CROATIAN GAS MARKET LIBERALIZATION. Marko Blažević, CEO

Transcription

1 CROATIAN GAS MARKET LIBERALIZATION Marko Blažević, CEO

2 SCOPE Introduction & Company Profile Regional Position & Infrastructure Gas Value Chain Supply & Demand Breakdown Regulatory Framework & Market Development Current Status & Outlook Public Service Supply Challenges Conclusions 2

3 BASIC COMPANY PROFILE HEP group is the national energy company, organized as a group of connected companies, which has been dealing with generation, distribution and supply of electricity for more than a century In the last few decades it has been dealing with distribution and supply of heat energy and natural gas to customers employees Yearly income app. 2 billion 3

4 HEP GROUP ON CROATIAN ENERGY MARKET 1 POWER A Production B Transmission C Distribution D Sale D Wholesale 2 NATURAL GAS Production Transport UGS Distribution Sale 3 HEAT ENERGY Wholesale Production Distribution Sale HEP actively participates in process HEP is not active in process 4

5 HEP GAS SUPPLY Ltd. - PROFILE Established: May 5 th, 2014 Headquarters: Ulica grada Vukovara 37, Zagreb 100% owned by HEP Corporation 14 employees HEP Gas Supply Ltd. is conducting wholesale supplier obligations on behalf and for the account of HEP Plc. supplies gas under regulated terms to public service suppliers for household customers ensures a reliable and safe gas supply in Croatia by conducting market maker obligations on the balancing energy market Contact information: ovt@hep.hr 5

6 REGIONAL POSITION HEP - REGISTERED AT CEGH Source: ENTSOG 6

7 CROATIAN GAS INFRASTRUCURE BACKBONE Transport system technical characteristics km of gas pipelines Over 450 of overhead facilities 148 measuring-reducing stations 282 measuring lines Gas system capacity: 192 GWh/day GWh transported in transport system exits 164 to distribution system 37 to end customers 9 transport system entrances 2 interconnectors 6 production entrances 1 UGS entrance/exit Existing Gas Transport System 75 bar Existing Gas Transport System 50 bar UGS Okoli Development projects Planned UGS Grubišno polje UGS Okoli technical characteristics Storage volume: 536 million m 3 Injection capacity: 3.84 million m 3 /day Withdrawal capacity: 5.76 million m 3 /day UGS Beničanci 7

8 THE PLAYERS GAS VALUE CHAIN Gas transport system PRMS Pressure Reducing and Metering Station entry/exit E.A. Energy-related activities 8

9 ENTERING THE WHOLESALE MARKET BRP Registration is done by Croatian Energy Market Operator (HROTE) Gas Supply or Gas Trading Licence (issued by HERA) Contract with HROTE (collaterals) Source: HROTE 9

10 GWh NATURAL GAS CONSUMPTION ,0% ,2% -4,5% -4,2% 2,7% 6,0% 0,0% ,6% ,0% ,0% ,0% ,0% 0 Source: PLINACRO Natural gas consumption Change (percentage) (%) compared compared to last to year last year -100,0% 10

11 Demand Supply SUPPLY & DEMAND BREAKDOWN 2015/ Source: PLINACRO 11

12 SUPPLY & DEMAND BREAKDOWN 2016 DOMESTIC PRODUCTION Onshore/Offshore GWh [45,8 %] IMPORT INTERCONNECTORS HU HR & SLO HR GWh [54,2 %] GWh Source: PLINACRO/HEP/ PETROKEMIJA TRANSPORT GWh TOTAL CONSUMPTION GWh GWh UGS TRANSPORT SYSTEM END USER 55,5% DISTRIBUTION SYSTEM END USER 44,5% ENERGY TRANSFORMATIONS GWh [19,2 %] PETROCHEMISTRY GWh [23,3 %] INDUSTRY GWh [13,0 %] DISTRIBUTION GWh HOUSEHOLDS GWh [25,0 %] NON-HOUSEHOLDS GWh [19,5 %] 12

13 GAS MARKET DEVELOPMENT Politically Controlled The Beginning of a Market Economy TSO Unbundling Start of Tariffication - HERA Market Opening August 1 st, 2008 for All Customers, Gas Market Model (BRPs) Croatian Hungarian Interconnector, Registration of New Market Participants (BRPs) Market Opening New players on the Market New Gas Market Act 2009/73/EC (Significant Market Opening on TSO & DSO Level) New Public Service Market Model, Day ahead VTP, Entry/Exit Tariff Model (January 1 st ) REMIT, Intraday VTP, Balancing Energy Market CAM NC, PRISMA/RBP, NC BAL Public Service Price Deregulation? 13

