1. Regulatory development and level of deregulation TSO Certification and CACM implementation in Montenegro
En.Trading 016 Seminar: “Keeping up with SEE power market development”
1st of December 2016, Hotel Splendid, Budva, Montenegro

2. Generation vs Consumption
System in brief
Generation vs Consumption

3. Montenegrin power system
Power Plants connected to the transmission network
TPP Pljevlja – 210 MW
HPP Piva – 3x114 MW
HPP Perućica – 5x38+2x58,5 MW
Total: (859MW)
Peak demand
Decreased to cca 550MW
Wind
In few weeks: 74MW

4. Production vs Consumption

5. Import, export, specifics...
Market status
Import, export, specifics...

6. Montenegrin electricity market
No organized Day Ahead Market
Formally opened for all consumers including households
In practice:
Numerous traders
1 dominant producer
+1 dominant supplier
+1 „ocasional“ supplier
+1 big consumer – selfsupplier

7. Montenegrin electricity market
Even most of regionally active traders are present in Montenegro:
Cross-border capacities
Bilateral trading
… there is very low activity towards end consumers
 No commercial interest
 Low prices or ….

8. …or
…Just a small & “boring” market?

9. Focus: undersea HVDC link – Montenegro –Italy
Investments
Focus: undersea HVDC link – Montenegro –Italy

10. Montenegrin grid Serbia 220 kV Pljevlja 2 - Bajina Bašta
280 km
400 km
688 km
20,5%
29,2%
50,3%
Total
1,368 km
Total length of transmission grid
MNE interconnections
Country
220 kV Pljevlja 2 - Bajina Bašta
220 kV Pljevlja 2 - Požega
110kV Pljevlja 1 - Potpec
400kV Ribarevine - Peć
400kV Podgorica 2 - Trebinje
220kV HPP Perućica - Trebinje
220kV HPP Piva - Sarajevo
110kV Herceg Novi - Trebinje
110kV Nikšić - Bileća
220kV Podgorica 1 - Koplik
400kV Podgorica 2 - Tirana
Line
Voltage
Serbia
Kosovo*
BIH
Albania

11. Investments in transmission grid
Annual investments (M€)
Assets (M€)

12. Undersea HVDC link

13. Electricity production (2014)
267 4 vs
Italy
Montenegro
TWh
TWh

14. Electricity consumption (2014)
308 4 vs
Italy
Montenegro
TWh
TWh

15. Regional level More than 400km length More than 1000m depth
180km overhead lines
PCI project
PECI project

16. Status: under construction
2015
2016

17. Can it „move“ the market?
GME
BSP
OPCOM
CROPEX
SEEPEX
HUPX
IBEX
....

18. Legal & Regulatory developments
Laws, Rules, Methodologies

19. Third package transposition in Montenegro
New Energy law – January 2016
EU Directives
Law on cross-border exchange of electricity and gas
EU Regulations
„Network Codes Ready“

20. Third package transposition in Montenegro
Parlamentary approval:
Of third package Directives
Third package core regulations (714/2009, 715/2009)
Government eligibility for transposition of regulations establishing Network Codes upon TSO proposal
Government - cooperates with ENC (throug MC)
TSO involved in Network Codes preparation as member of ENTSO-E

21. Third package transposition in Montenegro
 Except for the uncertianties on NC transposition on the level of the Energy Community, there is no obstacle for full impelmentation of NC Regulations in Montenegro.

22. „Third energy package“ implementation
TSO Certification
„Third energy package“ implementation

23. Crnogorski elektroprenosni sistem a.d.
Company Profile
Transmission network system operator in Montenegro
Established in 2009 as a result of the spin-off of transmission and dispatching activities from Elektroprivreda Crne Gore (EPCG) - vertically-integrated undertaking in the Montenegrin electricity sector.
Joint stock company
Licenced by NRA – ERA
Listed on stock-exchange

24. Shareholder structure
as of December 31st 2015
State of Montenegro is the majority shareholder with 55,0% of capital.
Terna (Italian Transmission System Operator) entered into CGES’s stake with a share of 22% through a process of reserved increase of capital.
EMS (Serbian Transmission System Operator) owns 11% of capital.
The rest (11%) is owned by other institutional and retail investors.

25. Montenegro A2A Terna EMS ME MF COTEE Market operator EPCG
100%
COTEE
Market operator
Other Investors
Other investors
11% 1%
42%
57%
55%
22%
11%
EPCG
Dominant producer
CGES
TSO
100%
CEDIS
DSO

26. Formal preconditions  National rules (Regulatory Agency)
 Community Rules (ENC)
 TSO Request
 National approval
 ENC Level approval

27. Other state owned entities
Montenegro
Terna
EMS ME MF
Other state owned entities
Other investors
55%
22%
11%
11%
CGES
TSO
Board of Directors
Management

28. Serious obstacles not expected
Formal preconditions
 National rules (Regulatory Agency)
 Community Rules (ENC)
 TSO Request
 National approval
 ENC Level approval
Serious obstacles not expected

29. Transposition and implementation
CACM in Montenegro
Transposition and implementation

30. CACM Regulaton – EC 1222/2015 First to be transposed
Formally: TSO to propose to the Government for approval
ENC Level decision would be „welcome“
Strong high-level will for early implementation

31. Why CACM in Montenegro?
Forward capacity allocation (FCA Code) already in early implementation (SEE CAO)
CACM is logical timevise consequence
Montenegrin market longs for integration
EU Iinternal Electricity Market is the only option

32. Why CACM in Montenegro? More liquid market
More opportunities for both – producers and consumers – social welfare
Strong price signals – investments
Optimal usage of the infrastructure

33. Preconditions for implementation
NEMO
Regional agreement on cross- border capacities calculation
EU – ENC agreement on „EU CACM“ and „WB6 CACM“ integration model

34. Will Montenegro get its own power exchange?
...and when?

35. Montenegrin Power Exchange?
Decision is made
Instead of waiting for spontanious apperance of bisnis oriented Day Ahead Market organizer, Government tasked:
TSO MO
Production company
To establish common project company that will run PX and enable market coupling within deadlines agreed in Western Balkans 6 MoU signed in Vienna in April 2016

36. Montenegrin Power Exchange?
Status:
Documents are ready (Shareholders agreement and Articles of assotiation)
Comments to be received by 3 initial shareholders within next week
Proposal to be made to all energy entities in the country – response to be received by mid December
Company to be established by the end of year

37. Montenegrin Power Exchange?
First task:
Finding strategic partner:
As long-term service provider or
As investor and long-term service provider
Requirements:
Biding zone Montenegro and:
1 coupled border in the first year of operation
2 coupled borders in the second year of operation
all ME borders coupled by the end of third year operation

39. Thank you Crnogorski elektroprenosni sistem a.d.
Bulevar svetog Petra Cetinjskog 18
81000 Podgorica, Montenegro