autorità per l'energia elettrica e il gas 1 the role of acquirente unico in the italian...
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Autorità per l'energia elettrica e il gas 1
The Role of Acquirente Unico in the Italian Electricity Market
Tunis, 12th Sept. 2013
2
Regulatory framework
Directive 96/92/CE – the Italian way to the liberalised market
Starting from vertically integrated monopolies (ENEL
and municipalities-owned utilities), generation and
selling were liberalized;
Transmission and Distribution were unbundled;
Progressive opening-up of the demand: distinction
between “eligible” and “captive” market;
Acquirente Unico was set up to procure energy to the
captive market (electricity supply to captive customers
was charged to distributors).
3
Regulatory framework
Directive 2003/54/CE – The Enhanced Protection market
Free Market:
From 1st July 2007, all customers are free to choose their
suppliers
Enhanced Protection Market
- households & SMEs (LV connected, <50 employees, <10
MEuro/y turnover) without a supplier.
- served by distributors (or their unbundled companies)
Safeguard Market
- customers not included in the enhanced protection market
and without an electricity supplier
- served by AU-selected retailers
4
Regulatory framework
Italian Electricity Market Model (from 1st July 2007)
Acquirente Unico
E/Protection Customers Customers
E/Protection Suppliers Safeguard
Suppliers
Safeguard Customers
Power Exchange (Day Ahead / Medium Term)
Producers & Imports
Safeguard Market
Retailers
Wholesalers
Open MarketEnhanced Protection Market
5
Regulatory Framework
Directive 2009/72/CE – Empowering customers
Confirmation of the “enhanced protection market”
Periodical monitoring surveys on competitive conditions of retail markets
Ensure effective treatment and settlement of complaints
More efficient procedure to switch (< 3 weeks)
UE Infringement Procedure closed in 2012:• Enhanched protection focuses on the interests of consumers and is based on
their free choice ;
• Price is not established by the State, but is based on AU supply costs operating in the free wholesale market
6
Self-production
Free market
Enhanced protection
market
TWh∆ %
* estimated
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
227.2 204.3
186.8 182.1 169.3 164.8 152.9 124.3
101.7 95.3 89.4 84.3 78.1 72.9
47.4 78.2 101.8 117.5 135.0 144.4 164.4195.0
217.5207.5 220.0 227.2
223.0 222.7
23.8 22.3 22.2 21.1 21.1 21.3 20.2 20.6 20.3
17.5 21.1 23.1
24.1 25.1 298.5 304.8 310.7 320.7 325.4 330.4 337.5 339.9 339.5
320.3 330.5 334.6 325.2 320.7 4.4% 2.1% 1.9% 3.2% 1.5% 1.6% 2.1% 0.7%
-0.1% -5.7%
3.2% 1.3%
-2.8% -1.4%
Regulatory Framework
Supply of electricity to the enhanced protection market
From 2007-2012
“enhanced
protection”
market has been
reduced from
124.3 TWh to
78.1 TWh (24%
of total energy
demand)
*
7
Regulatory Framework
Market evolution: switching trend for households
July
1 Q
2 Q
3 Q
4 Q
1 Q
2 Q
3 Q
4 Q
1 Q
2 Q
3 Q
4 Q
1 Q
2 Q
3 Q
4 Q
1 Q
2 Q
3 Q
4 Q
1 Q
2 Q
3 Q
4 Q
1 Q
2 Q
3 Q
4 Q
20,000,000
22,000,000
24,000,000
26,000,000
28,000,000
2007 2008 2009 2010 2011 2012 2013 2014
-3,4% (-0,9 Mil)
-5,0% (-1,3 Mil)
-4,7% (-1,2 Mil)
-3,8% (-0,95 Mil)
-5,2% (-1,2 Mil)*
-2,7% (-0,8 Mil )
-5% (-1,1 Mil)*
in 2012 about 950,000 customers have left E/P market, while 208.000 have switched-back
June 2007
March 2013 ∆
27,9 mln 22,5 mln -19,6 %(-4,1%/y)
* estimated
8
in 2012 about 192,000 customers have left E/P market, while 100.000 have switched-back
June 2007
March 2013 ∆
6,3 mln 4,5 mln -27 %(-5,4%/y)
July
1 Q
2 Q
3 Q
4 Q
1 Q
2 Q
3 Q
4 Q
1 Q
2 Q
3 Q
4 Q
1 Q
2 Q
3 Q
4 Q
1 Q
2 Q
3 Q
4 Q
1 Q
2 Q
3 Q
4 Q
1 Q
