Interview with Tomaž Štokelj, Ph.D., the Executive Manager of the Sales & Trading Division at Holding Slovenske elektrarne (HSE), Slovenian major producing and trading company.
1. How long have you been present on power markets in SE Europe? How would you evaluate the development and the actions taken on these markets?
HSE has been present on power markets in SE Europe almost from the beginning, i.e. from 2002 onwards. At that time, some administrative impediments, such as licences, companies, etc. did not yet exist. The trading took place mostly on the borders of individual countries (Croatia, Bosnia and Herzegovina, and Serbia). Soon after, in 2004, HSE established its first representative office which was located in Beograd. The representative office’s aim was to gather information on electricity trading, as well as establishing contacts and opportunities for lease or purchase of the generation capacities. Later on, the subsidiary company HSE Balkan Energy LLT has been established on this basis. As a consequence of the power markets’ liberalisation and the implementation of EU directives, the SE European countries began to amend their power legislations. Due to the results, HSE had to establish companies and subsidiaries in order to maintain and also expand its presence in the SE European area. In 2006, the company HSE Hungary has been established in Hungary and HSE Adria in Croatia. We have opened our representative office HSE Romania in Romania in 2007, in 2008 we have formed HSE Bulgaria in Bulgaria, and HSE MAK Energy in Macedonia in 2009. We are continuing with the establishment of our representative offices and the expansion of our business operation also in Greece and in Bosnia and Herzegovina.
The conditions on power markets on the SE European area are very specific. Clearly, notwithstanding the implementation of EU directives, the power market in the SE Europe is still not liquid and transparent enough. The state-owned power companies still maintain a monopolistic position in their countries. The electricity is still perceived as a social property; the percentage of paid electricity is substantially lower than in the notorious Europe. Due to financial problems, some state-owned power companies have been partially privatized. In the near future we expect the negative trend to continue, as problems and setbacks in some countries are still growing due to the recession. By this we mean especially the investments in the generation capacities and the transfer of electricity. As they do not have their own money (except in some rare exceptions), the “help” from the institutions from West Europe, strong in capital, will be necessary. The privatization of state-owned companies is also possible for which some of the biggest European energy companies are highly interested (CEZ Group, Enel, Edf, RWE, Verbund etc.).
2. You have been a member of BSP SouthPool from the beginning. In your opinion, what is the role and the meaning of the power exchange in the region?
The power exchange development project in the region is important from the viewpoint of transparency of prices on the markets for producers as well as for consumers of electricity.
3. According to the development projects in the region, how would you evaluate the possibility of the increase in liquidity at BSP SouthPool?
On the regional exchange SouthPool, there were 1,7 GWh of concluded transactions in November and December 2008, while in the first nine months of 2009 there were 10,2 GWh of concluded transactions. These data clearly show that the liquidity is increasing which also strengthens the meaning of the exchange. This gives a more transparent and a securer price signal to the market participants and increases the market transparency. After the introduction of market coupling, the increase of exchange liquidity is expected, but the scope of the increase depends mostly on the degree, to which the exchange will be included to the organizational structure after the introduction of market coupling. As far as the SE European markets are concerned, any comprehensive activities on the field of the establishment of the regulatory frameworks for the establishment of a transparent power market are hard to be expected in the near future. A substantial problem in establishing a regional exchange, which would include more countries of ex Yugoslavia, lies in the "unconnection" of these markets and unwillingness to cooperate among individual countries.
4. What are the main strategic goals of your company in the future?
In the future, the goals of HSE will be oriented in the provision of a reliable, safe and secure electricity supply in Slovenia and a concurrent expansion to the SE European markets. The focus will be on the further development projects and the construction of electricity generation capacities that will increase the Slovenian power self-sufficiency.
The whole Newsletter is available for download on the following link:
http://www.bsp-southpool.com/Portals/0/Media/Newsletter/BSPnews-October2009.pdf