Analysis of the Romanian Electricity Market

Abstract: As being applying to become a member of the European Union, Romania must, among many other things, accept the EU Electricity Directive from 1999 that stipulates how the energy shall be treated within the Union. In this Directive, it is clearly stated that all the countries within the European Union have to have a deregulated electricity market. The main objective of deregulating the wholesale electricity market around the world is to improve the efficiency of the electric power industry by encouraging competition. Or as it is written in the Directive; �To ensure the free movement of electricity while improving the security of supply and the competitiveness of the European economy. � [4] To be able to fulfil this mandatory task, the Romanian Market Operator OPCOM, has today contracted the French company AREVA T&D, who is in charge of the implementation of a new deregulated electricity market, with its main function being the Day-Ahead Market infrastructure (web-based bidding interface with market participants, matching process and settlement).This market is supposed to be taking into action during the summer of 2005. The scope of this training can be summarized in the following points, � Analyse the proposed national market rules of Romania. These rules integrate a Day- Ahead Market, a Balancing Market and Imbalance Calculation. � Analyze the formulation of the Settlement of these markets. The Settlement has the object to determine the payments for transactions made under the different markets by the market actors. � Develop a prototype / simulator of these Settlement rules that will allow verifying their consistence and that will be used in testing and demonstration environment. It is important to mention that the analyses above will be a theoretical analysis on the rules since the project is still in a developing phase and has not been tested in a real environment. The prototype / simulator will be implemented using AIMMS mathematical modelling language, where all settlement rules have to be implemented. The idea of the prototype is to simulate how the rules will behave and if the results are credible. To verify that the rules have been implemented in the right manners, the results given by AIMMS will then be compared with the results from the AREVAS�s e-terra settlement products, which is the simulator that is going to be used in the future market. Except for the settlement rules, the developed prototype will also include the matching process with its offer-acceptance algorithm to determine the cleared energy and price for each trading interval, and will serve to give feedback to the future matching process. It aims also to validate the results provided by the delivered algorithm. To be able to get a full vision, and as well to understand their implementation, the three different notions, Day-Ahead Market, Balancing Market and Imbalance Calculations studied under this project will be explained in detail, the role they play and why they are needed in a deregulated environment. Summarizing, this report will treat the following markets and areas; � Day-Ahead Market � Balancing Market � Imbalance Calculation � Settlement of these three processes Finally, some screenshot will be shown to visualise the prototype and how the results are presented to the customer together with some conclusions and the future work that can be done.