The Role of Acquirente Unico in the Italian
Electricity Market
Tunis, 12th Sept. 2013
Autorità per l'energia elettrica e il gas
1
Regulatory framework
Directive 96/92/CE – the Italian way to the liberalised market
 Starting from vertically integrated monopolies (ENEL and
municipalities-owned utilities), generation and selling were
liberalized;
 Transmission and Distribution were unbundled;
 Progressive opening-up of the demand: distinction between
“eligible” and “captive” market;
 Acquirente Unico was set up to procure energy to the captive
market (electricity supply to captive customers was charged to
distributors).
2
Regulatory framework
Directive 2003/54/CE – The Enhanced Protection market
 Free Market:
From 1st July 2007, all customers are free to choose their suppliers
 Enhanced Protection Market
- households & SMEs (LV connected, <50 employees, <10 MEuro/y
turnover) without a supplier.
- served by distributors (or their unbundled companies)
 Safeguard Market
- customers not included in the enhanced protection market and
without an electricity supplier
- served by AU-selected retailers
3
Regulatory framework
Italian Electricity Market Model (from 1st July 2007)
Producers & Imports
Power Exchange (Day Ahead / Medium Term)
Enhanced Protection Market
Safeguard Market
Wholesalers
Acquirente Unico
E/Protection
Suppliers
E/Protection Customers
4
Open Market
Safeguard Suppliers
Safeguard Customers
Retailers
Customers
Regulatory Framework
Directive 2009/72/CE – Empowering customers
 Confirmation of the “enhanced protection market”
 Periodical
markets
monitoring surveys on competitive conditions of retail
 Ensure effective treatment and settlement of complaints
 More efficient procedure to switch (< 3 weeks)
UE Infringement Procedure closed in 2012:
5
•
Enhanched protection focuses on the interests of consumers and is based on their free
choice ;
•
Price is not established by the State, but is based on AU supply costs operating in the
free wholesale market
Regulatory Framework
Supply of electricity to the enhanced protection market
TWh
∆%
298.5 304.8 310.7 320.7 325.4 330.4 337.5 339.9 339.5 320.3 330.5 334.6 325.2 320.7
4.4%
Self-production
23.8
Free
market
47.4
2.1%
22.3
1.9%
22.2
3.2%
21.1
1.5% 1.6%
21.1
21.3
2.1%
0.7% -0.1% -5.7%
20.2
20.6
20.3
17.5
3.2%
1.3% -2.8% -1.4%
21.1
23.1
24.1
25.1
78.2 101.8 117.5
135.0 144.4 164.4
195.0
From 2007-2012
217.5
“enhanced
207.5 220.0 227.2
223.0 222.7
protection” market
has been reduced
from 124.3 TWh to
78.1 TWh (24% of
227.2
Enhanced
protection
market
204.3
total
186.8 182.1
demand)
169.3 164.8
152.9
124.3
101.7 95.3
89.4
84.3
78.1
72.9
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013*
* estimated
energy
Regulatory Framework
Market evolution: switching trend for households
Millions
28
June
2007
March
2013
27,9 mln
22,5 mln
∆
-19,6 %
(-4,1%/y)
-2,7% (-0,8
-3,4% (-0,9
26
in 2012 about 950,000 customers
have left E/P market, while
208.000 have switched-back
-5,0% (-1,3
-4,7% (-1,2
24
-3,8% (-0,95
-5,2% (-1,2
22
-5% (-1,1
2007
2008
2009
2010
2011
2012
2013
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
July
20
2014
* estimated
7
Regulatory Framework
Market evolution: switching trend for SMEs
Million
6.0
-12,1% (-0,8 Mil)
5.5
June
2007
March
2013
∆
6,3 mln
4,5 mln
-27 %
(-5,4%/y)
in 2012
about 192,000
customers
have
left
E/P
market, while 100.000 have
switched-back
-6,0% (-0,32 Mil)
-4,5% (-0,23 Mil)
5.0
-1,9% (-0,10 Mil)
-4,1% (-0,19 Mil)
-5,9% (-0,27 Mil)*
4.5
-5,3% (-0,24 Mil)*
2007
2008
2009
2010
2011
2012
2013*
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
4Q
3Q
2Q
1Q
July
4.0
2014*
* estimated
8
Energy procurement
Electricity forecasts
In procuring electricity to the EP consumers, AU forecasts (medium and
long term) the electricity demand of the enhanced protection market
 Economic indices, such as GDP variation and forecasts, industrial
production for sectors, exchange rate €/$;
 Energy market indices, such as electricity supply in Italy, oil reference
prices;
 Retail market evolution, such as households and SMEs demand and
consumers switching trends.
9
Energy procurement
Procurement strategies
 Definition of a procurement portfolio, which diversifies supply sources
and uses appropriate price-risk hedging instruments, minimising the
purchasing costs.
 AU operates in regulated (spot and forward) markets and holds eauctions with transparent and non-discriminatory procedures.
Energy portfolio in 2012 (78,1 TWh)
10

physical bilateral contracts
57%

purchasing electricity on Power Exchange
43%
Energy procurement
Reference prices

14.89%
7.97%
7.46%
7.43%
7.02%
6.54%
5.31%
4.90%
2.18%
1.61%
1.37%
0.26%
AU transfers electricity to E/P Suppliers at a price
monthly based on its energy purchasing costs,
added with its own operating costs (i.e. Supply
Price);

The final price of electricity (Reference Price)
applied to end users is set quarterly by AEEG on the
basis
of
the
Supply
Price,
adding
regulated
components*
•
Supply Price
53%
•
Network Tariffs (Trans/Distr/Metering)*
15%
•
System general costs (FER, R&S, etc.)*
19%
•
Tax and VAT
13%
-1.54%
-7.01%
-7.61%
-7.89%
-8.50%
-8.66%
-9.00%
-9.46%
-10.03%
-11.13%
-12.09%
-12.65%
-13.70%
-18.60%
-20%
-10%
Fixed Price
Ref. Price Indexed
All-included
0%
10%
20%
Free Market Vs Reference Price
– Source: 3rd Quarter 2013, household, 3kW,2.700 kwh/y
11
3rd Quarter 2013, household, 3kW, 2.700 kwh/y
Energy Procurement
Main evidences
 AU operates as any other market participant, using the same
procurement
instruments,
adopting transparent
and
nondiscriminatory procedures and balancing its accounts;
 It represents a wedge between wholesale and retail markets, thus
permitting to avoid conflict of interests.
 It is an aggregator of demand, permitting to transfer wholesale
market prices to small customers
 The reference price is based on AU costs to buy energy for E/P
customers.
12
Customers Empowerment
Energy Consumer Help Desk
 In order to support small customers AEEG, with AU support, has
realized an help desk to inform about the open market benefits and
rights, and to receive claims not properly solved by suppliers;
 It represents an important support to monitor and to tune market
regulations;
 Main issues are: incorrect billing, not-required contracts, market
information;
 From 1st December 2009 to 30th June 2013:
- 2.000.000 inbound calls
- 140.000 new complaints (by mail, fax, e-mail)
13
Customers Empowerment
Energy Conciliation Service
 To implement the EU Third Package to introduce an Alternative
Dispute Resolution (ADR), AEEG has implemented an electronic
procedure to solve dispute between customers and their suppliers.
 Some features:
- completely free of charge;
- 100% on line: applications are submitted on a web site and parties
meet in a virtual room;
- The Parties may accept or not to participate as well as to reach a
final agreement
- Consumers Associations are involved to eventually support
consumers to access the Service;
14