INITIAL STEPS TO HOURLY BASED ELECTRICITY MARKET IN GEORGIA

Phase 1 of the transition involves implementing month-ahead and day-ahead scheduling for bilateral contracting on an hourly basis, as well as developing the "Day Ahead Planning" concept for all market participants. Key definitions in the new market model include Day Ahead Scheduling, which is a hourly scheduling of generation and consumption for the next day, and Month Ahead Planning, which is a hourly system planning for the next month. The Balancing Mechanism includes activities that complement bilateral contracts and are used to balance supply and demand in each half-hour trading period of every day. The proposed mechanism for Month Ahead Planning consists of receiving and filtering historical data on purchase and sale of electricity, sorting by selected typical days, defining the averaged shape of the curve for each typical day of the month, and adjusting for differences between electricity volumes. The result is the determination of planned capacities for each hour for the coming month. Day Ahead Scheduling involves a series of steps, including submission of hourly nominations by market participants, preparation of hourly balances by the Transmission System Operator (TSO), regimes verification on technical feasibility by the TSO, and TSO's approval of the next day's dispatch schedule by hours. The result is the planned curves of market participants for the (N+1) day, where N is the current day. The Day Ahead Planning (DAP) is a wholesale electricity market established for sale transactions day ahead on the basis of settlement periods. The first stage of DAP is to develop scheduling ability, where each producer, trader, and off-taker provides an estimate of their net electricity forecasts for the next day by hours. Power producers provide bids/offers for energy by hourly nominations, and the differences between forecast and actual become liabilities under the balancing mechanism. The DAP and bilateral contracting methodology involves analysis of historical metering data, selection of typical days, market participants selection for MAP-methodology using based on hourly shapes by seasons, and MAP calculations for selected market participants. The methodology also includes forms of load shapes by types of days, daily coefficients for typical days, weekly coefficients, and hourly planning coefficients for a planning month. The new system of hourly bilateral contracts aims to use the "take or pay" principle without any adjustments. Three basic modes of bilateral contracting are considered: Model 1, which is a full pool; Model 2, which is a partial pool plus free negotiation amongst market participants on a monthly basis; and Model 3, which is a partial pool and free negotiation among participants on a monthly and daily basis.