OBJECTIVE
The specific objective of the project is to contribute to the alignment
of policy enforcement, monitoring and harmonization of the Serbian legislation
with the EU Energy Acquis. The project aims
to ensure that the regulatory policies, mechanisms and operational practices
will be implemented in compliance with the best regulatory practices and
applicable provisions of the Energy Community law comprising the 3rd Package of
EU Internal Energy Market legislation, the Infrastructure Package and
applicable Network Codes.
- Policy enforcement,
monitoring and harmonization of national legislation with the EU Energy
Acquis
- Competitiveness on
electricity market based on non-discrimination, publicity and
transparency;
- Protection of energy
and energy products customers;
- Development of electricity and natural gas market and their connection with the single EU energy market.
RESULTS
During the second quarter of 2019, project activities were focused on the following energy regulation subjects:
1. Establishment of criteria for assessing the
need for price regulation in certain electricity market segments
Following the enactment of the new Energy Law at the end of 2014, only
households and small-medium size enterprises (SMEs) are entitled to receive
guaranteed electricity supply at prices regulated by the Energy Agency of the
Republic of Serbia. In addition, the provision of secondary and tertiary reserves, that are
required for electricity system balancing, is also a system service subject to price
regulation. The project team analyzed in
detail all the aspects of the market liberalization process in Serbia,
including issues such as the development of national and regional competition
and the protection of vulnerable customers, and proposed to the Energy Agency
internal procedures and criteria for assessing the need for further price
regulation for households, SMEs and
secondary and tertiary reserves.
2. Establishment of criteria for abolishing the
Supplier of Last Resort in the electricity sector.
The role of the Supplier of Last Resort in Serbia, as defined in the
2014 Energy Law, is to ensure uninterrupted electricity supply for consumers
not being eligible for the guaranteed supply regime. In this context, the
Energy Agency of the Republic of Serbia is empowered to assess the necessity of
the operation of the Supplier of Last Resort and its impact on competition. The
project team provided detailed case studies from the operation of the Supplier
of Last Resort in EU Member States, assessed the necessity of the operation of
the Supplier of Last Resort in the electricity sector under the current market framework, and provided
recommendations to the Energy Agency of the Republic of Serbia for the role and
the functions of the Supplier of Last Resort in the future, including
assessment criteria on the possible time of its abolishment.
3. Compliance programmes for Electricity and
Natural Gas Distribution System Operators
One of the key requirements of the 3rd Energy Package is the separation of vertically integrated
energy companies (“unbundling”), which eliminates the risk of discrimination in
the operation of the networks and on the way access to the networks is given. To
this end, Distribution System Operators
are obliged to develop compliance
programmes and annual reports in order to ensure that there is no
discriminatory conduct and that the unbundling process is properly monitored.
The project team developed regulatory instructions to the Compliance Officers of the
Distribution System Operators on the way that those programmes should be
developed and implemented, giving practical recommendations regarding the type
of measures that may be included in the programme and the way these measures
should be implemented and monitored through the annual reports. In addition,
practical guidance was given to the
Energy Agency of the Republic of Serbia on how to assess the content of the compliance programmes and the respective
annual reports.
4. Recommendations for regulatory investment
incentives for electricity and natural gas network infrastructure projects
The EU Directive 347/2013, which has been transposed in the legal
framework of the Energy Community, has provided guidelines on the way to manage
the risks of large-scale electricity and natural gas network infrastructure
projects, as well as the type of regulatory incentives to be given so as
to promote the development of those
projects and mitigate incurred risks. In this context, the project team
thoroughly reviewed and assessed the relevant regulatory framework set by the
Energy Agency of the Republic of Serbia to identify if it creates additional
risks or barriers for network infrastructure investments. In addition,
risk-related regulatory incentives were proposed to the Energy Agency of the
Republic of Serbia for the whole portfolio of electricity and natural gas
network infrastructure projects to
applied in case that a certain project
promoter experiences higher risks compared to the risks normally incurred by a
comparable infrastructure project.
5. Assessment and upgrading regulatory framework
for quality of service
The general goal of the quality of service regulation at electricity and natural gas level is to
guarantee a good level of continuity of supply, voltage quality, gas quality
and efficient services for electricity and natural gas consumers. The project
team initially performed a gap assessment of the Serbian legislation against
the requirements of the 3rd Energy Package, while analyzed best
practice solutions followed at EU level. The next step was the development of
suitable indicators and standards for electricity and natural gas service
providers, while support was provided on the Energy Agency of the Republic of
Serbia on developing regulatory instructions for submission of quality of
service data. The last part of the work focused on making recommendations for
further development of regulatory mechanisms in relation to price regulation
and network planning, while
methodologies were proposed for the calculation of compensation to
customers due to quality of service deviations.
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