Dejan KOLETNIK, vice-president of SDDE
The “new rules” impact on the
Slovenian energy market in respect of
district heating
MaTáSzSz - Autumn district heating conference
14&15 November 2013, Visegrád
Short overview
•
•
•
•
•
•
Short overview of DH in Slovenia,
The influence of natural gas prices in DH,
Significant changes in the Slovenian energy market in 2012,
The gas competition impact on DH prices,
Energy efficency impact on DH prices,
Energy Policy implementation& EE Directive.
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Short overview of DH in Slovenia
DH is local optional public service, (opt. For a commercial
activity of supply of end customers)
The distribution of heat includes:
- the supply of heat or cold from the distribution networks,
- the operation of the system operator of the distribution
network.
(Providers have to obtain, from NRA a licence to produce heat
for the district heating or cooling if the total installed thermal
power of their production units is above 1 MW)
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Short overview of DH in Slovenia
• 79 (companys) licence holders are supplying heat in 55
municipalities and were involved in both heat
distribution for district heating and heat production for
district heating of above 1 MW;
– 40.5% of produced heat is consumed by 123.838 household
customers (0,92 TWh);
– 43.9%, of produced heat is consumed by 31.926 industrial and
other non-household customers (1,0 TWh);
– 15.7% heat losses
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Heat distribution networks in Slovenia
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The big 5 distributors of heat to households
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Length of heat distribution networks by municipality
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Structure of the primary energy sources for the production of
heat for district heating
70%
60%
50%
40%
Coal
30%
Natural gas
Biomas
20%
10%
0%
2010
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2011
2012
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The influence of natural gas prices in DH
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End user gas prices for HOUSEHOLDS
(incl. Network charge, Commodity-Natural gas, VAT&Taxes) – I3 group
End user gas prices for HOUSEHOLDS were up to 30 % higher from the average EU27
1st half of 2012
+20%
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End user gas prices for INDUSTRY
(incl. Network charge, Commodity-Natural gas, VAT&Taxes) – I3 group
End user gas prices for INDUSTRY were up to 40 % higher from the average EU-27
1st half of 2012
+40
%
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…is Natural gas still a competitive source of
energy…
Natural gas consumption in Slovenia
1200
Sm3/year
1000
Average decrease of natural
gas consumption in last
years:
-13%
800
-4%
600
• for 13% in 2011,
• and additional 4%
for 2012.
400
200
0
2010
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2011
2012
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Significant changes in
the Slovenian energy
market in 2012
Some significant changes in
markets for electricity and gas
required a lot of adaptability.
Since national legislation on
energy issues was not yet
fully harmonised with the
requirements of EU, Slovenian
energy sector has faced with
difficulties also in 2012.
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• Decrease use of natural gas -> high end
user prices;
• Natural Gas market still on paper – no
additional supplier on energy market
scene;
• Long term gas contracts have locked
the consumers opportunity for better
DH price;
• Falling of electricity prices at power
exchanges -> reduced the use of gas
fired and CHP power plants;
• The growth of production from
renewables caused the problems
associated with support schemesadditional financial support – pay
day???;
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…someone problems are for others
Challenges & Opportunities…
A new gas supplier entered in 2nd
half 2012 into natural gas retail
market and make it happened…
The competition impact on gas prices
Natural gas price (only commodity) for HAUSEHOLDS in 2012
with a consumption from 501 in 1500 Sm3/year
-25%
Decrease of
natural gas
price
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Natural Gas war in 2012 – fight for the customer
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Gas prices reduction for more then
15% in two months;
Gas price drop for more then 25%
in one year:
Hrvoje Draškovič, the CEO of
Energetika Ljubljana: „I feel like a
robber of our customers“
Customers: “Why I have paid for
energy 25% more then other
average customers in EU?“
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„I feel like a robber of
our customers“
Hrvoje Draškovič, CEO of
Energetika Ljubljana
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Households „run“ for a new gas supplyer
• 2011 -> 97 customers switched to another
supplier;
• 2012 -> 11.294 customers in 2012 switched to
another supplier, which is around 8.6% of all
customers (131.652 end gas customers);
• 2013 -> 4.618 customers changed the supllyer in
the first 6 months this year;
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Natural gas market changes
• Share of natural gas purchased under the longterm contracts were still decreasing, short term is
„trendy“;
• Short-term gas contracts based on spot markets
have a positive effect on lowering the gas prices;
• Hybrid products are prevailing (short term+long
term contracts), also from the perspective of the
security of supply.
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The gas competition impact on DH prices
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DH prices in Slovenia have decreased
from 8% to 22%, for households and
up to 40% for industry (for customers
who have not been locked with long
term contracts).
City TRBOVLJE: 20% drop of DH prices
for households and 40% for industry,
because of market competition and
efficiency increase (new investments
into the reduction of heat losses of
the DH network).
