NPC Ukrenergo communicated to commercial and financial managers of large industrial enterprises the opportunities for streamlining the electricity costs through participation in the ancillary service market.
The meeting was attended by representatives of the Group of Agricultural Companies “Myronivsky Hliboproduct” (MHP), ATB-Market LLC, “Kyiv Metro” Public Utility Company, Poltava and Yeristovo Mining and Processing Plant (Ferrexpo), PJSC Nikopol Ferroalloy Plant, JSC Rivneazot, State Enterprise “Novator”, Gas Transmission System Operator of Ukraine LLC, etc., and electricity market traders. Please click here to view the presentation of the meeting.
Large industrial enterprises-consumers, which can change their consumption by more than 1MW without affecting production, can provide electricity balancing services on an equal basis with electricity producers and get paid for it.
In particular, when total electricity consumption raises or drops rapidly, Ukrenergo’s dispatchers can give commands to large consumers to decrease or increase their consumption in order to balance the power system. In this case, it is up to consumers to decide what power range they can give out for control at a profit.
The existing laws envisage two types of payment for such ancillary services. The first one is the so-called “payment for willingness”. It guarantees the consumer’s willingness to change capacity by the dispatcher’s command. The second one is a direct payment for the service of consumption increasing or decreasing by the command.
“For example, for your willingness to decrease consumption, you will receive payment of up to 500 UAH/MW (without VAT). Tentatively speaking, 12000 UAH/day, only for the promise that by the dispatcher’s command you will stop consuming 1MW. Moreover, if you receive the command to decrease consumption by 1MW during one hour, you will additionally receive payment equal to the balancing energy price if you follow this command. In other words, plus additional 1600-1800 UAH/MWh to 500 UAH/MW”, clarified Andrii Nemyrovskyi, Deputy Chairman of NPC Ukrenergo Management Board.
Today, in order to balance the power system, Ukrenergo has to provide 1000MW for load reserve daily (for consumers, this is a decrease in power consumption) and 500MW for unloading (increase in power consumption).
The consumers, which attended the meeting, were briefed on technical requirements for operating in the ancillary service market, principles of marginal pricing, and penalties in case of a failure to provide the services.
With information received, potential participants will be able to develop a feasibility study and use its findings to understand economic feasibility of participating in the balancing market and the ancillary service market.
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