Trading 53 Billion Kilowatt-Hours of Electricity by the Private Sector in the Electricity Exchange and Bilateral Contracts

  • 29 May 2024
  • 13:49
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Trading 53 Billion Kilowatt-Hours of Electricity by the Private Sector in the Electricity Exchange and Bilateral Contracts

Behrouz Ahmadi Hadid, "Director of Off-Market Transactions of Iran Grid Management Company", said: Last year, industries as much as 53 billion kilowatt-hours supplied their electricity needs from private power plants in the energy exchange and bilateral contracts. Behrouz Ahmadi Hadid, referring to the instructions for the presence of customers above one megawatt in off-market transactions by the Minister of Energy early last year, announced the increase in the volume of off-market transactions about 11% in March 2022 to about 14.5% at the end of March 2024.
Ahmadi said: The amount of transactions has a completely upward trend so that in the months of Feb. and Mar. 2024, the share of industrial transactions in the electricity exchange increased to about 20 percent.
Ahmadi Hadid, by explaining the current situation of the electricity industry's cash flow over the past years and stating its strengths and weaknesses, emphasized the necessity of changing the current cash flow process on the decision of the Ministry of Energy.
He further explained the new model of financial relations and liquidity in electricity distribution companies, based on which the resource allocation system has been revised and the beneficiaries of the electricity supply chain can receive their share of deposit resources regularly and on a Saturday every week.
In this mechanism, electricity distribution companies receive their current costs based on the amount of debt collection and based on the coefficients announced by the Ministry of Energy every week. The remaining resources in the centralized account, after deducting the legal obligations by Tavanir, will be deposited into the account of the electricity distribution companies, which should purchase electricity through the electricity exchange.
Ahmadi Hadid pointed out that a major part of the electricity sales revenue of power plants will be through the electricity exchange, and added: that the capacity of liquidity injection in the accounts of electricity distribution companies is estimated between 250 and 300 thousand billion IRR, considering the presence of industries above one megawatt in the electricity exchange with a consumption of about 100 billion kilowatt-hours, it is expected that more than 60% of electricity purchases in 2024 will be provided through the energy exchange.
Ahmadi Hadid continued: Electricity distribution companies are obliged to represent Iran grid Management Company to withdraw the balance of the electricity distribution company's account and deposit it into the account of electricity producers present in the wholesale market in case of non-purchase of electricity within a certain period.
He further added that increasing the share of energy exchange transactions to 30% this year and 60% by the end of 2027 is one of the legal provisions foreseen in the seventh plan. He noted that it is expected that at least 45% of the mentioned program will be realized this year.

 

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