guidelines tso restructuring
DESCRIPTION
Guidelines Tso RestructuringTRANSCRIPT
GUIDELINES FOR TSO GUIDELINES FOR TSO RESTRUCTURINGRESTRUCTURING
Fourth Athens ForumFourth Athens Forum
Athens June 2 to 4th, 2004
Chapter I
Contextual Framework
Clear Vision of Regional Trading Potentialities and
Constraints
Some Harmonization
might be required
Strategy for Regional IntegrationStrategy for Regional Integration
National Energy LawNational Energy Law
EC DIRECTIVESEC DIRECTIVES
MISSING LINKMISSING LINK
TSO RESTRUCTURING REFERENCE FRAMEWORKTSO RESTRUCTURING REFERENCE FRAMEWORKTSO RESTRUCTURING REFERENCE FRAMEWORKTSO RESTRUCTURING REFERENCE FRAMEWORK
STRATEGIC JOINT OPERATION STRATEGIC JOINT OPERATION AGREEMENTS WILL HAVE A AGREEMENTS WILL HAVE A CRITICAL IMPACT ON SMALL CRITICAL IMPACT ON SMALL
COUNTRIES TSO RESTRUCTURINGCOUNTRIES TSO RESTRUCTURING
Balkans Countries: Load Peak 2001
6,912
8,532
6,812
2,796
1,8531,281
7141,256
1,838
01,0002,0003,0004,0005,0006,0007,0008,0009,000
MW
Relative Peak Load in 2001Relative Peak Load in 2001Relative Peak Load in 2001Relative Peak Load in 2001
Consolidated Peak 6600 MW
INTELLECTUAL TECHNICAL COHERENCEINTELLECTUAL TECHNICAL COHERENCE
BLUEPRINT BLUEPRINT FOR THE RESTRUCTURING OF FOR THE RESTRUCTURING OF
NATIONAL TRANSMISSION NATIONAL TRANSMISSION FUNCTIONSFUNCTIONS
Standard Regional Standard Regional Market Design Market Design
CEER/EFETCEER/EFETTSOs Restructuring TSOs Restructuring Guiding Principles Guiding Principles
ETSO/UCTEETSO/UCTE
ValidationValidation ValidationValidation
IMPLEMENTATIONIMPLEMENTATIONSEE - BENCHMARKING
Athens Memorandum of Understanding #1 & #2
National Market Design National Market Design
National Transitory Constraints
Strategy for Regional IntegrationStrategy for Regional Integration
National Energy LawNational Energy Law
EC DIRECTIVESEC DIRECTIVES
RESTRUCTURING REFERENCE FRAMEWORKRESTRUCTURING REFERENCE FRAMEWORKRESTRUCTURING REFERENCE FRAMEWORKRESTRUCTURING REFERENCE FRAMEWORK
INTELLECTUAL LEADERSHIPINTELLECTUAL LEADERSHIP
EUROPEAN EUROPEAN COMMISSION COMMISSION
MACRO REGIONAL PLANNING
(Key Milestones)
MACRO REGIONAL PLANNING
(Key Milestones)
MACRO REGIONAL PLANNING
(Key Milestones)
MACRO REGIONAL PLANNING
(Key Milestones)
HARMONIZATIONHARMONIZATION
UCTE
OPERATION STANDARDS
UCTE
SYSTEM OPERATION & SECURITY
EFETEFET
TRADING MECHANISMS
GUIDELINES FOR EFFICIENT TRADING
ETSOETSO
MARKET DEVELOPMENT FACILITATION
GUIDELINES FOR TSO
RESTRUCTURING
CEER
FAIR LEVEL PLAYING FIELD & MONITORING
CEER
SEE REGION STANDARD MARKET
DESIGN
CHANGE MANAGEMENT ADVISORY COMMITTEE
LEAD RESPONSIBILITYLEAD RESPONSIBILITY
URGENTLY REQUIREDURGENTLY REQUIRED
LEADERSHIP FRAMEWORKLEADERSHIP FRAMEWORKLEADERSHIP FRAMEWORKLEADERSHIP FRAMEWORK
THE TSO BENCHMARKING FRAMEWORKTHE TSO BENCHMARKING FRAMEWORK
GUIDELINES FOR THE REFORM OF THE
TRANSMISSION FUNCTIONS
NATIONAL BLUEPRINTS FOR THE
REFORM
NATIONAL BLUEPRINTS FOR THE
REFORM
NATIONAL BLUEPRINTS FOR THE
REFORM
NATIONAL BLUEPRINTS FOR THE
REFORM
NATIONAL BLUEPRINTS FOR THE
REFORM
NATIONAL BLUEPRINTS FOR THE
REFORM
NATIONAL BLUEPRINTS FOR THE
REFORM
NATIONAL BLUEPRINTS FOR TSO
REFORMS
NATIONAL BLUEPRINTS FOR THE
REFORM
NATIONAL BLUEPRINTS FOR THE
REFORM
NATIONAL BLUEPRINTS FOR THE
REFORM
NATIONAL BLUEPRINTS FOR THE
REFORM
NATIONAL BLUEPRINTS FOR THE
REFORM
NATIONAL BLUEPRINTS FOR THE
REFORM
NATIONAL BLUEPRINTS FOR THE
REFORM
NATIONAL RESTRUCTURING IMPLEMENTATION
PLANS
BENCHMARKINGBENCHMARKING
ISSUES
COUNTRIES
ATHENS FORUM
REPORTING
ETSOETSO CEERCEERUCTEUCTE EFETEFET
REVIEW & ANALYSIS
EXECUTION AND PRESENTATION OF BENCHMARKEXECUTION AND PRESENTATION OF BENCHMARK
• Electronic data collection to facilitate information entry and compilation
• Presentation and consultation via a central database linked to background documents
• Wide availability of results by publication and update maintenance via global internet website
Might be done by Czech Might be done by Czech International AssistanceInternational Assistance
INITIAL DATA COLLECTION TEMPLATE (I)INITIAL DATA COLLECTION TEMPLATE (I)
Straightforward working template developed to collect and organize information within an
Excel spreadsheet
•Simple “tree” structure to address all main areas being benchmarked
•Expandable “Tree” structure Provides more detailed information as required
Information to be collected for each country
INITIAL DATA COLLECTION TEMPLATE (II)INITIAL DATA COLLECTION TEMPLATE (II)
•Area being benchmarked can be expanded within “tree” structure to cover more detailed criteria
•Collected information presented in a color coded way or as links… (when appropriate)
INITIAL DATA COLLECTION TEMPLATE (III)INITIAL DATA COLLECTION TEMPLATE (III)
Links are activated to display background documents including text, spreadsheets, organization charts, presentations, maps, etc.
