Country case study for electricity market restructuring Latvia. Rolands Irklis

Transcription

1 Country case study for electricity market restructuring Latvia Rolands Irklis Chairman Public Utilities Commission of Latvia www. erranet.org

2 Latvia and Cyprus in numbers Cyprus Latvia Teritory 9251 km km 2 Population 1`170`125 1`994`000 GDP (per capita) 34`970 USD 29`489 USD Electricity consumption (per capita) 3625 KWh 3507 KWh 2

3 History of electricity market in Latvia I Restoration of independence of Latvia 1991 Establishment of «Latvenergo» Vertically integrated utility responsible for Generation Transmission and Distribution af electricity 3

4 History of Electricity market in Latvia II Joining EU 2013 Nord Pool bidding area 1995 First procurements from small (IIP) 2007 Gradual opening of electricity market 2015 Cancelation of regulated tariffs for households 4

5 Generation mix and interconnectors Generation capacity HPP CHP (Gas) CHP (Bio) WPP Interconnector capacity Estonia Lithuania Russia Maximum load 1308 MW 5

6 Impact of Ignalina Nuclear PP Before 2009 After 2009 Ignalina nuclear power plant in Lithuania had 2 units each 1300 MW making Lithuania electricity net exporter. After joining EU both units was shut down first in December, 2004 and second in December 2009 making Lithuania deficit zone with imports from Estonia, Latvia and Russia. Latvia became as transit country. 6

7 New interconnectors Estlink 1 (350 MW) 2006 Estlink 2 (650 MW) 2014 NordBalt (700 MW) 2016 LitPollink (500 MW)

8 Effect on market prices NordBalt effect 8

9 Market prices today 9

10 Wholesale market of Latvia Almost 100% traded trough Nord Pool Day-ahead market fully integrated in European market Implicit cross border capacity allocation (integrated with spot market) 10

11 Generation and consumption Generation (GWh Consumption (GWh) 11

12 Latvenergo share in generation % 74% 77% Does it means dominance and market power? 12

13 Daly import/export Import during night Export during day 13

14 Daly generation Hydropower Large CHP (Gas) 14

15 Price volatility Lowest price EUR/MWh and one week later! 15

16 Cross border trade Typical flow from Estonia to Latvia and from Latvia to Lithuania Frequent congestions between Estonia and Latvia Price difference between Estonia and Latvia Price hedging instrument needed 16

17 Solution for price difference «PTR Limited» Forward capacity auctions 17

18 PTR Limited Yearly (300 MW), Quarterly (100 MW) and Monthly (50 MW) auctions Congestion income for TSOs can be used for cross-border infrastructure development If no infrastructure projects viable then for reduction of tariffs 18

19 Retail market of Latvia 45 registered retailers and 32 of them active Enefit 13,86% Geton Energy 9,48% INTER RAO Latvia 4,70% AJ Power 3,64% Lattelecom 0,45% Latvijas dzelzceļš 0,30% RTO Elektrotīkli 0,23% 220 Enerģija 0,18% Pārējie [PROCENTUĀLĀ VĒRTĪBA] IMLITEX LATVIJA 2,70% Starptautiskā lidosta Rīga 0,15% ESK Sistēmas 0,13% Latvenergo 60,89% Scener 2,81% Pārējie 0,31% Electric Power Supply 0,09% Baltcom 0,09% 19

20 Gradual opening of electricity market 20

21 Household market opening From January, 2015 regulated tariffs for household was cancelled All households which didn`t make choice in open market automatically recieved Universal Service price Universal Service price is fixed for one year with no restrictions to switch at any time Vulnerable consumers defined (low-income, disabled persons, families with 3 or more kids) discounted price 21

22 Unbundling of TSO and DSO TSO DSO Transmission system owner 22

23 Unbundling of TSO Independent system operator (ISO) model Transmission network owned by «Latvenergo» daughter company «Latvijas Elektriskie Tīkli» (LET) TSO («Augstsprieguma tīkls») is renting the network from LET «Latvenergo» and «Augstsprieguma tīkls» - both state owned companies «Latvenergo» shareholder Ministry of Economics «Augstsprieguma tīkls» shareholder - Ministry of Finance Certification decission was taken on January, During certification several non-compliances was found, for example all maintenance and development of the network was performed by System Owner. Certification decission was approved with condition that non-compliances will be solved during next two years. 23

24 Ownership structure Asset rental 24

25 THANK YOU FOR YOUR ATTENTION! Rolands Irklis W Web: