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The new wholesale electricity market model launched on 1 February 2022 implies that one of the power generating stations in the electricity system should provide a balancing service to the rest of the market participants. Due to this feature of the electricity market’s new model, it was necessary to make appropriate addenda to the RA Law on Energy. This was stated by the RA Deputy Minister of Territorial Administration and Infrastructure Hakob Vardanyan.

The draft law on Making Amendments and Addenda to the Law on Energy authored by the Government was debated at the regular sitting of the RA NA Standing Committee on Economic Affairs in the second reading on January 11.

As a result of the proposed amendments, the trade mechanisms in the balancing market, the functions of the balancing service provider and the cases of electric energy transfer by the consumer will be specified.

“The biggest amendment that has been made is switching to hourly accounting,” Hakob Vardanyan mentioned.

The Government introduced some technical and substantive amendments during the period from the first to the second reading, according to which sub-consumers are given the opportunity to be market participants and qualified consumers. Another substantive amendment referred to the service settings for electric car chargers.

According to Hakob Vardanyan, there is a misunderstanding that electricity will become cheaper as a result of market development. “There will be an introduction of a fair price formation mechanism,” he underscored.

“One of the biggest results of the market was the facilitation of import and export procedures, in which the balancing service plays a key role. In 2022 during this period, 365 million kw/h of electricity was exported from Armenia to Georgia: that’s more than the previous 10 years combined. In the previous ten years, 2012-2021, there was 242 million kw/h of electricity. With the previous procedures, the licensing process was quite complicated,” Hakob Vardanyan clarified.

According to the key rapporteur’s introduction, the functions of the economic entity regulating the balancing service have been exclusively assigned to Yerevan Thermal Power Station, because only it has the capacity to implement them with minimum expenses.

The revised draft was endorsed.