INVITATION TO SUBMIT OFFERS

Technical assistance to establish Institutional Set-up for Organised Day-

ahead market in Montenegro

Vienna, 16 October 2017

1
KEY DATA SHEET

Services requested Provision of technical assistance to establish Institutional Set-up

for Organised Day-ahead market in Montenegro

Contracting entity Energy Community Secretariat

Am Hof 4/5
1010 Vienna

Nature of contract Fee-based

Number and titles of lots One lot only

Scope of services Up to maximum 30 man/days

Type of procedure Direct Award according to paragraph 41 of the Austrian Public

Procurement law.

Deadline for submission of 30 October 2017, 12:00 CET

offers

Clarification requests Clarifications may be requested by email to

procurement@energy-community.org
Address for submission of offers procurement@energy-community.org

Applicable law Austrian Federal Public Procurement Law

(Bundesvergabegesetz2006, Federal Law Gazette I No.17/2006)

Language of the offer/service to English

be provided
All documents must be provided in English.

Currency The single currency for price conversions is: EUR

Place of performance of the As indicated in the Service Specification

services

Performance period November to December 2017

Deadline for contract awarding 02 November 2017

2
SECTION 1: SERVICE SPECIFICATIONS

Technical assistance to establish Institutional Set-up for Organised Day-ahead market in

Montenegro

1. BACKGROUND INFORMATION

The present procurement is launched within the framework of the Project: Technical Assistance to
Connectivity in the Western Balkans, Component 2: Regional Energy Market, implemented by the Energy
Community Secretariat (The Project). The present request for technical assistance relates to Institutional
Set-up for Organised Day-ahead Markets, identified in the Work Programme for the implementation of the
Grant Contract[1] as TA Project Number 6.

1.1. Contracting Authority

Energy Community Secretariat

Am Hof 4/5
1010 Vienna
Austria

1.2. Overview of the project Technical Assistance to Connectivity in the Western Balkans

Under its Action titled Technical Assistance to Connectivity in the Western Balkans (Action No. IPA
2015/038-055.02/MC/CONNECTA) the EU has allocated funds to support the development of a regional
energy market and the extension of the electricity and gas networks as well as of the Trans-European
Transport Core Network (TEN-T core network) in the Western Balkans region. Amongst other things, it will
support the identification and enforcement of soft measures and technical standards for the regional energy
market. This support comprises Component 2 of the Action and the EC has specified that the Energy
Community Secretariat (ECS) should undertake this.

Substantial efforts in terms of regulatory and institutional development are required if the three pillars of a
functioning regional energy market (i) spot market (ii) cross border balancing and (iii) cross border allocation
are to function smoothly. A number of regulatory and legal obstacles must be tackled and new/revised
legislation (primary and secondary) must be put in place in line with the Energy Community Treaty (ECT)
and the countries’ obligations towards the EU. Substantial capacity building and institutional development
is also required to ensure that on-going operation of the regional market to the benefit of both the Western
Balkans and the EU.

Within the framework of the project, technical assistance will be provided at national and regional level to
assist the national authorities to:

 align the relevant legislation with ECT/EU requirements and thereby underpin the regional energy
market;
 design the appropriate corporate structures and technical infrastructure to ensure that the various
processes required can be implemented;
 develop the relevant legal structures and models to ensure that energy can be traded; and
 negotiate suitable regional agreements to allow cross border trade.

The project started in June 2016 and is taking place over two years. Regular reporting to on the Western

[1 ]https://www.energy-community.org/dam/jcr:58e4a2f9-a67d-4bea-81f4-92b4bd949b59/ECS_WP_WB6_2016.pdf

3
Balkan 6 Initiative and the Berlin Process is foreseen which should provide the necessary incentive and
political support to overcome specific obstacles and ensure progress.

1.3 Profile of the implementing organisation

Energy Community Secretariat

The Energy Community is an international organisation dealing with energy policy. The organisation was
established by aninternational treaty in October 2005 in Athens, Greece. The Treaty establishing the
Energy Community brings together the European Union, on one hand, and countries from the South East
Europe and Black Sea region. The organisations’ seat is in Vienna, Austria. Privileges and immunities of
the Energy Community are laid down in the Agreement regarding the seat of the Secretariat of the Energy
Community signed on 29 May 20071.

