HIGH LEVEL FORUM SUPPORTED BY USAIDKOSOVO SECURITY OF ELECTRICITY SUPPLY IN KOSOVO KOSOVO ELECTRICITY MARKET STEPS TOWARDS REGIONAL INTEGRATION Dr Goran Majstrovic Prishtina ID: 525191
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MED HIGH LEVEL FORUM SUPPORTED BY USAID/KOSOVO“SECURITY OF ELECTRICITY SUPPLY IN KOSOVO”
KOSOVO ELECTRICITY MARKET – STEPS TOWARDS REGIONAL INTEGRATION
Dr. Goran Majstrovic
Prishtina
,
March
1
,
2016Slide2
Kosovo-Albania Electricity Market Study
To
compare
operation with and without market integration Kosovo – Albania in 4 aspects:Wholesale electricity priceGeneration output and country balanceCross-border line loadingSystem reseve needs
SCOPE OF WORKSlide3
Kosovo-Albania Electricity Market Study
Implemented
PLEXOS market simulation softwareobject-oriented, math programming optimizationYear 2020SEE region modeledhourly time stepmedium-term step (week) for correct simulation of hydrological regimeTwo simulation runs:separate markets of Kosovo and Albania
integrated market of Kosovo +
AlbaniaTOOL AND METHODOLOGYSlide4
Albaniadominated by hydro power plantsaverage
hydrology
load profilethe demand rises in winter monthsthe hydro seasonality does not coincide well with the load profile seasonalityKosovodominated by thermal power plantsDevelopment plan for 2020, including analysis with new generation unit (450 MW)load profilesmaller than Albanianlarger seasonality in monthly load profileKosovo-Albania Electricity Market StudyINPUT DATA SETSlide5
Comparison of productioncombination of hydro and thermal resources
causes
significant differences CM vs SMAlbaniarelatively small difference: generation profile conditioned by hydro inflows and overall energy deficitKosovoTPPs production increases to cover the extra demand from Albania in summer monthsdecreases when Albania has a surplus of energy or during maintenance periodsNote: both the SM and CM scenarios do not operate as isolated systems, they are both connected to the regional market
Kosovo-Albania
Electricity Market Study
RESULTS
–
GENERATION
OUTPUTSlide6
Comparison of imports and exports
Albania
remains a net importerKosovo remains a net exporterin CM case:Albania imports 2680 GWh (42% increase) and exports 1556 GWh (99% increase)Kosovo imports 1609 GWh (110% increase) and exports 2802 GWh (107% increase)cross-border trading increasesNote: in CM case exports/imports between Albania and Kosovo are includedKosovo-Albania
Electricity Market StudyRESULTS –
COUNTRY BALANCESlide7
Imports and exports: CMKS-ALB
interchange exports are
separated from the exports to the regional marketthe increased exchange between KS and ALB increases the overall export and import Note: all the direct exports from Kosovo to Albania, and the exports from Albania to Kosovo are the results of common market establishmentKosovo-Albania Electricity Market StudyRESULTS – COUNTRY BALANCESlide8
Comparison of market prices
wholesale
market
pricesboth Albanian and Kosovo prices decreaseon average in SMAlbania 52,73 €/MWhKosovo 52,01 €/MWhon average in CMAlbania 47,35 €/MWh (-10,20%)Kosovo 46,63 €/MWh (-10,34%)prices decrease on both sides of the bordernotably increased price stability (less variation in prices)
prices settle on a common price levelprices are not completely equal, though: because of
limited transmission capacity between Kosovo and Albania
Kosovo-Albania
Electricity Market
Study
RESULTS
–
ELECTRICITY
PRICESlide9
Albaniacongested hours per year drop significantly
in CM
for more than 2000 hours per year is able to resort to additional imports
Kosovonotable increase in congestions due to higher flows on the interconnectorsScenarioSeparate MarketsCommon MarketInterconnectorAL-extKS-extAL-ext
KS-ext
AL-KS
Hours (h)
5185
2058
3035
(-
41%
)
3734
(+
81%
)
124
monthly
line loading levels
:
stronger seasonality
exhibited
SM
CM
Kosovo-Albania
Electricity Market
Study
RESULTS
–
CROSS-BORDER
FLOWSSlide10
only the operational
TPPs and HPPs
with storages
have been consideredthe total required reserve is on average reduced by cca 5%reasons for this change:CM effect on the operation profile mostly occurs in the Kosovo TPPspositive effect of market integrationboth sides can count on the reserves from the storage HPPs on the Albanian sideHours (per year) of interconnectors operating at NTC limit
MWh/h
% change
Separate Markets
SM Albania
1310,23
SM Kosovo
326,42
SM Albania + SM Kosovo
1636,65
Common
Market
CM Albania
1311,37
0,09%
CM Kosovo
250,19
-23,35%
CM Albania + Kosovo
1561,56
-4,59%
Kosovo-Albania
Electricity
Market
Study
RESULTS
–
RESERVE
CAPACITITESSlide11
KEY FINDINGS AND CONCLUSIONSProduction
i
n
Albania, generation profile remains largely unchangedproduction from local lignite fired Kosovo TPPs changes based on Albania energy surplus/deficitWholesale energy pricesin CM, the prices settle on a common price levelprices decreasing in both systemsCross-border transmission congestionsOverall effect on relieving the congestion with external marketsMore demand satisfied internallyIn CM, Kosovo interconnection to external market is more congested, thoughAvailable reserve capacitiesthe total available reserve is on average reduced by 5%, but……a larger share of generation resources available overall→ Step toward common European electricity market…Kosovo-Albania Electricity Market StudySlide12
THANK YOU FOR YOUR ATTENTION
!