14 LEGISLATIVE FRAMEWORK The Energy Act Methodologies (Tariffs): TSO, DSO, UGS, LNG Supply (Public Service & SoLR) Balancing Energy 2009/73/EC The Gas Market Act Network Codes: TSO, DSO, UGS, LNG Rules on the Natural Gas Market Organization The Act on Regulation of Energy Activities General Terms & Conditions for Natural Gas Supply Separate Accounting Decree 14

15 NATURAL GAS MARKET MODEL Balancing Group Model (similar to Austrian and German model) Relationships between Gas Market Participants mainly Concluded through Bilateral Contracts HROTE Imbalance Settlement Responsible VTP Bilateral Trading - day ahead & intraday (prices not published) Gas Day 06:00 06:00 Storage Year April 1 March 31 Gas Year October 1 September 30 kwh (NCV 15 /15 ) 15

16 MARKET OPENING RETAIL LEVEL Incumbent HEP Group Others Source: HERA/HEP 16

17 End users natural gas price c /kwh GAS PRICE REGULATION EUROPE Zagreb 4,5 4 3,5 3 2,5 2 1,5 1 0,5 0 3,87 Source: ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity and Gas Markets in

18 PRICES End users natural gas price c /kwh Residential gas price, December 2016 (VAT included) 10 23, ,03 8,32 7,66 6,86 6,85 6,68 6,63 6,54 6,10 6,38 5,61 5,41 5,83 5,14 4,72 4,57 4,46 4,34 3,94 3,87 3,68 3,69 3,39 3,37 2,93 6, % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Residential gas price breakdown 20% 20% 17% 16% 17% 17% 16% 17% 12% 18% 14% 17% 17% 11% 6% 11% 10% 13% 11% 4% 10% 0% 4% 10% 10% 25% 22% 31% 35% 19% 31% 35% 33% 26% 30% 37% 31% 32% 40% 24% 10% 26% 54% 61% 39% 36% 35% 38% 40% 44% 51% 39% 46% 52% 36% 23% 5% 3% 21% 71% 7% 17% 2% 19% 18% 17% 20% 17% 17% 0% 0% 4% 9% 0% 4% 0% 37% 15% 35% 25% 12% 33% 29% 39% 48% 53% 56% 62% 65% 45% 49% 44% 9% 0% 24% 67% 21% 17% 16% 0% 0% 8% 21% 38% 28% 52% 45% 48% Source: E-CONTROL Energy Distribution Energy taxes VAT 18

19 Balancing energy price [ / MWh] Activated balancing energy [MWh] CHALLENGES Balancing Energy Price & Activation vs. CEGHIX 40,00 30,00 POSITIVE BALANCING ENERGY CEGHIX (NCV) Monthly Daily ,00 NEGATIVE BALANCING ENERGY ,00 Activated positive balancing energy , ,00 Activated negative balancing energy , Source: HROTE/CEGH 19

20 CHALLENGES Metered Data / Load Profiles 100% 90% 80% M/Q/HY/Y 70% 60% >50%! 40% 30% 20% 10% M/D/ID? 3 times a day ( 30%) 22% End costomer DS Hourly measured 40% End customer TS 0% Source: PLINACRO/HEP 20

21 PUBLIC SERVICE OUTLOOK Amendments to The Gas Market Act Public Service Suppliers Price Deregulation New wholesale public service market model What about the prices? 21

22 /MWh PUBLIC SERVICE WHOLESALE PRICE OVERVIEW (Exchange rate kn/ = 7,5) July/2009 October/2009 January/2010 April/2010 July/2010 October/2010 January/2011 April/2011 July/2011 October/2011 January/2012 April/2012 July/2012 October/2012 January/2013 April/2013 July/2013 October/2013 January/2014 April/2014 July/2014 October/2014 January/2015 April/2015 July/2015 October/2015 January/2016 April/2016 July/2016 October/2016 January/2017 April/2017 July/2017 October/2017 January/2018 April/2018 July/ ,00 40,00 35,00 30,00 25,00 20,00? 15,00 10,00 5,00 0,00 *October/2016 Alternative Gas Supply Offered to Households Month / Year * 22

23 CONCLUSIONS Croatian Gas Market Opening continues room for improvement Infrastructural & Technical Preconditions Needed for efficient Market Opening Further Improvements on Market Model and related Legal Frame Development on standardization of data exchange & communication protocols needed Safety features (SoLR, Risk management) Metered data & Load profiles Industrial Customers change in gas procurement policies Stakeholders Expectations - hard (impossible) to please everyone 23

24 Thank you for your attention! Contact: Disclaimer: Reviews and views expressed in this presentation represent the personal views of the author and are not in any way binding and can not be interpreted as an official viewpoint of the HEP Group. The consumption and market share data for 2015 & 2016 are unofficial. Official data will be published in the Annual Energy Report Energy in Croatia published by the Ministry of Economy. 24