Energy Regulatory Office of Kosovo
Recent Regulatory Developments
Dr. Ali Hamiti
Chairman of ERO
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ERO Identity
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Independent institution (art. 142 of the
Constitution).
Responsible for economic regulation of electricity,
gas, and district heating sectors.
Established in 2004, by Law 2004/9.
5 Board Members, full time, 5 year term.
Budgetary independence.
Chairman reports to Assembly.
ERO is member of the:
- Energy Community Regulatory Board (ECRB), and
- Energy Regulators Regional Association (ERRA).
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ERO Organisation
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Board of Commissioners (5)
Departments (4)
 Energy supply and market structure
 Consumer protection
 Legal and licensing
 Pricing and tariffs
Technical advisory group
Administration office
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Mandate of ERO
Objective
“Set the Regulatory Framework for a Transparent
and non discriminatory Energy Market based on
free Market principles – promote competition”
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Tasks
o Ensure non-discriminatory access for all
transmission and distribution network users at
access prices reflecting true economic costs;
o Promote economic efficiency of energy use by
providing short and long term true economic
prices;
o Protect Customers while Ensuring Investors’
Interests;
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ERO Activities
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Licensing of energy activities;
Granting of authorisation for new
generation capacity;
Approval of tariffs and tariff methodologies
for regulated activities;
Monitoring of unbundling and development
of competition;
Adoption of secondary legislation;
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ERO Activities (cont.)
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Approve technical Codes for system operations
Resolve Disputes between Customers/Licensees,
or between licensees;
Determine Standards of Service Quality of the
Licensee;
Approve Procedures for Allocation of
Interconnection Capacity;
Others such as: Issue “Certificates of Origin” for
RES, Maintain a Public Register (Licenses, Eligible
Customer, Certificates of Origin);
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Major recent ERO activities
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Preparation of draft rules on Certificates of Origin
and eligibility for Feed-in-Tariffs for RES generation
(currently under consultation).
 Issuing of Rule on Authorisations and Feed-inTariffs has already led to applications by
128MW of wind generation.
Preparation of draft rules on customers obtaining
eligible status.
 Right to eligibility extended to all nonhousehold customers in August 2009.
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Major recent ERO activities (cont.)
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Drafted first versions of the:
 Rule on Pricing for District Heating (DH) Sector;
 DH Tariff Methodology.
In process of finalization, and further process of
public consultation and final approval by the Board
of ERO.
Ongoing development of Regulatory Framework
for cogeneration:
 identification of instruments and the scheme
for support of cogeneration;
 modification of the draft Rule for support of
RES-E;
 pricing / Tariff Methodology for cogeneration.
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ERO after new Energy Laws (10/2010)
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Strengthening of ERO role in enforcing competition
and avoiding its restriction or distortion.
Strengthening of ERO role in monitoring security of
supply and identifying failure of authorisation
procedure.
Opening electricity market for all customers by
1/1/2015.
ERO approves electricity market design and market
rules.
Laws reflect market concept, decided by Government:
bilateral contracts market with balancing market.
Removal of cross subsidies and gradual rebalancing of
tariffs by 12/2014.
Laws provide clear specification of theft and related
actions.
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Kosovo Energy sector
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Generation operational capacities
 termo
927 MW
 hydro
43 MW
 wind
1.35 MW
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Line length
 transmission lines 1,142 km
 distribution lines 11,870 km
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Transformation capacities
 transmission
2,870 MVA
 distribution
2,571 MVA
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District heating concentrated in 4 cities covers 5% of
demand
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No gas nor gas network in Kosovo
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Performance of regulated industries
Continuing improvements in electricity industry
performance during 2009:
 consumption grew by 6.7%;
 generation from Kosovo sources grew by 6%;
 total distribution losses maintained at 42.8%;
 collection rates increased from 72% to 80%;
 SAIDI value of 95 hours and SAIFI value of 26.7.
 Major improvements in district heating industry
performance:
 heating supplies to customers rose by 37%;
 collection rates increased from 38% to 61%;
 Ongoing project: Improvement of DH sector –
Phase I: Rehabilitation of DH Systems of
Prishtina, Gjakova and Mitrovica; phase II:
Investment Forum
27 Oct 2010, New York Project.
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Prishtina
Cogeneration
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KRPP and KEDS transactions
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Government of Kosovo is undertaking two major
transactions during 2010-11.
Establishment of new MineCo and GenCo as public
private joint ventures to
 develop new lignite mine;
 build and operate Kosovo e Re Power Plant
(560MW) – expected commissioning by 2016-17
 rehabilitate existing Kosovo B power plant
(600MW).
Privatisation of retail supplier and distribution as
Kosovo Electricity Distribution and Supply (KEDS).
GenCo will have 20-year PPA with KEDS.
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Tariffs issues
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Electricity Tariff Review 4: tariffs for 1 April 2010 – 31
March 2011.
Licensees’ proposals represented an increase of 14% in
average tariffs.
Final approved tariffs unchanged from existing levels.
 correction of errors and claw back of capex not spent;
 adjustment of RAB valuation and disallowance of bad
debts to conform to ERO’s published methodology;
 reduction of excessive import price assumptions
Removal of all operating subsidies would have led to a 29%
tariff increase in 2010.
Appropriate tariffs policy crucial for implementation of
scheduled large-scale investment in mining, generation and
transmission and distribution networks.
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Major challenges for ERO in 2010-11
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Ensuring the regulatory framework facilitates the
KRPP and KEK transactions, while continuing to
protect customers, and meeting ERO’s legal duties.
Accommodating the KRPP transaction with its
long-term PPA, while ensuring compliance with
new laws and Kosovo’s international obligations to
open up its electricity markets to competition.
Allowing recovery of justified and reasonable
costs, while avoiding tariff shocks and excessive
increases in tariffs.
ERO Role in new market model design;
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Thank you for your attention
Dr. Ali Hamiti
Chairman of the Board
Energy Regulatory Office (ERO)
1 Hamdi Mramori Str.
10000 Prishtina, Kosovo
Tel: + 381 38 247 615
Fax: + 381 38 247 620
E-mail: [email protected]
Web: www.ero-ks.org
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