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EU & WBs / Albania Energy Regulatory Updates

Presentation of Albanian Centre for Energy Regulation and Conservation - ACERC

Acerc is a think tank centre with a focus on the Albania energy market and its integration in Regional & IEM. The Acerc mission based on the in-depth knowledge of EU and Regional Energy Law and Policy and strives to provide aqualified contribution to the promotion of the liberalization and effective integration as well as efficient use of energy resources.

Acerc main activities consists in build-up collaborationand support to market players in the market researches such as the release of reports, articles and periodicals. Activity accompanied with the offering of the support in capacity building through national and regional seminars, trainings and conferences. Initiatives aims to enable in advocating in the energy sector promoting a forum called in Albanian School of Regulation.

For more visit us at the Official Website of Acerc | Albanian Energy Market - AEM Group in LinkedIn

Regulatory Investment Risk Incentives in the WBs for PECI by Dr Lorenc Gordani | Sunday, August 16, 2015

AER Notice August 2015 Posted on Sun, August 16, 2015 13:54:33

On
17th April 2013, the EU adopted Regulation No 347/2013 on guidelines
for “TEN-E Regulation”. The TEN-E Regulation has been supplemented with new financial
instruments facilitating access to long term financing of eligible PCI by
providing debt facilities into projects. Then, on 14th October 2013,
the EC adopted a list of 248 key energy infrastructure projects, including also
third countries’ projects, among others such involving Energy Community
Contracting Parties (Albania, Bosnia and Herzegovina, Montenegro, Serbia and
Ukraine).

In
the same direction, on 6th October 2011, the EnC Ministerial Council
approved the establishment of a Strategy TF mandated to “elaborate a Regional Energy Strategy, including a special part on
Regional Power Development and Investment Plan aiming at promoting investments.

In the conclusions of its 33rd meeting of 18th June 2014,
the PHLG requested full incorporation of Regulation 347/2013 into the Energy
Community acquis at the Ministerial Council meeting in 2015.

As reported by the ACECR along the second week of
august 2015, the 13th
Ministerial Council Meeting on 16 October 2015, that will take place in Tirana,
Albania, have announced the following with the Decision D/2015/02/MC-EnC on the implementation of Regulation 347/2013.
Notwithstanding, in its Risk Related Regulatory
Investment Incentives for Projects of Energy Community Interest, Recommendation
Paper, from the April 2015, ECRB has consider necessary the elaborate of the
certain aspects of the regulatory treatment of PECI.

In
specific, ECRB notes that several
issues remain to be resolved by the EnC institutions in order to
establish a sustainable regional mechanism supporting infrastructure
investments in the region. The dynamics
of adjustment of the PECI list in synthesis state: currently it is not clear if
and when the PECI list will be reviewed when in EU the PCI list is renewed in
intervals of two years. Treatment
of the electricity generation projects in the second PECI list. Treatment of
CBA. Identifying applicable debt
and equity financing sources/mechanisms for PECI.

Then at its
meeting of 15th April 2014, the ECRB decided to develop a toolbox on
regulatory investment incentives to be used by the NRA depending on national
specificities and a common methodology for project risk evaluation. In regard,
it was followed with a rapid presentation of the national practices of risk
evaluation in the EnC CP and then with the recommendation on a common
methodology for risk identification. For concluding with a status review of
applicable investment incentives in the CP, highlighting the critical barriers
for introducing investment incentives and presents a toolbox which may be used
by NRAs to define applicable investment incentives.

As wide
accept the general “financial climate” for energy networks infrastructure
projects, is significantly influenced by the applicable regulatory framework.
Being subject of price regulation, electricity and natural gas transmission
companies reimburse their capital and operational expenditures based on pricing
mechanisms (price controls) developed by the NRA. Normally, well-designed price
controls should ensure recovery of all prudently incurred costs, including
investment projects costs, taking into consideration at least the average systematic risk of the TSO’s
investment portfolio via the regulator’s estimate of the cost of
capital, but also other risks depending
on the features of the applied model of price regulation.

The ECRB
recognizes that the PECI promoters may be exposed to additional
non-controllable risks that were not observed or accounted for by the NRA while
setting the price controls, and that such risks may adversely influence both
the project promoter’s decision to invest and the lenders perception of the
bankability of the project. Then the ECRB proposes the following approach to
risk identification and assessment to the Contracting Parties NRAs.

First, using
a transitional methodology for TSO’s portfolio risk identification and
assessment until implementation of the TEN-E Regulation in the Energy Community
law, which follows the ACER methodology
to the extent possible. In more using the ACER risk evaluation
methodology developed by ACER in line with Article 13.5 of the TEN-E Regulation
once the TEN-E Regulation is implemented by the Energy Community Contracting
Parties.