IMPLEMENTATION TIMEFRAME AND DANGERSIMPLEMENTATION TIMEFRAME AND DANGERSIMPLEMENTATION TIMEFRAME AND DANGERSIMPLEMENTATION TIMEFRAME AND DANGERS
BUILD UP OF VISION &
PERSPECTIVE
2002 2003
DESIGN & PLANNING
MOBILIZATION OF MEANS
2004
SET UP OF VIABLE INSTITUTIONAL FOUNDATIONS
2005
DEVELOPMENT OF MARKET
PARTICIPANTS
2006
PROGRESSIVE MARKET OPENING
2007
HARVESTING OF BENEFITS
2008
Strategic Strategic Vision of Vision of Potential Potential
Alliances is Alliances is Still Missing Still Missing (Currently underway)(Currently underway)
Countries Still Countries Still Have a Too Have a Too Short-Term Short-Term
and National and National PerspectivePerspective
(Danger of (Danger of replicating status replicating status
quo)quo)
Long-Term Long-Term Stability and Stability and Continuity in Continuity in Implementing Implementing the reforms is the reforms is
Important Important (Long & difficult (Long & difficult
process)process)
Establishment Establishment of Healthy of Healthy
Competitive Competitive Environment Environment (Increasing Number (Increasing Number
and Diversity of and Diversity of Market Participants)Market Participants)
Development of Development of Competitiveness Competitiveness and Progressive and Progressive State Divestiture State Divestiture
(Performance (Performance Improvement)Improvement)
Final Final ObjectiveObjective
The Market Design FrameworkThe Market Design FrameworkThe Market Design FrameworkThe Market Design Framework
Balancing MarketBalancing Market0 to 5% 0 to 5%
Real Time by System Operator
National and Regional Bilateral
Contracts
70 to 80% of 70 to 80% of DemandDemand
Annual – Seasonnal - Monthly
Day Ahead MarketDay Ahead Market15 to 20% 15 to 20%
Week to Day Ahead
GENERATOR CUSTOMER
TRADERSUPPLIERBROOKER
OffersBids
Price 1Price 1
Price 2Price 2
Price 3Price 3
Financial ProductsFinancial Products
Risk Mitigation
FUTURE CHANGES ARE ALREADY PREDICTABLEFUTURE CHANGES ARE ALREADY PREDICTABLEFUTURE CHANGES ARE ALREADY PREDICTABLEFUTURE CHANGES ARE ALREADY PREDICTABLE
• MARKET PARTICIPANTS: 2005 Industrial Eligible Customers
2005 Emergence of Trading Intermediaries
2006 Mix of Public/Private Participants
2006 Cross Border Alliances & Partnership
2006 Commercial Eligible Customers
2007 All Customers
2008 More Sophisticated Financial Products
Increased Number of:• Participants,• Intermediaries,• Commercial interests,• Competitors• Independent Behaviors• Products on the Market• Regulation
Flexibility in the Structures will be Flexibility in the Structures will be a Key Success Factora Key Success Factor
• MARKET: Consensus is already established
INTROVERT ORGANIZATIONS 1900 -
1980
COMMAND AND CONTROL
ORGANIZATIONS
CLIENT-ORIENTED ORGANIZATIONS
MARKET ORIENTED ORGANIZATIONS
More client oriented organizations are requiredMore client oriented organizations are requiredMore client oriented organizations are requiredMore client oriented organizations are required
EXPERTISE EXPERTISE CONCENTRATED AT CONCENTRATED AT
THE CORPORATE THE CORPORATE LEVELLEVEL
• Ever expanding
• Self centered
• Poor performers Can Hide within the Organization
• Protect Status Quo
• Internal controls difficult
• Client service oriented
• Profit center easily controllable
• Highly flexible and adaptable
• Competitive
DISTRIBUTED EXPERTISE, DISTRIBUTED EXPERTISE, TOOLS, SYSTEMS, TOOLS, SYSTEMS, MEANS, DECISION MEANS, DECISION
POWER AND INOVATIONPOWER AND INOVATION
Chapter IIChapter II
Guidelines for High Level Guidelines for High Level Unbundling of Power SectorUnbundling of Power Sector
STARTING POINT – Vertically Integrated Utility
IMPLEMENTATION FRAMEWORKIMPLEMENTATION FRAMEWORKIMPLEMENTATION FRAMEWORKIMPLEMENTATION FRAMEWORK
Telecommunication
CORPORATE SERVICES
Assets Management, Maintenance, Construction and Engineering
GENERATION
TRANSMISSION
DISTRIBUTION
SHARES OWNED BY THE GOVERNMENT
STARTING POINT – VERTICALLY INTEGRATED STARTING POINT – VERTICALLY INTEGRATED UTILITYUTILITY
STARTING POINT – VERTICALLY INTEGRATED STARTING POINT – VERTICALLY INTEGRATED UTILITYUTILITY
PHASE I – Functional Unbundling Within the Vertically Integrated Utility
