project. Implementation of commercial agreement KOSTT-OST regarding sharing of secondary regulation and the reserve as overall according to the new code
SEE CAO - KOSTT is shareholder, but not receiving the service
KOSTT signed agreement for establishing RSC in Thessaloniki and will likely not receive services before operation as CA/CB
Disables KOSTT in achieving WB6 commitments and soft measures requirements for regional market integration
In line with agreement between Kosovo-Serbia sign by prime ministers intermediated by EU on x.x.2013 and after
KOSTT and EMS facilitated by EU have signed framework agreement:
that stipulate date and principles to solve open issues between KOSTT EMS and at the end to recognize each other as Control areas, to resolve the congestion management and ITC problem regarding revenue collected by EMS
On x.x.2014 KOSTT and EMS has sign operational Inter TSO s agreement. In the agreement stated “that KOSTT and EMS started from 1 January 2015 has to operate as two separate CA subject fulfillment of requirement that may come from ENTSO-E”. This means Technical requirement
In this light KOSTT has started to work with ENTSO-E to continue the process of technical preparation of main function that is related to scheduling, accounting, grid model and in monitoring with PG KOSTT and Swissgrid the process were successfully performed.
On 31.oct.2015 with some obstacles with EMS were signed connection agreement KOSTT-ENTSO-E respectively with 31 TSO-S of continental Europe
The agreement is not Implemented ?

19. Common electricity market
Common market of Kosovo and Albania will be in line with EU target model – objective of Energy community
A single bidding zone in all markets’ timeframes
interconnections KS-AL will be considered as internal lines
No capacity booking or scheduling requirement
Would be coupled with other biding zones on the day ahead and intraday markets
Cross-border capacities with other zones would be allocated in line with the Forward Network Code
The generation mix would allow generators to optimize their generation portfolio that means link a hydro-based system of Albania with a lignite-based system of Kosovo
Common market Kosovo - Albania or a single bidding zone on all market timeframes will be in line with the EU target model which is also the objective of the Energy Community
Common market will full integrate the national markets of Kosovo and Albania. As indicated the benefits are higher if the markets are integrated into a single bidding zone in all markets’ timeframes where the interconnection capacities between Albania and Kosovo will be considered internal lines in the common market and will be used in the optimal manner without any capacity booking or scheduling requirement. Market could trade standardized products based on the market needs with the delivery in the joint bidding zone (Kosovo – Albania market), regardless where or to which TSO the internal scheduling takes place
In future market coupling process, such common market will act as a single bidding zone and would be coupled with other zones on the day ahead and intraday markets.
In the forward timeframe, the cross-border capacities with other zones would be allocated in line with the Forward Network Code, which is under development by the ENTSO-E
The generation mix would allow generators to optimize their generation portfolio
will link a hydro-based system of Albania with a lignite-based system of Kosovo. Efficient utilization of resources should allow the fossil-fuelled power plants to operate at more efficient load levels and thereby provide environmental benefits. In a common market where hydro power plants have a significant share in the generation mix such unintentional deviation of a system with non-flexible thermal units would be minimized

20. Why Common Market
The market characteristics of Kosovo and Albania suggest that market integration would benefit customers in both countries
Interconnection capacities and generation mix of both countries enable full integration of the markets all trading timeframes.
Exchange/share of reserves for balancing the both systems
Encourage power market competition
Preparation for the European Internal Market (EU Membership)
Meeting European objectives 20:20:20 (20% reduction of emissions, 20% renewable energy, and 20% improvement of energy efficiency by 2020)

21. Critical milestones Legislation regulators and licensing
Outline changes to national laws covering establishment of a regulatory committee and recognition of licenses issued by either ERO or ERE
Implementation of national law changes
regulators and licensing
Establishment of the Common Market Regulatory Committee
Development of the SO and MO licenses
Development of Price Control framework for SO and MO
Establishment of Market Rules Modification Committee
Development of procedure for allocation of congestion costs
Transmission and communication infrastructure upgrade to enable operation of this market

22. Thank You