the status of electricity market liberalization in turkey
Transkript
the status of electricity market liberalization in turkey
INOGATE/ERRA Training Programme: Introduction to the Regulation of Electricity Markets June 14-16, 2010 Istanbul, Turkey THE STATUS OF ELECTRICITY MARKET LIBERALIZATION IN TURKEY Fatih Dönmez Commissioner EMRA 1 Content About EMRA Electricity Market: History and Transition New age(2001-2009) Current Status Case Studies Future Prospects Conclusion 2 Fatih Dönmez - EPDK Kurul Üyesi About EMRA 3 EMRA Who is EMRA? EMRA is the sole regulator of electricity, natural gas, petroleum and Liquefied Petroleum Gases Market (LPG) markets in Turkey. What does EMRA do? EMRA; Issues secondary legislation Grants licenses to market players Approves tariffs Monitors, supervises and audits markets and market players What are EMRA’s objectives? EMRA’s main objective is to provide; Financially viable, stable and competitive energy market Fatih Dönmez - EPDK Kurul 4 Üyesi Sufficient energy at good quality ORGANIGRAM OF THE ENERGY MARKET REGULATORY AUTHORITY ENERGY GY MARKET ENER ENERGY MARKET REGULATORY REGULATORY BOARD BOARD 407 personnel in total PRESIDENT PRESIDENT VICE VICE PRESIDENCY PRESIDENCY LEGAL LEGAL DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT OF OF STRATEGY STRATEGY DEVELOPMENT DEVELOPMENT ELECTRICITY ELECTRICITY MARKET MARKET DEPARTMENT DEPARTMENT NATURAL NATURAL GAS GAS MARKET MARKET DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT OF OF TARIFFS TARIFFS DEPARTMENT DEPARTMENT OF OF HUMAN HUMAN RESOURCES RESOURCES AND AND FINANCIAL FINANCIAL AFFAIRS AFFAIRS VICE VICE PRESIDENCY PRESIDENCY PETROLEUM PETROLEUM MARKET MARKET DEPARTMENT DEPARTMENT PRESIDENTIAL PRESIDENTIAL ADVISORS ADVISORS PRESS PRESS ADVISORY ADVISORY LPG LPG MARKET MARKET DEPARTMENT DEPARTMENT DIRECTORATE DIRECTORATE OF OF BOARD BOARD SERVICES SERVICES DEPARTMENT DEPARTMENT OF OF APPROPRIATION APPROPRIATION DIRECTORATE DIRECTORATE OF OF THE THE PRESIDENT’S PRESIDENT’S PRIVATE PRIVATE SECRETARIAT SECRETARIAT SUPERVISION SUPERVISION AND AND CONTROL CONTROL DEPARTMENT DEPARTMENT LIASON LIASON OFFICE OFFICE 5 Fatih Dönmez - EPDK Kurul Üyesi Licensing Process All market activities must be licensed by EMRA Separate licenses are required for each market activity and facility Separate accounts are required: for all licensed activities and facilities for sales to eligible and sales to captive consumers for non-market activities EMRA’s procedure in licensing and share transfer mechanism is very quick and simple. Licensees may ask for land appropriation from EMRA 6 Fatih Dönmez - EPDK Kurul Üyesi Aims in Electricity Markets More private sector presence, Increase in foreign capital investments, Decrease in public sector investment, Increasing responsibility in the protection of environment and the consumers. Electricity prices to reflect costs in a competitive environment Increase in efficiency, Increase in service and product quality, Improvement in availability, Decrease in technical and commercial 7 Fatih Dönmez - EPDK Kurul Üyesi Electricity Market History and Transition 8 Ottomans to Turkish Republic YEAR 1913 1923 THERMAL HYDRO 17.2 32.7 TOTAL(MW) 0.1 0.1 17.3 32.8 • First electricity generation in Turkey (1902 – Tarsus – Hydro – 2kW) • 15 September 1902 ( Tarsus – Adana first electricifiation) •1914 – Istanbul Silahtarağa Coal Plan •Till 1938 – Osmanli Elektrik Şirketi (Concessions based on Act dated1910 ) •Hungarian Ganz, Banque de Bruxelles and Banque Generale de Credite •1 July 1938 – Osmanli Elektrik Şirketi has been nationalized 9 Fatih Dönmez - EPDK Kurul Üyesi Before 1980s / Municipalities Until 1970, electricity generation and distribution was under the control of Municipalities But this was a problem, since municipalities was not effectively using this income for investments and diverting it to other administrative problems 1970 – State owned TEK (Turkish Elektricity Company) has unified all activities (gen., dist, transmission) 10 Fatih Dönmez - EPDK Kurul Üyesi Drivers for Change High Demand Growth Treasury’s financial problems Municipalities lack of intent to divert electricity incomes for new generation capacity Long completion times of new projects 11 Fatih Dönmez - EPDK Kurul Üyesi Electricification of Turkey Rapid electrification between (1970-1989) TEK Generation Distribution Transmission Also DSI (State Water Works) has big projects Keban(1974) Afşin Elbistan A- Lignite (1984) 12 Fatih Dönmez - EPDK Kurul Üyesi BOT (Build Operate Transfer) Turgut Özal’s Formula First BOT - Law 3096 – (1984) “Assigning Investors other than the Turkish Electricity Authority (TEK) for Generation, Transmission, Distribution and Trading of Electricity” Purchasing guarantees with fixed predetermined rates. (Treasury guarantee) 13 Fatih Dönmez - EPDK Kurul Üyesi Failure of the pre 2001 model Highly critized for costs of and expensive purchasing guarantees Accused of incremental effect on electricity prices Problems due to Constitution Electricity as a “public service” becomes a matter of discussion between state institutions Investments couldn’t match demand increase 14 Fatih Dönmez - EPDK Kurul Üyesi New Age (Introducing Regulation: 2001-2009) 15 MILESTONES OF THE TURKISH ELECTRICITY MARKET REFORM Law No 3096 BOT Law (No 3996) BOO Law (No 4283) Electricity Strategy Market Paper Law (No 4628) First Electricity BSR Generation Licenses Start of B&S Market Establishment of EMRA Market opening 29 % 16 Second round of Generation Privatizations Start of distribution Other than privatization residential, all consumers will be eligible to choose its supplier Fatih Dönmez - EPDK Kurul Üyesi Main Focus: The Electricity Market Regulated Activities Transmission Distribution Competitive Activities Retail Sale Generation Retail Market Wholesale Market Captive Consumers Eligible Consumers 17 After Full Competition Fatih Dönmez - EPDK Kurul Üyesi Details of the Electricity Market Structure The market is based on voluntary bilateral contracts with a day-ahead & balancing pool Generators sell power to traders and eligible consumers, directly or via pool. TransCo operates the balancing market that allows buyers to adjust their schedules by buying and selling. The system imbalance price is marginal price of excepted bid and offer prices. Suppliers (Generators, Marketers) Trans TransCo bills network users for use of the grid Co DistCo bills network users for use of the grid Distribution Utility Consumers 18 Fatih Dönmez - EPDK Kurul Üyesi Privatizations and Regions Başkent : 1.2 milyar $ Sakarya: 600 milyon $ Meram: 440 milyon $ Aras: 128 milyon $ Osmangazi: 485 milyon $ Yeşilırmak: 441.5 milyon $ Çoruh: 227 milyon $ Total: 3.5 billion$ 19 Fatih Dönmez - EPDK Kurul Üyesi Electricity Distribution Region Privatizations by the End of 2009 20 Privatized Tender concluded Awaiting tender Fatih Dönmez - EPDK Kurul Üyesi Generation Plants to be privatized has a total capacity of 16 GW out of 24 GW owned by state To be privatized To be privatized Large Hydro Remain state owned Total Small Hydro Number of plants Minimum Installed Cap. Maximum Installed Cap. 21 Fatih Dönmez - EPDK Kurul Üyesi Balancing and Settlement Market The preparations were ready by 2006 On 1st June 2006, a black out happened Affected 14 cities in the western part of Turkey The reason was a shutter however Electricity prices were not cost based Some of the Autoproducer generation capacity (especially Natural gas plants), refused to work at offpeak hours So there need to be a “pool” which prices reflect the costs based on demand and supply availability 22 Fatih Dönmez - EPDK Kurul Üyesi Final – Balancing and Settlement Market Until Day-Ahead Day-Ahead Intra Day-Real time System Operation Electricity Trading 23 Fatih Dönmez - EPDK Kurul Üyesi Current Status (2001-2009) 24 Market Overview 25 Electricity and Natural Gas Sectors “Significant growth in consumption” Cumulative Growth in Demand (%) (2000-2007) Electricity Consumption Natural Gas Consumption 175 141 140 49 China OECD Statistics TURKEY 40 53 India 29 20 World 26 12 EU 9 12 8 OECD average Fatih Dönmez - EPDK Kurul Üyesi Electricity Consumption Non‐OECD TPES per Capita Elec.. Cons. per Capita Turkey World = 1 OECD‐Europe OECD Source: IEA Key World Energy Statistics 2009 27 Fatih Dönmez - EPDK Kurul Üyesi GDP, Energy and Electricity Growth Rates 28 Fatih Dönmez - EPDK Kurul Üyesi Installed Capacity 29 Fatih Dönmez - EPDK Kurul Üyesi Current Situation in Electricity Market Installed Capacity 2009 Electricity Generation 2009 194 billion kWh 44.559 MW Wind 1,7% Hydro 32,4% Oil Products 5,3% Others Domestic 0,4% Coal 19,3% Natural Gas 48,6% Oil Products 3,4% Imported Coal 4,3% Hydro 18,5% Wind 0,8% Natural Gas 36,7% Imported Coal 6,6% 30 Domestic Coal 21,7% Others 0,4% Fatih Dönmez - EPDK Kurul Üyesi Energy Sector “Main Characteristics” Rapid growth in demand: investment challenges and opportunities the role for competitive markets High level of import dependency: further role for development of domestic resources, in particular the renewables diversification Relatively high figures for energy intensity: potential for improvement of energy efficiency (but also linked to the structural issues related to economy) 31 Fatih Dönmez - EPDK Kurul Üyesi Private Sector Generation Investments EMRA granted a total of 821 generation licenses to construct 37.000 MW of installed capacity. Between 2003-2009 12.800 MW of new installed capacity was added to the system. %55 of the 12.800 MW belongs to private sector. Between 2010-2013 an additional capacity of 11.000 MW will be added to the system. 