Irina Milorava: We will Be Ready to Launch Efficient Operation of Energy Exchange on January 1, 2022
The Government has taken the decision to postpone the Energy Exchange inauguration for January 1, 2022, from July 1, 2021.
This energy market reformation project aims to liberalize the market and harmonize electricity tariffs with the market demands. Ipress has interviewed Irina Milorava, the Energy Exchange director-general.
-Mrs. Irina, the energy consulting board at the parliament’s economic policy committee has voiced that neither the sector nor the government nor the Energy Exchange is ready to launch an efficient operation of the Energy Exchange on January 1.
Do you try to accelerate the process and why?
-In reality, the committee has voiced other assessments, namely, whether the testing period should be longer or not. The trading platform for the market players is ready. The platform was developed by Europe’s one of the oldest and influential company NordPool that operates in 16 European countries. This trading platform has been already adapted to the Georgia reality. At this stage, the platform has already registered approximately 200 participants. They not only possess technical skills for trades, but they also place well-prepared statements, based on proper strategy. Though, the Energy Exchange is not the only segment on the new market. The trading process will run on balance and auxiliary service markets too, besides the Energy Exchange. In order to efficiently move to the hourly trading regime, the wholesale registry must satisfy the new market requirements. Together with the wholesale market operators, we started a combined testing of these 3 major components in April. The participants trade on both balance and auxiliary services market. The exchange trade results are sent by the exchange operator to the balance operator that also receives information on bilateral contracts between the market participants. On the day of physical supply, the balance market operator receives the real registry figures and computes the misbalance of the market participants. This combined testing comprises the full cycle of a trade. This type of testing will run for additional 6 months. -In Winter, our generation system cannot satisfy the domestic demand and the country faces an electricity deficit.
Do you think the winter period is an inappropriate period to launch the Energy Exchange? Don’t you think that this factor will incentivize importers to grow tariffs and dictate their condition to the exchange when they will have no domestic competitor?
-I understand this indignation. The question is whether winter is an ideal period to move to the mentioned format. I think that the only problematic argument is that the 1st of January coincides with Near Year and Christmas holidays. Though we plan to launch the daily testing format at least a month earlier before the Energy Exchange inauguration and we believe that we can move to the real trade platform by January 1 peacefully, without any additional problems. As a rule, winter is a deficient period, be it January 1, 2020, or January 1, 2022. Therefore, this problem will always exist. Therefore, we should take other types of decisions. Trans-frontier trade regulations should respond to this challenge and protect the market from improper tariffs.
-Why is it impossible to launch the Exchange, for instance on May 1, when the domestic generation facilities can compete with importers and you will have more time for preparations?
Even more so, Deputy Minister David Tvalabeishvili could not name a specific date for the Energy Exchange inauguration? -Our objective is to prepare this segment of the market for the date determined by the Government. I have reiterated several times that the Energy Exchange platform was ready for July 1st, but it is upon the Government to determine when to move to the hourly trade regime, whether the testing duration suffices for the combined operation of the market, and many other factors.