Vladimír Urbánek (Kurzy.cz)
Markets  |  March 27, 2013 11:35:01

International Energy Regulatory Forum has brought different views on the integration of the European energy market - the prices for end customers will continue to grow


The ninth edition of the International Energy Regulatory Forum
was held on 20 and 21 March in Prague hotel Ambassador - Zlata Husa in the presence of representatives of regulators and energy companies from dozens of countries in Europe. Present was the political representation of the Czech Republic and the European Commission for Energy. Under the auspices of the Prime Minister, Mr. Petr Necas, as well as the Ministry of Trade and Industry and the Confederation of Industry of the Czech Republic. Professional organizer and guarantor of the consulting firm Arthur D. Little.

The main topics have become the new trends and direction in the regulation of the energy sector, the consolidation of the energy markets in Central and Eastern Europe, the future development of the internal energy market
in Europe between 2013 - 2020, the results of the economic assessment of the benefits and costs of the implementation of intelligent metering systems and experience with the introduction of new regulatory mechanisms in Europe. The conclusions of the two-day conference proved particularly completely different views of the European institutions and representatives of the energy operators for the integration of the European energy market.  

Representative of the European Commission for Energy, Jan Panek, said the barriers to integration of the European energy market by 2014 are not insurmountable, but they are numerous. Representatives from energy companies and investors to this date were skeptical. A similar view taken by Paul and Solc, Deputy Minister of Industry and Trade, which they see as the biggest problem in the further development of networks just EU legislation, namely the forthcoming amendments to the EIA Directive and the resulting complications for the construction of energy infrastructure. Their findings with the solution of problems of differential allocation of resources consumption and production in Germany and added Dirk Biermann, Markets & System Chief Operations Officer, 50Hertz Transmission GmbH. Germany solves this problem by strengthening their networks and dialogue on cross-border cooperation with regional energetic systems. Emotional performances offered participants forums Jaroslav Hanak, President of the Confederation of Industry of the Czech Republic. Outside critics governing bodies of the Czech Republic and the EU stressed that energy for the Czech Republic, the driving force of the economy, and that Czech industry strongly supports nuclear energy. Johannes Mayer CEER presented the view of the European Association of regulators on the latest progress in the transposition of European legislation into national law, which, according to his view is not sufficient. Muether Daniel, Deputy Head of the Department for International Relations, BNetzA - Federal Network Agency for Electricity, Gas, Telecommunications, Posts and Railway, presented how the German regulator facing a fundamental change in energy policy, a move away from nuclear power and its replacement by renewable sources.

The Forum will be attended by key players in the energy market in Central Europe. Elis Paul, Chairman of the Board of Directors, the Prague Energy, Martin Herrmann, Chairman of the Board of Directors, RWE East, George Feist, Director for Strategy, EP Energy, Robert Hienz , Senior Vice President of Regional Coordination, E.ON and Martin Smith, Vice Chairman of the Board of Directors, CEZ. All confirmed the need to insist on such principles of regulation to ensure the attractiveness of the sector for investors and thus the security of energy supply. Forum participants also agreed that excessive subsidies renewable resources have resulted in market distortions, or violation of fair pricing. Despite the decline in the real price of electricity on the wholesale market price for the end consumer due to RES support is rising, which is not sustainable. Representatives of RWE and E.ON also criticized the rapid changes in the control settings that discourage companies from their other investments. As an example, the introduction of additional taxes named in Hungary or the Czech regulator's intention to change the currently valid parameters regulatory period.

After the index followed by a moderated panel discussion, which was attended by leading members of the Board of transmission networks in the region - CEPS, PSE Operator Polish, Slovak and German SEPS 50Hz Transmission. The second topic was enthroned attractiveness of the energy sector from the perspective of investors - to discuss representatives of CEZ, EP Energy and ENEL.

Forum preceded the day before the workshop. Controllers supported by the smart grid and smart metering in France and Italy presented Patricia de Suzzoni, Advisor to the President, the French Energy Regulatory Commission, and Eleanor Bettenzoli, Head of Electricity and Gas Smart Metering, Regulatory Authority for Electricity. For regulators from other countries performed Majda Paripovic, Head of Economy Department, Energy Agency of the Republic of Slovenia (Slovenia), Darius Biekša, Member of Regulatory Commission, the National Control Commission for Prices and Energy (Lithuania) and Tore Langset, Head of Economic Regulation, Norwegian Water Resources and Energy Directorate (Norway). For Energy Regulators Regional Association ERRA stepped Gábor Szörényi, General Secretary, Agency for the Cooperation of European Regulators ACER represented by Jacques de Jong, Member of Board of Appeal. This was followed by a panel discussion, which was held in the spirit of reaction representatives of regulated entities to new trends in the field of regulation.

