Serbia: Electricity traders guide for new market entrants, existing traders and their market challenges

, News Serbia Energy

There are many international electricity trading companies established in Serbia since local legislation requires establishing of local company for any electricity trading and transiting activity. Licence for electricity trading is at the same time licence for electricity supply (BRP contract with TSO grid operator EMS must be signed). Serbia is very important for electricity transiting and bilateral trading between trading companies since it represents a trading hub of the region due to bordering with eight countries.

In order to perform electricity supply in Serbia, several conditions must be met

– Company is registered in Serbia (APR) commercial registration office

– Company obtained license for electricity supply from Energy regulator (AERS)

– Company has valid EIC code issued by EMS TSO grid network company

– Company has signed Balance Responsibility contract with (EMS)

One of the obstacles in this process is amount of bank guarantee/deposit, which is determined by EMS, based on EMS risk assessment formula (minimum 50 000 EUR, max 1 000 000 EUR). In addition, difficulties related to obtaining necessary amounts of electricity have already been mentioned. There are 78 licences for electricity supply issued by AERS. Electricity supply licence is in the same time electricity trading licence.

But only 50% of 78 companies are active – exactly 39 companies. Only these 39 companies have signed BRP contract with EMS. Since BRP contract is also needed for electricity trading, not all of them intend to participate in supply segment of electricity market.

Power market traders:

HSE Balkan Energy, EPS, Alpiq Energija RS, Energy Financing Team, CEZ Srbija, EZPADA, AXPO, GEN-I, Korlea, Rudnap, PIMA, Verbund Trading Serbia, Conal Group, Statkraft Western Balkans, Repower Serbia, PLC Interenergo, Budapest energy TRading, HEP-Trade, EQM, EVN Trading, BSP Southpool, ELXIS, E&T Energiehandel Serbia, Merrill Lynch Commodities, OET, EPCG, JAS Budapest, Balkan Energetix, Decotra Power, Raw and Refined Commodities, Tinmar Energy, Plava Munja, Petrol, Fenix Fen, Europan Plus, MVM Partner Serbia, Danske Commodities, EFT Trade, Biogas Energy, Energy Active, ACEX, Enel Trade Serbia, Elgas Energy Trading, SEE Power, Swiss KTG, ALVA Power, GSA Energy, WP Trade Energy Systems, Energy Supply & Trade, Proentra, Sirius Regulus, CESTOR-VEKS, Dansenergy, Virtuese Tesla, NIS, Arcadia Servica, Sandton Trading, ELMAG, Proenergy, Care Transinvest, Elektro Energija, EPS Supply, Nova Commodities, Green Energy Trading, Brzmin, EDS International, EL Alna, Enoi Power, Energia Naturalis, MET Power, Mistel Energy, Vukovic DOO, IVJEST, Danske Commodities Invest, SEE Power Trading, WEG Kolektor, KIP Komerc, Mihajlovic-Savic Transport, Future Energy, Energotehnika Juzna Backa, PAn Intertrade, Network For Trading, Eneko Energy, Kurum Energija, Mirotin Energo, Ayen Energy Trading, ENG Service Trade, LC Electricity Supply and Trading.

Mid voltage troubles

There are five territorially organized distribution system operators (DSO) in Serbia. Starting from 1st of July 2013, EPS Supply took over the public supply activities from five distribution companies, and from that moment they officially became only DSO-s. Although they are all owned by EPS, there is significant difference in fees for system usage between different distribution system operators. It can be considered as discrimination since terms for access to the distribution grid are not equal, and the customers in mostly underdeveloped parts of Serbia pay higher distribution fees.

On regulated market, final electricity bill (fees + energy) is the same for all customers. Price of delivered electric energy is lowered if DSO has higher fee, in order to avoid discrimination. Eligible consumers cannot expect lower price of energy alone from its supplier, if they are unfortunate to be connected on DSO with high fees.

Why different DSO-s have different fees? Due to different operational expenses, where the main influence is loss in the distribution network. Losses in distribution network are not uniform across Serbia and, for example, losses of Elektrovojvodina stood at 11.4% in 2012, while losses of Jugoistok stood at 18.5% (main factor is electricity theft, which is accounted as loss in network).

The most logical solution is establishment of the single distribution system operator. Establishment of single DSO within EPS was recently proposed by the acting Director of EPS (but again, it was also announced in 2009). In addition, establishment of the single DSO was outlined in the Guidelines for restructuring of EPS adopted by the government of Serbia in November 2012. But, according to the

Ministry of energy, development and natural protection, decisions regarding the future organization and operation of DSO could not be possible before adoption of the necessary amendments to the Energy law. In practice, establishment of single DSO will hardly be achieved in next 6 months (steps: internal consensus within EPS > submission of official request to the Ministry > evaluation of the Ministry > preparation of amendments > publishing in official gazette > implementation). Due to parliamentary elections, government in Serbia is yet to be formed, so this could cause further delays. But, it can be expected that this problem would be solved by the end of 2014 (either by establishment of single DSO, or if AERS sets uniform tariff for distribution service, where EPS would divide income from fees between its distribution companies, based on their operational expenses).