Action_Plan_for_Liberalization_of_the_Power_Market,_July_27,_2017.docx
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US Agency for International Development
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7.1 Action Plan for Liberalization of the Power Market of the Republic of Armenia, July 27, 2017
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Attachment GoA protocol decision # dated 2017
ACTION PLAN
For Liberalization of the Power Market of the Republic of Armenia
| N |
| Activity |
| Description |
| Timetable |
| Responsible Body |
| Verifying Indicator |
| Source of Financing |
| 1 |
| Amendments to the RoA Energy, Licensing and State Duty Laws |
| 1. The MOEINR, in agreement with the PSRC, develops amendments to the RoA Energy Law, Licensing Law and State Duty Laws including the following activities: |
Specification of MOEINR and PSRC functions Provisions to promote gradual liberalization of the WREM, including descriptions of Capacity Market, Electricity Bilateral Contracts Market, Day-Ahead Market (DAM), and Balancing Market as well as ancillary services Unbundling of distribution and supply functions defining individual licenses and regulatory framework for each Specification and expanding of System Operator (ESO) and Market Operator (EMO) authorities Regulating export and import activities that do not require licensing Setting the licensing and regulatory framework for new type of wholesale electricity trade Provisions for nondiscriminatory access for third parties, including new grid connections and access to infrastructures.
| Third ten days of July 2017 |
| MOEINR, PSRC (by agreement) |
| Introducing a package of draft laws with amendments to the RoA Energy Law, Licensing and State Duty Laws to the GoA for discussion |
| Other sources not prohibited by law |
| 2. The MOEINR, in cooperation with the PSRC, develops new Energy Law taking into consideration international best practices, as well as issues revealed during implementation of new Electricity Market Model (EMM) and new Electricity Trade Mechanisms (ETM)s. |
| Third ten days of July 2020 |
| MOEINR, PSRC (by agreement) |
| Introducing draft new Energy Law to the GoA for discussion |
| 2 |
| Establishment and development of electricity Market Operator |
| 1. The PSRC, by agreeing with the MOEINR, provides new license to entity holding the license of the Settlement Center granting it Market Operator status and new jurisdiction to organize trade in the WREM, including, but not limited to, the following: |
a. Establishment and development of the WREM
b. Registration of WREM participants
c. Registration and processing of WREM participants’ offers/bids for electricity purchase and sale
d. Metering and invoicing of purchased and sold electricity on the WREM
e. Organization of trade with neighboring WREMs
| Third ten days of July 2017 |
| MOEINR, PSRC (by agreement) |
| Approval of PSRC’s Resolution |
| Other sources not prohibited by law |
| 3 |
| Approval of the Grid Code and extending the legacy of the Electric Power System Operator (EPSO) |
| 1. The PSRC, by agreeing with the MOEINR, approves the energy sector Grid Code presented by the EPSO |
| Third ten days of July 2017 |
| PSRC (by agreement), MOEINR, System Operator |
| Approval of PSRC’s Resolution |
| Other sources not prohibited by law |
| 2. The PSRC, by agreeing with the MOEINR, makes amendments to the license conditions of the System Operator by extending its jurisdiction to implement new tasks in accordance with Grid Code. |
| Third ten days of July 2017 |
| PSRC (by agreement), MOEINR, System Operator |
| Approval of PSRC’s Resolution |
| 4 |
| Improvement of tariff structure |
| 1. The PSRC improves the distribution tariff structure based on the calculation results for each voltage level, excluding the gains/losses occurring from deviations between the planned and actual generated electricity amount, as well as the cost of service for collection of payments for the delivered electricity. |
| Third ten days of January 2018 |
| PSRC (by agreement) |
| Approval of PSRC’s Resolution |
| Other sources not prohibited by law |
| 2. The PSRC improves the end-users tariff structure by voltage levels, including in the tariff calculation the actual amount of averaged costs required for electricity distribution to the particular voltage level consumers. |
| Third ten days of January 2019 |
| PSRC (by agreement) |
| Approval of PSRC’s Resolution |
| 3. The PSRC improves the generation tariff structure for calculation of energy and capacity charge by using the same approach for depreciation and profit allocation. |
| Third ten days of January 2018 |
| PSRC (by agreement) |
| Approval of PSRC’s Resolution |
| 4. The PSRC definitely increases the profit levels for generating and service-providing companies, thus improving their capability to obtain long-term commercial loans. |