The Energy Community Treaty extends the European Union (EU) internal energy market to its neighboring
countries. The principle objectives of the Energy Community are to create a regulatory and market
framework that is capable of attracting investments for a stable and continuous energy supply. This paves
the way for an integrated energy market, allowing for cross-border trade and integration with the EU market.
The Energy Community strives to enhance security of supply and competition, and to improve the
environmental situation in its Contracting Parties.

The activities of the Energy Community are administered by the Secretariat located in Vienna. Its tasks
range from the review of Treaty implementation process to the responsibility to ensure the Energy
Community’s budget – to which all Parties to the Treaty contribute – is spent correctly in accordance with
the Work Program of the Energy Community. It employs staff and manages resources and day-to-day
activities of the Energy Community.

1.4 Beneficiary country

Montenegro is the Contracting Party of the Energy Community and a party to the Western Balkan 6 (WB6)
process, which aims to further develop and integrate electricity markets of Western Balkan countries.

Three main entities in the electricity market of Montenegro are the transmission system operator CGES,
the electricity market operator COTEE and EPCG, the incumbent producer and supplier of electricity within
the same legal entity and the distribution system operator established as a separate legal entity CEDIS In
terms of generation fleet, EPCG operates two large hydro power plants, HPP Piva and HPP Perucica, and
one coal–fired power plant TPP Pljevlja. In the process of electricity market development under the WB6
initiative, Montenegro aims to develop an organized day-ahead market and, as the next step, to join the
regional market coupling process, further improve regional capacity calculation and allocation, as well as
to introduce cross-border balancing mechanisms.

Pursuant to the Government’s instruction2, the market operator COTEE, the transmission system operator
CGES and the incumbent utility EPCG set up in June 2017 a limited liability company with the task to
establish an organized day-ahead market (Power Exchange).

1
See also 87. Abkommen zwischen der der Republik Oesterreich und der Energiegemeinschaft uber den Sitz des Sekretariats der
Energiegemeinschaft (NR: GP XXIII RV 133 AB S.27);
2Informacija o mogućim rješenjima za otvorena pitanja iz oblasti energetike u okviru Berlinskog procesa
http://www.gov.me/sjednice_vlade/160
4
2. OBJECTIVE, PURPOSE AND EXPECTED RESULTS

2.1. Overall objective

The overall objective of the project is to find an efficient and viable model of strategic partnership for
organising electricity day-ahead market (DAM) in Montenegro.

2.2. Purpose (specific objective)

The purpose of the project is to conduct an analysis of possible models of strategic partnership through
which an organized day-ahead electricity market, ready for coupling with its neighbouring markets, can be
implemented in Montenegro.

Core of the assignment will be to define procedure and criteria for selection of a strategic partner and to
draft tender documents.

The proposed solutions shall be fully compatible with the purpose and overall target of WB6, to enable
adhering to a power exchange or, if economically justified (considering liquidity and economic viability),
creating an own power exchange, enabling smooth functioning of the wholesale market.

2.3. Results to be achieved

The selected consultant shall provide and organize the following:

 Evaluation of possible models of strategic partnership through which an organized day-ahead

electricity market, ready for coupling with its neighbouring markets, can be implemented,

 Draft conditions and procedures for selection of a strategic partner,

 Draft tender documents including criteria for selection of strategic partner for organisation of the day-
ahead market in Montenegro,

 Workshop dedicated to abovementioned topics.

5
3. SCOPE OF WORK

3.1. General

3.1.1. Project description

As detailed in the chapter 3.2. Specific work.

3.1.2. Geographical area to be covered

Montenegro

3.1.3. Target groups

Beneficiaries of the project are the Ministry of Economy of Montenegro and the company set up with the
task to establish an organized day-ahead market Berza elektricne energije d.o.o.