www.eihp.hrSlide13
ACTIVITIES
AND RE
SPONSIBILITIES
Rob Barnett Prishtina, March 1, 2016 MED HIGH LEVEL FORUM SUPPORTED BY USAID/KOSOVO“SECURITY OF ELECTRICITY SUPPLY IN KOSOVO” Slide14
So why a common electricity market?
improve security
of electricity supply in Albania and Kosovo;
the lack of generating capacities in Albania, and in Kosovo;the power systems of Albania and Kosovo are complementary, and common power system will have opportunity to optimize all resources and provide welfares for all stakeholders;the binding objectives of Albania and Kosovo to implement EU Directives in creating a large, open, competitive and harmonized market, in line with EU defined principles and goals;the importance of regional cooperation initiatives for merging national markets in order to facilitate the use of cheaper electricity sources and the exchange of electricity on a regional level.Slide15
Market models are broadly complementary
Long-term to
Day Ahead
Real timeWithin dayDay AheadAlbaniaBilateral contract Financial onlyPTRs
FTRs DAM
Gate closure and I/C NominationsAS Contracting?
Balancing market
AS utilisation
Kosovo
Bilateral contract
PTRs
AS Contracts
Gate closure and I/C
Nominations
Renomination
windows
Balancing market
AS utilisation
EU Target Model
Bilateral contract
or Financial only
PTRs
or FTRs
DAM and market coupling
Intraday trading
Gate closure
B
alancing market
AS utilisationSlide16
There are large potential efficiency savingsItem
Savings
Shared reserve requirement
SignificantCommon AS contractSmallIntegrated balancingSubstantialCommon sale of cross-border transmission rightsSmallSingle imbalance priceSmallSingle settlement systemSomeCommon credit requirementSignificantCommon PXSomeIntraday marketSomeSlide17
Albanian PX is happening; Kosovo has roleTransition to Common Market?PX separate from MO so not on critical pathPX contributes to
efficiency of price setting
Common PX will save
administration costsCommon PX will be more liquid than separate onesSlide18
Cross border exchange improvements
New line makes congestion less likely
Kosovo to make available
its borders for market coupling?Kosovo not coupled with AlbaniaNeed to make capacity available at border (KOSTT/OST agreement)Kosovo-Albania border needs firmness guaranteeSlide19
Integration with common marketPX not on critical path to Common Market
Useful addition
But so are
forwards markets and intraday marketsNot useful for Kosovo to develop own PX Liquidity from Kosovo very useful for PXNegligible changes to PX for Common Market(maybe broaden governance and regulatory responsibility but not essential)Slide20
Roadmap: Phased approach to market integrationPhase 1: Integrated DAM
this will create allocative efficiency at the day ahead stage and allow for cross-border efficiencies within the region through market coupling
Phase 2: Integrated balance responsibility and settlement
this will set out common trading arrangements allowing parties to integrate their imbalances across both markets.Phase 3: Integrated system operationby developing a single system operator, savings in reserves and ancillary services will be maximizedsingle imbalance priceSlide21
Markets
Regulators
Institutions
ForwardDAMIntradayBalancingSystem OperationForwardDAMIntradayBalancingSystem OperationTOSOMODSOParticipants
Forward
DAMIntradayBalancingSystem Operation
Forward
DAM
Intraday
Balancing
System Operation
TO
SO
MO
DSO
Participants
Forward
DAM
Intraday
Balancing
System Operation
Forward
DAM
Intraday
Balancing
System Operation
TO
SO
MO
DSO
Participants
Phases of market
integration
National
Common
National
Common
National
Common
PHASE
3:
System Operation
integration
PHASE
2:
Balancing and Settlement Integration
PHASE 1:
PX integrationSlide22
ConclusionsThis Roadmap recommended that integration be progressed
by phases
to
full integrationReasons for recommending this option relate to its delivery of the following substantial efficiency savings:Reserve sharing across both marketIntegrated balancingIntegrated credit security requirements minimizing participant costsThe EU Target Model seeks to improve trading efficiency in forward, day ahead, intraday and real-time timeframes, but for those steps is necessary appropriate level of market maturity.Slide23
THANK YOU FOR YOUR ATTENTION
!
www.eihp.hr