Gas

State of compliance

The Energy Law, adopted in June 2018, transposes the requirements of Directive 2009/73/EC and Regulation (EC) 715/2009. The new Law requires that the entire package of relevant secondary acts has to be adopted in the course of one year. Certain existing acts will have to be aligned with the new Law, while a number of completely new acts will have to be developed from the beginning.  
 

  • Unbundling

    Unbundling

    The only licensed gas transmission system operator in North Macedonia, GAMA, is part of a vertically integrated company which does not comply with the unbundling requirements of Directive 2009/73/EC. The State (controlling the entire production of electricity in the country) and Makpetrol, the biggest gas importer and supplier, are the only shareholders of GAMA. MER, although tasked by the State to develop the country’s transmission system, does not hold a license for transmission system operation.

    The new Energy Law foresees ownership unbundling as the only possible transmission system operator model. This solution could solve the long-standing dispute between the State and Makpetrol over the ownership of GAMA assets, which has blocked gas market development in the past.

    The regulator approved the Certification rules for transmission system operation under the Third Energy Package in August 2018, as one of the first secondary acts required by the  new Law.

    Three distribution companies are licensed for supply and distribution system operation, which is compliant with the acquis as they serve less than 100.000 customers.

  • Third Party Access

    Third Party Access

    The Energy Law transposes the general principles of third party access, as well as the missing provisions in regards to refusal of access and exemption for new infrastructure.

    ERC approves both the methodology and the tariffs for access to the transmission and distribution systems. In December 2018, it adopted the Rulebook on Methodologies for Transmission, Distribution and Market Operation of Natural Gas, the distribution tariff methodology and an entry/exit transmission tariff methodology as required by Regulation (EC) 715/2009.

    Capacity allocation rules are covered by two existing secondary acts, namely the Transmission Network Code developed by GAMA (‘the Network Code’) and the Market Rules developed by the regulatory authority. The Network Code provides the possibility for allocation of both firm and interruptible capacity, however, there is no obligation for the transmission system operator to offer both types. According to the Network Code, the TSO may sell annual and monthly capacity1. In case the demand for firm capacity should exceed the available capacity, the TSO is obliged to offer interruptible capacity. A time-interval for such an offer is not prescribed. A provision allowing network users to re-sell or sublet their unused contracted capacity on the secondary market is not included in the Network Code.

    The Transmission Grid Code and the Gas Market Rules transpose the requirements for third party access to services, capacity allocation and transparency, but they have to be aligned with the new Energy Law and with the missing requirements of Regulation (EC) 715/2009. The regulator’s Market Rules envisage the preparation of rules for capacity allocation that are supposed to lead to full Third Energy Package implementation, but such rules have not been adopted yet. Potential overlapping of rules covering allocation of capacity and congestion management should be avoided. Provisions on cross-border capacity allocation, as defined by the Energy Law, must also be taken into account.

    The required information is currently being published in accordance with the methodology for calculation of transmission charges, gas market rules and the transmission network code and relates to the tariff methodology, applicable tariffs, the capacity allocation mechanism and congestion management procedures. The transmission system operator does not publish information as required by Annex I of Regulation (EC) 715/2009.

    i.e. long- and short-term capacity.

     

  • Wholesale market

    Wholesale market

    The gas prices – wholesale and retail – are fully deregulated in North Macedonia. Nineteen licences have been issued for trade, but the market is still illiquid with very few active traders. The main reason is interconnection capacity – the sole interconnector is fully booked by Gazprom on the Bulgarian side. Two traders, Makpetrol, under a long-term contract with Gazprom and Kogel stil, import gas for the wholesale market. In addition to this, several big consumers import gas individually for their own needs, which counts three-fourths of total gas imports. All contracts are made on a bilateral, monthly or yearly basis. There is no virtual trading point, neither functional nor defined, in the transmission system.

    The new Energy Law, the Transmission Grid Code and the Gas Market Rules lay down the balancing rules, including on balancing groups, balancing responsibility and imbalance charges in line with Regulation (EC) 715/2009.

    The existing balancing-related provisions of the Network Code and Market Rules are not fully harmonized, e.g. the tolerance levels differ, and this has to be addressed when updating the secondary acts implementing the new Energy Law.  Several important elements of Regulation (EC) 715/2009, such as the provision on informing the balancing status to network users and the calculation of imbalance charges, are transposed in the Network Code. However, the imbalance charges are not being published, which is not in line with the Third Energy Package.

  • Retail market

    Retail market

    Based on the Energy Law and the Natural Gas Market Rules, all customers became formally eligible as of 1 January 2015, and end-user gas prices are deregulated. At the retail level, there are six active retail suppliers. Gas is mainly consumed by industrial customers, whilst households have an almost negligible share of total consumption, which might be changed in the next years. Namely the Government finalised tenders for a public private partnership to develop the gas distribution system.

    The Natural Gas Supply Rules transpose the main measures for customer protection from the gas acquis, including the procedure for switching suppliers. An additional secondary act defines the last resort supplier which has to be chosen in a tender procedure for a period of five years, as defined by the Energy Law. Promgas, the daughter company of Makpetrol, performs the supply of last resort. 

    There is a governmental programme for subsidizing the consumption of energy where monthly funds partially cover the cost of energy (electricity, heating energy, natural gas and other) for social aid recipients in place. The new Energy Law put the focus on energy vulnerable customers, setting the path for their protection, while more concreate measures and programmes have to be developed within a year by the Ministry responsible for energy in cooperation with the Ministry of social affairs.

    Besides the Energy Law, the Regulation for the Criteria and Conditions for Proclamation of State of Crisis in the Supply of Natural Gas transposed Directive 2004/67/EC. The Regulation has been improved from year to year. In particular, supply standards, as defined by Regulation (EC) 994/2010 and established by a Ministry Decree, provide an additional tool for customer protection.

  • Interconnectivity

    Interconnectivity

    The transmission network has a limited spread, with the sole supply entrance at the Bulgarian border. It has an annual capacity of 800 mln m3, which is still much more than needed to satisfy current demand. However, the development of the country’s internal transmission network is progressing quickly. In the last two years, Macedonia Energy Resources (MER) constructed almost 200 km on top of the existing 98 km. The plan is to construct an additional 140 km over the next two years.

    The transmission system operator, GAMA, jointly controlled by Makpetrol and the State, operates the main transmission and branch pipelines, including the only interconnection point. GAMA has a technical agreement with Bulgartransgaz, which has yet to be aligned with Regulation (EU) 703/2014. In addition, MER, responsible for network development but not having a transmission system operator licence, signed a Memorandum of Understanding with DESFA, the Greek transmission system operator, for the interconnection of the two systems.

    The Regulation for the Criteria and Conditions for Proclamation of State of Crisis in the Supply of Natural Gas established measures and a national communication plan in emergency situations. Communication and cooperation with neighbouring transmission system operators is subject to the voluntary implementation of Regulation (EU) 2017/1938 at borders with non-EU countries, i.e. Contracting Parties to the Energy Community.