CORPORATE SERVICES
TELECOMMUNICATION SERVICES
SUPPORT NON-CORE SERVICES
GENERATION TRANSMISSION DISTRIBUTION
THERMAL
HYDRO
NUCLEAR & OTHERS
GO
TO
SO
MO
POWER SECTOR SUPPORTPOWER SECTOR SUPPORT COMMERCIAL
STARTING POINT – Vertically Integrated Utility
IMPLEMENTATION FRAMEWORKIMPLEMENTATION FRAMEWORKIMPLEMENTATION FRAMEWORKIMPLEMENTATION FRAMEWORK
PHASE I - FUNCTIONAL UNBUNDLINGPHASE I - FUNCTIONAL UNBUNDLINGPHASE I - FUNCTIONAL UNBUNDLINGPHASE I - FUNCTIONAL UNBUNDLING
ADVANTAGES Soft preparation for corporatization while
political process unfold;
Opportunity for internal rationalization before corporatization;
Identification of stranded resources before transfer to new operating corporations;
DISADVANTAGES Performed by current rather than future line
managers (lack of critical screening)
Based on current organizational structure and processes rather than redesigned structure and processes
Based on the use of same management systems, software and constraints;
Often reproduce the same functional status quo (no reengineering of operations)
CORPORATE SERVICES
TELECOMMUNICATION SERVICES
SUPPORT NON-CORE SERVICES
GENERATION TRANSMISSION DISTRIBUTION
SHARES STILL OWNED BY THE GOVERNMENT
THERMAL
HYDRO
NUCLEAR & OTHERS
GO
TO
SO
MO
POWER SECTOR SUPPORTPOWER SECTOR SUPPORT COMMERCIAL
PHASE II – High Level UnbundlingGO
TO
SO
MO
THERMAL
HYDRO
NUCLEAR & OTHERS
STATE HOLDING COMPANYGENERAL MANAGER
SUB-SECTOR MANAGERSUB SECTOR MANAGER SUB-SECTOR MANAGERSUB-SECTOR MANAGER
PHASE I – Functional Unbundling Within the Vertically Integrated Utility
CORPORATE SERVICES
TELECOMMUNICATION SERVICES
SUPPORT NON-CORE SERVICES
GENERATION TRANSMISSION DISTRIBUTION
THERMAL
HYDRO
NUCLEAR & OTHERS
GO
TO
SO
MO
POWER SECTOR SUPPORTPOWER SECTOR SUPPORT COMMERCIAL
STARTING POINT – Vertically Integrated Utility
IMPLEMENTATION FRAMEWORKIMPLEMENTATION FRAMEWORKIMPLEMENTATION FRAMEWORKIMPLEMENTATION FRAMEWORK
Three Leadership Paths can be Considered:Three Leadership Paths can be Considered: Government Lead PathGovernment Lead Path Utility Lead PathUtility Lead Path Government Initiated PathGovernment Initiated Path
HIGH LEVEL UNBUNDLINGHIGH LEVEL UNBUNDLING
STARTING FROM HERE THE REFORM STARTING FROM HERE THE REFORM NEEDS TO BE ORCHESTRATED FROM NEEDS TO BE ORCHESTRATED FROM
A LONG-TERM PERSPECTIVEA LONG-TERM PERSPECTIVE
Three concurrent processes need to be Three concurrent processes need to be simultaneously managedsimultaneously managed
IMPLEMENTATIONIMPLEMENTATION
IMPLEMENTATION
DEC 2004
JUL 2006
DEC 2006
JUL 2007DESIGNDESIGN
DESIGN & PLANNING
JUNE 2004
OPERATIONS
CURRENT LEVEL OF OPERATIONCURRENT LEVEL OF OPERATION
CLEAN UP - RATIONALIZATIONCLEAN UP - RATIONALIZATION
TIME
EFFORT & MONEY
HARVESTING OF HARVESTING OF BENEFITSBENEFITS
RESTRUCTURING DESIGN HORIZONRESTRUCTURING DESIGN HORIZON
PHASE IPHASE IFUNCTIONAL
UNBUNDLING & DESIGN
PHASE IIPHASE IIHIGH LEVEL
CORPORATIZATION
PHASE IIIPHASE IIICORPORATIZATION OF
BUSINESS UNITS
PHASE IVPHASE IVDIVESTITURE AND
PRIVATIZATION
PROPER CONDITIONS FOR
MARKET OPENING
DANGER
GLOBAL PERSPECTIVEGLOBAL PERSPECTIVEGLOBAL PERSPECTIVEGLOBAL PERSPECTIVE
GOVERNMENT LEAD IMPLEMENTATION PATHGOVERNMENT LEAD IMPLEMENTATION PATHGOVERNMENT LEAD IMPLEMENTATION PATHGOVERNMENT LEAD IMPLEMENTATION PATH
GOVERNMENTGOVERNMENT
MINISTRY OF FINANCE OR ECONOMY
CORPORATE SERVICES
TELECOMMUNICATION SERVICES
SUPPORT NON-CORE SERVICES
GENERATION TRANSMISSION
THERMAL
HYDRO
NUCLEAR & OTHERS
GO
TO
SO
MO
POWER SECTOR SUPPORTPOWER SECTOR SUPPORT COMMERCIAL
DISTRIBUTION
GENERATION
THERMAL
HYDRO
NUCLEAR & OTHERS
GO
TO
SO
MO
TRANSMISSION DISTRIBUTION
TELECOMSTELECOMS
SUPPORT Co
POWER SECTOR POWER SECTOR SUPPORTSUPPORT
NON CORENON CORE
GOVERNMENT DISPOSE OF LEFT OVER
FURTHER REFORMS DOWNSTREAM MORE DIFFICULT TO IMPLEMENT
WITHOUTDIRECT GOVERNMENT INTERVENTION IN OPERATIONAL MATTERS
CORPORATE SERVICES
TELECOMMUNICATION SERVICES
SUPPORT NON-CORE SERVICES
GENERATION TRANSMISSION
THERMAL
HYDRO
NUCLEAR & OTHERS
GO
TO
SO
MO
POWER SECTOR SUPPORTPOWER SECTOR SUPPORT COMMERCIAL
DISTRIBUTION
GOVERNMENTGOVERNMENT
SHARES OWNED BY THE STATE
TRANSMISSION SHELL
GENERATION SHELL
DISTRIBUTION SHELL
