Electricity

State of compliance
 

  • Unbundling

    Unbundling

    The regulator certified the transmission system operator KOSTT on 15 February 2019, taking into account in its final decision the Energy Community Secretariat’s Opinion issued on 2 February 2019. KOSTT is unbundled in line with the requirements for ownership unbundling defined by the Law on Electricity, according to which, the Government controls the generation company KEK, while the transmission system operator KOSTT is controlled by the Parliament. Legal unbundling of the distribution system operator KEDS from supply activities is in effect as of 1 January 2015. A report on the implementation of the compliance programme for 2018 does not identify any discriminatory behaviour by KEDS. The Secretariat expressed concerns regarding rebranding with respect to the separate identity of the supply company KESCO from KEDS.

     

  • 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. Transmission and distribution tariffs for the period from April 2019 to March 2020 were approved by the country’s regulatory authority ERO. According to the tariff system, transmission and distribution tariffs are applied also to generators. The tariff to be paid by generators connected to the transmission network exceeds the maximum value allowed by Regulation (EU) 838/2010.  

    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 the 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).

  • Wholesale market

    Wholesale market

    Wholesale prices in the electricity market are fully deregulated since 1 April 2017. An electricity trading procedure for the electricity generators, electricity companies with a public service obligation and system operators was developed by the transmission system operator and approved by the regulator in 2018. In the absence of an organised short-term market, the procedure defines an auctioning mechanism for short-term trading. A new biannual report on the level and effectiveness of market opening and competition is currently being drafted by the regulator.

    The operation of a day-ahead market in Kosovo* is linked to the ongoing establishment of a power exchange in Albania, and the transmission system operator KOSTT’s participation as a shareholder in the Albanian power exchange, for which KOSTT has expressed an interest.

    The power purchase agreement concluded for the new thermal power plant Kosovo e Re is expected to impede the development of competition in the wholesale market and the establishment of a day-ahead market.

    The transmission system operator has not yet adopted new balancing rules that should set a framework for market-based and cross-border balancing cooperation. Imbalance settlement is implemented by the transmission system operator since 1 June 2017.

    The regulator adopted Rules on the Publication of Electricity Market Fundamental Data, transposing Regulation (EU) 543/2013 on submission and publication of data in electricity markets. However, data are not submitted to the ENTSO-E Transparency Platform yet. The REMIT regulation is still to be transposed by 29 November 2019. 

  • Retail market

    Retail market

    All customers are eligible to change their supplier in line with a procedure defined in the switching rules adopted by ERO.

    Deregulation of the retail market was again postponed in October 2018. The regulator amended a Guideline on liberalisation of the electricity market in Kosovo* in order to prolong regulation of supply prices, by 31 March 2020 for customers supplied at a 35 kV voltage level, and by 31 March 2021 for 10 kV customers. 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. 

    The supply company KESCO, which is acting also as a universal supplier and a last resort supplier, for a period of three years, is the only active supplier in Kosovo*, out of the seven licensed.

    The Third Energy Package provisions on protection of customers, including vulnerable customers, have been transposed. However, 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. A feasibility study on the implementation of smart metering is currently being developed by the regulator in cooperation with the distribution system operator.

  • Regional integration

    Regional integration

    Regional integration of Kosovo*’s electricity market is pending the resolution of a dispute between the transmission system operators of Kosovo* and Serbia, which is subject to the Ministerial Council’s decision in (Case ECS 03/08) requiring Serbia to rectify the breach of Energy Community law by the end of May 2019, and both Serbia and Kosovo* to make their best efforts to find a solution. Negotiations between Serbia and Kosovo* on this long-standing dispute are stalled. On 7 November 2018, the Kosovo Business Registration Agency registered a supply company Elektrosever, wholly owned by the Electric Power Utility of Serbia, EPS. The registration certificate was corrected in March 2019. Follow-up activities towards licensing of the registered company are yet to be taken. Licensing of a Serbian supplier in Kosovo* is a precondition for the entry into force of the Connection Agreement between ENTSO-E and the transmission system operator of Kosovo*, KOSTT. Until the Connection Agreement between KOSTT and ENTSO-E is in force, EMS will continue to allocate the interconnection capacities. An agreement on past congestion management has also not been finalised.

    The project for day-ahead market coupling of Kosovo* and Albania is expected to be resumed following adoption of Council of Ministers decisions in Albania in May and September 2019, setting the framework for the establishment of the Albanian power exchange. A Memorandum of Understanding on day-ahead market coupling between the transmission system operators and national regulatory authorities of Albania and Kosovo* was signed in August 2018.

    The Law on Electricity 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.

    Amendments to the Grid Code were adopted by the transmission system operator, with the regulator’s approval, transposing the Network Codes on demand connection and on requirements for generators.