State of compliance
The Law on Electricity transposes the requirements for ownership unbundling of the transmission system operator in line with the acquis. Accordingly, the Government controls the generation company KEK, while the transmission system operator KOSTT is controlled by Parliament. KOSTT has filed the application for certification to the regulator on 3 May 2018. The regulator must adopt a preliminary decision on certification of the transmission system operator within four months from the date of notification and submit it to the Secretariat for its Opinion.
Legal unbundling of the distribution system operator KEDS from supply activities is in effect as of 1 January 2015. An annual report on the implementation of the compliance programme is regularly prepared by the appointed compliance officer and published on KEDS website. The monitoring of the compliance report is to be finalised by the regulator until the end of September 2018. In case of discriminatory behaviour by KEDS, the regulator shall take appropriate enforcement action in line with the Law.
Access to the system
Access to the system
The requirement to grant third party access based on published, objective and non-discriminatory tariffs has been transposed in line with the acquis. ERO approved and published transmission and distribution tariffs.
The Law defines that authorization for the construction of direct lines shall be granted by the regulator on the basis of non-discriminatory, objective and publicly available criteria. The criteria have not been published by ERO yet, despite the deadline for their adoption having expired.
Allocation of cross-border transmission capacities by KOSTT is subject to entry into force of the Connection Agreement with ENTSO-E. Until then, EMS will continue to perform capacity allocation without the consent of KOSTT (Case ECS 03/08).
As of 1 April 2017, wholesale prices in the electricity market are deregulated. According to the Law, the market operator and the transmission system operator are responsible for the organization of the physical day-ahead and intraday electricity markets, and for their coupling with other electricity markets. The operation of a day-ahead market in Kosovo* is pending the establishment of a power exchange in Albania, in which the transmission system operator KOSTT expressed interest to participate as a shareholder. A Memorandum of Understanding on cooperation on the establishment and operation of the Albanian power exchange between the Ministries of Kosovo* and Albania was signed in November 2017.
The power purchase agreement concluded for the new thermal power plant Kosovo e Re is expected to distort competition in the wholesale market and establishment of a day-ahead market.
The Law on Electricity stipulates an obligation of the transmission system operator to procure balancing services in a transparent, market-based and non-discriminatory procedure. To implement this, the Law requires the transmission system operator to adopt balancing rules, which have not been drafted and submitted for regulatory approval yet. As of 1 June 2017, balance responsible parties’ imbalances are settled based on the methodology for determining the imbalance settlement price, applied by the transmission system operator.
Regulation (EU) 543/2013 on submission and publication of data in electricity markets is still not transposed, and data are not submitted to the ENTSO-E Transparency Platform yet.
All customers are eligible to change their supplier in line with a procedure defined in the switching rules adopted by ERO.
As of 1 April 2017, supply prices for high voltage customers are deregulated. Transmission and distribution system operators are procuring electricity for network losses at non-regulated prices. An action plan for further deregulation of retail prices is defined in a guideline on market liberalisation in Kosovo*, issued by the regulator in January 2017. According to the guideline, prices of supply for medium voltage customers were to be deregulated by 31 March 2018. However, the regulator postponed deregulation of these prices until 1 April 2019 due to the lack of competition. This decision was not supported by the report on the functioning of the electricity market, which the regulator is obliged to issue at least every second year. In addition, no measures to improve competition in the market were taken by the regulator, despite its competences prescribed by the Law.
A supply company KESCO was appointed by ERO as a supplier of last resort, in line with the procedure defined by the Law. A methodology for setting the price of last resort supply was adopted by ERO. In practice, supply of last resort has not been exercised yet.
The Third Energy Package provisions on protection of customers, including vulnerable customers, have been transposed. A programme for establishing a status of socially vulnerable customers, the scope of their rights and measures for their protection has still not been adopted.
Regional integration of the Kosovo*’s electricity market is pending the resolution of a dispute between the transmission system operators of Kosovo* and Serbia (Case ECS 03/08). KOSTT and EMS failed to make progress in implementing contracts signed in 2014. Negotiations between Serbia and Kosovo on this long-standing dispute are facilitated by the Energy Community Dispute Resolution and Negotiation Centre and supported by the technical assistance provided under the WB6 regional energy market connectivity programme.
At present, the allocation of interconnection capacities is still being allocated by EMS. While KOSTT is participating as one of the shareholders in the regional capacity auction office SEE CAO, it can use its services only upon the entry into force of the Connection Agreement with ENTSO-E. Until then, EMS continues to perform the allocation of capacities.
The implementation of a developed mechanism for the cross-border procurement of secondary regulation reserve between the transmission system operators of Kosovo* and Albania is also depending on the entry into force of the Connection Agreement.
A Memorandum of Understanding on day-ahead market coupling between the transmission system operators and national regulatory authorities of Albania and Kosovo* was drafted and signed by Kosovo* stakeholders. Signature of Albanian stakeholders is still awaited. The MoU envisages the coupling of these two markets to be finalised by end June 2019.
The Law allows electricity trading licenses issued in the other Parties to the Energy Community Treaty to be recognised in Kosovo* based on the reciprocity principle and in accordance with applicable trading, balancing and fiscal rules.
The transposition of the Connection Network Codes in Kosovo* is still to be initiated even though the deadline for its finalisation was 12 July 2018.