On 27 October, the NEURC approved draft amendments to the Rules for the Retail Electricity Market for publication. The draft provides for incentives for domestic consumers and businesses for agreeing to change their consumption schedules or volumes during peak hours. The mechanism is not yet in force: the document will be put out for comments and open discussion.
Briefly about the main points
- A bonus is offered for adhering to the agreed loading schedule.
- Households and businesses may take part.
- To take part, you will need a separate agreement with the aggregator.
- There is no need to change your current electricity supplier.
- The amounts of the payments and the launch date have not yet been determined.
The reward will be linked not to a simple reduction in kilowatt-hours, but to the implementation of agreed measures within a specified timeframe
The new approach is known as demand response. Consumers will voluntarily adjust their load on electricity grid in accordance with the terms of the contract and the aggregator’s instructions. This may involve not only reducing electricity consumption, but also temporarily increasing it or shifting the load to other times of the day.
Households, in particular, will be able to reschedule the operation of boilers, washing machines and dishwashers from the evening to the night or another period of lower demand. Businesses will be able to adjust the schedules of individual production processes. Payment will depend on whether the participant has met the agreed targets, rather than simply on the fact that consumption was lower that month.
The aggregator will coordinate the participants, and the electricity supply contract will remain in force
To take part, consumers will need to enter into a contract with an aggregator — a company that will pool the ability of different customers to adjust their load. The aggregator will coordinate the group, issue commands and settle payments for the demand response services provided.
The participant will have two separate legal relationships: a contract with the supplier for standard power supply and an agreement with an aggregator regarding demand management and remuneration. There is no need to cancel your current supplier or switch to another company to do this.
The draft stipulates that the agreement with the aggregator must specify the equipment and metering points, the type and scope of services, the price, the calculation method, the procedure for receiving instructions, and liability for deviations from the agreed schedule.
The amount of remuneration will be determined by the terms of the contract and the performance of the aggregated group
The regulator did not specify a single fixed payment amount. The amount that a particular household or business will be able to receive will depend on the terms of the contract with the aggregator, the level of agreed flexibility and the results of the group’s participation.
The aggregator must inform the participant of the group’s performance at least once during the billing period. Payment information must, free of charge, include a breakdown of the volumes of services, the prices applied, the calculation method, and any incentive, compensation or penalty payments. At the consumer’s request, the company must explain the method of calculation.
A single energy consumption, generation or storage facility cannot be part of more than one aggregation unit at the same time. A single aggregator will need to be selected for each specific installation.
The draft rules are still to be discussed, and the final terms and the start date have not yet been set
The aim of the changes is to reduce the load on the electricity grid during peak consumption hours and to distribute it more evenly throughout the day. The document was drawn up in accordance with Law No. 4834-IX, which provides for the alignment of Ukrainian energy legislation with European rules.
The NEURC is to publish a draft resolution to invite comments and suggestions, and to hold a public consultation. Following this process, the commission will be able to consider the final version. The actual launch date, the final terms of participation and the payment arrangements will depend on the approved rules.
