1. 1
Innovation TowardsInnovation Towards
EntrepreneurshipEntrepreneurship
Ilir M.Shala, MScIlir M.Shala, MSc
Director of DepartmentDirector of Department
Project Management & Engineering Department, KOSTTProject Management & Engineering Department, KOSTT
KUSA ENTREPRENEURSHIP WORKSHOPKUSA ENTREPRENEURSHIP WORKSHOP
17 & 18.11.2014, Prishtina17 & 18.11.2014, Prishtina
2. ““I have more respect for the person who succeeds withI have more respect for the person who succeeds with
an idea than for the person who has thousands ofan idea than for the person who has thousands of
ideas and does nothing about them”ideas and does nothing about them”
Tomas EdisonTomas Edison
2
3. History of EntrepreneurshipHistory of Entrepreneurship
• History of the Entrepreneurship
– Production Level vs. local consumption
– Exchanges of production
– Governmental Agencies engagement, XVII Century (offered the
capital for financing the production entrepreneurships)
• The current development of Entrepreneurship began after
World War II, 50th years when states are seeking to build
their economies from the destruction of war.
– People had new ideas for businesses or work as individuals and
started in many ways and with limited capital to established
businesses which continued to challenge companies large.
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4. Entrepreneurship DefinitionEntrepreneurship Definition
• Entrepreneurship is the driving force of economic
development and entrepreneurs by introducing new ideas in
the market are responsible for economic development of a
country
• Entrepreneurs are faced with the dilemma characteristic in
their businesses going entrepreneurship across the life cycle
of which consists of four phases: inception, growth,
maturation and emergence
• Product Innovation has to do with the Final product (or
service) that will be sold, the especially with regard to its
features
• Innovation process has to do with the way in which the
product is produced and distributed, particularly with respect
to improvements cost or reliability. 4
5. 5
Entrepreneur DefinitionEntrepreneur Definition
• Entrepreneurs should be able to identify new products /
services and secure financial capital and new resources to
produce and deliver these products.
• Funding and other resources can come from them or from
other sources
• They are prone to take risks and associate with economic
growth.
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6. Creativity, innovation andCreativity, innovation and
entrepreneurshipentrepreneurship
Creativity is thinking new things, and innovation is doing
new things
Creativity is the ability to develop new ideas and to
discover new ways of looking at problems and
opportunities.
Innovation is the ability to apply creative solutions to those
problems and opportunities in order to enhance people’s
lives or to enrich society
Entrepreneurship = creativity + innovation
Creating the Value in the MarketplaceCreating the Value in the Marketplace
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8. 88
Skills Required for an EntrepreneurSkills Required for an Entrepreneur
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Manageri
al Skills
Manageri
al Skills
Financial
Skills
Financial
Skills
Marketing
Skills
Marketing
Skills
Personal
Skills
Personal
Skills
Communi
cation
Skills
Communi
cation
Skills
10. The 2005 state of KEK - T & D DivisionThe 2005 state of KEK - T & D Division
External EnvironmentExternal Environment
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Ownership ID
KEK assets were managed by the
Kosovo Trust Agency;
KTA was a UN instrument,
established by UNMIK Regulation
No. 2002/12;
Ownership transferred to the
Government of Kosova (following
the approval of the “Ahtisaari” Plan
by the United Nations Security
Council);
Possibly to the Ministry of Energy
and Mines;
KEK was a vertically integrated
corporation;
Incorporation was performed by the
end of 2005;
KEK was managed by Board of
Directors;
KEK BoD was established by the
Board of KTA and its members are
selected by the same body;
The Executive team was made of
local managers;
The Executive Team needs the
approval of BoD;
Management ID
11. 11
The 2005 state of KEK - T & D DivisionThe 2005 state of KEK - T & D Division
External Environment, Cont…External Environment, Cont…
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Athens Treaty ID
Treaty establishing the European
Community for Energy;
Signed on October 25th 2005;
Kosova signatory of the Treaty;
Equal partner in the energy market
of the SEE;
Integration into the EU market;
Direct representation in the
Energy Community bodies;
ERO regulates the energy market of
Kosova and issues:
Conditions and criteria for issuing
licenses to carry out energy
activities;
Procedures for granting permits for
the construction of new generating
and transmission capacity;
Criteria for regulating network and
public supply prices and approving
tariffs;
Conditions of energy supply;
Monitoring the effective unbundling
and development of competition in
the energy sector;
Costumer protection, etc.
ERO ID
12. 1212
The 2005 state of KEK - T & D DivisionThe 2005 state of KEK - T & D Division
External Environment, continue…External Environment, continue…
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Stakeholders ID
Government Laws, Rules and
Regulations (Kosova’s Assembly,
Ministry of Energy and Mining,
Ministry of Economy and Finances,
Ministry of Environment, Ministry of
Labor and Social Welfare;
Donors Rules and Regulations
(World Bank, International
Monetary Fund, European Bank for
Development, USAID, European
Agency for Reconstruction (EU),
German Bank for Development
(KfW), SIDA, etc.);
Others (Customers, UNMIK, Media,
KFOR, Police (UN and local),
International Liaison Offices, etc.);
13. 131313
The 2005 state of KEK - T & D DivisionThe 2005 state of KEK - T & D Division
Internal EnvironmentInternal Environment
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Education ID
Emergence of private universities
without a clear needs assessment
of the energy sector;
Lack of practice amongst students
of the public university;
Lack of direct cooperation
between KEK and Universities;
KEK had a good knowledge base,
when it comes to the operation
and maintenance of the old
equipment;
KEK lacks skills and knowledge
for operation of the new
equipment;
Knowledge ID
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Balanced ScorecardBalanced Scorecard
Adopt in a changing external environment
in order to remain a successful participant
in the upcoming deregulated
energy market
Costs
Internal
Business
Process (HR)
Learning &
Growth
(Education)
Regulations
15. 15
New EntrepreneurshipNew Entrepreneurship
ITSMOITSMO
• Innovation – doing new things
– Six Groups were created:
1. Human Resources Group
• Interim organization chart, Interim staffing plan, Plan for Human
Resources needs, Identify gaps in capabilities, Identify and select
of staff to be split between Transco JSC and KEK JSC, Transfer
of staff, Hire missing staff
1. Financial Group
• Create an economic model of Transco JSC, Prepare preliminary
budget/cash flow forecast for Transco JSC, Open bank account
in name of Transco JSC, Determine start-up working capital
requirements, Deposit funds
1. Tariffs Group
• Start-up costs, Set provisional tariffs to be paid by KEK J.S.C to
Transco J.S.C, Fund sharing agreement
16. 1616
New EntrepreneurshipNew Entrepreneurship
ITSMO, cont.ITSMO, cont.
