The analysis of the market of electric power industry

The process of the formation of the competitive market of electric power proceeds in the Russian Federation.



The process of division of the companies combining natural monopoly and potentially competitive kinds of activity is close to the end. Manufacture, sale and purchase of the electric power relate to potentially competitive kinds of activity, rendering of services of transfer of electric energy and operative-dispatching management relate to natural monopoly ones. FAS Russia conducts the monitoring of the processes of the division of kinds of activity as well as assists the companies to secure the observance of requirements of the legislation.



The wholesale market of electric energy and capacity (WMEEC) in the Russian Federation represents the system of contractual relations of its participants which are interconnected by the unity of technological process of manufacture, transfer, distribution and consumption in the united energy system of Russia. The subjects of WMEEC are the organizations carrying out purchase and sale of the electric power and rendering infrastructural services in WMEEC (the system operator - OJSC «System Operator - Central Dispatching Department of the United Energy System» and the federal network company - OJSC «Federal Network Company of the United Energy System».



The Non-commercial Partnership «Trading System Administrator of the Wholesale Market of Electric Energy and Capacity» (NP «TSA»), established in accordance to the legislation, is responsible for the organization of sale and purchase of the electric power in the wholesale market.



The price of the electric power in the wholesale market is formed in each of 6000 units of the energy system accounting model. Each of these unites is connected to the physical object of the energy system - substation transformer, generator, etc. The prices are determined by the results of the auction tenders that are held every day by NP «TSA» on each unit of the model at each hour of the coming day - more than 144 thousand auctions every day as a whole. Auction is calculated on the basis of applications of buyers and sellers. In the application the volume and the price at which participants are ready to buy or sell the electric power at each hour of the following days are displayed. Crossing point of price applications of consumers and manufacturers - is the price of the electric power at the given hour in the given unit.



The tenders are held under the principle of marginal pricing - the price is determined by the maximal price offer of the last electric power station which volumes are demanded by the market. The price in the consumer unit will depends, first of all, on price offers of electric power stations, network losses, network restrictions on electric power flows.



Due to peculiarities of the electric power as a commodity and peculiarities of pricing in competitive sector of the WMEEC the antimonopoly control demands the approach that differs from the one in the other commodity markets.

With the purpose of the duly prevention, revealing, restriction, suppression of monopolistic activity and unfair competition, including an opportunity of the subjects of electric power industry to manipulate the prices in the wholesale and retail markets, FAS Russia carries out the control over the functioning of the wholesale and retail markets of electric energy, including over the activity of NP «TSA».



Besides, FAS Russia participates as a coauthor in preparation of all normative and legal acts elaborated by ministries and authorities within the frameworks of electric power industry reforming.



As a result of the reforming of this branch new «rules of a game « are being formed now, the subjective structure of the market and the structure of owners are changed. All this puts the new purposes and tasks before the antimonopoly authority:



1. The tasks of the antimonopoly regulation in the wholesale market of the electric power are:



to prevent price manipulations by means of:

abusing of the dominant position by manufacturers of electric energy;

vertical integration (including restrictions of the fuel delivery);

horizontal integration (affiliation of the generating companies that are able conjointly to influence the price);

agreements and the concerted actions among manufacturers and infrastructure.



2. The tasks of the antimonopoly regulation in the retail market of the electric power are:



to secure the forming of competition by means of:

division of competitive and natural monopoly kinds of activity;

creation of the conditions for entering the wholesale market by local energy supplying organizations;

holding of tenders for the status of guaranteeing suppliers;

the control over non-discriminatory access of consumers, independent energy supplying companies to services of the transfer of electric energy;

securing of the consumers' rights to choose an energy supplying organization.