1. - K O S O V A N T R A N S M I S S I O N S Y S T E M & M A R K E T O P E R A T O R - O P E R A T O R I I S I S T E M I T, T R A N S M I S I O N I T & T R E G U T T Ë K O S O V Ë S - HIGH LEVEL FORUM-MED SIGURIA E FURNIZIMIT ME ENERGJI ELEKTRIKE NЁ KOSOVЁ S ECURITY OF E LECTRICITY S UPPLY IN KOSOVO 1 March 2016 Prishtine

2. KOSTT Role in the Power System of Kosovo  KOSTT J.S.C is a public company, the shareholder of which is the Republic of Kosovo, through the Ministry of Economic Development  The Transmission System Operator manages operation, maintenance and development the electricity transmission system in the HV levels of network 400kV, 220kV and 110kV.  The Kosovo Transmission and System Operator Complies with the provisions of the:  Grid Codes  Electrical Standards Code & Technical Equipment Code  Connection Charging Methodology  KOSTT performs:  Real Time Operation  Observability of neighboring transmission grids  Short (Day Ahead),Medium and Long term Planning\Analysis

3. Role and Responsibilities  Provide Transmission service under regulated tariff  Provide non-discriminatory open access to the grid  Enhance reliability and balancing the system  Planning, development and maintenance of network responsibility  Transmission delivery service  Facilitate and operate the Market 3

4. Establishment of KOSTT 4 Directive 2003/54/EC Regulation 1228/2003 Energy Community Treaty Kosovo Legal Framework Establishment of KOSTT - July ‘06 Market Rules Technical Codes Licensed in Oct ‘06 by Regulator KEK (PCK) KEK HoldCo KOSTT HoldCo KOSTT JSCKEK JSC Tariff regulation for TUoS (2007)

5. Kosovo Transmission System Interconnected With SEE Network K S

6. System and Generation Adequacy Transmission capacity for export Transmission capacity for import Generation Adequqcy e.g in year 2020 is -300MW and in 2021 balanced Generation adequacy ibn 2021 is -650MW

7. Transmission Infrastructure- Peak Demand-Generation Capacity Total length of OHL of various voltage level Transformers : 7 peak load of system 2015 1130 MW Demand 2015 5.55 TWh In Kosovo the production is dominated by Thermal Power plant 92.8%, the rest hidropower plant around 6.8%

8. Investments in Transmission in KOSTT  Already invested 2006-2016, 168 mil euro,  Committed Investments 2016–2018, 79 mil euro,  Funding Sources:  KOSTT, KFW, EBRD, USAID,EU,WB. Main infrastructure Projects:  New 400 kV Interconnection line Kosovo- Albania and LFC project  Construction of two 400/110kV substations: Peja3,Ferizaj2  SCADA/EMS and Telecomm, IT for Market  Refurbishment of all 220/110kV substations  Construction of six 110/10 (20) kV substations and 150 km of new 110 kV lines ;  Refurbishment of 110/10(20) kV substations, etc. 8

9. Gjendja e rrjetit ne vitin 2009

10. Pamja e rrjetit pas investime ve dhe atyre te planifikua ra deri ne vitin 2018

11. 11 New National Control Centre-Scada EMS

12. Transmission Capacity Development 2009-2016 Rritja e kapaciteteve transmtuese sipas kriterit N dhe N-1 per shkak te investimeve. Me ngjyre te kyqe piku I konsumit. Gjate vitit 2009-2010 Piku ka qene 1072MW dhe kapaciteti transmtues rreth 850MW qe dmth gjate kohes se pikut konsumit eshte dashur te redukohet per shkak te transmisionit. Ne vitin 2016 kapaciteti transmetues eshte mbi 1600MW gjate kriterit N dhe N-1 rreth 1200MW. Kjo eshte sinjal I mire I perkrahjes se investimeve ne gjenerim dhe ngarkese dhe ka pak nevoje.

13. Achievements  Transmission Network Development Achievements: Increase of internal transmission network capacities Increase of reliability, quality and security of supply Support for Distribution Load (economic development) Reduction of active and reactive power losses Increase of System performance in compliance with ENTSO/E technical requirements Significant reduction of non-planed outages  Support for security of supply: Internal and regional Electricity Market promotion  Promoting new investments in generation  RES and load support (Economic development)

14. Transmission Losses and Voltage Quality Improvement 2015 The losses are reduced because of Invesment in Transmission network. In2006 the losses was at 280GWh and 2015 at 110GWh Inprovement of volatges as results of investment. The voltages are in compliance with grid code requirements Max and Min voltage of operation according grid code GWh

