1. Energy Agency of the Republic of Serbia
Regional electricity market I panel: How to integrated electricity market in South East Europe - Regulatory aspects -
Ljiljana Hadzibabic
Council member
Energy Agency of the Republic of Serbia
Belgrade,
25. April 2013.

2. Content The objectives of SEE Regional market integration
EU Target Model for Electricity Market Integration
The 8th Region - SEE
Regional and national programs
Allocation of roles and responsibilities of relevant institutions
Regulatory role
Current state and development possibilities for Serbian market
Market model and market participants in Serbia
The dynamics of the Market Openning
The legal framework for the functioning of National Market
Comparative Electricity Prices for the industry in some EU countries

3. The objectives of SEE Regional market integration
The main goals are:
Creating a competitive integrated Regional energy market – more efficient than national markets
Efficient management of interconnection capacities: Capacity Allocation and Congestion Management (CACM)
Attracting investments in energy
Providing a secure and sustainable supply of customers at reasonable prices

4. EU Target Model for Electricity Market Integration
Common vision for completion of Internal Electricity Market (IEM) by 2014
Electricity markets across Europe must share a set of common features and be linked by efficient management of interconnection capacities
In order to achieve this: CACM and Balancing have been identified as priority areas → 3rd Legislative Package

5. The 8th Region - SEE 9 Energy Community Treaty Contracting Parties
the neighboring countries Bulgaria, Greece, Hungary, Romania and Slovenia
Italy with regard to the interconnections between Italy and the CPs to the EnC Treaty (DC undersea cables)
+ Moldova and Ukraine are not technically in parallel synchronous operation within ENTSO-E, and thus cannot perform operationally CACM mechanisms in the 8th region
SEE
9 contracting parties
>20 borders
Population:
137 million
The ultimate goal is to achieve a single platform for yearly, monthly and daily implicit auctions for the SEE region.

6. Legal Basis
Directive 2009/72/EC 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC
Regulation (EC) No 713/2009 of 13 July 2009 establishing an Agency for the Cooperation of Energy Regulators
Regulation (EC) No 714/2009 of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003
EU Legislation implementation within SEE Region
Contracting Parties (CP) shall bring into force the laws, regulations and administrative provisions necessary to comply with Directive 2009/72/EC, Directive 2009/73/EC, Regulation (EC) No 714/2009 and Regulation (EC) No 715/2009, as adapted by the PHLG Decision (Jun/Oct 2011), by 1 January 2015

7. New EU institutions based on the 3rd Package:
New Institutions
New EU institutions based on the 3rd Package:
ENTSO-E (TSOs)
ACER (Regulators)
Joint preparation of:
Framework Guidelines
Network Codes
Target models for capacity allocation and congestion management

8. Regional and national programs /1
National development
Regional cooperation
Parallel development of regional and local electricity market?
SEE local markets are underdeveloped in average - mainly bilateral markets
Markets are largely illiquid
Dominant existing production company
Legislative changes are still ongoing
Obstacles to market development in each jurisdiction in SEE (except Hungary, Italy, Moldova and Ukraine)
Parallel

9. Regional and national programs /2
The committed institutions:
TSOs  to develop concepts and make proposals
Consultants  to moderate and make recommendations
Regulators  to decide or approve
Supports and encourages the adopted policies and market development in line with the EU Target Model
Approves of TSOs proposals related to organizational, commercial and legal aspects
Verifies of compliance with national legal framework and development schedules and with EU legal framework
Energy Community joint projects:
Wholesale Market Opening (WMO)
Balancing Energy Market
Market monitoring
Supplier switching

10. National Market Electricity Market By the Energy Law 2011 Bilateral
Balancing Market
Power Exchange

11. The Legal Framework for the Market Functioning
EU directives - mandatory baseline
The Energy Law
2nd package
3rd package by 2015
Transmission and Distribution Grid Codes
Cross-border transmission capacities - Rules governing the allocation of rights
Market Code
Power Excange Code
Supplier changing Rules
Methodologies for the determination of the price for access to electricity transmission and distribution system

12. Market Participants Electricity Producers Suppliers (60)
Public Suppliers (1)
The final buyers (3.6 million)
Transmission System Operator
Distribution System Operator
Market Operator
Balancing responsibilities of all market participants;
Relations of Market participants are regulated by agreements.

13. Current state of Serbian electricity market - model

14. The Dynamics of the Market Opening
Potentialy, 43% of market was oppend in 2008 (all non-household)
The markets will be 100% be open from 1 Jan 2015, but the households and small
consumers may choose from the market or the public supply

15. Current state of Serbian electricity market - data
2012:
GWh %
Transmitted electricity
40,197
100
Transmission losses
2.55
Maximum daily gross consumption
141.43
Maximum hourly load MW
6,622
Total consumption
28,457
70.8
Transit
8,176

16. Traders activities in the 2011 and 2012

17. The physical flow of the interconnectors in 2012

18. Comparasion of the Electricity Prices for the Industry (31) - The second half of 2012 -

19. The trend of electricity prices in the future
Price now
Price after
2020.
Profit
Costs
rationalization
New power plants
and ecology
Renewable Energy
Cost
Cost of CO2 ?

20. The trend of electricity prices in Serbia
Regulated / Free Market
+ Public Supply
+ Distribution
+ Transmission
- Electricity production and purchase
Regulated prices approved by the Regulator
since October 2012

21. Thank you for your attention!
Ljiljana Hadzibabic
Council member
Energy Agency of the Republic of Serbia