Focus on Energy, 2010 - Karanovic & Nikolic

opening of the energy market. The existing regulated tariffs which are valid for all customers are notcost reflective and provide no incentive for customers to switch suppliers or for potential investors toenter Serbian electricity markets. The new electricity generation projects consisting of two lignite-basedthermal power plants and gas fired combined heat and power plant (“CHP”) are progressing. The investmentsin the new interconnections and in the transmission networks are progressing as planned.With regard to gas, some crucial provisions of the EC Directive 2003/55/EC 23 have not still been fullytransposed. The amendments to the Serbian energy law were supposed to transpose all of the missingprovisions of the gas related acquis communnautaire as was agreed in the Treaty establishing the EnergyCommunity. However, analyses of the draft amendments have shown that there are still crucial provisionsmissing with regard to the EC Directive 2003/55/EC and even more in respect to the EC Directive2004/67/EC and EC Regulative 1775/2005. 24Environmental legislation and the practical implementation of such legislation also requires further improvementsfor it to comply with the acquis communnautaire.With regard to competition legislation, 2009 brought significant progress. The new Serbian law on competition25 was adopted in November 2009. It has introduced more efficient procedures. Furthermore,the thresholds for merger controls are now higher. This provides the commission with more capacity topursue merger control, cartels and abuse of dominance cases.12The legal framework for promoting renewable energy sources has to advance further in order to attractinvestors to tap into the Serbia’s great renewables potential.The Energy Sector Development Strategy of the Republic of Serbia 26 highlights five key priorities:FOCUS ON ENERGYergyinstallations);within the domestic energy sectors, as well as within the frameworks of the existing regional infrastructuresystems.KosovoIn 2009 the three basic laws of the energy sector of Kosovo were brought back to the legislature forredrafting. The objective was the achievement of full compliance with the requirements of the Treaty.These Kosovo laws are the law on energy 27 , the law on electricity 28 and the law on the energy regulator 29 .These drafts were submitted to the Secretariat for comments on a number of occasions. Improvementsof some key elements are expected including the treatment of the regulatory authority the Energy RegulatoryOffice of Kosovo with respect to its powers, responsibilities and its financial and operationalcapacity. In addition it is hoped that this legislation will improve the functional structure of the marketenvironment, provide the conditions needed for the achievement of much needed security of electricitysupply, customer rights, customer protection and quality of service, the opening of the market to competitionand the monitoring of obligations.After the unbundling of the transmission system operator (“KOSTT”) in 2006, the “Kosovo EnergyCorporation” is currently undergoing further legal unbundling into two separate corporate structures – a23 Previously defined.24 Each previously defined.25 The Law on Competition (“Official Gazette of the Republic of Serbia” No. 51/2009).26 The Energy Sector Development Strategy of the Republic of Serbia dated May 2005.27 The Law on Energy No 2004/8, published in the „Official Gazette of Kosovo“ No. 22.28 The Law on Electricity No. 2004/10, published in the „Official Gazette of Kosovo“ No. 29.29 The Law on Energy Regulator No 2004/9, published in the „Official Gazette of Kosovo“ No. 22.