SUPPORT & NON-CORE SHELL
SHELL COMPANIES READY TO RECEIVE TRANSFER OF ASSETS, RESOURCES AND LIABILITIES FROM VERTICALLY INTEGRATED UTILITY
The Vertically Integrated Utility is Incorporating an Appropriate Number of Subsidiary Companies
UTILITY LEAD IMPLEMENTATION PATHUTILITY LEAD IMPLEMENTATION PATHUTILITY LEAD IMPLEMENTATION PATHUTILITY LEAD IMPLEMENTATION PATH
CORPORATE SERVICES
TELECOMMUNICATION SERVICES
THERMAL
HYDRO
NUCLEAR & OTHERS
GOVERNMENTGOVERNMENT
TELECOMSTELECOMS
GO
TO
SO
BMO
TRANSMISSIONGENERATION
THERMAL
HYDRO
NUCLEAR & OTHERS
DISTRIBUTION
POWER POWER SECTOR SECTOR SUPPORTSUPPORT
NON NON CORECORE
SUPPORT Co
GENERATION HOLDING OWNS THE SHARES OF THE OPERATING COMPANIES
STATE HOLDING COMPANYGENERAL MANAGER
SUB-SECTOR MANAGER
SUB SECTOR MANAGER
SUB-SECTOR MANAGER
SUB-SECTOR MANAGER
GOVERNMENTGOVERNMENTSTATE OWNS THE SHARES OF THE HOLDING COMPANY
UTILITY LEAD IMPLEMENTATION PATHUTILITY LEAD IMPLEMENTATION PATHUTILITY LEAD IMPLEMENTATION PATHUTILITY LEAD IMPLEMENTATION PATH
POWER POWER SECTOR SECTOR SUPPORTSUPPORT
NON NON CORECORE
LEFT OVER
FORMER VERTICALLY INTEGRATED UTILITY
TELECOMMUNICATION SERVICES
GOVERNMENTGOVERNMENT
STATE HOLDING COMPANY
GENERAL MANAGER
SUB-SECTOR MANAGER
SUB SECTOR MANAGER
SUB-SECTOR MANAGER
SUB-SECTOR MANAGER
Telecommunication
CORPORATE SERVICES
Assets Management, Maintenance, Construction and Engineering
GENERATION
TRANSMISSION
DISTRIBUTION
SHARES OWNED BY THE GOVERNMENT
GOVERNMENT INITIATED IMPLEMENTATION PATHGOVERNMENT INITIATED IMPLEMENTATION PATHGOVERNMENT INITIATED IMPLEMENTATION PATHGOVERNMENT INITIATED IMPLEMENTATION PATH
NON COOPERATIVE MANAGEMENT
GOVERNMENT ESTABLISH AND STAFF A SHELL STATE HOLDING COMPANY
The Government Own the Shares of the Holding The Government Own the Shares of the Holding
(No Significant Assets Yet)(No Significant Assets Yet)
GOVERNMENTGOVERNMENT
STATE HOLDING COMPANY
GENERAL MANAGER
SUB-SECTOR MANAGER
SUB SECTOR MANAGER
SUB-SECTOR MANAGER
SUB-SECTOR MANAGER
CORPORATE SERVICES
TELECOMMUNICATION SERVICES
NON-CORE SERVICES
GENERATION TRANSMISSION DISTRIBUTION
TRANSMISSION SHELL
GENERATION SHELL
DISTRIBUTION SHELL
SUPPORT & NON-CORE SHELL
The Holding Establish Shell Companies (Own the Shares)The Holding Establish Shell Companies (Own the Shares)
GOVERNMENT INITIATED IMPLEMENTATION PATHGOVERNMENT INITIATED IMPLEMENTATION PATHGOVERNMENT INITIATED IMPLEMENTATION PATHGOVERNMENT INITIATED IMPLEMENTATION PATH
VERTICALLY INTEGRATED
UTILITY
And Lead the Realization of the And Lead the Realization of the Preparatory Functional Unbundling Preparatory Functional Unbundling
and Screening Processand Screening Process
CORPORATE SERVICES
TELECOMMUNICATION SERVICES
SUPPORT NON-CORE SERVICES
GENERATION TRANSMISSION
THERMAL
HYDRO
NUCLEAR & OTHERS
GO
TO
SO
MO
POWER SECTOR SUPPORTPOWER SECTOR SUPPORT COMMERCIAL
DISTRIBUTION
NO ASSETS YETNO ASSETS YET
BUT ORGANIZATIONAL DESIGN BUT ORGANIZATIONAL DESIGN INITIATEDINITIATED
GOVERNMENTGOVERNMENT
STATE HOLDING COMPANY
GENERAL MANAGER
SUB-SECTOR MANAGER
SUB SECTOR MANAGER
SUB-SECTOR MANAGER
SUB-SECTOR MANAGER
CORPORATE SERVICES
TELECOMMUNICATION SERVICES
NON-CORE SERVICES
GENERATION TRANSMISSION DISTRIBUTION
GOVERNMENT INITIATED IMPLEMENTATION PATHGOVERNMENT INITIATED IMPLEMENTATION PATHGOVERNMENT INITIATED IMPLEMENTATION PATHGOVERNMENT INITIATED IMPLEMENTATION PATH
CORPORATE SERVICES
TELECOMMUNICATION SERVICES
SUPPORT NON-CORE SERVICES
GENERATION TRANSMISSION
THERMAL
HYDRO
NUCLEAR & OTHERS
GO
TO
SO
MO
POWER SECTOR SUPPORTPOWER SECTOR SUPPORT COMMERCIAL
DISTRIBUTION
TRANSMISSION DISTRIBUTION SUPPORT Co
TELECOMMUNICATION SERVICES
GENERATION TRANSMISSION
THERMAL
HYDRO
NUCLEAR & OTHERS
GO
TO
SO
MO
POWER SECTOR SUPPORTPOWER SECTOR SUPPORT COMMERCIAL
DISTRIBUTIONGeneration Transmission
Telecommunications
SUPPORT AND NON-CORE SERVICES
FORMER VERTICALLY INTEGRATED UTILITY
TELECOMSTELECOMS
TRANSMISSION SHELL
GENERATION SHELL
DISTRIBUTION SHELL
SUPPORT & NON-CORE SHELLGO
TO
SO
MO
THERMAL
HYDRO
NUCLEAR & OTHERS
POWER POWER SECTOR SECTOR SUPPORTSUPPORT
NON NON CORECORE
FORMER VERTICALLY INTEGRATED UTILITY
TELECOMMUNICATION SERVICES
DISTRIBUTIONGeneration Transmission
