1. Introduction
1.1
I will also mentioned, that it was the fact that each state (‘market’) grow apart from each other that made them completely different from each other, that they could actually complement each other once they unite. At the same time, it will be stressed that although in political context may be easy to justify and implement a unification of countries, since similarities and common issues will prevail by coming together. But, in the electricity sector these countries were never united and until recent reforms under the requirements for implementation of EU ‘acquis communautaire’ they had nothing in common, therefore it has to be understood that uniting technically two different and independent systems may be challenging.
1.2 Explaining the current efforts and understanding of a common electricity market from both governments perspective. Emphasizing that government strategy tends to be limited within the requirements of the EU ‘acquis communautaire’ and not to extend their integration beyond the framework of the guideline requirements of the European Community Energy Treaty (‘Trehttps://www.freelancewritersplanet.com/wp01-admin/profile.phpaty’).
I would emphasize that government strategy is limited only within the integration of the system operation and balancing settlement, while does not address other licensees such as generators and supplier in each country, does not have a common policy towards customers services, price regulations and security of supply, market entry may be similar but different still in each country. In this respect, I will propose my version of a full integrated, namely united electricity market, with a single regulator, who will have absolute control over the market, by unifying and standardizing regulations which will be applicable in both countries to all entities, not just cross-border entities. The regulator, will deal standardize, connection fees, licensing, customer switching procedure, social support schemes, RES schemes, security of supply.
I will try to argue that joining of the market to such extend will reduce costs, as opposed to having separate regulators with doubled functions for each national market.
1.3 I will highlight current legal difficulties regarding market unification, namely KOSTT’s absence of recognition as a TSO. In addition, I will initially mentioned briefly the administrative implication regarding the proposed full extend of market coupling, namely legislative changes from primary to secondary legislation, to include harmonization of legislation, and introduction of new legislation. As well as introducing a new market model and harmonized regulations, and other implication of technical nature.
2. MARKET BACKGROUND
2.1 Albanian Electricity Market
(a) Historic background and generation capacities, customer profile, transmission connections;
(b) Market players, level of market liberalization and market model;
(c) Efforts to establish an Exchange Market (PX)
(d) Status in fulfilling Energy Communities requirements;
2.2 Kosovo Electricity Market
(a) Historic background and generation capacities, customer profile, transmission connections;
(b) Market players, level of market liberalization and market model;
(c) Difficulties of the current TSO recognition status;
(d) Status in fulfilling Energy Communities requirements;
3. ACTIVITIES & CURRENT GOVERNMENTAL PROPOSAL FOR COMMON MARKET
3.1 Mutual understandings between governments
(a) Cooperation agreements to join the markets in terms of system operation and balancing settlement;
(b) Agreement to address together the security of supply issue by jointly developing additional capacities in Kosovo
3.2 Proposed market integration
(a) Full market integration one system operator, one market operator and joint regulatory committee for these cross-border entities
(b) Advantages& Disadvantages, commercial gains and analysis of available reports in this matter;
4. SINGLE AND UNIFIED ELECTRICITY MARKET BETWEEN ALBANIA & KOSOVO
4.1 The Proposed unified electricity market
(a) Main features of the unified market. Single regulator, SO and MO. Single bidding zone, standardized and single licensing, tariff, dispute settlement, customer connection and switching policies, to include customer social support schemes and RE scheme policies.
(b) Clear Market Model
(c) Main differences with the current proposed model by the governments and the Energy Community requirements, and additional benefits.
(d) Similar market couplings, (e.g. Chile, unification of Germany)
5. PROCEDURAL IMPLICATION AND CHALLENGES IN UNIFING THE MARKET
5.1 Technical and infrastructure capabilities
(a) Transmission and communication infrastructure;
(b) Interconnection lines between countries introducing and internal market transmission lines;
(c) Addressing potential congestions and balancing requirements
5.2 Implications in current legislation
(a) Review the constitutions and current Primary Laws of each country and determine to what level they may be an obstacle to unify the market.
(b) Identify the Primary laws relevant, such as energy, electricity and regulatory laws, as well as competition or market monitoring laws, and what needs to be changed.
(c) Identify Secondary legislations in both countries regarding the electricity market and market participants that impact or prevent the market unity.
(d) Identify and review the Transmission Codes, balancing procedures, congestion management procedures, auxiliary services which need to be standardized.
5.3 Challenges
(a) Redefining the role of the Energy ministries and delegating their competences to the Regulator; Seat of regulator, settling disputes; Electricity tariffs and the fact of different currency between countries.
(b) Standardizing laws related to procurement, either for power purchase or awarding contracts regarding construction of new generation capacities;
(c) What new laws need to be introduced, and who and how will be appointed and monitored the single entities.
6. SIGLE MARKET’s ROLE IN THE REGION MARKET
7. CONCLUSION DISCUSSION & RECOMMANDATIONS

