The SEE region’s TSOs are at an initial stage of a coordinated capacity
calculation process and the development of the electricity balancing market in
the SEE Region is characterised by the nationally oriented approach. The
integration of national electricity balancing markets in an efficient manner
can provide security of supply at the same time lowest cost and significantly
enhance technical performance and competition.
In regard the economic impact of Balancing Integration an assessment
study called “Enormous cost savings to be
attained through balancing market integration in South East Europe, EKC Study,
16 Feb 2015” demonstrates what steps need to be taken to achieve an regional
integration in the electricity sector. Current the prices for balancing energy
are regulated in Macedonia and Albania. There are market based prices in Serbia
(directly linked with BSP offers), and in Montenegro and Bosnia and Herzegovina
they are calculated on the basis of costs for covering the imbalances. Then there
is no full balancing responsibility in all countries.
Therefore, there is an insufficient level of competition: usually one
dominant BSP per country. Imbalance settlement price often not market–based: therefore,
there is no full incentive for BRPs for better balancing, nor the full
cost-reflectivity to align the costs of provision of balancing services (by the
BSPs). In same time even there is a high level of balancing reserve (7-28% of
generation), no cross-border balancing except for the emergency energy, which
is treated as Balancing Energy exchange, but activation time is > 1 hour.
Focusin here only to Albania the country operates at the same time as
Control Area and a Control Block. OST as Albanian Transmission System Operator
is obliged to provide System services for the entire control area. Balancing
mechanism and imbalance settlement practice is applied in line with the Market
Rules, as amended in 2012. Reservation of balancing capacity, FCR, FRR services
and the corresponding activated energy is not market-based and it is a part of
Ancillary Services.
Public Generation Company (KESH) is the only
BSP in Albania, which provides services through Ancillary Service Agreement
concluded with TSO. TSO is not entitled for emergency imports, which is a sole
obligation of KESH. The structure of production in which a dominant role is
played by the hydro units, provides a good basis for the provision of FRR and
RR. Generators, suppliers, eligible customers and DSO, except KESH, represent
Balance Responsible Parties in Albanian Control Area.
Balance responsible obligations are based on transmission
fee contract. DSO is obliged to import electricity for covering its losses. DSO
will pay for negative imbalance and positive imbalance will not be compensated.
Other BRPs: are paid with regulated price for positive imbalances in the
tolerance band and are paying for negative imbalance with import price for the
current month multiplied by the corresponding coefficient, or with the price of
energy that KESH buys from concessionary IPP (small HPP).
Then the integration of country with the
balancing markets in WBs would increase the competition, i.e. number of BSPs o
increase the technical possibilities for the provision of balancing capacity and
lower the level of required reserve (common dimensioning, reserve sharing). The
lower the overall balancing costs, due to lower reserve and to the competition
of bids for balancing energy, and align the costs for the provision of
balancing services with the cost for making them available.
Compressively the study quantifies the
benefits to be gained in order to incentivise regulators and transmission
system operators to reform their balancing regimes and to correctly prioritise
the integration path taken. For example, the annual saving potentials of 45
million Euros for the control block comprising Serbia, Kosovo*, Montenegro and
Macedonia would be attained in case of a common dimensioning and sharing of
balancing reserves and the introduction of imbalance netting.
Without further stopping to the reason for
balancing reserve, the integration roadmap for the balancing integration in SEE
region provides a feasible and logical sequence of integration steps of
specific balancing models. Even it is hard to precisely predict the
geographical pattern of integration, however, it is expected that integration would
start on the basis of current LFC blocks (SMM, SHB). Kosovo* could be defined
as a LFC area in the SMM block, then followed with Albania joining SMM block,
towards further integration at the level of the SEE region.
In regard of the last one the enactment the new Law of the Electricity Sector no 43 on 30th
April 2015 which aim a fully aligned with Directive 2009/72/EC dated 13 July
2009 “On common rules for the internal market in electricity”, on the part
of Market Rules establish that ERE, upon proposal of the Transmission System
Operator and in collaboration with all participants of the electricity sector,
shall adopt the Electricity Market Rules, within 1 (one) year from the date of
entry into force of this law.
The here communication came within the framework of
preparation of the analytic report, to be release in short upcoming period by
ACERC, about liberalisation and organised market in Albania. In cases of
interest to the directly involvement as author with analyses or for any kind of
support and partnership, contact us at the info@albaniaenergy.org. For more
keep update with the EU &
WBs / Albania Energy Regulatory Updates or visit the Official Page of ACERC.