Baltic ITC mechanism and the best ITC model
Baltic ITC mechanism and the best ITC model for the Baltic region (Lithuanian TSO opinion) Romas PANGONIS Senior engineer of System Reliability Division National Dispatch Centre LIETUVOS ENERGIJA AB
Current situation with ETSO ITC mechanism (1) 2 • New ITC was not agreed for the period 2007. It is based on IMICA and WWT principles compensation scheme • The regulators do not agree on their advise for the European Commission • Until new ITC will be developed, interim compensation mechanism was not supported by the majority rule (9 votes missing to get a majority) • Currently CBT (Cross Border Trade) compensation scheme is in force until new ITC will be developed, agreed and ratified by all participating countries by majority rule • Baltic TSOs are not participating in ETSO ITC compensation scheme
Current situation with ETSO ITC mechanism (2) 3 • The European Commission takes leadership on ITC subject with technical ETSO and ERGEG assistance • The Commission intends to propose draft guidelines on the ITC mechanism during spring 2007, based on the IMICA method • The intention is to agree on the improved methods for the last three quarters of the year 2007 • Immediate solution should be reached on technical calculations and political judgment • Unified L & G tariff policy in EU is needed
Current situation with ITC schemes in Baltic, Russia and Belarus 4 • Separate agreements for Russian transit with Estonia, Latvia and Lithuania. The initiator of transit always assumed to be Russian TSO. • Separate agreements for the Baltic TSOs initiating energy transmission via Estlink. • Separate agreement for loop flows in Lithuania and Latvia • Double payments for Estlink transmission by paying 330 k. V tariff and transit payment for Estonian TSO • The transit payment does not depend on physical energy flow
ETSO TF ITC activities on implementation Interim ITC mechanism and ITC for the period 2008 5 • 5 separate streams (ad hoc groups) were established for investigation of : – definition of transits, computation of reference exchanges, use of net flows – regional approach – procedures for data collection, number of recorded situations – improvement of the computation of sensitivity factors – loop flows • The intention is the agreement on Interim compensation scheme from the June 1 (July), 2007 • Is it realistic?
Ad Hoc Steering Committee modifications to the IMICA. “Interim Scheme for 2007”. Modified principles to edge and perimeter countries 6 • The injection fee has been proposed the same as Netflow fee (calculated about 1. 4 €/MWh) between participating entities (Injection fee is 1. 0 €/MWh in current CBT) • The injection fee has been charged on both perimeter import and export. (In current CBT only perimeter import is charged) • The injection fee contributions are based on real Flows (CBT contributions are based on scheduled (declared) flows)
Possible Risk of implementation of ETSO ITC mechanism for Baltic’s TSO (Edge TSOs) 7 • ETSO ITC compensation mechanism is mostly developed for central Europe TSO by taking into account low correlation among Edge countries • All computations are based on n-2 year data sets. New participants could face a problem of estimating real compensation with regard to Estlink • Edge TSOs are responsible for real Net Imports and Exports Flows with Perimeter countries (1. 4 €/MWh) considering that these flows do not cause any transits for other TSOs • Implementation of ITC mechanism depends on political decision of existing members of CBT. However, impact of Baltic States will be very low.
Baltic TSO’s activities to agree on BRELL ITC compensation scheme • While implementation of ETSO ITC mechanism is not clear, Baltic TSOs can not fully proceed with ITC compensation mechanism for Russia and Belarus • Certain actions taken and proposals for BRELL (Baltic and Belarusian TSOs) ITC compensation scheme submitted • The analysis of computed results based on 2005 data sets a possibility to implement Interim ITC in Lithuania and maybe all Baltic region. Our comments have been sent to the Chairman of ETSO TF ITC • BRELL working group for ITC issues established
The best ITC model for the Baltic region (Lithuanian TSO proposal) (1) 9 • Regional Baltic TSO ITC mechanism (two-layer agreement with BRELL countries and ETSO TSOs) based on regional approach should be reached • Separate compensation fund for Baltic region (LT, LV, EE) should be established • No cross-border market fee for exports/imports via Estlink. • Compensation among different ETSO ITC mechanism regions should be based on calculated average net flow price • Introduction of G component in tariff (to cover netflow fee in case of export)
The best ITC model for the Baltic region. (Lithuanian TSO proposal) (2) • First layer agreement should be based on principles by extending to 5 accounting blocks: Russian TSO (continental part: North West, Central, Briansk region, and Kaliningrad region) Belarusian TSO Estonian TSO Latvian TSO Lithuanian TSO BRELL ITC fund should be formed depending on hourly transit amounts while block’s contributions depend on net flow for 5 calculated blocks The second layer of the agreement based on ETSO ITC regional proposal should be reached among Baltic countries and determine responsible TSOs transmissions for the other ETSO region 10
Thank You!
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