City MARIBOR: Long term gas supply
contracts for DH company's
paralyzed the DH prices. The end
customers wanted to jump from DH
to individual gas fired heating
systems.
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Average retail prices of DH for household in selected Slovenian towns
for 2010–2013
-8,5% (long term contracts)
EUR/MWh
-20% (long +short term contracts)
Surce: Statistical office of RS
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COAL
GAS
GAS
GAS
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…DH systems which are using for energy source
biomass are pushing Natural gas behind…new DH
systems switch to biomass source…Biomass is
„trendy“
•
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Local energy concept (LEC) is adopted in the form of a decree with the
prior consents of the minister responsible for energy.
Existing and planned use of energy should be present LEC and should
comply with the state or European energy policy on the following objectiv
-> the share of renewables in final energy structure should be 25%
Low budget for renewables subvention scheme
• On January 2013 GOV RS gave its approval to rise the fee for RES
sub. scheme by approx. 335% for the year 2013.
• Lowering the competition for Metal industry -> Its almost a 100%
increase on an annual basis which represents additional financial
burden (for exmpl. from 6.7 EUR/MWh network charges duties
Metal industry are obliged to pay additional 6.2 EUR/MWh =12,9
EUR/MWh).
• Metal industry view: „Having already high el.energy prices in
Slovenia compared to their competitors in Europe, this increased
fee, is a reckless move from the government which does not help
economy but it presents further, unnecessary burden. „ said by
Marko Drobnič, CEO Talum.
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Energy Policy implementation
Implementing the 3rd Energy package and the Energy Efficiency (EE) Directive
2012/27/EU into national legislation would:
• enhance Security of energy supply and security of energy services,
• foster Competitivness of the society, economy and of energy supply and energy
services,
• assure Environmental Sustainability and reduce climate change chalanges.
…but EU energy framework legislation is still not yet fully implemented into the
national legislation with the:
– Energy Act EZ-1 (is still in Parlamental procedure), probably will be acting in
2014,
– a new Energy Concept is planned for 2014 (aim is Increasing the Energy
Efficiency (EE) and use of RES, network development with introduction of
active networks -> smart grids)
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Energy efficiency Directive 2012/27/EU
• In 2007 EU summit, MS agree on a 20%
energy efficiency target by 2020, together
with a 20% renewable energy target and a
20% CO2 reduction target;
• This targets are indicative' and not binding
targets!
• Will this be met in SLO?
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Declared targets in SLO for 2020
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RES share in gross final consumption
Renewable energy sources (RES) share target
Target 2020
RES share target 25%
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Heat consumption
District heating included
Transportation
Electricity
consumption
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RES target by sectors for 2020
Surce: Ministry of infrastructure
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Greenhouse gas (GHG) emmisions by sectors in SLO
Emissions GHG [mio t CO2 ekv]
Growth of (+5%)
Reduction
Other sectors (process emissions,
waste, agriculture, etc.)
Transport
Manufacturing&Construction
Transformation (Production of el. energy and
district heating)
Other wide use
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Energy efficiency Directive 2012/27/EU
• By the end of 2015 MS shuold carry out and notify to
the EC a comprehensive assessment of the potential
for the application of high-efficiency cogeneration and
efficient DH and cooling.
• first semester of 2014, EC will review the progress
towards the 20 % energy efficiency target, report on it
and assess whether further measures are needed;
• The II. Action plan for EE from 2008-2016 , is 9% and
will be realized.
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The Energy efficiency Directive (EED) 2012/27
implementation in SLO
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Proposal for implementation of the EED in national energy law EZ-1 for EED is still
not in implementation;
The EED is a game-changer for energy companies, which are required to achieve
1.5% energy savings every year among their final clients;
The main changes in the EE Directive are:
– A 3% renovation rate for public buildings which are “central government-owned and
occupied”;
– An obligation on each EU member state to draw up a roadmap to make the entire buildings
sector more energy efficient by 2050 (commercial, public and private households included);
– The new directive also includes additional measures on energy audits and energy
management for large companys, cost-benefit analysis for the deployment of combined heat
and power generation (CHP) and public procurement.
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The Slovenian Energy Policy results to 2030
• 6 mio EUR investments in RES and EE yearly,
• 1.300 mio EUR total investments in energy sector
yearly,
• Approx. 8.000 direct employment only from RES and
EE, if business sector will follow with employment doubled.
Result are not only in achieving targets -> but benefits
which will cause lower import of energy for around 1 %
GDP and higher competiveness of economy.
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Invitation to
International district energy
conference
Slovenia, Portorož, March 2014
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Thank you for your
attention !
SDDE - Slovensko društvo za daljinsko energetiko
Karlovška cesta 3, 1000 Ljubljana
[email protected]
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