EnergiNet legislative “road map” updated in Russia

The road map is approved by the Government of the Russian Federation to improve legislation and eliminate administrative barriers in order to ensure the implementation of the National Technology Initiative in the EnergyNet direction. It provides the submission to the Government of the Russian Federation no later than May 2022 of a draft law on integrating the demand management mechanism into the wholesale electricity market.

The updated version of the legislative "road map" of Energinet was approved on March 3 by decree of the Government of the Russian Federation No. 402-r. Among others, it contains provisions on the continuation of work on the development of a mechanism for managing the electricity demand in the UPS of Russia.

“The systematic introduction of the electricity demand management mechanism in the industry has been going on for more than five years. In 2019, with the launch of a pilot project to create aggregators of retail consumer demand management services, this work entered a new stage, the result of which will be the introduction of a new economic and technological mechanism in the wholesale electricity and capacity market. In 2022, as part of a pilot project, we continue to work to ensure the economic efficiency of the mechanism and improve the quality of fulfillment of obligations by participants, introduce tools for monitoring and responsibility for the provision of services, analyze the practical experience gained over three years, on the basis of which we are finalizing a draft federal law that allows us to integrate demand management in all market segments,” said Maxim Kuleshov, Head of System Services Market Department of SO UPS JSC.

Demand management (Demand Response) implies a reduction in energy consumption by the end user under certain economic signals of the electricity market with receipt of revenue for such a reduction in consumption. The model of retail consumer demand management aggregators, created as part of the road map of the EnergyNet National Technology Initiative, gives consumers of the retail electricity market the opportunity to participate in price-dependent consumption reduction (wholesale consumers have the opportunity to use price-dependent consumption tools on their own starting from 2017).

Demand management aggregators are specialized organizations that coordinate the ability of a group of retail consumers to manage their electricity consumption, convert it into electricity demand management services and direct to consumers a part of the revenue received from the sale of this service. Through demand management aggregators, consumers can benefit in the short term by replacing inefficient generation with demand management resources and generating lower electricity prices, and in the long term by accounting for demand management volumes in the capacity market.

The pilot project on the formation of a mechanism for managing the demand of retail consumers was launched in June 2019 in accordance with the Decree of the Government of the Russian Federation No. 287 of 03/20/2019. The goals of the pilot project are to develop regulatory, contractual, technological solutions and form a pool of retail consumers demand management aggregators.