The topics touched upon topical cases CEZ Group in Bulgaria. Pacovský Martin, Head of International Operations Department, ČEZ, said: "The problem of electric power is the one that is the most visible link in the chain. What happens next in Bulgaria, we are able to predict on the basis of our experience in Albania. The tendency is, of course, carry the burden on private investors. The situation slightly improves the fact that Bulgaria is an EU member, so we shall discuss in Brussels.I firmly believe that in Bulgaria we get to a reasonable trajectory. "

Despite the participation of many representatives of the regulatory authorities of EU member states and representatives of European institutions this year's conference took place without the participation of a representative of the Energy Regulatory Office.

"I am very sorry that for the first nine-year history of the International Energy Forum regulatory refused participation regulator representatives from the Czech Republic. As we stand at the beginning of the fourth regulatory period, it would be useful to know the intentions of the ERO. I am also sorry that he could not respond to the Office of inspiration and ideas regulators and regulated entities from more than ten countries. "Says Dean Brabec, managing partner of CEE consulting firm Arthur D. Little.

Other key findings from the IX. International Energy Regulatory Forum:

Attractiveness of the industry - is declining, it is necessary to create a stable environment

Energy companies that have a chance to invest, rather focus on Turkey and Africa. The EU itself is in terms of investment less attractive. It is influenced primarily unstable environment, political influences, lack of transparent regulations and price reductions for commodity component of rates, but increasing the total cost by the effects of decentralization, promotion of renewable energy and the need for investment in networks).

The role of the regulator - is growing, it is necessary to change the dialogue and set priorities

Approach to regulation must undergo changes. The priority must be to control outputs (reliability, quality, safety) versus strict control inputs. Focus on cost reduction, investment and revenue can be disastrous for power - well remember the blackouts from Italy, the U.S. and other countries.
I Czech Republic due to overflow of electricity from Germany at very serious problems. Regulator should create an environment that will enable investors to business development and investment promotion.
Regulators in neighboring countries promote investment in new technologies, innovation and encourage investors to improve the quality, safety and reliability of supply. "Regulation in the Czech Republic to work, the energy began to be reliable and it would be a shame if it changed," the regulator intends to workshop participants .

The single market - not yet in sight

In the interest of integration of the European energy market, we do everything in our power. But maybe it's better recognize that it does not occur in 2014, as now seems to be how this complex project. Even in 2015, the single market is not reality. Representatives are ERRA and CEER highly pessimistic unlike
from the European Commission. It was an open question whether it will play the role of European national interests.

Construction of new resources - at a price of 38 EUR / MWh impossible without state support

Conventional power plant at current prices for the commodity not worth building. The turning point lies somewhere
the limit from 60 to 65 EUR / MWh versus today's 38 EUR / MWh. The way the state guarantee for the purchase of electricity, ie. guarantee the price and volume. The question is, however, also this approach, because changes in Germany (massive support RES shutdown core, a new connection between the north and south, ...) caused a fundamental change in the representation and use of production resources. The forum also dropped the idea of the need to create an entirely new model for the production of electricity and the market.

Investment of 1,000 billion between 2010 to 2020 - who will pay?

Based on a study DG Energy will need to invest in networks (distribution - 400 billion, to transfer 200 billion in generation capacity and 500 billion EUR). DG Energy is expected that investments will be made ??by private investors with the support of the European and national institutions (eg from 2014 starts program Connecting Europe Facility). By how much is due to the price of electricity rises
for end users, the study does not speak.

Electricity prices are falling - for customers, however, grow

Electric power prices dropped to the level of 38 EUR / MWh. Overall, however, prices are rising, thanks to the promotion of renewable sources, stagnant consumption and increased demands on the transport capacity. RES support tools were not well thought out, because they have forgotten the question of who will pay this bill and how it will be high. Therefore, our prices for final customers continue to grow. The lesson from the previous development may be the introduction of the obligation to make any major change in energy legislation thorough analysis of the impact on the market.

Strengthening the safety, reliability and quality of supply - unfortunately still at the national level

Liability of energy security remains at the national level. End consumers will
failure with a claim to your distributor, not in Brussels. This is not anything to say, when the EU has issued over the past 10 years, a total of 40 new energy initiatives that are inconsistent
and in many cases, by contrast, are counter-productive. The three main objectives of the European Union - sustainability, competitiveness and security of energy supply - are contradictory and can not be fully achieved simultaneously.

Further, Jubilee, X. International Energy Regulatory Forum will be held from 19 to 20 March 2014.  

Roman Kopecká  
Project Manager

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