3.2. Specific work

The TA Provider shall perform the following tasks:

1. Task: Identification and evaluation of possible models of strategic partnership through which
an organized day-ahead electricity market, ready for coupling with its neighbouring markets
can be implemented under the existing legal framework and in line with the Government’s
instruction

In implementing this task, the Service Provider will be particularly responsible for the
following:

a. Review of the ownership structure, organisation, institutional position, regulation and

licensing, financing, liquidity, products, gate closure times, clearing and settlement models,
market coupling arrangements and other relevant aspects of the European power
exchanges, with the special emphasize on the power exchanges in the SEE region.
b. Review the existing EU and national legislation relevant for the organisation of the entity
operating the day-ahead electricity market in Montenegro (such as the laws governing power
sector, trade, commercial, fiscal, financial and company matters) and the relevant instruction
of the Government of Montenegro. The TA provider will provide a clear overview of
obligations stemming from CACM Regulation that could be fulfilled immediately or in a short
period of time, and of those that require amendment to the existing legislation.
c. Based on reviews done in a. and b., the TA provider will identify possible models of strategic
partnership for the organisation of a day-ahead electricity market, ready for coupling with its
neighbouring markets;
d. Based on c., the TA provider will elaborate in details advantages and disadvantages of
identified models of strategic partnership for the organisation of a day-ahead electricity
market, taking into account the Western Balkan 6 targets and deadlines for setting up a day-
ahead market and its coupling with neighbouring WB6 or EU Member States;
e. Submit the draft Report with the outcome of the activities a, b, c. and d. to the Beneficiaries
and the Secretariat for review.
6
 f. Submit the finalized Report with implemented comments from the Secretariat.

2. Task: Definition of a procedure and criteria for selection of a strategic partner

a. Based on findings of the report from Task 1.e, the TA provider will draft a detailed procedure
for selection of strategic partner and a list with a detailed description of criteria that shall be
used for evaluation of interested parties for strategic partnership for organisation of the day-
ahead market in Montenegro, taking utmost account of the designation criteria and tasks of
nominated electricity market operator (NEMO) as defined by the Commission Regulation
(EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and
congestion management (CACM Regulation).

3. Task: Drafting tender documents for selection of strategic partner

a. Based on the results of Task 1 and Task 2, the TA provider will draft tender documents for
selection of strategic partner for organisation of the day-ahead market in Montenegro, ready
for coupling with neighbouring markets.

4. Task: Presentation and approval of the overall outcome of the project

a. Organise a dedicated workshop to present the overall outcome of the project to all interested
stakeholders and market participants.
b. Submit documents developed under Task 2 and 3 to the Beneficiaries, and the Secretariat
for approval.

Each of the beneficiaries will nominate a person in charge for the overall communication with the Provider
of Technical Assistance (TA Provider) and the Energy Community Secretariat (the Secretariat) and for the
supervision of the implementation of the project. This person will be assisted by the Working Group for
implementation of obligation from WB6 Initiative, for approving the completion of the deliverables defined in
the Service Specification for the Technical Assistance.

The Beneficiary will provide all necessary inputs to the TA Provider, including the effective primary
legislation relevant for establishing organised electricity markets and market coupling.

3.3. Project management

In terms of project management and organisation, the TA Provider shall be responsible to coordinate
workflow and take care that project is implemented in accordance with the defined work plan and time
schedules.

Access of the TA Provider and its staff to certain files and documents may be limited for the sake of
confidentiality protection, in accordance with the national legislation. Official contacts from Contracting Party
and the TA Provider shall notify Secretariat of any such instances that may affect the performance of the
service by the TA Provider.

7
4. IMPLEMENTATION SCHEDULE AND LOGISTICS

4.1. Start date

The assignment should start no later than 03 November 2017.

4.2. End date

All activities and deliverables should be performed and submitted no later than 29 December 2017.

4.3. Schedule and number of working days for the assignment

Expected engagement in man-days is approximately 20 to max 30, out of which a minimum of 5 days
shall be field work (the duty station – Montenegro), the rest may be home office.

By submitting an offer, the TA Provider declares to be bound with his/her proposal, unless changes to the
offer are requested by the ECS.

5. REQUIREMENTS

5.1. Staff and qualifications

Consultant’s staff and qualification

The required expertise of the consultant include competences:

Desired skills and competences include references in Energy Markets & Processes.