Telecommunications
Non-Core and Support Services
POWER POWER SECTOR SECTOR SUPPORTSUPPORT
NON NON CORECORE
LEFT OVER
FORMER VERTICALLY INTEGRATED UTILITY
TELECOMMUNICATION SERVICES
GOVERNMENTGOVERNMENT
TELECOMSTELECOMS
GO
TO
SO
BMO
TRANSMISSIONGENERATION
THERMAL
HYDRO
NUCLEAR & OTHERS
DISTRIBUTION
SUPPORT Co
STATE HOLDING COMPANYGENERAL MANAGER
SUB-SECTOR MANAGER
SUB SECTOR MANAGER
SUB-SECTOR MANAGER
SUB-SECTOR MANAGER
LEFT OVER
POWER POWER SECTOR SECTOR SUPPORTSUPPORT
NON NON CORECORE
LEFT OVER
NATIONAL ENERGY POLICY DEVELOPMENT
IMPLEMENTATION OF NATIONAL ENERGY POLICY
AND MANAGEMENT OF THE RESTRUCTURING PROCESS UNTIL FULL
DIVESTITURE
INDEPENDENT MANAGEMENT OF
OPERATIONS
SECTOR ORGANIZATION AT THE END OF SECTOR ORGANIZATION AT THE END OF PHASE II – HIGH LEVEL UNBUBDLINGPHASE II – HIGH LEVEL UNBUBDLING
SECTOR ORGANIZATION AT THE END OF SECTOR ORGANIZATION AT THE END OF PHASE II – HIGH LEVEL UNBUBDLINGPHASE II – HIGH LEVEL UNBUBDLING
AND STILL FAR FROM A MARKET AND STILL FAR FROM A MARKET ENVIRONMENTENVIRONMENT
NO INTERNAL COMPETITIONNO INTERNAL COMPETITIONSTILL A VERTICALLY INTEGRATED UNDERTAKING
The Market Design FrameworkThe Market Design FrameworkThe Market Design FrameworkThe Market Design Framework
Balancing MarketBalancing Market0 to 5% 0 to 5%
Real Time by System Operator
National and Regional Bilateral
Contracts
70 to 80% of 70 to 80% of DemandDemand
Annual – Seasonnal - Monthly
Day Ahead MarketDay Ahead Market15 to 20% 15 to 20%
Week to Day Ahead
GENERATOR CUSTOMER
TRADERSUPPLIERBROOKER
OffersBids
Price 1Price 1
Price 2Price 2
Price 3Price 3
Financial ProductsFinancial Products
Risk Mitigation
Chapter IIIChapter III
Guidelines for Establishing a Guidelines for Establishing a Competitive Environment Prior Competitive Environment Prior to Market Openingto Market Opening
PHASE III – Corporatization of Business Units
GOVERNMENTGOVERNMENT
GENERAL MANAGER
PORTFOLIO MANAGER OTHERPORTFOLIO MANAGER GENERATION PORTFOLIO MANAGER DISTRIBUTION
STATE OWNED DISTRIBUTORS
Distributor 3Distributor 3
Distributor 2Distributor 2
Distributor 1Distributor 1
STATE OWNED POWER PLANTS
GO
TO
MO
SO
TelecomTelecom
MeteringMetering
PHASING OUT
Public Wholesale SupplierPublic Wholesale Supplier
Left OverLeft Over
LEFT OVERLEFT OVER
TSO
PHASE II – High Level Unbundling of Sub-SectorsGO
TO
SO
MO
THERMAL
HYDRO
NUCLEAR & OTHERS
STATE HOLDING COMPANYGENERAL MANAGER
SUB-SECTOR MANAGERSUB SECTOR MANAGER SUB-SECTOR MANAGERSUB-SECTOR MANAGER
PHASE I – Functional Unbundling Within the Vertically Integrated Utility
CORPORATE SERVICES
TELECOMMUNICATION SERVICES
SUPPORT NON-CORE SERVICES
GENERATION TRANSMISSION DISTRIBUTION
THERMAL
HYDRO
NUCLEAR & OTHERS
GO
TO
SO
MO
POWER SECTOR SUPPORTPOWER SECTOR SUPPORT COMMERCIAL
STARTING POINT – Vertically Integrated Utility
IMPLEMENTATION FRAMEWORKIMPLEMENTATION FRAMEWORKIMPLEMENTATION FRAMEWORKIMPLEMENTATION FRAMEWORK
PROGRESSIVE ESTABLISHMENT OF A COMPETITIVE ENVIRONMENTPROGRESSIVE ESTABLISHMENT OF A COMPETITIVE ENVIRONMENT
INDEPENDENT OPERATING CORPORATIONS EXPOSED TO COMPETITION
MISSIONMISSION
IMPROVEMENT OF THE INDIVIDUAL PERFORMANCE AND OF THE IMPROVEMENT OF THE INDIVIDUAL PERFORMANCE AND OF THE COMPETITIVENESS OF EACH BUSINESS UNIT, WITH THE OBJECTIVE OF COMPETITIVENESS OF EACH BUSINESS UNIT, WITH THE OBJECTIVE OF
SECURING ITS LONG-TERM VIABILITY IN THE NATIONAL AND SECURING ITS LONG-TERM VIABILITY IN THE NATIONAL AND REGIONAL ELECTRICITY MARKETREGIONAL ELECTRICITY MARKET
ANDANDPREPARE FOR STATE DIVESTITURE (IF AND WHEN APPROPRIATE)PREPARE FOR STATE DIVESTITURE (IF AND WHEN APPROPRIATE)
POLICY ORIENTATIONS
GOVERNMENTGOVERNMENT
PHASE III – CORPORATIZATION AND PRODUCTIVITY PHASE III – CORPORATIZATION AND PRODUCTIVITY IMPROVEMENT OF BUSINESS UNITSIMPROVEMENT OF BUSINESS UNITS
PHASE III – CORPORATIZATION AND PRODUCTIVITY PHASE III – CORPORATIZATION AND PRODUCTIVITY IMPROVEMENT OF BUSINESS UNITSIMPROVEMENT OF BUSINESS UNITS
STATE HOLDING COMPANY
GENERAL MANAGER
PORTFOLIO MANAGER OTHER
PORTFOLIO MANAGER GENERATION
PORTFOLIO MANAGER DISTRIBUTION
PORTFOLIO MANAGER TRANSMISSION
PORTFOLIO MANAGER TRANSMISSION