15. Position of KOSTT toward ENTSO-E  According to Brussels agreement KOSTT has signed Inter TSO agreement with neighboring TSO-s  On 01.10.2015 KOSTT has signed connection agreement(CA) with 30 TSO-s of Continental Europe  According to connection agreement KOSTT has to work with PG KOSTT to fulfill all noncompliance's regarding OH  Based on technical and HR capacities of KOSTT, the objective is to sign permanent connection agreement in period of two year and ENTSO-E membership  KOSTT is a part of ITC mechanism on ENTSO-E as from 1.january 2016  KOSTT is observer in SEE planning group, maintenance group, CMMI etc. 15

16. 16  KOSTT and OST has conducted studies about sharing the reserves  Based on results achieved it was foreseen a benefit for investment in sharing the reserves  The LFC project contains equipment's, tools and platforms installed in both control centers to enable the sharing reserve for secondary regulation  As defined by ENTSO-E, two or more TSOs can decide to constitute an LFC Block.  The project is finished Sharing of Reserves Between KOSTT-OST  Testing was perform successfully with monitoring of PG KOSTT and Swissgrid  On 15.12.2015 the commercial agreement was signed

17. Dimensioning Reserve results 17 ► Results of the combined assessment probabilistic and deterministic (min. max. values of both approaches) Required reserves (  for max. power deficit) Required reserves (  for max. power surplus) + 260 MW - 170 MW KOSTT + 150 MW - 65 MW OST + 260 MW - 160 MW joint Me metoda per llogaritje nga ENTSO-E rezulton qe nese KOSTT dhe OST I bashkojn rezervat atehere dy TSO-t kan obligim me 260MW rezerve terciare per shkak te bllokut me te madhe dhe - 160MW per shkak te konsumit me te madh

18. TPA (TUoS & ConnCh) Bilateral Trading Scheduling and accounting Monthly (H-Data) Settlement Customer Switching Y/M/D Capacity auction (SEE CAO) 18 Bilateral Trading Y/M Capacity Auctioning TPA (TUoS & ConnCh) Monthly (M-Data) Settlement of TUOS Y/M/D capacity auction (SEE CAO) TPA (TUoS & ConnCh) Bilateral Trading Scheduling and accounting Monthly (H-Data) Settlement Customer Switching Balancing Mechanism TPA (TUoS & ConnCh) Bilateral Trading Scheduling and accounting Monthly (H-Data) Settlement Customer Switching Balancing Market (KS-AL) DAM/Intra day market (KS-AL) Phase 1 2007- 2013 Phase 2- KEMM 2013- ? Phase 3 Phase 4 Phases of Market Development Y/M/D Capacity auction (SEE CAO) Regional DAM/ intra day market Regional balancing Market Balancing Market (KS-AL) DAM/Intra day market (KS-AL)  Bilateral Market defined by contracts  Supported by Balancing Mechanism (BM)  Bilateral financial settlement of contracts Key Points of KEMM  Central financial settlement of BM and Imbalances  Can integrate with Regional Market as it develops

19. Bilateral Market – Bilateral contracts Bilateral Contracts AS Contracts Supply ContractsPSO Contracts EC Suppliers PSO Customers Public Electricity Supplier Kosovo Market Area EC Neighboring Market Areas Neighboring Market Areas TSMO Wholesale Customer IPP 1.. incumbent Generator IPPn RES Generator Generators Import/export contracts EC

20. Difficulties Towards Market Opening The Kosovo power sector is small and faces with:  Small size of national Power Market  Deficit in generation capacities and adequacy  Existing old power plant which worsen the situation  Chronic shortage of energy to meet its customer demands  Dependent on electricity import  Regulated tariffs  Obstacles in regional integration 20

21. Common Electricity Market  Common market of Kosovo and Albania in line with EU target model – objective of Energy community  a single bidding zone in all markets’ timeframes  interconnections KS-AL will be considered as internal lines  No capacity booking or scheduling requirement  would be coupled with other zones on the day ahead and intraday markets  cross-border capacities with other zones would be allocated in line with the Forward Network Code  The generation mix would allow generators to optimize their generation portfolio  will link a hydro-based system of Albania with a lignite-based system of Kosovo 21

22. Conclusion Significant investments resulting with increase of reliability and security of system operation and is a good signal that KOSTT can support the Market The line between Kosovo –Albania will be in operation in June 2016. The impact of the line will relieve the congestion in region and will promote market development. New generation capacities are needed KOSTT and OST have done progress toward sharing the reserves. Technically the LFC project is completed and successfully tested KOSTT, OST and All stakeholders have to work to mitigate all the barriers to enable the common Market 22

23. www.kostt.com Thank You 23