| Third ten days of January 2019 |
| PSRC (by agreement) |
| Approval of PSRC’s Resolution |
| 5. The PSRC introduces capacity and electricity charges for new market participants entering the WREM and defines the charges for each type of ancillary services. |
| Third ten days of July 2019 |
| PSRC (by agreement) |
| Approval of PSRC’s Resolution |
| 5 |
| Transition to new EMM |
| 1) The PSRC, by agreement with the MOEINR, approves temporary rules for the WREM gradual liberalization and makes: |
a. Decision on entities having the right to purchase and sell electricity by bilateral contracts beyond the WREM regulated market
b. Decision on balancing mechanisms
c. Decision on rules for electricity metering and invoicing
d. Decision on temporary procedure for WREM entry and exit
| Second ten days of September 2017 |
| PSRC (by agreement), MOEINR |
| Approval of PSRC’s Resolution |
| Other sources not prohibited by law |
2) The Market Operator, in order to develop WREM new rules, implements the respective calculations using the optimal structure modeling software and, in cooperation with the System Operator and market participants, develops concepts on RoA EMM and ETMs providing them for the MOEINR and PSRC approval. New EMM and ETM concepts at least will:
a. Guarantee large consumers, suppliers, electricity wholesale trade implementers entry to the WREM and organize export of electricity leftover at a particular time
b. Introduce the mechanism for distribution of responsibilities for WREM participants
c. Ensure full transition to the electricity hourly trading principle
d. Provide capacity market, Bilateral Contracts, DAM, and balancing market as well as ancillary services
e. Ensure the right of power plants to sell certain amounts of supplied electricity by prices exceeding the regulated tariffs
| First ten days of February 2018 |
| MOEINR, PSRC (by agreement), Market Operator, System Operator |
| Approval of PSRC’s Resolution |
| 3) The PSRC, by agreeing with the MOEINR and taking into consideration the proposals provided by the Market Operator, approves EMM and ETM concepts ensuring the implementation of obligatory requirement presented in 5.2. |
| Third ten days of July 2018 |
| , PSRC (by agreement), MOEINR Market Operator, System Operator |
| Approval of PSRC’s Resolution |
| 4) The Market Operator launches the software selected for introduction of EMM and ETM and initiates its trial (simulation) implementation without financial liabilities to market participants. |
| Third ten days of January 2019 |
| MOEINR, PSRC (by agreement), Market Operator, System Operator |
| Approval of PSRC’s Resolution |
| 5) The PSRC, by agreeing with the MOEINR and taking into consideration the proposals provided by Market Operator in compliance with EMM and ETM concepts, approves the WREM new rules and implements transition to electricity new market model with financial liabilities to market participants. |
| Third ten days of July 2019 |
| PSRC (by agreement), MOEINR, Market Operator, System Operator |
| Approval of PSRC’s Resolution |
| 6 |
| Unbundling of distribution and supply functions |
| 1) The PSRC introduces a new financial reporting system for the financial unbundling of the Distribution System Operator expenditures on distribution and supply. |
| Third ten days of January 2018 |
| PSRC (by agreement), Distribution System Operator (DSO) |
| Approval of PSRC’s Resolution |
| Other sources not prohibited by law |
2) PSRC agreeing with MOEINR approves:
a. Distribution Grid Code
b. Electricity trade rules on retail market
c. Electricity distribution new contract template
d. Electricity supply new contract template
| Third ten days of July 2019 |
| PSRC (by agreement), MOEINR, Market Operator, DSO |
| Approval of PSRC’s Resolution |
| 7 |
| Elaboration of new Long-term Development Plan |
| 1) The System Operator, agreeing with the MOEINR, PSRC, and other state entities and interested parties including market participants, develops RoA Energy sector new perspective development plan for the next 10-year period. |
| Third ten days of July 2021 |
| MOEINR, PSRC (by agreement), System Operator |
| Approval of MOEINR Minister’s Order |
| Other sources not prohibited by law |
ACRONYMS
DSO Entity possessing the Electricity Distribution Services License
EMM Electricity Market Model
EMO Entity possessing the Electricity Sector Market Operator service provision license
ESO Entity possessing the Electricity Sector System Operator service provision license
ETM Electricity Trade Mechanism
PSRC Public Services Regulatory Commission
RoA MOEINR Ministry of Energy Infrastructures and Natural Resources of the Republic of Armenia
WREM Wholesale and Retail Electricity Market
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