The Deregulated German Market

gasteknik.dk

The Deregulated German Market

The Deregulated German Market

Marcus Böske

Managing Director

Stadtwerke Lübeck Netz GmbH

31 October 2007 Page 1

DGF Conference Gasmetering


Agenda

• Short presentation of Stadtwerke Lübeck

• Objectives of deregulation

• Time schedule for deregulation in Germany

• Consequences for small and medium utilities

• Network access gas

• First consequences for customers

• Prospects

31 October 2007 DGF Conference Gasmetering

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Introduction

Stadtwerke Lübeck GmbH

• supplies electricity, gas, water and

district heating in the city and outer

region of Lübeck

• has 751 employees

Region Lübeck

approx. 210,000 inhabitants

approx. 210 sq.km

31 October 2007 DGF Conference Gasmetering

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Key figures Stadtwerke Lübeck

Business Year 2006 Transfer Sales

Transfer Grid

Number

of Meters

Grid length

in km

Gas

2,421 GWh

2,721 GWh

60,569

1,621

Electricity

1,536 GWh 925 GWh

143,072

2,856

District heating

238 GWh

238 GWh 1,611

178

Water 12.8 Mio. m³ 12.8 Mio. m³ 42,594 1,262

31 October 2007 DGF Conference Gasmetering

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Business segments

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Subsidiaries and Shareholders

Hansestadt Lübeck

100 %

DONG Energy

Stadtwerke Lübeck

Holding GmbH

25,1 %

4,92 %

69,98 %

Stadtwerke Lübeck

GmbH

74,9 % 25,1 %

DONG Energy

Sales GmbH

100 %

Stadtwerke Lübeck

Netz GmbH

31 October 2007 Page 6

DGF Conference Gasmetering


DONG Energy is our strategic partner and shareholder

• Strategic partnership since March 2005

• Joint venture „DONG Energy Sales GmbH”:

Gas and electricity for Stadtwerke und

industrial customers in Germany

• DONG Energy supplies gas to Stadtwerke

Lübeck

• Direct access to electricity and gas

production gives the opportunity for new

innovative products

• In the future: Shared projects for power

plants and / or renewable electricity

generation

• Development of synergies, shared

capabilities and improvements

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Objectives of deregulation (1)

Main objectives of Unbundling

(§6 Energy industry act*)

Transparency

Avoid

crosssubsidisation

Unbundling

No discrimination

Source: Federal Network Agency Germany

*Energiewirtschaftsgesetz / Second Energy Statutes

Reorganisation Act in Germany, dated July 7th, 2005

31 October 2007 DGF Conference Gasmetering

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Objectives of deregulation (2)

Expected effects in the marked:

• Cost control in distribution and

transport systems

• Easy access to the grids and

networks (suppliers, power

producer)

• Full competition in the end

customer market

• Condition: Marginal income in

the sales department is needed

31 October 2007 DGF Conference Gasmetering

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Time schedule of regulation

After the regulation is before the regulation

1997 EU energy directive Electricity

1998 EU energy directive Gas

2004 EU directive Transport / Long Distance Gas

2005

New Energy Industry Act / Regulated Network Access /

Federal Network Agency (Bundesnetzagentur)

2007 Network Access Model Gas (1 Oct. 2007)

To come:

New act against restraints on competition

Incentive Regulation

Ownership Unbundling? / Regulation Storage?

Regulation Energy Trade

Source: BGW/SWLN

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Consequences for small and medium utilities

• Unbundling kills synergies in (former integrated)

utilities

• Regulation produces increase of work for data

collection, process documentation as well as

calculation and application of grid fees

• Regulation demands new IT-systems and data

structures

• Incentive regulation will reduce the future grid fees to

below the minimum level for investments and

maintenance

31 October 2007 DGF Conference Gasmetering

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Network access gas (1)

Simplifications for Stadtwerke:

• Only one network access model

• Cost allocation similar to the

electricity model (top down)

• Internal booking of transport capacity

• Wholesale opportunities

• Simplified balance group

management (tappings and infeeds)

• Change of gas suppliers similar to

procedure for electricity

Stand: 2006

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Network access gas (contract overview)

Balancing-group

coordinator

TSO

Virtual

trading point

Importer

Capacity

contract

Network-connectingcontract

Bilanzkreisvertrag

group contract

Network balancing

group contract

DSO

Supplier balancing

Supply contract

Feeding-in / take-off contract

Network connection contract

Customer

Supply contract

Supplier

DSO: Distribution system operator

TSO: Transport system operator

31 October 2007 DGF Conference Gasmetering

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Status of third party access in Lübeck

Contracts with suppliers

(Stadtwerke and third parties)

Electricity

79

Gas

8

Customers delivered

by Stadtwerke

Customers delivered

by third parties

Load

profile

134,173 62,249

Remote

metering

424 101

Load

profile

3,621 14

Remote

metering

263 7

Status: October 2007

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Components of gas prices (End customers 2006)

Gas supply

Transport system

Sales

Distribution system

Gas tax

Concession levy

VAT

Source: PfaffenbergerPartner GBR / bremer energie institut,

Kurzgutachten zu den Bestimmungsfaktoren der Gaspreise in Deutschland

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Consequences: new supplier for end customer

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Consequences: intensive media coverage

Hamburger Morgenpost

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Prospects (1)

Further indications for increasing

competition:

• Increasing number of contracts

between suppliers and distribution

network operators

• Intensive response on rising prices:

newspapers, politicians, consumer

protection, judicial decisions etc.

• Guidelines and support for changing

the supplier in the newspaper, web

etc.

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Prospects (2)

• Increasing importance of biogas

(feeding-in, CHP etc.)

• Discussion about energy efficiency

will lead to new requirements for

metering

• Independent metering service

provider

• A competitive German market

won‘t change the fact, that we will

have to import gas....

31 October 2007 DGF Conference Gasmetering

Page 19


Thank you for your attention

Marcus Böske

Managing Director

Stadtwerke Lübeck Netz GmbH

Phone: +49 451 888 - 1500

marcus.boeske@sw-luebeck.de

www.sw-luebeck.de

31 October 2007 DGF Conference Gasmetering

Page 20

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