industrial energy consumers forum (ief) hungary
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Industrial Energy Consumers Forum (IEF) Hungary. Electricity Market Liberalization in Hungary 10 September 2003, Prague. IEF – Industrial Energy Consum ers’ Forum. IEF: a not-for-profit NGO Date of establishment: March 2000 Legal form: association (of public interest) - PowerPoint PPT PresentationTRANSCRIPT
Industrial Energy Consumers Forum (IEF) Hungary
Electricity Market Liberalizationin Hungary
10 September 2003, Prague
2AEM/SVSE – Česká energetika ve Sjednocené Evropě
IEF – Industrial Energy Consumers’ Forum
IEF: a not-for-profit NGODate of establishment: March 2000Legal form: association (of public interest)„Scope of authority”: network energy (natural gas, heat & electricity)Target group: non-household sector
3AEM/SVSE – Česká energetika ve Sjednocené Evropě
Leading Members
4AEM/SVSE – Česká energetika ve Sjednocené Evropě
The Approach
1. The Market Background
2. The Electricity Act No. CX of 2001
3. New Market Structure & Mechanism
5AEM/SVSE – Česká energetika ve Sjednocené Evropě
1-1 Electricity flows (GWh in 2002)
GROSSPRODUCTION
35 976
NETWORKLOSSES
4 328
EXPORT3 367
IMPORT7 624
ESCsRETAIL SALES
32 621
HOUSEHOLDS10 560
COMMUNAL6 884
PRODUCTIVE16 018
MVM
Public34 256
IPPs1 720
6AEM/SVSE – Česká energetika ve Sjednocené Evropě
1-2 Physical Flows (GWh in 2002)
7AEM/SVSE – Česká energetika ve Sjednocené Evropě
1-3 Ownership Structure
RWE
MOL
MVM
ATELAES SummitCroesus
Suez-Lyonnaise
(Electrabel)Electricité de
France
Gaz de France
E.ON
ENISNAM/Italgas
Trans-elektro
DÉGÁZ
DDGÁZ
ÉGÁZ
KÖGÁZ
TIGÁZ
FÕGÁZ
GM/ÁPV
Hungarian State
Ruhrgas
TITÁSz
DÉMÁSz
DÉDÁSz
ÉMÁSz ELMÜ
ÉDÁSz
Bakony
VértesPaksDuna-menti
Budapesti Pécs Tisza Csepel
Mátra
Debrecen
Ownership structure of Hungarian Energy Industry
Transmission
Sales
Storage
MAVIRISO
OVITTrans-
mission
EnBW
8AEM/SVSE – Česká energetika ve Sjednocené Evropě
1-4 Consumers’ Expectations
IEF – Accenture market survey conducted in early 2001
51 large electricity and/or natural gas consumerSectors: metallurgy, metall processing, chemical/pharma industry, food industry, transportation, packaging, building material, power plants, utilities, etc.
(charts: electricity on the left, NG on the right)
9AEM/SVSE – Česká energetika ve Sjednocené Evropě
1-4 Survey (1) Starting dateConsumers would like to see the earliest possible date, which allows a well-based market opening up.
• 1 January 2002 for electricity (with no reservation)
• the earliest date to achieve price advanteges and quality improvement
• 1 January 2002 for natural gas too (but following accelerated preparation)
• the earliest date to achieve improved quality and eventual price advanteges
10%
67%
8%
15%
1 July 2001
1 January 2002
Other date
EU-accession date
10%
52%
16%
19%
3%
• year beginning date, anyway
10AEM/SVSE – Česká energetika ve Sjednocené Evropě
1-4 Survey (2) Short-term electricity pricesMajority prognosticates price decrease between 0-15% on short-term.
• in real terms, incl. inflation, price rises for primary energy sources, and network fees
• more pessimistic, than the preliminary modelling suggested (15-40%)
53%
26%
3%
5%
10%3%
Between 0-10%
Between 10-15%
Between 15-20%
Above 20%
0%, or no decrease
No reply
11AEM/SVSE – Česká energetika ve Sjednocené Evropě
1-4 Survey (3) Long-term energy pricesUncertainty regarding the long-term prices.
• primary energy source prices and inflation in the background of increased price prognoses
• competitive market forces in the background of price decrease prognoses
• world market price trends in the background of increased price prognoses
• competitive market forces in the background of price decrease prognoses
44%
38%
18%
Increase
Decrease
No change
45%
29%
26%
12AEM/SVSE – Česká energetika ve Sjednocené Evropě
1-5 Industrial Electricity Prices (USD/MWh)
Source: OECD-IEA, RAO UES
Country 1998 1999 2000 2001 2002
Austria 78 57 38 n/a
France 47 44 36 n/a
Germany 67 57 41 n/a
UK 65 64 55 48
Russia 25 12 14 n/a
USA 45 39 40 42
Czech Republic
52 48 43 43
Hungary 56 55 49 51 60
13AEM/SVSE – Česká energetika ve Sjednocené Evropě
2-1 Hungarian prelude to liberalization…
July 1999 Governmental Resolution No. 2199/1999 (Basics of Energy Policy & Market Model – MEA document)
March 2000 Government submits the draft Act on Electricity (>100 GWh/yr » 2001. I.1.)