2 Q
3 Q
4 Q
4,000,000.0
4,500,000.0
5,000,000.0
5,500,000.0
6,000,000.0
2007 2008 2009 2010 2011 2012 2013* 2014*
-6,0% (-0,32 Mil)
-4,5% (-0,23 Mil)
-1,9% (-0,10 Mil)-4,1% (-0,19 Mil)
-5,9% (-0,27 Mil)*
-12,1% (-0,8 Mil)
-5,3% (-0,24 Mil)*
* estimated
Regulatory Framework
Market evolution: switching trend for SMEs
9
In procuring electricity to the EP consumers, AU forecasts
(medium and long term) the electricity demand of the enhanced
protection market
Economic indices, such as GDP variation and forecasts,
industrial production for sectors, exchange rate €/$;
Energy market indices, such as electricity supply in Italy, oil
reference prices;
Retail market evolution, such as households and SMEs demand
and consumers switching trends.
Energy procurement
Electricity forecasts
10
Definition of a procurement portfolio, which diversifies supply
sources and uses appropriate price-risk hedging instruments,
minimising the purchasing costs.
AU operates in regulated (spot and forward) markets and
holds e-auctions with transparent and non-discriminatory
procedures.
Energy portfolio in 2012 (78,1 TWh)
physical bilateral contracts
57%
purchasing electricity on Power Exchange
43%
Energy procurement
Procurement strategies
11
Energy procurement
Reference prices AU transfers electricity to E/P Suppliers at a
price monthly based on its energy purchasing
costs, added with its own operating costs (i.e.
Supply Price);
The final price of electricity (Reference
Price) applied to end users is set quarterly by
AEEG on the basis of the Supply Price, adding
regulated components*
• Supply Price
53%
• Network Tariffs (Trans/Distr/Metering)*
15%
• System general costs (FER, R&S, etc.)*
19%
• Tax and VAT
13%
– Source: 3rd Quarter 2013, household, 3kW,2.700 kwh/y
Free Market Vs Reference Price
3rd Quarter 2013, household, 3kW, 2.700
kwh/y
Series1
-20% -10% 0% 10% 20%
-18.60%-13.70%
-12.65%
-12.09%
-11.13%
-10.03%
-9.46%
-9.00%
-8.66%
-8.50%
-7.89%
-7.61%
-7.01%
-1.54%
0.26%
1.37%
1.61%
2.18%
4.90%
5.31%
6.54%
7.02%
7.43%
7.46%
7.97%
14.89%
Fixed PriceRef. Price Indexed All-included
12
AU operates as any other market participant, using the same procurement instruments, adopting transparent and non-discriminatory procedures and balancing its accounts;
It represents a wedge between wholesale and retail markets, thus permitting to avoid conflict of interests.
It is an aggregator of demand, permitting to transfer wholesale market prices to small customers
The reference price is based on AU costs to buy energy for E/P customers.
Energy Procurement
Main evidences
13
In order to support small customers AEEG, with AU support, has realized an help desk to inform about the open market benefits and rights, and to receive claims not properly solved by suppliers;
It represents an important support to monitor and to tune market regulations;
Main issues are: incorrect billing, not-required contracts, market information;
From 1st December 2009 to 30th June 2013:
- 2.000.000 inbound calls- 140.000 new complaints (by mail, fax, e-mail)
Customers Empowerment
Energy Consumer Help Desk
14
To implement the EU Third Package to introduce an Alternative Dispute Resolution (ADR), AEEG has implemented an electronic procedure to solve dispute between customers and their suppliers.
Some features:
- completely free of charge;
- 100% on line: applications are submitted on a web site and parties meet in a virtual room;
- The Parties may accept or not to participate as well as to reach a final agreement
- Consumers Associations are involved to eventually support consumers to access the Service;
Customers Empowerment
Energy Conciliation Service