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Course Syllabus This 5-day training course will be organised into thematic modules focusing on the hottest issues of energy sector regulation. The training program combines “classic” regulation under the traditional vertically integrated industry structure with up-to-date issues of regulation in developing a competitive industry environment. MODULE 1 - ROLE AND FUNCTIONS OF THE REGULATOR
The principal objectives of the regulatory institutions are a) to protect energy consumers from monopoly pricing and behaviour; b) to protect private investment from politically dictated prices and from regulatory uncertainty and if relevant, c) to monitor and foster energy market competition. In order to meet the above objectives under a private and increasingly competitive industry setting, the regulator should be a decision making body highly independent from short-term political influences and direct industry interests.
This module provides participants with an overview on the objectives as well as on the institutional setting and decision making processes of energy regulatory institutions. Common tasks for energy regulators (stemming from the need for economic regulation) are discussed. A discussion on the monitoring activities of regulators as well as on their practices to ensure the transparency of their operations is provided. An introduction to the basics on the legal aspects of regulatory work is given with a special emphasis on licensing. MODULE 2 - TARIFF SETTING AND PRICE REGULATION One of the principal tasks of energy regulators is to set or authorise regulated prices for the companies under regulation. The participants will be provided with the theoretical basics and also an overview of the price regulatory process, including the setting of the revenue requirement, tariff design alternatives and questions in the choice of a price regulatory regime. Incentive price regulation is covered extensively. The relation between price and service quality regulations for network companies is highlighted. Participants will be involved in an hands-on exercise to determine a tariff based on their new skills. MODULE 3 - RESTRUCTURING OF THE ELECTRICITY AND GAS INDUSTRIES A major change in electricity and gas industry structure which also transforms the regulator’s entire job is when competition is introduced into the operations of these traditionally vertically integrated sectors. This part of the course will introduce the basic ideas and principles behind recent restructuring and liberalisation process in the electricity and gas sectors, with a special emphasis on the European experience. The practice of unbundling and providing regulated access to essential facilities is discussed. Different models of wholesale and retail competition are introduced. The program includes an in-depth analysis of gas market restructuring. Participants will demonstrate their knowledge of the operation of an electricity exchange through a group exercise. MODULE 4 - ENERGY MARKET REFORM ISSUES IN EMERGING / TRANSITION ECONOMIES
This special day is dedicated to lectures and discussions on the specific problems and issues emerging / transition economies are facing when reforming their energy sectors. The work products of ERRA’s technical committees on pricing and licensing are heavily utilised here. Experiences with the major reform steps are discussed one-by-one. The state of art in removing final and cross subsidies from electricity prices is presented. An assessment on the experiments, experiences, successes and failures with increased private participation in the sector is provided. An overview of the variety of electricity market structures found within ERRA members is discussed. The extent of and the potential solutions for the stressing problems of non-payment as well as for the support of low income customers in emerging economies are presented. Country case studies complete the program of this day. MODULE 5 - REGULATION AND SECURITY OF SUPPLY
This module will analyse the relationship between security of supply in electricity and gas services and regulatory practices. After a discussion on the global trends affecting the future of energy security, an assessment of the impacts of the regulatory environment on both generation adequacy and the reliability and quality of network operations is given. Special attention is given to discussions on the regulatory measures left under competitive market structures to affect investment into extraction, generation and the network. A visit to the Hungarian electricity system operator will bring the real-life operational issues of such a system closer to the participants. |