32 Fatih Dönmez - EPDK Kurul Üyesi Electricity Demand Forecast 60.000 400.000 Demand increase rate over 7% p.a. 350.000 50.000 300.000 40.000 30.000 200.000 (GWh) (MW) 250.000 150.000 20.000 100.000 10.000 50.000 - 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Peak Demand (Actual) Electricity Demand (Actual) Peak Demand (High) Electricity 33Demand (High) Peak Demand (Low) Electricity Demand (Low) Fatih Dönmez - EPDK Kurul Üyesi Demand & Investment Requirement 800.000 713.901 700.000 600.000 532.102 GWh 500.000 400.000 377.729 300.000 283.523 200.000 100.000 Investment Requirement by 2030 • Generation 180 – 210 billion USD • Transmission 6 – 7 billion USD • Distribution 7 – 8 billion USD 0 2010 2015 2020 34 2025 2030 Fatih Dönmez - EPDK Kurul Üyesi Transmission Network & Interconnections 2.100 MW BULGARİSTAN DIMODICHEV HABİPLER ÇAYLI TES BABAESKİ HAMİTABAT İKİTELLİ N NA Nİ ST A FILIPPI KAPTAN 1.250 MW YU ALİBEYKÖY A.ALANI D.PAŞA AMBARLI UNIMAR İÇDAŞ KARABİGA İÇDAŞ BEYKOZ PAŞAKÖY EREĞLİ OSMANCA Z.KÖY ÜMRANİYE ADA-GEBZE TEPEÖREN ADAPAZARI ÇAYIRHAN GÖKÇEKAYA BURSA BALIKESİR TUNÇBİLEK ÇAN BOYABAT AMASRA Y.TEPE SOMA KARGI SEYİTÖMER ALTINKAYA KARABÜK ÇANKIRI X TEMELLİ BORÇKA K.KALE DGKÇ 480 MW ORDU-2 İAKSU YUSUFELİ AĞRI SİVAS DEÇEKO KANGAL 170 MW BAZARGAN VAN KEBAN KHOY ELBİSTAN TATVAN İRAN KARAKAYA MANİSA YEŞİLHİSAR KONYA IŞIKLAR HİLVAN YEDİGÖZE YATAĞAN ADANA OYMAPINAR KEMERKÖY G.ANTEP ERZİN VARSAK ILISU SİLOPİ TES DOĞANLI KIZILTEPE CİZRE HAKKARİ ÇUKURCA PS3 Ş.URFA BİRECİK ERMENEK KAYRAKTEPE AKSA BATMAN ATATÜRK ANDIRIN KAVŞAK SEYDİŞEHİR ÇETİN DİYARBAKIR DENİZLİ AYDIN YENİKÖY 110 MW BABEK D.BEYAZIT ERZURUM ALİAĞA IĞDI R HORASAN ÖZLÜCE KAYSERİ KOCATEPE UZUNDERE ERMENİSTAN KARS AKINCI İÇANADOLU DGKÇ GÜRSÖĞÜT GUMRI DERİNER ARKUN KALKANDERE TİREBOLU H.UĞURLU KAYABAŞI GÜRCİSTAN HOPA ARTVİN HİSAR GÖLBAŞ I BATUM SAMSUN TES CENGİZ SAN-SEL TES SAMSUN DGKÇ BORASCO ÇARŞAMBA BAĞLUM SİNCAN 240 MW BLACKSEA SİNOP TES AKFEN ZAKHO KESEK MERSİN İSKENDERUNİSDEMİR IRAK TEİAŞ-APK 2008 TS (PLANLANAN) HATAY HALEP 850 MW MEDITERRANEAN SURİYE TS (MEVCUT) HES (PLANLANAN) HES (MEVCUT) TL (MEVCUT) TL (PLANLANAN) 220 kV EİH 154 kV EİH 35 Fatih Dönmez - EPDK Kurul Üyesi Tariffs’ Regulation Activity Method Transmission Revenue Cap Distribution Hybrid (Revenue & Price Cap) Retail Price Cap 36 Fatih Dönmez - EPDK Kurul Üyesi Strategy On Electricity Non-residential consumers will be able to be eligible consumers by the end of 2011. Full market opening by the end of 2015 all consumers will be eligible consumer. Legal unbundling of Distribution Companies will be completed by the end of 2012. Completion of distribution privatization in 2010. Commencement of generation privatization in 2010. 2023 Vision in Power Sector Exploitation of known lignite and charcoal reserves Achieving 30% share for renewables in generation Full utilization of economical hydroelectric potential Reaching 20.000 MW wind capacity Fatih Dönmez - EPDK Kurul 37 Üyesi Commissioning all of geothermal potential (about 600 MW) Renewable Incentives Law (nr. 5346) on Supporting Renewable Electricity Generation Purchasing guarantee thru a feed in tariff for all renewable sources: A guaranteed price in TL equivalent to 5 – 5.5 €cent/kWh Purchasing obligation on retailers according to respective market share through bilateral contracts Duration: 10 years Land appropriation issues: on the lands owned by Forestry or Treasury: 85% deduction in fees for land usage Prospects for future Differentiated pricing among renewable sources: Higher FIT for solar Dönmez - EPDK Kurul 38 Differentiated purchasing obligation: “A renewableFatihpool” Üyesi Wind Atlas 39 Fatih Dönmez - EPDK Kurul Üyesi Geothermal Atlas 40 Fatih Dönmez - EPDK Kurul Üyesi Solar Atlas 