EU assisting Energy Agency of Serbia to upgrade its regulatory policies, mechanisms, practices in line with the EU Energy Acquis

• Project: Technical Assistance to the Energy Agency of the Republic of Serbia – Approximation of NRA Tasks to the Third Energy Package
• Project duration: July 2018 – January 2020
• Country: Serbia
• Beneficiaries: The Ministry of Mining and Energy of the Republic of Serbia, while the end-recipient of the project activities is the Energy Agency of the Republic of Serbia
• Financing: The project is co-funded by the European Union and the Republic of Serbia (EuropeAid/138046/IH/SER/RS).
• Implemented by: LDK Consultants Global EEIG in consortium with GFA Consulting Group, GFA South East Europe, Kantor Management Consultants and Quiditta

CONTEXT

The project is part of the EU Action Programme for Serbia (2014), whose objective is to support the energy sector in terms of enhancement of the security of supply, the introduction of more competitive energy market structures and improvement of the sustainable energy development. The beneficiary institution of the project is the Ministry of Mining and Energy, while the end-recipient of the project activities is the Energy Agency of the Republic of Serbia.

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.

The project will help Serbian people to get reliable and sustainable energy at affordable prices, will stimulate the network infrastructure investments in the energy sector and will contribute to the creation of an integrated EU energy market.

Wider impact of the project:

• 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 first quarter of 2019, the following project activities were implemented and finalized:

1.   Assessment of monitoring activities of the Energy Agency

A solid regulatory monitoring framework enables a regulatory authority to assess the smooth functioning of the energy markets and the performance of the regulated energy entities in line with Serbian legislation, as well as identify fields of improvement and further actions to the benefit of Serbian consumers. The project team reviewed the current monitoring of AERS activities in terms of scope, efficiency, effectiveness and staff adequacy and pinpointed gaps and elements of the monitoring functions, which should be upgraded during the next phase of the project.

2.    New calculation methodologies and numerical estimation of the Value of Lost Load for relevant customer categories in Electricity and Natural Gas sector

The estimation of the Value of Lost Load (VoLL) allows for a more effective and efficient transition to a liberalized market structure. It is also used during energy infrastructure project assessment and reflects the real cost of outages for system users, hence providing a good indication for investment decisions. In this context, the project team developed calculation methodologies and performed numerical estimations of the Value of Lost Load for various customer categories in the electricity and natural gas sector, as well provided capacity building to AERS officers on this subject.

3.    Certification of the Electricity and Natural Gas Transmission System Operators

Unbundling in the energy sector prevents discrimination in the access of electricity and natural gas networks, allows for fair market competition and can lead to more affordable prices for the consumers. The project team developed procedures for the certification of the transmission system operators, which will be used to verify the operators’ compliance with the Unbundling rules indicated in the 3rd Package of the EU Internal Market Legislation. A training workshop was also performed, whose objective was to enhance AERS capacities in the field of the certification.

NEXT STEPS

In the remaining project period significant capacity building activities are envisaged, as well as the provision of support on the assessment of Quality of Supply, the assessment of the need for price regulation in certain electricity market segments, TSO and DSO Compliance Programmes, regulatory investment incentives and other activities, as defined and agreed with a beneficiary.