• Innovation – doing new things
– Six Groups were created:
4. Commercial Group
• Draft service agreement between KEK JSC and Transco JSC on
IT and other shared services, Draw up contract / agreement
between KEK JSC and Transco JSC for the hand over, KEK JSC
and Transco JSC shall establish standards and metering devices
at power plants and distribution grid level, at the separation
between generation, transmission and distribution, Interim
Commercial agreements of KEK JSC and Transco JSC on
metering, hand over points, ancillary services, maintenance
confidentiality.
5. IT Group
• Identify Software, Licenses and other property out of List of
Transco JSC Assets, Plan for IT, metering and financial
management needs
6. Risk Management Group
17. 17
Legal & Regulatory FrameworkLegal & Regulatory Framework
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July 2006July 2006
Establishment ofEstablishment of
ITSMOITSMO
July 2004July 2004
Establishment ofEstablishment of
Energy Regulatory OfficeEnergy Regulatory Office
Dec 2004Dec 2004
Establishment ofEstablishment of
Ministry of Energy & MiningMinistry of Energy & Mining
Primary Legislation in Energy Sector in Kosovo (June 2004)Primary Legislation in Energy Sector in Kosovo (June 2004)
- Law on Energy -- Law on Energy -
- Law on Electricity -- Law on Electricity -
- Law on Energy Regulator -- Law on Energy Regulator -
Nomination
Licensing
Economic regulation of theEconomic regulation of the
energy sectorenergy sector
Designing sectors’Designing sectors’
developments strategiesdevelopments strategies
and policiesand policies
Operation of the electricityOperation of the electricity
system and electricitysystem and electricity
marketmarket
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KOSTT and its functionsKOSTT and its functions
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• KOSTT JSC is responsible for:
– Transmission of electricity on HV grid (400,
220 and 110 kV) and other ancillary
services (…secondary regulation, etc.)
– Maintenance & development of SSs
– Operation of Kosovo electricity system
– Balancing (demand = supply)
– Operation of electricity market
– Congestion management (allocation of
interconnections)
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License obligationLicense 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
• Connection Charging Methodology
• Transmission Network Development Plan
• Other documents
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20. 20
KOSTT IncomesKOSTT Incomes
20Loss payment
Use of Network Charges
System Operation Charges
Market Operation ChargesGenerator Supplier
Congestion Fee
CCh Methodology
Compensation for
transit
TUoS
Connection
Charge
CB mechanisms
Regulated &
Monitored Incomes
Ancillary Services
21. 21
Transmission NetworkTransmission Network
Development PlanDevelopment Plan
• Investment & development plan is based on:
– market analyses, forecasts, long-term power balance, current
state of TN, SO & MO needs, regional
development/investments
– numerous studies (national & regional) are consulted
• Five major areas of investment & development
– Reinforcement of the internal TN and its interconnections to
neighbouring systems
– IT Systems (hardware and software) to support MO
– Metering and Data Acquisition systems
– Implementation of a modern SCADA/EMS system Telecom-
N
– Systems to procure & utilise Ancillary Services 21
22. Electricity MarketElectricity Market
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• Base Energy isBase Energy is
concentrated in Kosovaconcentrated in Kosova
• High demand in SouthHigh demand in South
BalkansBalkans
• GR, AL, KS, MK & MN –GR, AL, KS, MK & MN –
net importersnet importers
• Flows from North →Flows from North →
SouthSouth
• KOSTT – important nodeKOSTT – important node
– ValuableValuable
interconnectionsinterconnections
• Most congestedMost congested
interconnections (capacityinterconnections (capacity
allocation process)allocation process)
– RO→SR, BG→SR,RO→SR, BG→SR,
KS→MK, MK→GR,KS→MK, MK→GR,
BG→GR, SR→KSBG→GR, SR→KS
24. Regional Market & MechanismsRegional Market & Mechanisms
• KOSTT is in the process of application for ENTSO-E membership
– TSO organization established under the 3rd
package (EU directives and
Regulations for Energy – is approved on 2009 and is applicable from 03.2011)
– Currently member of Regional Market Working Group (this group within ENTSO-E)
• Member of SECI (South East Cooperation Initiative) Group
• Active participation in the Energy Community activities
• Integration in all cross-border mechanisms
– Signed the MoU for establishment of regional office for coordinated allocation of
transmission capacities (CAO – Coordination Auction Office) – December 2008
• Integration in Regional Electricity Market - initial discussions
– Opportunities for market participants to trade on regional level bilaterally &
centralized
– Trade with lower procurement costs & lower congestion costs
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