Operation of the balancing electricity market
Since July 1, 2023, the balancing electricity market (BEM) in Kazakhstan, which had been in simulation mode for over 15 years, has been transitioned to real-time operation.
The BEM is a framework of interactions between market participants and the BEM’s settlement centre, which emerges from the physical settlement of electricity imbalances in the unified power system of Kazakhstan by the system operator and is concerned with the trading of balancing electricity and negative imbalances.
The single electricity purchaser mechanism in Kazakhstan provides for the purchase and sale of scheduled quantities of electricity. Any deviations from the daily schedule, referred to as imbalances, shall be financially settled at BEM.
A positive imbalance in the energy system, resulting from the excess of consumption over generation in the daily schedule, is defined as the deficit. Conversely, a negative imbalance refers to a situation where there is an overabundance of generation compared to consumption, resulting in a surplus.
The objectives of the BEM are to:
- make the entities operating within the BEM framework financially liable for their daily unscheduled imbalances in the unified power system (UPS) of Kazakhstan.
- provide for physical and subsequent financial settlement of imbalances in the UPS of Kazakhstan;
- encouraging the BEM’s entities in addressing the imbalances in the UPS of Kazakhstan; and
- encourage the entities to install the commercial metering system.
The BEM entities are all participants of the wholesale electricity market.
KEGOC, as a BEM entity, implements legal measures to address the imbalances within the UPS of Kazakhstan. These measures involve collaborating with neighbouring countries' energy systems to rectify unscheduled power flows at the borders with said systems. KEGOC, as part of its interaction with the energy systems of other countries, sells and buys balancing electricity and negative imbalances from the settlement centre in order to settle the deviations on the border with Russia and Central Asia.
The BEM entities are required to enter into contracts with the settlement centre for the purchase and sale of balancing electricity and negative imbalances, as well as into an accession agreement.
By order of the Ministry of Energy dated June 6, 2023, KOREM JSC was designated as the settlement centre.
The purchase and sale of balancing electricity and negative imbalances is carried out on the basis of a purchase and sale contract. In turn, under the accession agreement, the BEM entities are jointly liable for the purchase and sale of balancing electricity and negative imbalances based on hourly amount of balancing electricity and imbalances.
At BEM, the sale of balancing electricity and the purchase of negative imbalances are limited to the settlement centre. The settlement centre at BEM calculates prices in accordance with the Ministry of Energy's guidelines.
The settlement centre generates calculations of hourly volumes of balancing electricity and hourly imbalances, as well as a register of mutual settlements between BEM participants, based on the results of the settlement period.
The register identifies the pairs of the BEM entities for subsequent settlement of monetary obligations. The register of settlements is a document that confirms the BEM entities' right to claim and the existence of monetary obligations.
The BEM entities may transfer to the balance provider the responsibility for the purchase and sale of balancing electricity and negative imbalances under a responsibility transfer agreement. In this case, the purchase and sale contract for balancing electricity and negative imbalances concluded with the settlement centre shall be changed accordingly.
A balance provider is the wholesale electricity market entity that has accepted responsibility for the financial settlement of its own imbalances and imbalances of other BEM entities. The balance provider must be included on the settlement centre's list of balance providers.
Renewable energy sources that have a long-term electricity purchase and sale contract with a single electricity purchaser are required to enter into a transfer of responsibility agreement with that single purchaser.
