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Autorità per l'energia elettrica e il gas 1 The Role of Acquirente Unico in the Italian Electricity Market Tunis, 12th Sept. 2013.

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Presentation on theme: "Autorità per l'energia elettrica e il gas 1 The Role of Acquirente Unico in the Italian Electricity Market Tunis, 12th Sept. 2013."— Presentation transcript:

1 Autorità per l'energia elettrica e il gas 1 The Role of Acquirente Unico in the Italian Electricity Market Tunis, 12th Sept. 2013

2 2 Regulatory framework Directive 96/92/CE – the Italian way to the liberalised market Starting from vertically integrated monopolies (ENEL and municipalities-owned utilities), generation and selling were liberalized; Transmission and Distribution were unbundled; Progressive opening-up of the demand: distinction betweeneligible and captive market; Acquirente Unico was set up to procure energy to the captive market (electricity supply to captive customers was charged to distributors).

3 3 Regulatory framework Directive 2003/54/CE – The Enhanced Protection market Free Market: From 1 st July 2007, all customers are free to choose their suppliers Enhanced Protection Market - households & SMEs (LV connected, <50 employees, <10 MEuro/y turnover) without a supplier. -served by distributors (or their unbundled companies) Safeguard Market - customers not included in the enhanced protection market and without an electricity supplier - served by AU-selected retailers

4 4 Regulatory framework Italian Electricity Market Model (from 1 st July 2007) Acquirente Unico E/Protection Customers Customers E/Protection Suppliers Safeguard Suppliers Safeguard Customers Power Exchange (Day Ahead / Medium Term) Producers & Imports Safeguard Market Retailers Wholesalers Open MarketEnhanced Protection Market

5 5 Regulatory Framework Directive 2009/72/CE – Empowering customers Confirmation of the enhanced protection market Periodical monitoring surveys on competitive conditions of retail markets Ensure effective treatment and settlement of complaints More efficient procedure to switch (< 3 weeks) UE Infringement Procedure closed in 2012: Enhanched protection focuses on the interests of consumers and is based on their free choice ; Price is not established by the State, but is based on AU supply costs operating in the free wholesale market

6 6 Self-production Free market Enhanced protection market TWh % * estimated Regulatory Framework Supply of electricity to the enhanced protection market From 2007-2012 enhanced protection market has been reduced from 124.3 TWh to 78.1 TWh (24% of total energy demand) *

7 7 Regulatory Framework Market evolution: switching trend for households in 2012 about 950,000 customers have left E/P market, while 208.000 have switched-back * estimated

8 8 in 2012 about 192,000 customers have left E/P market, while 100.000 have switched-back * estimated Regulatory Framework Market evolution: switching trend for SMEs

9 9 In procuring electricity to the EP consumers, AU forecasts (medium and long term) the electricity demand of the enhanced protection market Economic indices, such as GDP variation and forecasts, industrial production for sectors, exchange rate /$; Energy market indices, such as electricity supply in Italy, oil reference prices; Retail market evolution, such as households and SMEs demand and consumers switching trends. Energy procurement Electricity forecasts

10 10 Definition of a procurement portfolio, which diversifies supply sources and uses appropriate price-risk hedging instruments, minimising the purchasing costs. AU operates in regulated (spot and forward) markets and holds e- auctions with transparent and non-discriminatory procedures. Energy portfolio in 2012 (78,1 TWh) physical bilateral contracts 57% purchasing electricity on Power Exchange 43% Energy procurement Procurement strategies

11 11 Energy procurement Reference prices AU transfers electricity to E/P Suppliers at a price monthly based on its energy purchasing costs, added with its own operating costs (i.e. Supply Price); The final price of electricity (Reference Price) applied to end users is set quarterly by AEEG on the basis of the Supply Price, adding regulated components* Supply Price53% Network Tariffs (Trans/Distr/Metering)*15% System general costs (FER, R&S, etc.)*19% Tax and VAT13% – Source: 3 rd Quarter 2013, household, 3kW,2.700 kwh/y Free Market Vs Reference Price 3 rd Quarter 2013, household, 3kW, 2.700 kwh/y Fixed Price Ref. Price Indexed All-included

12 12 AU operates as any other market participant, using the same procurement instruments, adopting transparent and non- discriminatory procedures and balancing its accounts; It represents a wedge between wholesale and retail markets, thus permitting to avoid conflict of interests. It is an aggregator of demand, permitting to transfer wholesale market prices to small customers The reference price is based on AU costs to buy energy for E/P customers. Energy Procurement Main evidences

13 13 In order to support small customers AEEG, with AU support, has realized an help desk to inform about the open market benefits and rights, and to receive claims not properly solved by suppliers; It represents an important support to monitor and to tune market regulations; Main issues are: incorrect billing, not-required contracts, market information; From 1 st December 2009 to 30 th June 2013: - 2.000.000 inbound calls - 140.000 new complaints (by mail, fax, e-mail) Customers Empowerment Energy Consumer Help Desk

14 14 To implement the EU Third Package to introduce an Alternative Dispute Resolution (ADR), AEEG has implemented an electronic procedure to solve dispute between customers and their suppliers. Some features: - completely free of charge; - 100% on line: applications are submitted on a web site and parties meet in a virtual room; - The Parties may accept or not to participate as well as to reach a final agreement - Consumers Associations are involved to eventually support consumers to access the Service; Customers Empowerment Energy Conciliation Service

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