Electricity

State of compliance
 

  • Unbundling

    Unbundling

    On 24 April 2018, the national regulatory authority adopted a final decision certifying the transmission system operator following the Secretariat’s positive Opinion submitted to the regulator on 26 February 2018. The transmission system operator is obliged to appoint a compliance officer within six months, and, within 12 months, to initiate amendments to the Law or an enabling regulation to ensure a separation of control in line with the certification decision.

    As regards distribution unbundling, Elektroprivreda Crne Gore (EPCG) established in 2016 a separate legal entity Crnogorski elektrodistributivni sistem (CEDIS) to operate, maintain and own the distribution network and identified its assets, staff and management structure. The regulatory authority has approved the compliance programme of CEDIS and the appointment of a compliance officer. The first compliance report confirmed that the distribution system operator’s behaviour was in conformity with the Law and the compliance programme. Rebranding was done in a compliant manner.

    RAE adopted the rules for the operation of a closed distribution system and the applicable exemptions.

     

  • Access to the system

    Access to the system

    The Energy Law requires network operators to grant non-discriminatory access to the transmission and distribution networks unless the provision of public services is endangered. RAE has developed network tariff methodologies for transmission and distribution system operators.

    The regulator adopted the rulebook on the conditions for construction of direct lines in line with the acquis.

    SEE CAO performs joint capacity allocation for Crnogorski elektroprenosni sistem (CGES) on a yearly, monthly and daily basis for the interconnections with Albania and Bosnia and Herzegovina. CGES applies Rules for Allocation of Interconnection Capacity through annual, monthly, weekly and intraday split auctions of interconnection capacities with the Serbian electricity system.

  • Wholesale market

    Wholesale market

    The generation of electricity is not subject to price regulation.

    The legislative framework needed for establishing the organised electricity market is set by the 2015 Energy Law and the Law on Cross-border Exchanges of Electricity and Natural Gas adopted in 2016.

    BELEN, the company responsible for establishing a power exchange, was set up by the market operator Crnogorski operator trzista elektricne energije (COTEE), CGES and EPCG in August 2017. BELEN is in the process of selecting a strategic partner supported by technical assistance under the WB6 regional energy market connectivity programme.

    The national balancing market is functional. In addition to the incumbent generation company EPCG, who is acting as a balancing service provider, a contract for providing balancing services was signed with an industrial customer. Imbalance settlement is applied to all market participants in a non-discriminatory manner. According to the current methodology, prices of balancing reserves are regulated until a competitive balancing market is in place.

    Regulation (EU) 543/2013 on market data transparency is transposed in a compliant manner by the Rulebook on information provided by the transmission system operator and the manner of submitting and publishing data with electricity market relevance, adopted by the Ministry of Economy in March 2018.

  • Retail Market

    Retail Market

    Only the electricity prices for the four customers connected to the transmission network are not regulated. Customers connected to the distribution network, however, were entitled to regulated supply by the incumbent EPCG until a universal service supplier will be appointed in a competitive procedure not later than 31 December 2016. The government missed that deadline.

    Until the selection of a supplier, the methodology for setting prices for supplier of last resort and vulnerable customers is applied. Regulated prices based on a reference market price of electricity are available to households, small customers, vulnerable customers, and to other customers if left without their supplier. The Energy Law introduced another possibility for end-user price regulation allowing RAE to intervene to prevent abuse of a dominant position. Pursuant to the time schedule for price setting, price increases are restricted to 7% in 2017 and 6% in 2018 for households and small customers

    Overall, the degree of retail market opening in Montenegro is not satisfactory. The rather small and highly concentrated retail market makes supplier switching unattractive and impedes new entrants from entering the supply market.

  • Regional integration

    Regional integration

    The Montenegrin transmission system operator is a shareholder of SEE CAO and the Security Coordination Centre (SCC), which was established together with the transmission system operators of Bosnia and Herzegovina and Serbia in August 2015. Coordinated capacity calculation is still missing.

    The roadmap for day-ahead market integration in the Western Balkans includes coupling projects with all neighbouring WB6 parties and with Italy. No concrete progress has been made yet, since the decision on market coupling depends on the selection of a strategic partner.

    The transmission system operator established cooperation in exchanging balancing energy with the transmission system operators of Serbia and of Bosnia and Herzegovina. Implementation of regional balancing cooperation, including imbalance netting in the first place, is still pending.  

    The Decrees for transposition of the network codes on demand connection, requirements for connection of generators and requirements for connection of HVDC systems were drafted and submitted to the Government for adoption. They are subject to interdepartmental consultations since May 2018.

    The Energy Law allows for the recognition of retail supply licenses of undertakings established and licensed in another Contracting Party or an EU Member State, whereas wholesale supply does not require licensing in Montenegro.