Electricity and Heat Market
Areas of Improvement in FOREM
Main problems requiring further improvement in FOREM:
- Commercial management principles imperfection and weak incentives for improving
efficiency in the production of electricity and its delivery to customers;
- Costly pricing mechanisms for suppliers of electrical energy and power;
- Imperfection of current contract regimes on FOREM between suppliers and purchasers of
electrical energy (power);
- Imperfection of methodological base for supporting FOREM’s functioning;
- Low level of settlements in monetary form;
- Negative balance between the cost of electrical energy (power) supplied and bought on
the internal Russian market.
 The goal of the changes being made is to transform FOREM
into a competitive wholesale market in electrical energy (power):
- Develop competitive relations between participants in FOREM;
- Maximise participation of electricity producers in trade on a single wholesale market
and ensure non-discriminatory access to the grid;
- Improve the efficiency of wholesale trading by introducing a competitive pricing
mechanism on FOREM, combined with state regulation of electricity transmission charges;
- Optimise the use of power stations equipment and fuel expenses reduction;
- Optimise the development of generating capacity and network infrastructure;
- Radically improve the liquidity of settlements with suppliers of electrical energy
(power).
|
Transformations taking place within FOREM. In order to separate the
functions of operational and process management in the operating regimes of those members
of FOREM which are part of the Unified Energy System of Russia and also to separate the
function of organising commercial relations between them, an Operator of the FOREM
Trading System is being set up in the form of a closed joint stock company. The
new company will be called the «Centre for Contracts and Settlements on the Federal
(All-Russian) Wholesale Market in Electrical Energy (Power) (CCS)». The founding partners
of the new company are RAO UES of Russia and Rosenergoatom. This new closed joint stock
company is an independent legal entity intended to organise contractual activity and
co-ordinate FOREM’s cash flows. The functions of FOREM System Operator
— that is providing basic system services on the wholesale market — will be fulfilled
by the CDU (Central Dispatch Unit) of the Unified Energy System of Russia and the RDBs
(Regional Dispatch Boards) of the corresponding regions.
The Supervisory Council of the CCS will monitor compliance by
the Trading System Operator with the Operational Regulations of FOREM and also the
transparency of its activity. At the first stage, its staff will be composed of
representatives of organisations involved in the market, representing the interests of
suppliers, consumers and organisations which service FOREM. In the future, it is proposed
to include representatives of the Russian Ministry for Anti-Monopoly Policy and the
Federal Energy Commission of Russia. The shareholders in the company CCS of FOREM will
include representatives of all organisations active on FOREM, on terms and conditions to
be determined by a specially convened Assembly of such organisations.
It is expected that FOREM will transition into an entity involved in
trading electrical energy (power) in sectors where deliveries are free, binding and
co-ordinated and also in trading on the exchange. In each of the sectors of
wholesale trading, a new system of contractual arrangements will be developed and
implemented. At the same time, the competitive areas of wholesale trading will make a
transition to the use of non-regulated prices for electricity, determined in accordance
with a standard set of new Market Operation Regulations. These
regulations will ensure optimisation of loadings on generating facilities on the basis of
competitive selection and also will provide for the use of market pricing mechanisms in
FOREM’s various energy zones. The share of segments with market pricing will gradually
be expanded, with a corresponding reduction in the shares of those sectors with a
regulated pricing structure.
Mechanisms and procedures for non-discriminatory access to the electric power
grid will be developed, together with methods and procedures for the state
regulation of power-grid services.
RAO UES of Russia will be responsible for the readiness of the grid and
dispatch infrastructure for the wholesale market, while preserving the
hierarchical operations and dispatch management structures of the Unified Energy System
and Combined Energy Systems of Russia.
It is intended to establish divisions of the power-grid company RAO UES
of Russia in the various energy zones of the wholesale market on the basis of the main
power grid system.
It is intended to develop the market in supplementary system services
(provision of reserve capacity, assistance with the regulation of frequency, etc.).
Providing the System Operator with the opportunity to acquire system services from market
participants will create additional economic mechanisms for ensuring the reliable
functioning of the Unified Energy System of Russia.