Transcript Kosovo Power Sector – Challenges and Opportunities

REPOWER – KOSOVO
AECOM International Development
Kosovo Power Sector – challenges
and opportunities
FarukFaruk
Serdarevic
Serdarević
- Chief
– Chief
of Party
of Party
Ceia Whitaker
Celia Whitaker- Deputy
– Deputy
ChiefChief
of Party
of Party
Prishtina, March 01, 2016
1
Kosovo electricity market structure
2
ENHANCEMENT OF SECURITY OF SUPPLY
Security of Supply significantly improved
but not sustainable !
Kosovo key energy projects in 2016:
1.
New Kosovo Power Plant coal fired generation
transaction
2.
Refurbishment of TPP Kosovo B and
3.
Common electricity market between Albania and
Kosovo
3
POWER SECTOR MAIN ISSUES IN 2016
1. New Kosovo Power Plant
– Heads of Terms signed; financial close 2016
2. Market for offtake
– Market competition – possibilities for new investments
– Common electricity market with Albania - important to
export excess baseload and import reserve, to benefit of
both countries
– 400 kV line to Albania almost complete – removal of
main physical barrier
– Proposed HVDC line to Italy will provide an additional
market
4
POWER SECTOR MAIN ISSUES IN 2016
3. TPP Kosovo B
– Development of rehabilitation project; multi year
life extension, environmental compatibility with
current environmental standards
4. TPP Kosovo A
– Maintain in operations until Kosovo B rehabilitated
to reduce imports
5. KEK unbundling
– Separation of KEK mining from other KEK
activities
5
POWER SECTOR MAIN ISSUES IN 2016
6. Renewable energy sources
– Streamline administrative processes and facilitate
investment in RES (establishment of One Stop
Shop)
7. Remove retail market barriers
– Rebalance tariffs
– Put Supplier Switching Rules in place
– Identify and remove remaining administrative or
structural barriers
8. Environment
– Ensure and upgrade environment compliance
6
POWER SECTOR MAIN ISSUES IN 2016
9. New suppliers
– Energy Agreement – Northern municipalities failure to request a licence must not block ENTSOE membership application
10. Affordability
– Enhance customer protection to shelter the most
vulnerable customers
11. Third package implementation
–
Major exercise by many institutions to implement
7
Challenges but also opportunities
8
Linkages and dependencies
9
REQUIRED ACTIONS
• Power sector participants need to work together
actively, collaboratively and coordinated to achieve
the milestones essential if 2016 is to be a turning
point
• Kosovo will require support from its international
partners to enable it to achieve energy security,
civil stability and economic growth
• EU needs to recognise the security of supply
imperative and allow Kosovo time to comply
10
REQUIRED ACTIONS
• Kosovo is committed to clean energy projects –
our International partners and NGOs must be
realistic about Kosovo’s reliance on lignite and
accept that Kosovo has an unavoidable duty to
protect its citizens’ welfare – and keeping the
lights on is part of that duty.
• Kosovo business sector needs to recognize the
opportunities that electricity market will offer
together with further enhancement of
renewable energy market
11
USAID Development Objectives in Kosovo
USAID/Kosovo Country Development Cooperation Strategy:
Increased Investment and Private Sector Employment
Intermediate Result:
Improved Natural Resource Management in Key Areas
REPOWER - KOSOVO
Objective 1:
Promoting Clean Energy
• Legal and policy
• Regulation and projects prioritization
• Market coupling
Objective 2:
Improving Enabling Environment for Private
Investment in the Energy Sector
• Power sector unbundling
• Financing strategies
12
REPOWER-KOSOVO Project
Implementer:
AECOM International Development
Duration:
5 years (1 Oct 2014 – 30 Sep 2019)
Contract Value:
12 mil.$
Main Beneficiaries:
REPOWER - KOSOVO
ERO
•
Energy Regulatory Office (ERO)
•
Ministry of Economic Development
(MED)
•
Transmission, System and Market
Operator (KOSTT)
•
Kosovo Energy Corporation (KEK)
13
KOSOVO - EU INTEGRATION PROCESS
14
KOSOVO’S LEGAL / TREATY OBLIGATIONS
On 21st October 2005, Kosovo adhered to the Athens
Treaty establishing the Energy Community to
 Create a stable regulatory and market
framework capable of attracting investment
 Create a single regulatory space for trade
Χ Enhance security of supply through investment
and interconnection
Χ Improve the environmental situation through
the efficient use of electricity and the use of
energy from renewable sources
Χ Develop market competition
15
KOSOVO’S LEGAL / TREATY OBLIGATIONS
•
•
•
•
This echoes the underlying ethos of the
EU itself, which is to create “an area
without internal frontiers in which the free
movement of goods, persons, services
and capital is ensured …” (Art. 26.2
TFEU)
Kosovo has worked to approximate the
latest iteration of Energy Community Rules
into national legislation
Some obligations require gradual
implementation to remove barriers to
genuine implementation
de facto not just de jure implementation
16
11 YEARS IN THE COMMUNITY - ACHIEVEMENTS TO DATE
1. ERO was established in 2005; has issues of
under-funding and under-staffing but October
2015 Budget Law confirmed its full funding
request
2. KOSTT was fully unbundled from KEK in 2006;
it is independent in accounting, management and
legal terms from electricity generation and supply
3. ERO set multi-year price controls for the sector
in 2012 – the first in the region
17
11 YEARS IN THE COMMUNITY - ACHIEVEMENTS TO DATE
4. KEDS was fully unbundled from KEK in 2013; in
2015 its supply and distribution functions were
separated legally. Compliance programme is
approved
5. Distribution and supply are fully privatized
6. Government intends to further unbundle KEK’s
remaining activities to separate mines from
generation – no obligation, but has positive impact on
Treaty goals
7. New generation projects will reduce market
concentration and State stake
18
LEGAL OBLIGATIONS: CURRENT ISSUES
•
The free movement principle – but Kosovo is
constrained in practice
•
Kosovo is committed to genuine market
liberalisation – but implementation may take
time
•
Security of supply – foundation of the European
internal market: ‘social and territorial cohesion’
•
2017: Legal duty not to exceed environmental
limits – but must recognize security of supply
imperative
19
REPOWER’S SUPPORT ON TREATY OBLIGATIONS
REPOWER-KOSOVO among others will support MED
and other institutions in the sector during the 2016-19
period by:
– Assisting MED, ERO in the development of secondary
legislation to fully transpose the TEP
– Assist in designing and planning actions required to
implement TEP
– Support MED, ERO and other institutions in removing
administrative barriers to RES development
20
Thank you for your attention!
21