In regard
the Transitional methodology for risk
identification and assessment ECRB considers that the process of
identification and assessment of TSOs project portfolio should include the
following steps: Availability of information on project portfolio risks;
Identification of the nature of risks from a regulatory point of view; Risk
mitigation measures by TSOs; Assessment of systematic risk and definition of
cost of capital; Risk mitigation measures already applied by NRAs.

Regard a summary of national practices regarding risk mitigation,
regulatory measures and monetary reward or penalty schemes, in the
analysed markets, the rate-of-return, price cap and revenue cap regulation are
implemented. Rate-of-return regulation is normally performed on yearly basis,
while in the case of incentive based regulation the revenues or prices are
capped for different periods, namely three or five years.

In
specific on the electricity investment, are applied the following regulatory
systems: Rate-of-return regulation in four jurisdictions (Bosnia and
Herzegovina, Croatia, Serbia, Ukraine); Revenue cap in four jurisdictions (FYR
of Macedonia, Kosovo*, Moldova, Montenegro); Price cap in one jurisdiction
(Albania). And in natural gas, are applied the following regulatory systems:
Rate-of-return regulation in four jurisdictions (Bosnia and Herzegovina,
Georgia, Serbia and Ukraine); Revenue cap in three jurisdictions (Croatia, FYR
of Macedonia, Moldova).

The here
communication came within the framework of the preparation of the analytic
report, about Energy Market and Investments Opportunities in Albania and the
WBs, to be release in the shortly upcoming period by ACERC. In cases of
interest to the directly cooperation as author with analyses or for any kind of
involvement or support as well as a partner, contact us at the
info@albaniaenergy.org. For more keep update with the EU & WBs / Albania Energy
Investments Updates

or visit the Official Page of ACERC.



The Regime of the Direct Electricity Lines in Albania by Dr Lorenc Gordani | Sunday, August 16, 2015

AER Notice August 2015 Posted on Sun, August 16, 2015 00:23:59

Albania
has given a new law on the electricity sector that aim a fully aligned with
Directive 2009/72/EC dated 13 July 2009 “On common rules for the internal
market in electricity”. In regard of the “Direct Line” it establish that it means either an electricity line
linking an isolated generation site with an isolated customer inside or outside
Albania, or an electricity line linking an isolated generation site with a
customer outside of Albania, or an electricity line linking an electricity
producer and an electricity supply undertaking to supply directly their own
premises, subsidiaries and eligible customers.

The new Law on the Electricity Sector no.
43 of the 30th April 2015 recognise, in the article 33, all electricity
producers and suppliers within a given territory may supply their facilities,
branches and clients, via a direct line. No transmission or distribution
license shall be required for the operation of a direct line state the article
34m par. 5.

In regard, the direct lines constructed
for electricity export purposes by domestic producers to connect customers
outside the country, are subject to Council of Ministers’ approval, after the
given opinion from ERE. Instead, the direct lines constructed for the
connection of e internal market by domestic producer to connect customers
inside the country, or supply company which supplies its assets or eligible
customers, as well as lines connected to the transmission system for maintenance
purposes, are subject to responsible Ministry’s approval, after the opinion
given from ERE.

However, all the criteria and the procedures
for granting of authorizations for the construction of direct lines shall
approve by the Council of Ministers. The Minister authorizes the construction
of a direct line even in the case that applicant is refused access to the grid
for cases defined in Article 29 of this law, or in case a procedure for dispute
settlement has been initiated, as set forth under the Article 24 of this law.

Nerveless, the Minister may refuse to
grant its authorization for the construction of a direct line if the granting
of such authorization would obstruct the fulfilment of public service
obligations and customer protection, defined by the provisions of the law. The
explanations for such a refusal should be fully justifiable and are notified to
the applicant.

Important is the remind that the
possibility of supplying electricity through a direct line as referred above
shall not limit the right of a customer to enter into electricity supplying
agreements with another supplier of his choice. However the expenses for the
construction and operation of direct lines shall be incurred by the holder of
the authorization. As well as regarding the establishment, exercise and termination
of the rights related to the construction and operation of direct lines
encumbering third party property the provisions of the Civil Code shall be
applied.

Regard the technical and safety standards
in electricity sector: the technical rules for design, construction and
operation of the direct lines, including the rules of technical safety, are
developed by the ministry responsible for energy in cooperation with General
Directory of Standardizations and are approved with the decision of the Council
of Ministers. Design, construction and operation of the direct lines are
presumed that meet the applicable technical requirements and criteria when they
are in compliance with the respective harmonized Albanian standards (Article 34,
par. 3).

The here
communication came within the framework of the preparation of the analytic
report, about Energy Market and Investments Opportunities in Albania, to be release
in the shortly upcoming period by ACERC. In cases of interest to the directly
cooperation as author with analyses or for any kind of involvement or support
as well as a partner, contact us at the info@albaniaenergy.org. For more keep
update with the EU & WBs / Albania Energy Investments Updates or visit the Official
Page of ACERC
.