0 Lithuanian PX Giedrius Radvila AB “LIETUVOS ENERGIJA” 2009-09-16 Minifora Vilnius Is there a need for a change? 1 NORD POOL PX NORD POOL PX APX UK APX Gielda Belpx Powernext EEX Energi OTE PXE EXAA South Pool Opcom ? OMEL GME Issues that need to be addressed 2 Closure of second unit of Ignalina NPP Exporting system becomes importing Diversification of fuel for electricity production in Baltic states Projects of new interconnections Background for changes 3 2008 Cooperation agreement between NPS and Lietuvos energija – Planning of establishment of Estlink price area. Joint declaration of the prime ministers council of the Baltic (27th April 2009) Memorandum of understanding of the Baltic energy market interconnection plan (17th June 2009) Baltic energy market interconnection plan (17th June 2009) LV, LT, SW memorandum of understanding (9th July 2009) Lithuanian electricity expansion plan (8th of July 2009) Lithuanian electricity market expansion plan 4 http://www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id=349252&p_query=&p_tr2= Goals of market development 5 To improve conditions for consumers to choose or change supplier without any barriers; To stipulate competition among generators, importers and suppliers; To remove barriers for the trade with parties from EU; To set transparent conditions for the trade of electricity imported from non EU countries; To develop transparent electricity market organization and surveillance based on Nord Pool Spot principles. Changes Support of effective co-generation and renewable energy 6 Unfettered bilateral trade generation with EU countries, transparently regulated trade with non EU countries The support of Organization of trade at PX generators does not based on Nord Pool Spot distort electricity price principles. Goal – determine s and does not create market price of electricity PX, barriers for electricity Wholesale market market operation. Generators Hourly trade and balance Suppliers responsibility Transmission grid Distribution Regulated tariffs grid Transparent applicable only for household consumers and Source: Svenska Kraftnät transportation of small commercial Consumers electricity. consumers. Ability to choose supplier, which offers best price and make an agreement for the electricity provision. Changes of electricity market from 1st January 2010 7 Implementation of Nord Pool Spot (NPS) principles for wholesale trade organization. Price formation principle - marginal price setting. Trading platform for anonymously trading at auction until 2011. Hourly trading and balancing responsibility applied for all market participants. Unfettered trade with EU countries; Transparent and competition ensuring tariffs for electricity market and transmission grid entrance, clear regulation and control towards electricity produced and imported from non-EU countries. Implemented non discriminatory and transparent principles of electricity transportation. Securing independency of TSO according EU regulation. Application of regulated tariffs 8 Starting from 1st of January 2010, regulated tariffs is going to be abolished for the consumption totaling 35% of Lithuanian demand. Gradual increase of a share of consumers with non-regulated tariffs: Starting January 1st, 2011 - 45 % Starting January 1st, 2012 - 55 % Starting January 1st, 2013 – regulated tariffs are applied only for the household consumers. Starting January 1st, 2015 for all consumers (except the guaranteed tariffs for the consumer groups designated by EU regulations) Changes Restructuring Lietuvos energija AB 9 Lietuvos energija AB TSO functions Market operator functions Today Import/Export Operation of power production (KHPSPP, KHPP) Lietuvos energija AB Independent supplier AB Import/Export Trade of electricity Until 2010 Operation of power production (KHPSPP, KHPP) TSO AB TSO functions Market operator functions Lietuvos energija AB Independent supplier AB Import/Export, Holding company Trade of electricity TSO AB 2010 TSO functions Market operator functions Kruonis HPSPP and Kaunas HPP Power production Lietuvos energija AB Kruonis HPSPP MO AB TSO AB 2011 Import/Export and Kaunas HPP Market operator (ISO) Holding company Power production functions TSO functions Changes Auctioning 10 Import/Export Producers LT PX Producers LT BP1 BP..N Suplaer1 Suplaer2 Suplaer3 Suplaer4 Consumers Consumers Consumers Consumers Changes Price formation 11 Price, €/MWh Demand Supply Marginal price for all transactions at auction, €/MWh Volume, MWh Changes Gate closure 12 13:00-16:00 submission of correction of regulation Announcement of power bids volumes regulation transmission capacities and prices power bids to by TSO TSO 10:00 1 hours before operation hour 13:00 balance gate closure settlement 10:00 Start of DAM Day ahead auction Operation trade hour Regulation/B until 13:00 market alancing participants must submit bids and offers Physical electricity market 1 day before operation day Operation day (physical delivery) Changes Cooperation with Nord Pool Spot 13 2009-05-05 Prefeasibility study by Nord Pool Consulting. 2009-06-06 Seminar by NPC on proposals for Lithuanian DAM 2009-06-23 – 2009-08-28 Negotiations with Nord Pool Spot 2009-08-28 Letter of Intent was signed. Service Level Agreement TSO MO NPS No.73/2009 Nord Pool Spot will deliver the technical solution for new Lithuanian market place Nord Pool Spot AS and Lietuvos Energija AB today announced that they have signed a Letter of Intent to implement a new market model for the Lithuanian electricity market. In the future the Lithuanian market will be based on the same principles as the Nordic power market, where price and flow are calculated at the same time to increase market efficiency (implicit auction). The parties aim to establish a service contract where Nord Pool Spot will provide the systems and services from the Nordic market to the Lithuanian market place. The technical solution will be ready prior to 1 January 2010, when the new market model is scheduled to start operating in Lithuania. Lysaker, 28 August 2009. Towards an integrated market 14 2010-2013 Creation of common Baltic’s electricity market based on Nordic electricity market organization principles and gradual abolishment of regulated tariffs for consumers 2009 Isolated Baltic electricity market. Estlink II Estlink I Baltic electricity market integration Estlink I Swedish- Baltic link Common Baltic LitPol link electricity Polish PX market Gielda Energii Estlink I Polish PX Gielda Energii 2014 - 2015 Polish PX Integration of Baltic electricity market Gielda Energii into the Nordic and continental Europe electricity markets. Implementation of projects of new interconnections. 15 Thank you. Questions?