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Energy and Water Services Regulatory Commission of the Republic of North Macedonia in 2018

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Energy and Water Services Regulatory Commission of the Republic of North Macedonia in 2018 ENERGY AND WATER SERVICES REGULATORY COMMISSION OF THE REPUBLIC OF NORTH MACEDONIA APRIL 2019 ANNUAL REPORT 201 8 Annual Report of the Energy and Water Services Regulatory Commission of the Republic of North Macedonia in 2018 ENERGY AND WATER SERVICES REGULATORY COMMISSION OF THE REPUBLIC OF NORTH MACEDONIA ___________________________________________________________________ The Annual Report of the Energy and Water Services Regulatory Commission of the Republic of North Macedonia for 2018 has been prepared in accordance with Article 36 from the Energy Law, which establishes the obligation of the Energy and Water Services Regulatory Commission to submit the Annual Report for its operation during the previous year to the Assembly of the Republic of North Macedonia, not later than 30th of April of the current year. The Annual Report of the Energy and Water Services Regulatory Commission for 2018 contains detailed information on the performance of the competences according to the Energy Law and the Law on Setting Prices of Water Services, as well as information on the material-financial operation. The Energy Law also determines that the Annual Report of the Energy and Water Services Regulatory Commission needs to be submitted to the Government of the Republic of North Macedonia and the Ministry competent for the performance of the assignments within the energy area, so that they could be informed, as well as to the Energy Community Secretariat. The Report contains overview of the activities performed by the Energy and Water Services Regulatory Commission during 2018, with special review of: − State of the energy markets, − State of the prices and tariffs regulation, − Preparing regulatory acts, − International activities and − Financial Statement of the Energy and Water Services Regulatory Commission. Members of the Commission Marko Bislimoski, M.Sc., President Kushtrim Ramadani, M.Sc., Vice-president Svetlana Janevska, Member Enver Elmazi, Member Panche Orcev, Member Atanasko Tuneski, PhD, Member Natasha Veljanovska M.Sc. Member April 2019 -1- Annual Report of the Energy and Water Services Regulatory Commission of the Republic of North Macedonia in 2018 CONTENTS INTRODUCTION ------------------------------------------------------------------------------------------------- 5 I. ORGANIZATIONAL SETTING OF THE ENERGY REGULATORY COMMISSION-------- 6 II. ELECTRICITY MARKET --------------------------------------------------------------------------------- 9 II.1. General Data on the Power System ---------------------------------------------------------------------------- 9 II.1.1. Electricity Generation Plants ---------------------------------------------------------------------------------------------------9 II.1.2. Electricity Transmission System --------------------------------------------------------------------------------------------- 12 II.1.3. Electricity Distribution Systems --------------------------------------------------------------------------------------------- 14 II.2. State of the Electricity Market --------------------------------------------------------------------------------- 15 II.2.1. Electricity Generation, Sales and Purchase ------------------------------------------------------------------------------ 16 II.2.2. Electricity Consumption ------------------------------------------------------------------------------------------------------- 20 II.2.3. Electricity Purchase for Covering Grid Losses --------------------------------------------------------------------------- 22 II.2.4. Electricity Purchase and Prices for Tariff and Small Consumers ---------------------------------------------------- 24 II.2.5. Trends at the Liberalized Electricity Market ----------------------------------------------------------------------------- 26 II.2.6. Electricity Quality --------------------------------------------------------------------------------------------------------------- 30 II.2.7. Switching Connection Category --------------------------------------------------------------------------------------------- 32 II.2.8. Development and Investment Plans --------------------------------------------------------------------------------------- 33 II.3. Regulations --------------------------------------------------------------------------------------------------------- 35 II.3.1. Tarrif System for Electricity Sales to Consumers Supplied by the US and SoLR -------------------------------- 35 II.3.2. Rules for Electricity Purchase for the Universal Supplier ------------------------------------------------------------- 36 II.3.3. Electricity Supply Rules -------------------------------------------------------------------------------------------------------- 