The main objective of entering the electric power market since January 1, 2019 is to ensure the balance reliability of the power system of Kazakhstan. Balance reliability is the ability of a power system to meet consumer demand for electricity at any time.
Entering the electric power market will allow:
- increase the investment attractiveness of the industry through the provision of long-term guarantees for investors developing generating capacity;
- to ensure the long-term reliability of the Unified Electric Power System of the Republic of Kazakhstan through the priority development of generating capacity.
The existing electricity tariff will be divided into two parts:
- electricity tariff - a variable part, which will ensure the recoupment of costs for the production of electric energy;
- the capacity tariff is a permanent part, which will ensure the return on investment in the construction of new and renewal, modernization, reconstruction, expansion of existing electrical capacities.
According to subparagraphs 3), 4) and 5) of paragraph 2 of Article 10-3 of the Law of the Republic of Kazakhstan “On Electric Power Industry”, the United Purchaser carries out the purchase of services to maintain the availability of electrical power and the centralized provision of services to ensure the availability of electrical power to bear the load. Consumers will pay for the service to ensure the availability of electric power to bear the load at a single average price for all. Thus, the costs of creating a new generation, expansion and modernization of power plants will be distributed evenly among all consumers of the republic.
By the Order of the Ministry of Energy of the Republic of Kazakhstan No. 357 dated September 07, 2018, the Settlement and Financial Center for Support of Renewable Energy Sources LLP (hereinafter referred to as LLP RFC for Renewable Energy Sources) was determined by the Single Buyer performing the centralized purchase of services for maintaining electrical capacity readiness and centralized provision services to ensure the availability of electrical power to bear the load.
According to clause 6 of Article 12 of the Law of the Republic of Kazakhstan “On Electric Power Industry”, energy supplying, energy transfer organizations and consumers that are subjects of the wholesale electricity market are obliged to enter into contracts with a single purchaser for the provision of electric power readiness to bear the load and participate in the electric power market Based on these contracts.
Energy-supplying, energy-transmitting organizations and consumers, which are subjects of the wholesale market, form forward-looking applications for consumption, which indicate the maximum values of electrical power consumption for each month and send them to the system operator no later than the first of August of the year preceding the current year. The maximum power consumption is calculated as the arithmetic average of the average hourly consumption values on workdays in the hours from 17-00 to 23-00.
The scope of services for ensuring the availability of electrical power to bear the load set for the current year in the contract is the maximum electrical power consumption for the corresponding year indicated in the corresponding forecast application for consumption. A change in the contractual volume in the direction of reduction is not allowed. The purchase of electric energy in the control hours of working days by the subject of the wholesale market in the electricity market is allowed within the limits of the contractual capacity. In cases of monthly excess, penalty coefficients are applied to the difference of excess over the contractual amount.
According to the Law of the Republic of Kazakhstan “On Electric Power Industry”, an energy producing organization prohibits the sale of electrical energy to wholesale market entities that do not have contracts with a single purchaser for the provision of services to ensure the availability of electrical power to bear the load.
The system operator, on the basis of the forecast applications of the wholesale market entities, no later than the first of October of the year preceding the settlement one, develops the forecasted demand for electrical capacity for the coming and next calendar years.
To meet the forecast demand for electric power, the single purchaser concludes purchase agreements for the maintenance of electrical capacity readiness (in order of priority):
- with the winners of tenders for the construction of generating plants newly commissioned (the individual tariff, the volume and terms of purchase are established by the authorized body);
- with existing energy producing organizations that have entered into an investment agreement for modernization, expansion, reconstruction and (or) renovation with an authorized body (individual tariff, volume and terms of purchase are established by an authorized body);
- annually with existing energy producing organizations that include heat and power plants, at the marginal tariff for the service to maintain the availability of electrical power;
- annually until December 25 with the current energy producing organizations for the upcoming calendar year based on the results of centralized trading in electric capacity at prices and in the volumes that were formed as a result of these auctions.
Energy-producing organizations are allowed to centralized trading after the system operator certifies the electrical power of generating plants.
The operator of the centralized trading market annually in the second decade of November organizes and conducts centralized trading in electric capacity for the coming calendar year in the manner established by the authorized body.
The participants of the electric power market are: system operator, single buyer, energy producing organizations, consumers of capacity market, including industrial complexes, operator of the centralized trade market.