Yana Lyakh, Lead Specialist, Unicorn Systems UA, about the first impression of the launch of the new electricity market model: the first challenges, the tools, the new opportunities and the increased motivation of market participants to adapt to the new working conditions.
“To identify and correct all bottlenecks”
In general, we positively appreciate the decision to open the electricity market on July 1, 2019. The decision to launch the market was correct, if only because it would quickly identify and correct all the bottlenecks both in legislation and in software products that ensure the work of the market.
Of course, we see both flaws in the operation of the software, as well as some regulatory problems. For example, on the first trading day, as far as we could see, there was no bidding on the intra-day electricity market, and the publication of the results of the balancing market was a bit late. We see that some processes in the electricity market are performed manually, the participants face certain technical difficulties. Market operators have to solve many problems with the tools.
“What if the launch of the market was postponed”
At the same time, if the launch of the market had been postponed, the problems would have not been detected. And the participants would still face them, albeit a few months later. But in this case Ukraine would lose the credibility of European institutions that have been funding the liberalization of the electricity market for many years.
The launch of the market showed the European community the readiness of Ukraine to fulfill its obligations on time, which will definitely contribute to closer cooperation between Ukraine and European countries. In particular, Ukrenergo published statistics according to which over 35 million kWh of electricity was imported to Ukraine in the first week of the open market operation.
“The introduction of an open market = electricity trading with Europe”
The introduction of an open market in Ukraine leads the process of electricity trading in Ukraine to European standards. This means that most barriers for electricity trading between Ukraine and European countries are brought down.
In fact, this will allow Ukraine:
- To participate in Market Coupling.
- To conduct joint auctions for capacity allocations with neighboring countries, which will allow market participants to increase the efficiency of electricity exports and imports.
- For those parts of our power system that are synchronized with ENTSO-E, this will give prospects for participating in joint projects to improve network security, integrate balancing markets, etc.
All of this will, of course, require modifying software. First of all, it is Ukrenergo’s software, which will need to be integrated with the software of neighboring system operators.
“Participants will be motivated to quickly learn how to work”
We participated in the market opening processes in many European countries and we can confidently say that if the participants have passed the necessary training in working with systems, were inducted in the market rules and have the support of market operators, then a catastrophe will not occur at the start. Actually, this is already confirmed by the first results of the market.
A lot will depend on decisions that are made by regulatory bodies. Restrictions imposed in the early stages of the market should protect the most unprotected categories of consumers. So far it can only be said that the launch of the market did not affect the price of electricity for the population, on which opponents of market launch tried to speculate.
The rest of the participants will be motivated to quickly learn to work in the new market, improve their own energy efficiency and look for suppliers with more favorable conditions.
This, in turn, will create competition among market players and will encourage them to fight for consumers by offering them better conditions.
Yana Lyakh for Kosatka.Media
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