MARKET
TRANSITIONAL REGULATION OF THE ELECTRICITY MARKET
Participants in the Transitional Market
Producers and Suppliers participate in the Transitional Market (EAC Production and EAC Supply are not considered as Market Participants)
Producers and Suppliers participate in the market by concluding bilateral contracts with each other.
The Participants enter into Bilateral Contracts for the purchase and sale of a certain amount of energy on a monthly basis for entire calendar months.
Bilateral Contracts are declared to the Cy TSO by the Delivering Participant to the Receiving Participant by 12:00 three business days before the start of the calendar month.
Main Characteristics of the Transitional Electricity Market
Producers
A Participant Producer can participate in the wholesale market, either with conventional generating units or with renewable energy sources for electricity generation (RES-E).
Producers are obliged within a certain tolerance to inject power to the system, as per the aggregate quantities agreed in their bilateral contracts with Suppliers, on monthly basis.
SUPPLIERS
A Participant Supplier can participate in the wholesale market, only if he has contracts with customers for the supply of electrical energy of an aggregate agreed power exceeding a limit, which is defined by a CERA decision. The purpose of a set limit is to avoid excess transactions burdening the Cy-TSO and DSO workload.
Suppliers are responsible for covering their customers’ requirements according to their bilateral contracts with Producers The settlement of Participants’ deviations will be based on a monthly aggregate (for each calendar month).
Suppliers represent the final customers: Final customers are those with installed programmable Seasonal Time of Day (STOD) meters or those customers who intend to change their meter to STOD. The Monthly Accounts: are calculated based on consumptions using programmable Seasonal Time of Day meters.
MONTHLY SETTLEMENT
Participants (Producers and Suppliers) are exposed to the transactions of the balancing mechanism, exercised by the TSO each day, for balancing supply and demand. The clearance period is based on calendar month settlements for the whole month.
Producer
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In case the Producer’s generated energy is greater than the Producer’s contracted amount, then the generation surplus is paid based on the corresponding thermal generation EAC avoidance cost for the month. This charge is regulated by CERA.
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In case the Producer’s generated energy is less than Producer’s contracted amount, then the generation deficit is charged to the Producer based on the wholesale component of the EAC regulated tariff for Supply (W-T). W-T is calculated based on the Regulatory Decision No.02/2015 “Regulatory Practice Statement and Electricity Tariff Methodology” R.A.A. 208/2015.as regulated by CERA.
Supplier
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Suppliers must perform a forecast process in order to calculate the aggregate consumption of their customers (based on historical data) and in order to estimate the bilateral contract quantities they intend to enter into.
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In case that the customers they represent consumed energy greater than the Supplier’s contracted amount, then the energy deficit is charged to the Supplier at the wholesale component of the EAC regulated tariff for Supply (W-T) for the corresponding connection voltage level. This will be calculated as per Regulatory Decision No.02/2015 “Regulatory Practice Statement and Electricity Tariff Methodology” R.A.A. 208/2015.
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In case that the customers they represent consumed energy less than Supplier’s contracted amount, then the energy surplus is paid based on the corresponding thermal generation EAC avoidance cost for the month.
Remarks
It is expected that the transitional regulation of the Electricity Market:
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should not bring additional cost to the Cyprus consumers, before applying the Final Model
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should promote efficient electricity generation
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does not provide market procedures regarding the provision of ancillary services, as these are to continue to be provided by EAC
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does not apply to any organisational steps to be implemented by the TSO regarding bilateral transactions, neither settlement procedures of a balancing mechanism based on half-hour recordings.
Measurement data recorded on STOD meters will be available to the Participants by the Distribution System Operator.
The commencing of the Transitional Electricity Market is in effect since 1st September 2017.
The Transitional Market Arrangements of the Electricity Market in Cyprus will be in effect until the full implementation of the New Electricity Market Model when all Participants activities including EAC Generation and EAC Supply will be transferred under the New Contractual Framework of the Electricity Market.