May 2000 Draft Act debate halted in the Parliament
October 2000 MEA/HEO information on the market opening up(>19 GWh/yr » 2002. I.1.)
September 2001
New draft submitted
18 Dec. 2001 New Electricity Act (>30%? » 2003.I.1.)
14AEM/SVSE – Česká energetika ve Sjednocené Evropě
2-2 Act No. CX of 2001 on Electricity
A framework lawRTPA, ISO, HEO, dual market, balance groups, import limits
Detailed rules in:Eligible consumersImporting rulesStranded (transitional) costsCommercial Code & ISO Code
Gov’t & ministry orders
15AEM/SVSE – Česká energetika ve Sjednocené Evropě
2-3 Double Market Structure
Protected/captive consumers
Import
Eligible consumers
Traders
Power Plants
MVM as Public Wholesaler
Regional Public Electricity Suppliers
MarketableBinded for Public Purposes
16AEM/SVSE – Česká energetika ve Sjednocené Evropě
3-1 Traders & Their Backgrounds/ClientsMagyar Áramszolgáltató
(RWE)
System Consulting
D-Energia(EdF)
Entrade(ATEL)
Áramkereskedelmi Kft(E.on Hungária)
MVM Partner(MVM)
Ukrainian Contracts
Paks NP, Vértes PlantPPAs + imports
Budapesti Power Plant+ imports
Debrecen CCGT+ imports
Mátra Power Plant
Csepel Power Plant+ imports
MAL Rt, MOL Rt
???
???
GE Lighting
BorsodChem
MVM
17AEM/SVSE – Česká energetika ve Sjednocené Evropě
3-2 Import ATC (Q1-Q2 2003)150 MW
150 MW
450 MW
18AEM/SVSE – Česká energetika ve Sjednocené Evropě
3-3 Domestic CapacitiesLimits to market opening:
Regulated generation prices till 2004 Gridlocked PPA portfolio Import limitation (50%) till EU-accession Potential import refusal + ATC issues
Fair competition rules and network access, without real supply choice ?Actually available: 300 MW (from which competitive: 200 MW)
19AEM/SVSE – Česká energetika ve Sjednocené Evropě
3-4 (Future) Capacities
Import ATC auctions (by MAVIR ISO) Domestic capacities:
already marketable (partially competitive) renegotiated PPAs (hardly) MVM auction sales of unnecessary (for public purposes) power
Capacities should catch-up with demand
20AEM/SVSE – Česká energetika ve Sjednocené Evropě
3-5 Demand Side
Eligible consumers:
> 6,5 GWh/year = cca. 300 companies
(33%)
> 100 GWh/year 20 companies (20%)
> 10 GWh/year 140 companies (10%)
21AEM/SVSE – Česká energetika ve Sjednocené Evropě
3-6 Contracts Power (commodity) contracts
non-scheduled full supply non-scheduled partial supplies schedule based
Balance Group contract Network access & usage contracts
Switching: 30 days termination notice until 1 July 2003, then 6 months – co-operative former suppliers
22AEM/SVSE – Česká energetika ve Sjednocené Evropě
3-7 Hungarian Co. considerations (1)1/ Price Sensitivity 2/ Damage/risk Sensitivity
Maintaining Environmental issues competitiveness Own plants
EquipmentsSupply/sales to customers
Price level Quality
3/ Client Service
23AEM/SVSE – Česká energetika ve Sjednocené Evropě
3-7 Hungarian Co. considerations (2)
Dependence & Rigid Prices
Flexibility & Risk Management
Trading freedom
direct market access: OTC, PX
portfolio management
structured purchase of partial quantities
partial supply contract
full supply contract Price uncertainties
24AEM/SVSE – Česká energetika ve Sjednocené Evropě
3-8 Current Power Contracts (1) BorsodChem (700 GWh)
IPP (40 MW) + partial supply contracts with Entrade in February
Hungarian Aluminium (750 GWh) two plants – two contracts with E.on from March
GE Lighting (180 GWh) full supply for 6 plants with MVM Partner from April
Ózd Metallurgy (300 GWh) imports on its own
51 consumers, representing 5,7 TWh (18%) on the market
25AEM/SVSE – Česká energetika ve Sjednocené Evropě
3-8 Current Power Contracts (2)Hungarian Co. Prices (HUF/kWh)
6789
101112
Q4
1998
Q1-
2 19
99
Q3-
4 19
99
2000
2001
2002
Q1-
2 20
03
Q3
2003
Public SupplyMarket
Free market prices are 5-15 % below the monopol prices (HUF 11-12)
26AEM/SVSE – Česká energetika ve Sjednocené Evropě
3-8 Summary
Electricity Market in September 2003:
After the market opening up, but before the real competition yet
27AEM/SVSE – Česká energetika ve Sjednocené Evropě
Ipari Energiafogyasztók Fóruma - 1137 Budapest, Jászai Mari tér 6.
Telephone: (+36-1) 237 1380 Telefax: (+36-1) 359 6440
Ipari Energiafogyasztók Fóruma - 1137 Budapest, Jászai Mari tér 6.
Telephone: (+36-1) 237 1380 Telefax: (+36-1) 359 6440
Thanks for your kind attention !
Visit our homepage: www.ief.hu +www.energia.lap.hu
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