[Alexander Merkulov][October, 11 2006] On 1st September 2006, the decree of the Government of Russian Federation â„– 529 of 31.08.2006: About the improvement of the operating of electric energy (power) wholesale market came into effect. This was a new step in the reform of the Russian energy wholesale market.
Now the energy wholesale market consists of three operational platforms:
- Regulated contracts
The contract price is fixed for each generator; the volumes are set out in the energy and power balance approved by the Federal Tariff Service. The part of the regulated contracts volumes in the balance has to be reduced by a minimum of 5% each year. The volumes exceeding the regulated contracts are to be sold/bought on the free market.
- The “day ahead” sector
In the short-term market, the participants compete for the full volume of the generated energy/clients’ consumption on the base of price claims. The price is formed on the node-marginal principle, with due regard for technical losses and system restrictions. The auction results in by-the-hour plans of generation/consumption for the day ahead.
- Balancing market
At this stage the derivatives are traded on the basis of competitive price forming.
In comparison with previous models, the new model is more market-oriented and more competitive.