36 II.3.4. Electricity Market Rules ------------------------------------------------------------------------------------------------------- 36 II.3.5. Rules for Electricity Purchase for Covering Losses in the Distribution Grid of Elektrodistribucija -------- 37 II.3.6. Rules for Allocation of Cross-Border Transmission Capacities ------------------------------------------------------ 37 II.3.7. Elektrodistribucija DOOEL Skopje Compliance Program ------------------------------------------------------------- 37 II.3.8. Rules for Electricity Purchase for Covering the Losses in the Electricity Transmission System ------------ 37 II.3.9. Rules for Compensation of Damage Caused to the Producers and Consumers of Electricity -------------- 37 II.4. Certification of the Electricity TSO ---------------------------------------------------------------------------- 38 II.5. Licenses -------------------------------------------------------------------------------------------------------------- 39 II.6. Approval of Electricity Tariffs and Prices ------------------------------------------------------------------- 41 III. NATURAL GAS MARKET ------------------------------------------------------------------------------ 43 III.1. General Data on the Natural Gas Sector -------------------------------------------------------------------- 43 III.2. State of the Natural Gas Market ------------------------------------------------------------------------------ 44 III.2.1 Development and Investment Plans --------------------------------------------------------------------------------------- 49 III.3. Regulations --------------------------------------------------------------------------------------------------------- 52 III.3.1. Amendments on the Rulebook for Natural Gas TSO and DSOs Tariffs ------------------------------------------- 52 III.3.2. Rulebook for Natural Gas TSO, DSOs and Market Operator Tariffs ----------------------------------------------- 52 III.3.3. Natural Gas Transmission and Market Operations Tariff System -------------------------------------------------- 53 III.3.4. Natural Gas Distribution Tariff System ------------------------------------------------------------------------------------ 53 III.4. Licences -------------------------------------------------------------------------------------------------------------- 53 III.5. Approval of Natural Gas Tariffs ------------------------------------------------------------------------------- 54 III.5.1. Tariffs for Natural Gas TSO for 2019 of GA-MA JSC Skopje ---------------------------------------------------------- 54 III.5.2. Tariff for Natural Gas Distribution for 2019 of DTDIZ - Skopje ------------------------------------------------------ 54 III.5.3. Tariff for Natural Gas Distribution for 2019 of JP “KUMANOVO GAS”- Kumanovo --------------------------- 54 -2- Annual Report of the Energy and Water Services Regulatory Commission of the Republic of North Macedonia in 2018 III.5.4. Tariff for Natural Gas Distribution for 2019 of JPED “STRUMICA GAS”- Strumica ----------------------------- 55 III.3.5. Average Monthly Natural Gas Prices in 2018 -------------------------------------------------------------- 56 IV. DISTRICT HEATING MARKET ----------------------------------------------------------------------- 60 IV.1. General Data on the District Heating Sector --------------------------------------------------------------- 60 IV.2. State of the District Heating Market ------------------------------------------------------------------------- 63 IV.2.1. Development and Investment Plans -------------------------------------------------------------------------------------- 68 IV.3. Regulations --------------------------------------------------------------------------------------------------------- 69 IV.4. Licenses -------------------------------------------------------------------------------------------------------------- 70 IV.5. Approval of District Heating Prices --------------------------------------------------------------------------- 70 IV.5.1. District heating prices adopted with Decisions from 30.07.2018, applied as of 01.08.2018 -------------- 70 V. OIL & OIL DERIVATIVES MARKET ----------------------------------------------------------------- 74 V.1. General Data on the Oil Sector -------------------------------------------------------------------------------- 74 V.2. State of the Oil and Oil Derivatives Market ---------------------------------------------------------------- 75 V.2.1. Market Participants ------------------------------------------------------------------------------------------------------------ 75 V.2.2. Production, Purchase and Sale of Oil Derivatives ---------------------------------------------------------------------- 77 V.3. Licenses --------------------------------------------------------------------------------------------------------------
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