Electricity market design and regulatory
issues in Albania and South East Europe
Workshop
Albanian power market
Sokol RAMADANI
Chairman
ERE- Albania
1 FEBRUARY 2012
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Introduction
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oLegal framework
oMarket aim
oMarket structure
oMarket model Implementation
oFuture development
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Legal framework
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Legal acts designing of the power market in Albania
Law nr. 9072 date 22.05.2003 “On power sector ” defines:
o
the principle of the activities in the power sector
o
responsibilities of the actors performing in the market
o
responsible body for the design of the electricity market in Albania.
Government decision 338 date 19.03.2008 On the power
market model in Albania . This document provides:
o
o
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a framework on the government reform in the electricity sector
including the privatization of the distribution sector,
sett clear rules for carrying out transaction in the markets that are
transparent and non-discriminatory.
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Market aim
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
Capture the full value of the Albanian hydro resources for
the benefit of Albanian tariff customers

To move from a vertically integrated entity to a structure
with functionally, legally and financially separate
entities.(generation, distribution transmission

Provide bilateral contracts with simple regulated balancing
market for energy transactions, which will improve
transparency and avoid unnecessary “layering” of
transactions.

Move toward consistency with EU Directives and the Energy
Community Treaty
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Market structure
Relations among market participants
Flow of Funds
Energy Flow
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Relations among market participants
Regulated Market (price and other terms and conditions of the
contract approved by ERE)
Between KESH Gen and Wholesale Public Supplier (at least for
purpose of making transparent of the price charged by KESH Gen to
Wholesale Public Supplier);
Between Wholesale Public Supplier and Retail Public Supplier;
Between OST and other market participants for transmissionrelated services, including ancillary services;
Between DSO and other market participants for distribution-related
services;
Between SPPs or IPPs and the Wholesale Public Supplier;
Between Retail Public Supplier and its tariff customers;
Between KESH Gen and Traders, including import contracts for the
exchanges of power, which are subject to ERE scrutiny or
procurement rules;
Between OST and KESH Gen, SPPs, IPPs and Traders for the
transmission losses and Ancillary Services.
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Relations among market participants
Unregulated market
Between Qualified Suppliers and Eligible Customers;
Between and among SPPs, IPPs, Qualified Suppliers and Traders;
Between Wholesale Public Supplier and IPPs, SPPs, Qualified
Suppliers and Traders; and
Between DSO and Traders, Qualified Suppliers, IPPs and SPPs for
energy needed to cover losses in the distribution system.
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Market Structure
Appendix C
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Energy Supply Agreements
OST
KESH Gen
Distribution Company
Public Supplier
(Retail)
Economy Energy Purchases
Regulated Tariffs and Service
Agreements with Tariff Customers*
Wholesale Supplier
Tariff Customers
Traders
Eligible Customers
SPPs; IPPS; and
Qualified Suppliers
Electricity Supply Agreements
(
Electricity Supply Agreements
Electricity Supply Agreements
Export Markets
Electricity Supply Agreements for Licensed Exports*
* Regulated by ERE
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Market Structure
Appendix A
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Electricity Flow
KESH Gen
OST:
Transmission System
Distribution Company
(Disco)
IPPS
Tariff
Customers
Imports
SPP
Eligible Customers
In Distribution
Areas
Export
Markets
Eligible Customers
Directly Connected
to Transmission Grid
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Eligible
Customers
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Market model implementation
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 Market Opening
- liberalization of the retail supply
market
- upgrade of the transmission and distribution system (reduce of
technical and nontechnical losses)
- Improvement of inter- -connection lines and functioning of the
new dispatch center
 Adoption of the secondary legislation
- Market rules
- Grid Codes –
- Tariff methodology
- Approval of model agreements
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Future development
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Approval of the new law in accordance with the EU requirements
especially for the security of supply and market opening
Design of a new market model which will reflect the government
policy to continue the reform in the electricity sector taking into
consideration :
o
o
o
o
o
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Distribution and Retail Public Supply functionally financially and legally
unbundled,
Possible privatization of the public generation
TSO and Market operator functionally financially and legally
unbundled,
Enhance efficiency and transparency in the market operation and
functioning.
After adoption of the new law and new Market Model by the GOA, the
ERE need to reflect the changes in the Market Rules and other
secondary legislation related to the market functioning
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Future development
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Enhance efficiency and transparency
-
Administrative capacity necessary for the implementation
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Thank you for the attention
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