REMARKS
The paper needs to be analytical, not introductive. It shall describe the benefits of market integration and having one regulator regulating the market in two states. Emphasizes should be given to the natural balancing that bot market can do to each other due to their generation characteristics (hydro vs. thermal).

Market Facts:
Description KOSOVO ALBANIA
Geographical Area 10,887 km² 28,748 km²
Population 1,824,000 2,890,000
No. of Customers 490,545 1,218,000
Max. Elec. Capacity Power Plants 1,217 MW 1,824 MW
Coal-Fired PP 1,717 MW 0 MW
Hydro 45 MW 1,860 MW
Oil 0 MW 98 MW
Renewable/Wind 1.35 MW 0
Electricity production 4,894 GWh 4,726 GWh
Net Imports 966 GWh 3,356 GWh
Net exports 475 GWh 288 GWh
Total electricity supplied 5,385 GWh 7,794 GWh
Gross electricity consumption 5,399 GWh 7,815 GWh
No. of Transmission Interconne. 7 5
Generation 5 Coal Units / Public
1 Hydro / Public
3 Small Hydro/Private 3 Hydro Units /Public
98 Small Hydro Private
Distribution Network Private Public ( was Privatized to CEZ government bought it back)
Retail/Supply Private – Public Supplier (same owner as in Distribution Network) Public – Public Supplier( was Privatized to CEZ government bought it back)
New Suppliers 2 pending application
(Croatian & Serbian State Suppliers) 0
Main Projects New Private Coal fired PP to be built by 2020 (600 MW)
400 kV Transmission line between Kosovo-Albania under construction
Fuel Sources Large Lignite reserves, limited water Water, Oil, Gas potential

Potential References

PRIMARY

Legislation

The Law on Energy Sector, No. 43/2015, Republic of Albania, dated 30th April 2015

Law on Energy in Kosovo

Law on Electricity in Kosovo

Law on Energy Regulatory Office in Kosovo

Memorandums of Understanding between Albania and Kosovo on establishing the common electricity market.

The Energy Community Legal Framework, 3rd Edition, Edited by Dirk Buschle and Jolanta Navickaite, July 2013, (https://www.energy community.org/portal/page/portal/ENC_HOME/DOCS/2178178/0633975AD2077B9CE053C92FA8C06338.PDF)

SECONDARY

Books

Hunt, Sally, 2002, Making Competition Work in Electricity, Book, John Wiley & Sons, 450

Articles

P. Krstevski, V. Borozan, A. Krkoleva Mateska, J. Angelov, R. Taleski, 2015, Investigating the Conditions for Establishing a Regional Power Exchange, Ss. Cyril and Methodius University, Faculty of Electrical Engineering and IT Skopje, Republic of Macedonia

Veit Böckers, Justus Haucap, Ulrich Heimeshoff, 2013, Benefits of an integrated European electricity market: the role of competition, University of Düsseldorf (DICE)

Reports

AECOM, February 2016, Road Map of Activities and Responsibilities in Establishing Common Electricity Market: Kosovo – Albania
Vattenfall Europe PowerConsult GmbH, 2013, Report Study about Security of Electricity Supply in Kosovo, on behalf of Kosovo Transmission System and Market Operator J.S.C. (KOSTT)

Presentations

Naim Bejtullahu/CEO Kosovo TSO, 2014, Common Electricity Market Kosovo – Albania