What will the new Regulatory policy 2012 – 2016 bring?

Week in Slovakia

Case: The new Regulatory policy 2012 – 2016

Two weeks ago the Regulatory Office for Network Industries (ÚRSO) proposed the newest version of the proposal for the new Regulatory policy for the period 2012 – 2016. What will the new policy bring was one of the major topics at the SPX conference in Starý Smokovec.

Compared with the previous proposal, the current approved version was updated with a chapter in which the regulator evaluates the ending period. „The Office evaluates its work highly positively”, state Branislav Sušila from Východoslovenská energetika and also adding that at some parts it creates a feeling of tendentiousness. 

Regulatory period for 5 years

The main point of departure of the new regulatory policy will be the 5-years regulatory period. On the other hand, another important issue is the extent to which changes will be made in the primary and other legislative. The frequent changes in the regulatory rules were a thorn in the eye of many energy companies in the past as they negatively influence business in the trading sector and at the same time they act as a brake to new investment.

„Price cap” method

The new regulatory policy prefers the „price cap” method, which is based on setting price ceilings. The reference year for setting prices for electricity transmission will be the year 2010 (for the period since 2012) and it will be set according to a number of coefficients and factors:

• coefficient JPI-X
• investments
• quality standards
• revenues for connection and over crossing the reservation capacity
• costs for fulfilling duties etc.

In case of electricity distribution, the reference period will be the previous regulatory period. In the field of systemic and supporting services, the Regulatory policy wants to create conditions that would secure their functioning a creation based on market mechanism. It also counts with creation of differentiated tariffs for big consumers.

In the natural gas sector a modified method of „price cap” will be introduced. The price for transmission will be created according to evaluation and comparison with the prices in the neighbouring countries („benchmarking”) and the price for connecting to the transmission or distribution network will be counted according to real costs, which are connected with this act.

Deregulation

It is being discussed whether the segment of small enterprises will remain regulated even after 2012. In case of households, the new regulatory policy introduces a trend of gradual deregulation of the price of the commodity component. Price for power electricity is one of the categories, which together create the end price. Power electricity accounts for more than 40 % of the end price.

Changes in renewable energy support

The new regulatory policy should also bring changes that will influence the way how renewables are supported, but also the installations that use combined electricity and heat production. First of all it new policy will set fixed prices for feed-in tariffs based on individual energy sources, whether it is solar or wind etc. The capacity will be also limited according to the reliability of the source.

Furthermore it  will also change the way of supporting RES energy production by giving the  distribution companies the freedom not to buy all the electricity. According to the new regulatory policy, the RES electricity will be bought in by one single subject on the market.

Branislav Sušila (Východoslovenská energetika) presented the new Regulatory policy 2012 – 2016 at the spring conference SPX that took place on 19 – 20 May in Starý Smokovec

Monday – 23rd May 2011

Conference SPX: The system of how deflections are accounted within wholesaling with electricity is not good. Representatives from the traditional electricity supplying companies all agreed on this fact. For example Stredoslovenská energetika pays a lot for the deflections, which is caused primarily by the system that is base on a 15-minute clearing period. The change from the previous one hour interval to a 15 minute one caused that the price for deflection increased by 20 % and this is reflected nowhere else than in the end price for customers. The Spring conference SPX took place on 19 – 20 May in Starý Smokove and energia.sk was the media partner.

The city district of Bratislava, Nové Mesto collected almost three tons of electric waste. Almost half of it were old televisions, the second biggest group were refrigerators. The waste will be further recycles and will not end at a traditional waste disposal. Last year during the spring and autumn collection the amount was almost 10 tons.

Chief of the Regulatory Office Jozef Holjenčík believes that the chairman of parliament and leader of the party SaS Richard Sulík has some commitments toward the business lobby and thus he tries to get rid of him from the function. Therefore Sulík wants to change the regulatory law.

Tuesday – 24th May 2011

A private investor company wants to build a small hydro-power plant on the river Váh near the town Liptovský Ján. The realisation costs should be approximately 3 million Euro. The total installed capacity of the small power plant should be no more than 0,68 MW. The proposal counts with two alternatives, the first one would be a derivation type plant able to generate 2.710 Mwh of electricity a year or a hydro power plant with a sluice gate generating 3.455 Mwh of electricity per year. The construction should be finished in 2014.

Inspectors from the State energy inspections carried out more then 500 controls last year. The inspectors issued fines worth of 144 thousand Euro to those subjects that were inspected. During the controls they have discovered at least 400 cases where some energy regulations were being breached. Most of the cases when some rules were infringed were in the heating sector.