41 41 Fatih Dönmez - EPDK Kurul Üyesi Renewable Potential Power Generation Source Potential Under Construction Hydro 35,000 MW 6,300 MW 14,617 MW Wind 48,000 MW 636 MW 912 MW Solar 32.6 MTOE - - Geothermal 600 MW 20 MW 94 MW Biomass 10.6 MTOE 13 MW 87 MW 42 In Operation Fatih Dönmez - EPDK Kurul Üyesi Case Studies 43 Problem of Low “Licence to Realization” Total EMRA Electricity Generation Licences 37.000 MW For new plants since 2003 However, total generation capacity has grown from 35500MW to 44700 MW (~9000 MW) 6215 MWs of these are from the private sector However YoY increase in 2009 has been around 3200 MW Licence trading: Some consultancy companies has received licences but instead of investing, they are more interested in trading the licences. Lack of (equity) capital is a major problem 44 Fatih Dönmez - EPDK Kurul Üyesi Wind Applications 1 November 2007, EMRA opened application of Wind plants (New round of applications) There were around 78000 MW of applicants However Turkish Transmission Company (TEIAS) thinks there is only 15000 MW of capacity to handle wind Strategy Paper states “20000 MW of Wind by 2023” The applications to be finalized in 2010 with a round of biddings for transmission capacity reservations 45 Fatih Dönmez - EPDK Kurul Üyesi System Operation (DUY-Balancing and Settlement B&S) Balancing and Settlement Market has provided a medium for investors to sell their electricity at higher rates. For example: Feed-in Tariff for Renewables was 5.5 €cent Most of the investors achieved no less than 7€cents at System Marginal Price B&S However due to economic crises in 2009 these prices drop to 5€cents) 46 Fatih Dönmez - EPDK Kurul Üyesi Generation Privatization Capacity (MW) 3,677 12 524 148 16 349 Assets Count Privatization Model Timing Thermal 18 Hydro 27 Run of River 56 Total 101 Block asset sale of thermal power plants Transfer of Operation Rights (ToOR) of hydropower plants Started in 2010 Largest in Europe 47 Fatih Dönmez - EPDK Kurul Üyesi Distribution Privatization Figures for 2009 160 billion kWh electricity distributed 30 million users %13 technical & nontechnical losees 13 17 14 Distribution Regions - Tendering amount 5.1 billion $ - Private companies operating in 5 regions (21 provinces) 21 15 12 -Privatization tenders completed for 11 regions amounting 56 provinces 9 4 6 16 11 19 8 10 5 18 20 Tendered 3 2 Privatized 1 7 To be tendered 48 Fatih Dönmez - EPDK Kurul Üyesi Privatized Generation and Distribution Companies Distribution Privatization Problems on inspection Tariff problems Customer Services Generation Very very competitive rounds Most of the Hydro Plants achieved more than 3000$/kW Will this affect electricity prices? How? 49 Fatih Dönmez - EPDK Kurul Üyesi Resistance to Retail Competition Electricity companies are resisting to retail competition on the bases of 1.Income distortion 2.Distco: “We need more time”. Transition period should be longer. EMRA decreased the eligible customer limit to 100.000 kWh for 2010 Eligible Customer Limit Year kWh 2006 6,000,000 2007 3,000,000 2008 1,200,000 2009 480,000 2010 100,000 50 Fatih Dönmez - EPDK Kurul Üyesi Current and Planned International High Voltage Interconnections BULGARİSTAN BULGARİSTAN 145 km 1510 MVA 136 km 995 MVA GÜRCİSTAN 28 km 287 MVA YUNANİSTAN 260 km 1510 MVA GÜRCİSTAN Tiflis ERMENİSTAN ERMENİSTAN 