The Professional Staff of the TA provider shall consist of one or more key experts with profound knowledge
of the functioning of the competitive market in network energy. Key expert(s) must have in-depth
understanding of the European electricity market, Commission Regulation (EU) 2015/1222 establishing a
guideline on capacity allocation and congestion management, organisation and functioning of organized
day-ahead electricity market, as well as of the market coupling process. The aforementioned must be
supported with at least 2 references in the last 5 years.
The Key Expert(s) must have a Master degree and at least 5 years of relevant experience in tasks related
to establishment, functioning or analysis of electricity market, in line with the tasks assigned to her/him.

Key expert qualifications shall be evaluated on the basis of the competence and references for the task
assigned to her/him.

The TA Provider may be a natural or legal person. TA Provider may engage support staff and subcontract
after approval by the ECS. Support staff may be engaged for clerical and logistic matters, translation, legal
expertise and similar tasks, as appropriate. Support staff shall not be taken into account for bid evaluation.
8
6. DELIVERABLES AND REPORTING

6.1. Reporting requirements

The TA Provider shall submit the following reports and deliverables:

 Report under Task 1

 Document including a procedure and criteria under Task 2
 Draft tender documents under Task 3

The outcome of the TA shall be presented at the workshop no later than 22 December 2017.

SECTION 2. INSTRUCTION TO BIDDERS

Procedure and Timeline

Through the present procedure, the Secretariat invites the service providers to submit offers to the
Secretariat in line with the present Invitation. The bids shall be submitted electronically (per e-mail).

The deadline for the submission of offers is 30 October 2017, 12:00 CET. The risk of timely submission
is with the service providers. Offers arriving at the Secretariat after deadline will not be considered.
The Secretariat will select the successful service provider and award the contract by 0 2 November,
2017. During this period the Secretariat may enter into negotiations with the interested providers of
services.
The Secretariat will notify the result to the participating service providers by electronic mails without delay
after the contract has been awarded.

Following the signature of a contract with the successful participant, the provision of consultancy services is
expected to start on 03 November 2017.

Selection Procedure and Award Criteria

An evaluation committee within the Secretariat will select the successful offer. The offer presenting the most
appropriate and most economical solution of the highest quality to the task as specified in the service
specifications and after negotiations, as the case may be, will be awarded the contract.

9
Requirements for interested Service Providers

Contracting Authority

Energy Community Secretariat,

Am Hof 4, 5th floor,
A-1010 Wien
Austria

Contact Details

Within the Contracting Authority, the contact person for all technical clarification requests and additional
information is Ms. Jasmina Trhulj, with the following contact details: jasmina.trhulj@energy-community.org
All questions regarding the procurement shall be addressed to procurement@energy-community.org .
Offers, as well as any inquiries and requests concerning these documents and the procedure shall be sent
by email in English to the Contracting Authority.

Applicable Law

According to Article 66 of the Procedural Act of the Ministerial Council of the Energy Community on
Procedures for Establishment and Implementation of Budget, Auditing and Inspection, procurement shall
be done in accordance with the relevant provisions of the Austrian Federal Public Procurement Law
(Bundesvergabegesetz 2006, Federal Law Gazette I No. 17/2006) in its most recent version
(“hereinafter “the Public Procurement Law”). The Law, which implements EU public procurement law, is
available on the Internet (in German) at www.bva.gv.at.
The procedure takes place below the threshold.3

Given the Energy Community’s legal nature as an international organization and in line with Article 5 of the
Headquarters Agreement with the Republic of Austria, the present public procurement procedure is not
subject to review by the Austrian authorities.

Award procedure

The contract will be awarded through Direct Award procedure, according to paragraph 41 of the Austrian
Public Procurement law.

3
REGULATION (EU) 2015/2342 of 15 December 2015 http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv:OJ.L_.2015.330.01.0018.01.ENG&toc=OJ:L:2015:330:TOC ;
https://www.ris.bka.gv.at/Dokumente/BgblAuth/BGBLA_2015_II_438/BGBLA_2015_II_438.pdf
10
Service Providers and Consortia

Only invited service providers, listed on the Roster of Experts of the Energy Community Secretariat4 can
participate in this procurement.

