- 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 -

KOSTT JSCFunctioning

Developments Perspective

Prishtina20 January 2010

Fadil IsmajliChief Executive Officer

Kosovo- International investors’ conference New Kosovo Power Plant

2

Legal & Regulatory Framework in Kosova

2

July 06Establishment ofITSMO

July 04Establishment ofEnergy Regulatory Office

Dec 04Establishment ofMinistry of Energy & Mining

Primary Legislation in Energy Sector in Kosovo (June 04)- Law on Energy -- Law on Electricity -- Law on Energy Regulator -

Nomination

Licensing

Economic regulation of the

energy sector

Designing sectors’

developments strategies and

policies

Operation of the electricity

system and electricity

market

3

KOSTT and its functions

3

• KOSTT JSC is responsible for:

– Bulk transmission of electricity on HV network and other ancillary services (…secondary regulation, etc.)

– Maintenance & development of TS

– Operation of Kosovo electricity system

– Balancing (demand = supply)

– Operation of electricity market

– Congestion management (allocation of interconnections)

4

License obligation-development of rules, codes, etc.-

• Market Rules – OP for implementation of rules

• Grid Code & Metering Code

• Electrical Standards Code & Technical Equipment Code

• Distribution Code (in cooperation with DSO)

• Technical performance indicators

• Commercial Agreements

• Long-term Power Balance (& PB on annual basis)

• Business Plan of KOSTT (2007-2012)

• Connection Charging Methodology • Transmission Network Development Plan• Other documents under preparation/under approval

4

5

Access to the Transmission Network

• KOSTT will offer its transmission capacities for all usersEC Directive → Law on Electricity → TSO License– Cost reflective and regulated tariffs & charges

• Transmission Use of System Charges (EROs Tariff Methodology)Generation component in the Tariff methodology for Transmission Use of Charge

(ToUS) equal to zero (G=0)• Physical connection to the transmission network (KOSTTs Charging

Methodology): Deep connection approach• Cross border related mechanisms (CB principles & rules)

– Parties’ access is granted following the fulfillment of technical & financial criteria

– Transparency in Third Party Access (TPA) ensured by the Grid Code and other technical codes

5

6

Transmission network development

6

• Investment plan – approved by ERO (regulator)• Significant projects, which will accommodate system users’ needs

Results

→ Increase of transmission capacity (53%)

→ Improve the security of the network

→ Increase interconnection capacities for regional market

→ Enabling higher level of cross-border flows over KOSTT’s system

→ To meet future generation capacities and supply in Kosovo

→ Improve the quality of supply & system operations capabilities

7

Perspective for investments

• Well developed legal framework (all in compliance with EU legal framework)

• Strong and autonomous agencies (Regulators, Antitrust, etc.)

• Very well developed electricity transmission infrastructure - regulated and easy access to the network

No requirements for generation developer to invest in interconnections

Establishment of the appropriate SCADA system

Establishment of the tools for monitoring and settling all power transactions in the market (software platform reflecting the market)

• Well operational Transmission, System and Market obligations with motivated and skilled staff

7

8

Historic Electricity Consumption & Peak Load

8

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

504

537 621

693690

624 603

500

525

550

604

692733

656617

653

755780

808

892 914970

0

100

200

300

400

500

600

700

800

900

1000

GWh

MW

Year

Year

Constantl

y

IndustryHousehold War

High Increase

(7% average)

Similar reflections on the peak load (MW)

In 10 years

=double

9

Energy sector developments

• Continuous need for power import of neighboring countries like Macedonia, Albania, Montenegro, etc.

• Privatization of distribution and supply of electricity

• Emerging regional market – wider market, more possibilities

– Development of regional bodies for facilitation of electricity market and trades

– Development of electricity trading mechanism

Regional and European integration

9

10

www.kostt.com

Thank You

Kosovo- International investors’ conference Kosova e Re Power Plant

20 - 21 January 2010

KOSTT - Transmission, System and Market Operator j.s.c.Iljaz Kodra  nn

10000 Prishtina, Kosova