80,7 km 574 MVA NAHÇİVAN 87 km 2x132 MVA Erivan IRAN 73 km 204 MWA 100 km 581 MVA TÜRKİYE Tebriz IRAK YUNANİSTAN SURİYE 124 km 1005 MVA 400 kV 400 kV Under Construction 220 kV 154 kV 42 km 408 MVA KKTC SURİYE KIBRIS RUM KESİMİ 51 Fatih Dönmez - EPDK Kurul Üyesi Interconnections with Neighbour Countries Electricity Imports from Georgia Azerbaijan Greece Turkmenistan Iran (to be started by 2010-2011) Electricity Exports to Georgia Greece Azerbaijan Iraq Syria In terms of imports Iran is very popular. In exports Iraq is the leading country Also Turkey is aiming to join UCTE by the end of 2010 52 Fatih Dönmez - EPDK Kurul Üyesi Consumer Services There is a regulation for Electricity Consumer Services Call center Reponses to failures Quality of services There are still a long way to go in terms of Customer Services. With the new amendment to 4628 Electricity Market Law the metering issues will be clarified (Who owns the meters? Distco or Customer) 53 Fatih Dönmez - EPDK Kurul Üyesi Environmental Problems Not in my backyard! Hydros in the northwest is very unpopular among indigenous people Coal plants are generally a matter of revolt by NGOs and local people Nuclear: There is a very powerful resistance People may be right Some hydro constructions have been very damaging The amount of water left for the people has been recently regulated. (Sustainability) There are many court orders against constructions 54 Fatih Dönmez - EPDK Kurul Üyesi Future Prospects 55 New Regime after 2010? A new amendment is in the Ministry There are changes EMRA may be divided into two ( Electricity&Gas vs Oil) New Licence regime (Supplier License) Preliminary Licensing (Two staged Licensing, License will not be given until the necessary permissions are fulfilled) The owner of the meter (Distribution) Türkiye Elektrik Piyasa İşletim A.Ş – Electricity Market Operator Ancillary Services 56 Fatih Dönmez - EPDK Kurul Üyesi Solar PV Applications Turkey is one of the leaders in Solar Thermal Panels There is around 12 million meter2 of panels (For Hot Water only - Estimated) Growing interest in PV and CSP However FIT for all renewables is 5-5.5€cent Too much interest Lobbies, pressure groups Expected to have similar applicant volume as the wind licence applications under the proposed regime (if FIT is adjusted to 24 €cent) 57 Fatih Dönmez - EPDK Kurul Üyesi Smart Grid There are several demo projects Still the understanding is “remote metering” However, stake holders should be aware that “Demand Control” is very important 58 Fatih Dönmez - EPDK Kurul Üyesi Electric Cars The oil products’ taxes in Turkey is very high. Previously a rapid transition to LPG from gasoline has been observed. In 2009, LPG consumption exceeded gasoline for the first time. Same dynamics may alter the transportation regime 59 Fatih Dönmez - EPDK Kurul Üyesi Conclusion Turkey has gone a long way since market reform But there are many things to be done Retail competition More consumer based regulation (such as vulnerable consumer) Extending Renewable FIT New challenges (Smart Grid, microgeneration, electric cars) Increasing diversification hence energy security Energy efficiency and savings to be made Integration to European Market More environmental regulation 60 Fatih Dönmez - EPDK Kurul Üyesi 61 Fatih Dönmez - EPDK Kurul Üyesi www.epdk.gov.tr 62