Wednesday – 25th May 2011

The subsidiary company of Slovenský plynárenský priemysel (SPP) Eustream plans to invest 400 million Euro until 2015 into new devices and ecological technologies. Another subsidiary company of SPP, SPP – distribution plans to invest into maintenance of transmission networks around 90 million Euro. SPP also informed that until 2013 they would like to build a small geothermal power plant with a total installed capacity of 3,5 MW in eastern Slovakia.

Producer and supplier of heat a hot water in Prešov has initiated a project of building another boiler house that would burn wooden residues. The new heat source should supply 3.890 flats in the city part Sekčove. In the second period in 2012 it should also provide heat to additional 3.000 flats. The total installed capacity will be 8 MW. When both of the construction periods will be finished, the total amount of sold heat per year will be 40.000 MWh.

According to the Regulatory Office of Network Industries (ÚRSO), Slovak electricity market is fully liberalised, opened to all participants of the market and has sufficient transmission capacities.

Experts from the European Commission do not consider the in media discussed oil pipeline via Žitný ostrov: Družba – Swechat as a strategical one from the perspective of energy security of Slovakia or European Union. Members of the working group marked it as „commercial”. The information was provided by a well informed source from the oil industry to energia.sk. In practice it means that the project will not be eligible to apply for a possible financial support from public sources or those by which the EU supports projects that strengthen energy security. According to the source, the information will be soon published officially and it will also propose to Slovakia that in order to increase energy security of the country, it should focus on increasing the capacity of pipeline Adria or by a reverse flow with Czech Republic.

The company Transpetrol, a.s. will pay the state dividends for last year worth of 10,3 million Euro. It will happen for the first time since 6 years, when the company was not able to pay the dividends due to a court decision. Since March 2004 Transpetrol was not allowed to pay dividends as a result of a court decision based on the dispute around a group of businessmen connected to the person of Ignác Ilčišin that were claiming a 34 % share in the company.

Thursday – 26th May 2011

The Nuclear and Decommissioning Company (JAVYS) is thinking about locating the radioactive waste storage at three different places, Jaslovské Bohunice, Veľké Kostoľany and Kalná nad Hronom. Currently all three alternatives are being evaluated and analysed what would their impact be on environment. This storage place should only be a temporary one for the waste until it is transported to the place of permanent storage. JAVYS preference is Jaslovské Bohunice.

Minister of Economy Juraj Miškov is confident that the project of the oil pipeline connection between Slovakia and Austria is a benefit for Slovakia. After it will be finished, the state budget could count with additional 15 million Euro. Miškov also believes that construction works on the pipeline could start next year.

Friday – 27th May 2011

SPP confirmed that it still wants to increase prices for natural gas for households this year. Twice. On 1st July by 8 % and 1st September by almost 21 %. The company has already submitted a price proposal to ÚRSO. The main reason behind the decision is the increasing price of oil on world markets. The current price is 40 % higher than it was projected in the previous price settings therefore SPP had to react. ÚRSO did not comment on the issues, but the decision should be known by 6th June.

Nuclear and Decommissioning Company (JAVYS) will have to invest into expanding the republican deposit for storing low and medium radioactive waste and into building new storage capacities for very low radioactive waste due to the fact that the reactor V1 will be shut down earlier. The total investment should be 27 million Euro. The deposit is located in Mochovce.

The company Západoslovenská energetika (ZSE) opened its first recharge station for electromobiles in Bratislava. However, it will not be accessible for the public. First the company wants to test it internally and then open it. Next week Východoslovenská energetika will open a second station in Bratislava. Until the end of this year ten more stations should be opened in Bratislava. The stations are being installed under the heading of VIBRATE project that should secure a connection of stations between Bratislava and Vienna.

French company Corys has won the contract with Slovenské elektrárne, a.s. to renovate the training simulators in the first and second block of the nuclear power plant Mochovce and in the power plant V2 in Jaslovské Bohunice. The multimillion worth projects should be finished by 2013.

The chalet by Zelené pleso (Green mountain lake) in High Tatras should have a new energy source in form of a small hydro-power plant. Currently the chalet is generating electricity with a diesel generator. The project proposal came as a reaction to the successful installation of a solar power plant on Téryho chalet. The power plant should have a total installed capacity of only 10 to 15 kW. Changing the diesel generator for a hydro power plant would save 150 litres of diesel every week.

K téme