Interested service providers may only submit one offer. If an interested service provider submits or
participates in more than one offer, such offer shall be disqualified. This does not exclude participation as
sub-contractor in more than one offer.

Offers may be submitted by a natural/legal persons or by a consortium5. A consortium shall nominate one
authorized representative and state that its members will, in case of being awarded the contract, carry out
the project bearing joint liability. The offer shall clearly specify the tasks to be performed by the individual
members of the consortium. One undertaking may only participate in one consortium.

Declarations by Interested Service Providers

By submitting an offer, the interested service provider declares that he/she is fully aware of the content of
the present Invitation including the service specifications, that he/she is authorized and capable to conduct
the services requested, that he/she offers to perform the services at the conditions laid down in these
documents and, if applicable, in accordance to what was agreed during negotiations, including the service
specifications and at the price offered, and that he/she will be bound by his/her offer after the expiry of the
deadline for submission of offers until the expiry of the deadline for contract awarding.

By submitting an offer, the interested service provider further declares to accept Parts I and II of the
Austrian Procurement Law as the legal basis for the present award procedure;

 to not make any arrangements regarding pricing or other informal agreements with other service
providers contravening statutory provisions, conventions, or general principles of competition law,
and that he/she is aware that such a contravention results in an exclusion from the procedure;
 that there is no double funding for the same activities from any related or similar project in this
field neither to the interested service provider or any of the sub-contractor;
 that he/she has the economical, financial and technical ability to provide the services requested
and to deliver the results in accordance with these tender documents.

4
https://www.energy-community.org/portal/page/portal/ENC_HOME/SECRETARIAT/Job/Roster
5
Participation in this tender procedure is open on equal terms to all natural and legal persons effectively established in countries as specified in
the Annex I. to the Regulation (EU) No 232/2014: Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, The
Republic of Moldova, Morocco, occupied Palestinian territory (oPt), Syria, Tunisia, Ukraine. No restrictions regarding nationality applies to legal
and natural persons Established in the Energy Community Contracting parties, Observers and Candidate Countries. This rule doesn’t apply to the
experts proposed under service tenders.
11
 Content and Format of Offers

All offers, the annexes, declarations etc. as well as any communication throughout the whole procedure
must be in English only. Interested service providers are requested to submit an offer based on the
present service specifications by e-mail. The offer shall contain three sections: general information on
the interested service provider, technical proposal and financial proposal.
General information shall contain, as a minimum,
1. Name, seat and address of the service provider;
2. Duly authorized contact person(s)6 together with telephone number and email address;
3. Date and legally valid signature on the offer.

The technical proposal shall contain, as a minimum,

 A brief description of the service provider’s organization, if it is a legal entity
 An outline of relevant experience of the service provider and, in the case of consortia, for each
partner, on assignments of a similar nature;
 A description of the methodology and work plan/schedule.
 The list of the proposed experts (and, where applicable, other staff involved), the role that would
be assigned to each of them and their tasks.
 CVs of the proposed expert(s) (and, where applicable, other staff involved);
 Estimates of the expert(s)/staff input needed to carry out the assignment.

The Financial Proposal shall contain, as a minimum, an all-inclusive price in Euro, exclusive of VAT7, based
on a detailed and commented break down for each expert and for other services and deliverables
necessary to fulfil the requirements of the Service Specifications8

Confidentiality during the procedure

All commercial and business secrets as well as other non-public information and data relating to or
submitted by interested service providers as well as the Contracting Authority shall be handled strictly
confidential during and after the tender. Additional legal requirements remain unaffected.

6
The contact persons must be authorized to represent the interested service provider, to negotiate and to conclude the contract on his/her behalf.
7
VAT listed separately.
8
The detailed price calculation shall include the man-hours or man-days, as detailed in the proposal, allocated hourly or daily rates of the staff,
as well as other expenses. Costs for business trips foreseen shall also indicate any daily allowances to be paid.

12
Costs incurred for preparing offers
Costs incurred by interested service providers in the course of the present procurement procedure,
including costs related to preparatory work, documentation and certificates, translations, participation in
negotiations etc. will not be reimbursed.

13