ARMS LENGH MANAGEMENT OF ARMS LENGH MANAGEMENT OF PORTFOLIOS OF INDEPENDENT BUSINESS PORTFOLIOS OF INDEPENDENT BUSINESS
UNITSUNITS
TSMO
GO
TO
SO
BMO
Generator 1Generator 1
Generator 2Generator 2
Generator 3Generator 3
Generator 4Generator 4
Generator 5Generator 5
Generator 6Generator 6
Generator 7Generator 7
Generator 8
Generator 9
Generator 10
Distributor 4Distributor 4
Distributor 3Distributor 3
Distributor 2Distributor 2
Distributor 1Distributor 1
Distributor 8Distributor 8
Distributor 7Distributor 7
Distributor 6Distributor 6
Distributor 5Distributor 5
WholesaleWholesale
ConstructionConstruction
EngineeringEngineering
TelecomTelecom
Non CoreNon Core
Non CoreNon Core
Non CoreNon Core
Non CoreNon Core
PHASE III – Corporatization of Business Units
GOVERNMENTGOVERNMENT
GENERAL MANAGER
PORTFOLIO MANAGER OTHERPORTFOLIO MANAGER GENERATION PORTFOLIO MANAGER DISTRIBUTION
STATE OWNED DISTRIBUTORS
Distributor 3Distributor 3
Distributor 2Distributor 2
Distributor 1Distributor 1
STATE OWNED POWER PLANTS
GO
TO
MO
SO
TelecomTelecom
MeteringMetering
PHASING OUT
Public Wholesale SupplierPublic Wholesale Supplier
Left OverLeft Over
LEFT OVERLEFT OVER
TSO
PHASE II – High Level Unbundling of Sub-SectorsGO
TO
SO
MO
THERMAL
HYDRO
NUCLEAR & OTHERS
STATE HOLDING COMPANYGENERAL MANAGER
SUB-SECTOR MANAGERSUB SECTOR MANAGER SUB-SECTOR MANAGERSUB-SECTOR MANAGER
PHASE I – Functional Unbundling Within the Vertically Integrated Utility
CORPORATE SERVICES
TELECOMMUNICATION SERVICES
SUPPORT NON-CORE SERVICES
GENERATION TRANSMISSION DISTRIBUTION
THERMAL
HYDRO
NUCLEAR & OTHERS
GO
TO
SO
MO
POWER SECTOR SUPPORTPOWER SECTOR SUPPORT COMMERCIAL
STARTING POINT – Vertically Integrated Utility
PHASE IV – State Divestiture or Privatization
Distributor 4Distributor 4
Distributor 8Distributor 8
Distributor 7Distributor 7
Distributor 6Distributor 6
Distributor 5Distributor 5
ConstructionConstruction
EngineeringEngineering
Non CoreNon Core
Non CoreNon Core
Ind SupplierInd Supplier
Ind SupplierInd Supplier
IMPLEMENTATION FRAMEWORKIMPLEMENTATION FRAMEWORKIMPLEMENTATION FRAMEWORKIMPLEMENTATION FRAMEWORK
APPROPRIATE TIMING FOR MARKET OPENINGAPPROPRIATE TIMING FOR MARKET OPENING
PHASING OUT OF NON-CORE CO
STATE OWNED DISTRIBUTORS
STATE OWNED POWER PLANTS
GOVERNMENTGOVERNMENT
TSMOGO
TO
MO
SO
Independent State Owned TSMO
TelecomTelecom
MeteringMetering LEFT LEFT OVEROVER
PHASE IV – STATE DIVESTITUREPHASE IV – STATE DIVESTITUREPHASE IV – STATE DIVESTITUREPHASE IV – STATE DIVESTITURE
STATE HOLDING COMPANYGENERAL MANAGER
PORTFOLIO MANAGER OTHER
PORTFOLIO MANAGER GENERATION
PORTFOLIO MANAGER DISTRIBUTION
LIQUIDATION MANAGER
Generator 1Generator 1
Generator 2Generator 2
Generator 3Generator 3
Generator 4Generator 4
Generator 5Generator 5
Generator 6Generator 6
Generator 7Generator 7
Generator 8
Generator 9
Generator 10
Distributor 4Distributor 4
Distributor 3Distributor 3
Distributor 2Distributor 2
Distributor 1Distributor 1
Distributor 8Distributor 8
Distributor 7Distributor 7
Distributor 6Distributor 6
Distributor 5Distributor 5
WholesaleWholesale
ConstructionConstruction
EngineeringEngineering
TelecomTelecom
Non CoreNon Core
Non CoreNon Core
Non CoreNon Core
Non CoreNon Core
Generator 7Generator 7
Generator 6Generator 6
Generator 5Generator 5
Generator 4Generator 4
Generator 9Generator 9
Generator 8Generator 8
Independent Privately Owned
Power plants
Distributor 4Distributor 4
Distributor 8Distributor 8
Distributor 7Distributor 7
Distributor 6Distributor 6
Distributor 5Distributor 5
Privately Owned Distribution Companies
ConstructionConstruction
EngineeringEngineering
Non CoreNon Core
Non CoreNon Core
Ind SupplierInd Supplier
Ind SupplierInd Supplier
Private Businesses
PROCEEDS OF DIVESTITUREPROCEEDS OF DIVESTITURE
PREDEFINED MAXIMUM % OF VALUE OF STRANDED ASSETS PREDEFINED MAXIMUM % OF VALUE OF STRANDED ASSETS USED TO LIQUIDATE LEFT OVERSUSED TO LIQUIDATE LEFT OVERS
BALANCE OF PROCEEDS PAID TO THE CONSOLIDATED STATE BALANCE OF PROCEEDS PAID TO THE CONSOLIDATED STATE ACCOUNT AS DIVIDENDS FROM THE HOLDINGACCOUNT AS DIVIDENDS FROM THE HOLDING
