Present state of ITC in Baltics Kalle Kilk - Konkurentsiamet
Present state of ITC in Baltics Kalle Kilk - Konkurentsiamet
Present state of ITC in Baltics Kalle Kilk - Konkurentsiamet
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<strong>Present</strong> <strong>state</strong> <strong>of</strong> <strong>ITC</strong> <strong>in</strong> <strong>Baltics</strong><br />
<strong>Kalle</strong> <strong>Kilk</strong><br />
OÜ Põhivõrk<br />
OÜ Põhivõrk
Topics<br />
• Current method <strong>of</strong> <strong>ITC</strong> <strong>in</strong> BRELL<br />
• Planned transitional <strong>ITC</strong> mechanism for<br />
BRELL<br />
• Baltic <strong>in</strong>tegration to ETSO <strong>ITC</strong><br />
OÜ Põhivõrk
Current <strong>ITC</strong> <strong>in</strong> BRELL (1)<br />
• Each TSO has bilateral agreements with other<br />
TSO-s whose network is impacted by transactions<br />
orig<strong>in</strong>ated by market participants <strong>of</strong> the first TSO<br />
• The necessity for transit compensation is decided<br />
upon the commercial terms <strong>of</strong> each transaction<br />
contract (po<strong>in</strong>ts <strong>of</strong> energy delivery)<br />
• Russia compensates separately to Estonia, Latvia,<br />
Lithuania and Byelorussia for transit<strong>in</strong>g energy to<br />
Kal<strong>in</strong><strong>in</strong>grad, Lithuania compensates to Latvia for<br />
transit<strong>in</strong>g energy to Estonia etc.<br />
OÜ Põhivõrk
Current <strong>ITC</strong> <strong>in</strong> BRELL (2)<br />
• The transit amount itself is calculated by<br />
comb<strong>in</strong><strong>in</strong>g declared transactions and physical<br />
flows giv<strong>in</strong>g priority to transactions between<br />
neighbours – no physical ground!!!<br />
• Calculation period is one month – very <strong>in</strong>accurate<br />
consider<strong>in</strong>g the volatility <strong>of</strong> power flows<br />
• The amount <strong>of</strong> compensation is a question <strong>of</strong><br />
bilateral agreements and barga<strong>in</strong><strong>in</strong>g skills – no<br />
transparency or unified aproach<br />
OÜ Põhivõrk
Example <strong>of</strong> current calculation method<br />
Fixed<br />
deliveries:<br />
LT-Kg 85<br />
LT-LV 124<br />
LT-EE 39<br />
RU-LT 8<br />
RU-LV 134<br />
LV-EE 3<br />
EE-LV 116<br />
EE<br />
EE-LV 113<br />
LT-EE -39<br />
RU-LV 132<br />
RU-RU 5<br />
LV<br />
LT-LV 124<br />
LT-EE 39<br />
RU-RU -5<br />
Klngrd. 232<br />
LT-Kg 85 LT<br />
RU-RU 147<br />
211<br />
158<br />
83<br />
St. Petersb.<br />
Pskov<br />
RU-LV 54<br />
RU-RU 0<br />
54<br />
2 Pskov<br />
RU-LV 2<br />
RU-RU 0<br />
150 Byelorussia<br />
RU-LT 8<br />
RU-RU 142<br />
RU-LV 78<br />
RU-RU 5<br />
Legend:<br />
Measured<br />
Fixed<br />
Calculated<br />
OÜ Põhivõrk
Why new <strong>ITC</strong> mechanism was needed<br />
• Many flaws to old <strong>ITC</strong> solution<br />
• Regulation 1228-2003 requirements not fulfilled<br />
• New DC connection between Estonia and F<strong>in</strong>land<br />
– direct physical connection <strong>of</strong> Baltic and<br />
European markets<br />
OÜ Põhivõrk
Steps towards new <strong>ITC</strong><br />
• It was decided by BRELL <strong>in</strong> 2005 that a new,<br />
better <strong>ITC</strong> system must be <strong>in</strong>troduced<br />
• A temporary solution for year 2006 was supposed<br />
to be developed<br />
• A complete ETSO <strong>ITC</strong> system would be<br />
implemented with commision<strong>in</strong>g <strong>of</strong> Estl<strong>in</strong>k<br />
OÜ Põhivõrk
<strong>Present</strong> <strong>state</strong> <strong>of</strong> the modified <strong>ITC</strong><br />
mechanism for BRELL<br />
• Temporary solution for BRELL <strong>ITC</strong> up to 2007<br />
accord<strong>in</strong>g to the agreed pr<strong>in</strong>ciples from BRELL<br />
<strong>ITC</strong> TF meet<strong>in</strong>g 15-16.11.2005<br />
• Intra-Baltic <strong>ITC</strong> accord<strong>in</strong>g to the proposal by<br />
Estonian TSO (ma<strong>in</strong> pr<strong>in</strong>ciples agreed between<br />
Baltic TSO-s <strong>in</strong> Nida meet<strong>in</strong>g (21-23.09.2005)<br />
OÜ Põhivõrk
BRELL <strong>ITC</strong> mechanism – 1-st layer (1)<br />
OÜ Põhivõrk
<strong>Present</strong> <strong>state</strong> <strong>of</strong> the modified <strong>ITC</strong><br />
mechanism for BRELL (2)<br />
• Solution not applied due to:<br />
– <strong>in</strong>sufficient time for buid<strong>in</strong>g contractual structure<br />
– <strong>in</strong>ability to agree on prices <strong>of</strong> transit service<br />
– connection <strong>of</strong> Ukra<strong>in</strong>e network to BRELL power<br />
r<strong>in</strong>g<br />
• Earlier transit agreements prolonged for year<br />
2006<br />
OÜ Põhivõrk
<strong>ITC</strong> <strong>in</strong> year 2007<br />
• Full ETSO <strong>ITC</strong> solution must be applied <strong>in</strong><br />
<strong>Baltics</strong><br />
• <strong>Present</strong>ly not clear which will be the details <strong>of</strong><br />
ETSO 2007 <strong>ITC</strong><br />
• Many unsolved issues concern<strong>in</strong>g the special<br />
<strong>state</strong> <strong>of</strong> electrical operation <strong>of</strong> <strong>Baltics</strong> compared<br />
to the rest <strong>of</strong> Europe<br />
OÜ Põhivõrk
<strong>ITC</strong> 2007 uncerta<strong>in</strong>ties<br />
• Exact procedure <strong>of</strong> handl<strong>in</strong>g the Perimeter<br />
Country flows (physical or declared, netted or<br />
not netted, etc.) miss<strong>in</strong>g<br />
• Network cost calculation not described<br />
sufficiently<br />
• How losses are taken <strong>in</strong>to account<br />
• Choice <strong>of</strong> sensitivity factors<br />
• Etc.<br />
OÜ Põhivõrk
Difficulties for apply<strong>in</strong>g simple ETSO<br />
“Perimeter Country” approach<br />
• <strong>Baltics</strong> considerably <strong>in</strong>duce transit <strong>in</strong> the border<br />
areas <strong>of</strong> Russian and Byelorussian grid and this has<br />
to be compensated for as well<br />
• Physical transit amount through <strong>Baltics</strong> is very big<br />
compared to declared transactions end<strong>in</strong>g <strong>in</strong><br />
<strong>Baltics</strong><br />
• Physical transit through <strong>Baltics</strong> exists even if the<br />
<strong>Baltics</strong> are selfbalanced i.e. when there is no<br />
declared export or import from/to <strong>Baltics</strong><br />
OÜ Põhivõrk
Thank You!<br />
OÜ Põhivõrk
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