Energy Community drops cases against Macedonia

Energy Community drops cases against Macedonia
By Denitsa Koseva in Sofia May 30, 2018

The Secretariat of the Energy Community said it has formally closed several cases against Macedonia after the country adopted the crucial EU-requested energy law that foresees further liberalisation of the electricity market to include small firms and households.

The law, approved by parliament on May 21, envisages the liberalisation of the electricity market from 2019, allowing households and small firms to choose their supplier. The law is fully aligned with EU energy legislation.

“Following the adoption of the law, this Contracting Party formally rectified the breaches established by the Ministerial Council in cases ECS-09/16 and ECS-02/15,” the Energy Community’s Secretariat said in a statement.

Macedonia was the sole country where households and small business were not allowed to purchase electricity directly from the supplier of their choice.

“With the adoption of the new law, eligibility of these customers is ensured,” the statement noted.

This law was supposed to be adopted in 2014, but the approval process was prolonged by the previous government led by the conservative VMRO-DPMNE party.

Starting from 2019, state-owned power producer ELEM will be obligated to direct 80% of its production to the universal supplier, which will be selected via a tender. Gradually this percentage will be lowered, and in 2025 only 30% of ELEM’s production should be handed over to the universal supplier.

The law also specifies the ownership of state-owned energy companies and thus will decentralise the competence of the government. ELEM will remain under government control, while transmission operator MEPSO will be under the Ministry of Transport and Communications, and Macedonian Energy Resources (MER), a company which develops gasification projects in Macedonia, will be run by the Ministry of Economy.

The liberalisation of the electricity market in Macedonia started in 2008 when big industrial consumers were allowed to choose their supplier. The second stage continued in 2014 when 230 companies with annual revenues of €10mn were included in the process.

However, the following stages that envisaged market liberalisation for small firms and households planned for 2015 and delayed until 2016 were not implemented. The explanation was that the electricity prices would increase if the government allowed further market liberalisation.

According to earlier data, as of April 2014, about 44% of the electricity market in Macedonia had been liberalised.