Administrator of Trading System ATS

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Administrator of Trading System (ATS)

• Russian Power Exchange

Ent. 7, 12 Krasnopresnenskaya Embankment, Moscow,
123610, Russia
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Company profile

• Nonprofit Partnership Administrator of Trading
  System (NP ATS) was established on November 23,
  2001 pursuant to the Government Resolution No.
  526 dated July 11, 2001 On Reforming Power
  Industry in the Russian Federation
• The only power exchange in Russia
• Cost of services regulated by State
• ATS members are 31 major Russian power producers
  and consumers
• ATS owns 100 of a clearing company
• ATS main governing body - Supervisory Board -
  consists of
• - 8 state representatives
• - 4 representatives of power producers
• - 4 representatives of power consumers

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Main Functions

• Organization of wholesale power trading
• Developing market rules, ensuring implementation
• Granting market access, maintaining market
  participants database
• Settlement of financial transactions for the
  energy traded
• Power production/consumption metering system
  control
• Market monitoring and analysis
• Providing alternative dispute resolution
• Control over System Operator

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Wholesale market - Regulated sector

• Vesting contracts
• Starting from July,1 2007 90 of electricity
  sold under tariff regulation
• 100 of capacity is sold under vesting contracts
• Tariff is set by a state regulator Federal
  tariff service
• Predefined parties to contracts
• Financial arrangements under vesting contracts
  are supervised by ATS. The volume of electricity
  traded under vesting contracts is decreasing
  every half a year
• By 2011 all electricity will be traded on
  competitive market

Market liberalization
Population is supplied with electricity under
tariff
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Wholesale market - Competitive sector

• Day ahead market
• Market participants submit price bids
• Price is set by auction for every hour of the
  next day
• Market participants compete for full amount of
  generators output/users consumption
• Nodal marginal pricing at 6400 nodes
• Centralized financial settlement
• Non regulated bilateral contracts
• Price is defined by parties to a contract
• Hourly basis delivery
• Parties pay the difference in nodal prices
  between respective nodes
• Direct financial settlement between parties

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Balancing market

• Difference between trading schedules and actual
  generation/consumption volume
• Initiatives are fixed by system Operator and
  calculated by ATS
• Price calculated on the basis of
• Day ahead market prices
• Tariffs for producers
• System Operator chooses a generating equipment
  configuration on the basis of bids submitted at
  Day ahead market
• Centralized financial settlement

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Market Today and Tomorrow
Market today, 2007
Market - 2011
Electricity
Electricity
Each year volume of electricity sold under
vesting contracts will be decreasing until the
market becomes fully competitive in 2011
Vesting contracts (Starting from July 1, 2007
90 of electricity sold under tariff regulated
by the Federal tariff Service)
Free bilateral contracts (Price is set by
parties)
Regulated
100 competitive
Day ahead market (10 of electricity)
Day ahead market
Competitive
Balancing market
Balancing market
Capacity
Capacity
Government resolution setting pace for
liberalization in 2011
Regulated bilateral contracts
Long-term auctions
Competitive
Regulated
Free bilateral contracts
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Wholesale Market Geography
3
3
(1,2) Territories with Day ahead Market (full
market modal) (3) Territories with tariff
regulated market Far East, Komi Republic,
Archangel Region, Kaliningrad Region.
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European Russia, pricing
Trade Volume
Tariff
Prices, euros/MWh
Average annual price in European Russia 14.5
/MWh Average tariff 8,8 /MWh
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Siberia, pricing
Trade Volume
Tariff
Prices, euros/MWh
Average annual price in Siberia 5.1 /MWh
Average tariff 6.4 /MWh
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Key Market Statistics

• Annual turnover 18.7 billion euros (from
  September 1, 2006 to August 31, 2007)
• Traded volume (two price zones) reached
  approximately 1,000 TWh (from September 1, 2006
  to July 31, 2007)
• 187 market participants
• - Power suppliers - 44
• - Power consumers - 143
• 80-85 of electricity produced in the Russian
  Federation is traded in the Wholesale power
  (capacity) market

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Market Regulation
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13
Market Regulation Tomorrow
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Capacity Market

• 2007 - 2008 100 capacity sold under regulated
  contracts
• In 2008 first auction for generation capacity
  for the following year (85 of capacity will
  still be covered by a tariff, the rest traded at
  competitive prices)
• 17 zones of free power flow, with one price
  determined for each zone
• Competitive prices payment method
• Free bilateral contract
• Contract with an infrastructure for Suppliers
  selected by an auction for generation capacity

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Markets in the Future

• Ancillary services market (2008)
• Financial derivatives market (2008-2009)
• Financial Transmission Rights Market (2008-2009)

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Thank you for your time and attention!
Dmitry Ponomarev, NP ATS Management Board
Chairman