PREDEFINED MAXIMUM % OF PROCEEDS ALLOCATED TO PREDEFINED MAXIMUM % OF PROCEEDS ALLOCATED TO FURTHER PRODUCTIVITY IMPROVEMENT OF REMAINING FURTHER PRODUCTIVITY IMPROVEMENT OF REMAINING
STATE OWNED BUSINESS UNITSSTATE OWNED BUSINESS UNITS
Chapter IVChapter IV
Organizational Design of Organizational Design of the Power Transmission the Power Transmission FunctionsFunctions
TRANSMISSION INSTITUTIONAL FRAMEWORK OPTIONS
STATE HOLDING COMPANY
GENERAL MANAGER
SUB-SECTOR SUB-SECTOR OTHEROTHER
SUB-SECTOR SUB-SECTOR GENERATIONGENERATION
SUB-SECTOR SUB-SECTOR DISTRIBUTIONDISTRIBUTION
SUB-SECTOR TRANSMISSION
TSMO
GO
TO
BMO
SO
REG
ULA
TO
RS
Regional Day Ahead Market
GENERATION DISTRIBUTIONNON
CORE
TRANSMISSION GRID RELATED
SYSTEMS OPERATION RELATED
TRANSMISSION GRID OWNERSHIP
RELATED
TRANSMISSION GRID OPERATION
RELATED
POWER SYSTEM OPERATION
RELATED
MARKET OPERATION
RELATED
Sorting of Critical Transmission FunctionsSorting of Critical Transmission FunctionsSorting of Critical Transmission FunctionsSorting of Critical Transmission Functions
GO
SO
TO
BMO
WILL LIKELY BE THE FINAL OPTION WILL LIKELY BE THE FINAL OPTION RETAINED BY COUNTRIES SHARING RETAINED BY COUNTRIES SHARING
BALANCING AND DAY-AHEAD MARKETSBALANCING AND DAY-AHEAD MARKETS
SOLE OPTION CURRENTLY CONSIDERED SOLE OPTION CURRENTLY CONSIDERED BY ETSO MEMBERSBY ETSO MEMBERS
OPTION FAVORED IN NORTH AMERICAOPTION FAVORED IN NORTH AMERICA
RETAINED IN CROATIA AND BiHRETAINED IN CROATIA AND BiH
Transmission Institutional Organizational OptionsTransmission Institutional Organizational OptionsTransmission Institutional Organizational OptionsTransmission Institutional Organizational Options
INCREASED LEVEL INCREASED LEVEL OF:OF:
• INDEPENDENCEINDEPENDENCE
• NUMBER OF PLAYERSNUMBER OF PLAYERS
• INSTITUTIONAL INSTITUTIONAL COMPLEXITYCOMPLEXITY
• MANAGEMENT MANAGEMENT COMPLEXITYCOMPLEXITY
• EFFORT REQUIRED TO EFFORT REQUIRED TO FORM BUSINESS UNITSFORM BUSINESS UNITS
• MORE COMPLEXITY TO MORE COMPLEXITY TO MANAGE INTERFACES MANAGE INTERFACES (AGREEMENTS)(AGREEMENTS)
• MORE REGULATIONMORE REGULATION
• OPERATIONS COSTSOPERATIONS COSTS
• HIGHER DEGREE OF HIGHER DEGREE OF CONFIDENCE OF PRIVATE CONFIDENCE OF PRIVATE INVESTORSINVESTORS
GO TO ISO IMOOPTION 4
UNLIKELY OPTION UNLIKELY OPTION (AT LEAST FOR MANY YEARS)(AT LEAST FOR MANY YEARS)
IMOTSO
(GO+TO+SO) OPTION 3
GridCo (GO+TO)
ISMO(SO + MO)
OPTION 2
TSMO(GO + TO + SO + BMO)
OPTION 1
FOR PROFIT NOT FOR PROFIT
Management Department
GOGO
Grid OwnershipManagement Department
Grid Operation
Department
TOTO
Grid Operation
Department
TSO
Transmission Company Before Market Opening
Legal Corporations Departments Within Corporations
Traditional European TSO Before Market OpeningTraditional European TSO Before Market OpeningTraditional European TSO Before Market OpeningTraditional European TSO Before Market Opening
System Operation
Department
SOSO
System Operation
Department
ACCEPTABLE TO ETSOACCEPTABLE TO ETSO
Management Department
GOGO
Grid OwnershipManagement Department
Grid Operation
Department
TOTO
Grid Operation
Department
Market Operation
Department
MOBMO
Market Operation
Department
System Operation
Department
SOSO
System Operation
Department
Legal Corporations Departments Within the Corporation
TSMO
OPTION # 1 – No UnbundlingOPTION # 1 – No UnbundlingIntegrated Transmission Functions after Market OpeningIntegrated Transmission Functions after Market Opening
OPTION # 1 – No UnbundlingOPTION # 1 – No UnbundlingIntegrated Transmission Functions after Market OpeningIntegrated Transmission Functions after Market Opening
ACCEPTABLE TO ETSOACCEPTABLE TO ETSO
INDEPENDENT AND INDEPENDENT AND NOT FOR PROFITNOT FOR PROFIT
FOR PROFITFOR PROFIT
Management Department
GOGO
Grid OwnershipManagement Department
Grid Operation
Department
TOTO
Grid Operation
Department
Market Operation
Department
MOMO
Market Operation
Department
System Operation
Department
SOSO
System Operation
Department
GridCoGridCo
Grid Management
ISMOISMO
System Management
Legal Corporations Departments Within Corporations
OPTION # 2 OPTION # 2 Separation of Grid Operation from System OperationsSeparation of Grid Operation from System Operations
