NEURC plans to increase the supply day-ahead electricity by limiting vertically integrated companies

The National Energy and Utilities Regulation Commission (NEURC) plans to limit the sale of electricity under bilateral agreements between the participants of vertically integrated entities to 50% from December 1, 2021, in order to increase the supply of and reduce deficit hours.

The relevant decision is scheduled to be considered at a meeting on November 10, 2021

As noted in the draft resolution, starting from July, the market "day ahead" there was a shortage of hours, which was caused by the withdrawal of supply from the market "day ahead" to other market segments (bilateral agreements - ed.).

Thus, the supply decreased by 24% in July 2021. In August 2021, supply fell by another 2%, the number of deficit hours increased, even more, causing a sharp jump in price.

In September, supply continued to decline by 7%, in October demand increased as expected, and with low supply, deficit hours increased even more. For 4 days of November, the vast majority of hours of the day are scarce, the total deficit is 16,384 MWh. In view of the above, the Energy Market Department has developed a draft resolution

"On Amendments to the Market Rules", which proposes to set limits on the monthly sales of electricity under bilateral agreements between producers and other participants in the electricity market, which are part of one vertically integrated sub. of the business entity or are affiliated with each other, in the amount of 50%,” the Regulator noted.

At the same time, the commission reminded that in the period from 01.09.2021 to 01.04.2022 the supply of electricity in accordance with the bilateral contract concluded by electricity producers can be carried out only if such bilateral contracts were concluded as a result of electronic auctions.

"Notwithstanding the above-mentioned provision of the Law, sales under bilateral contracts take place within the framework of companies that are part of one vertically integrated business entity or are affiliated with each other," the statement of reasons reads.

12:57 / 9 November 2021

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