OPTION # 2 OPTION # 2 Separation of Grid Operation from System OperationsSeparation of Grid Operation from System Operations
OPPOSED BY ETSOOPPOSED BY ETSO
SPARE SLIDES NOT USED
•The Serbian Case
ELEKTROISTOK
EPS CORPORATE OFFICE
Transmission Support Services
Telecommunication Department
Other Departments
Power System Control Department
SubsidiarySubsidiary
Step 1 of the ReformStep 1 of the Reform(Transformation of the EPS Elektroistok Subsidiary into a Transmission and System
Operation Company (TSO)
Transmission Grid Owner & Transmission Grid Operator
(GO + TO = TSO)
SO
TSO
System Operation Control
(Dispatch Centre)
OperationsPlanning and
Analysis
MeteringAccounting &
Tariffs
ElectricityTrading
Telecommunications Group
Energy Planning
Group
TransmissionNetwork Group
Information Technology Group
EPS Holding Company
Generation Companies
Distribution Companies
System Operation Functions (on Vojvode Stepe)
Elektroistok System Operations Building Isolated from other EPS
functions located on Vojvode Stepe
TSO ElektroistokTransmission Grid and
System Operation Subsidiary
Physical, Functional and Accounting
Unbundling
Grid Operation Functions (on Kneza Milosa)
Elektroistok Grid Operations Remains in the Same Building on
Kneza Milosa
Step 1 of the ReformStep 1 of the ReformMinimization of the Cultural Shock at Time of the Merging of the SO Functions
EPS CORPORATE OFFICE
Transmission Support Services
Telecommunication Department
Other Departments
Power System Control Department
Step 2 of the ReformStep 2 of the Reform(Unbundling and Transfer of the EPS Corporate Transmission Technical Support
Services to the Elektroistok Subsidiary)
ELEKTROISTOK
SubsidiarySubsidiary
Transmission Grid Owner & Transmission Grid Operator
(GO + TO = TSO)
SO
TSO
STRENTHENING OF THE MANAGEMENT CAPACITY AND INDEPENDENCE OF
ELEKTROISTOK
EPS CORPORATE OFFICE
Transmission Support Services
Other Departments
Power System Control Department
Step 3 of the ReformStep 3 of the Reform(Unbundling and Corporatization of the EPS Telecommunication Department as a
Subsidiary of Elektroistok)
Telecommunication Department
ELEKTROISTOK
Subsidiary of EPSSubsidiary of EPS
SO
TSO
Subsidiary of the Elektroistok TSO
Telecommunication
Commercial Commercial OperationsOperations
Power Sector Operations
Step 4 of the ReformStep 4 of the Reform(Development and Establishment of a Market Operation Department within Elektroistok)
EPS CORPORATE OFFICE
Transmission Support Services
Telecommunication Department
Other Departments
Power System Control Department
ELEKTROISTOK
Subsidiary of EPSSubsidiary of EPS
Subsidiary of the Elektroistok TSO
SO
TSMO
Telecommunication
MO
ESTABLISHMENT OF THE NATIONAL MARKET
OPERATION DEPARTMENT
Step 5 of the ReformStep 5 of the Reform(Transformation of Elektroistok into a Fully Independent Transmission,
System and Market Operator)
EPS CORPORATE OFFICE
Transmission Support Services
Telecommunication Department
Other Departments
Power System Control Department
ELEKTROISTOK
Subsidiary of EPSSubsidiary of EPS
Subsidiary of the Elektroistok TSO
SO
ITSMO
Telecommunication
MO
XX FULL UNBUNDLING & TRANSFORMATION OF ELEKTROISTOK INTO AN ITSMO
ITSMO - Elektroistok Company
END OF PHASE V OF RESTRUCTURINGEND OF PHASE V OF RESTRUCTURING
EPS Holding Company
Portfolio of Generation Companies
Portfolio of Distribution Companies
Market Operation Department
(on Vojvode Stepe)
Grid Operation Department
(on Kneza Milosa)
System Operation Department
(on Vojvode Stepe)
GO ?GO ?
GO ?GO ?
POTENTIAL FURTHER RESTRUCTURING STEPSPOTENTIAL FURTHER RESTRUCTURING STEPS
ITSMO - Elektroistok Company
Market Operation Department
(on Vojvode Stepe)
Grid Ownership & Operation Department
(on Kneza Milosa)
System Operation Department
(on Vojvode Stepe)
Independent ISMO(on Vojvode Stepe)
Independent IMO (on Vojvode Stepe)
Independent ISO (on Vojvode Stepe)
OR
Independent GridCo(on Kneza Milosa)
GR
SK
RO
TR
BG
AL
A
I
HR
H
Ser
Mon
SLO
BiH
BG
UA
MD
MK
ROHRHRSLOSLO
BiHBiH
ALAL
SerSer
MonMon
MKMK
BGBG
RORO
GR GR
Proposed UCTE Proposed UCTE Control BlocksControl Blocks
Proposed UCTE Proposed UCTE Control BlocksControl Blocks
AA
SKSK
HH
BORZENOPCOM