Implementation of offsets between participants of the balancing market

Since July 1, 2023, the transition to a new model of the electric energy market has been carried out on the basis of a single electric energy buyer mechanism and a real-time balancing electric energy market.

Thus, by Order of the Minister of Energy of the Republic of Kazakhstan dated 06.06.2023 No. 211, the Company was determined by the settlement center of the balancing market, which carries out centralized purchase and sale of balancing electricity and negative imbalances in the balancing electricity market in accordance with subparagraph 22-5) of Article 1 of the Law of the Republic of Kazakhstan «On Electric Power Industry» (hereinafter – the Law).

In accordance with paragraph 3 of Article 15-10 of the Law, the subjects of the balancing electricity market carry out the sale of balancing electricity in the balancing electricity market only to the settlement center of the balancing market. Subjects of the balancing market of electric energy purchase negative imbalances in the balancing market of electric energy only from the settlement center of the balancing market.

Also, in accordance with paragraph 2 of Article 15-10 of the Law, the purchase and sale of balancing electricity and negative imbalances in the balancing electricity market is carried out within the framework of a contract for the purchase and sale of balancing electricity and negative imbalances, concluded according to a standard form approved by the authorized body.

Within the framework of the contract of sale of balancing electricity and negative imbalances:

• the settlement center of the balancing market sells (buys), and the subject of the balancing electricity market buys (sells) balancing electricity and negative imbalances in accordance with the terms of the Contract, the requirements of the legislation of the Republic of Kazakhstan in the field of electric power and the Rules of functioning of the balancing electricity market;
• the subject of the balancing market of electric energy sells (buys), and the settlement center of the balancing market buys (sells) balancing electricity and negative imbalances in accordance with the terms of the Contract, the requirements of the legislation of the Republic of Kazakhstan in the field of electric power and the Rules of functioning of the balancing electricity market;
• the subject of the balancing electricity market undertakes to pay for balancing electricity and negative imbalances in the amount and in the manner established by the Contract, the requirements of the legislation of the Republic of Kazakhstan in the field of electric power and the Rules of functioning of the balancing electricity market.

At the same time, according to subparagraph 10) of paragraph 13 of Article 15-10 of the Law, the settlement center of the balancing market makes offsets for obligations to purchase (sell) balancing electricity and negative imbalances in the balancing market between the subjects of the balancing market under the accession agreement.

In order to offset obligations for the purchase (sale) of balancing electricity and negative imbalances in the balancing market between the subjects of the balancing market, between the subjects of the balancing market and the settlement center of the balancing market, an accession agreement is concluded, in accordance with paragraph 2 of Article 15-10 of the Law.

Within the framework of the accession agreement, the settlement center of the balancing market calculates, determines and distributes the monetary obligations of the subject of the balancing electricity market that have arisen in the balancing electricity market of the Republic of Kazakhstan, and the subject of the balancing electricity market undertakes to pay them in accordance with the procedure provided for in the Agreement.

It follows from the above that the settlement center of the balancing market performs the following actions:

• sells and buys balancing electricity and negative imbalances;
• determines the total volume of purchase and sale of balancing electricity and negative imbalances and their cost for each subject of the balancing electricity market for the month;
• issues to the subjects of the balancing market of electric energy an invoice for the release of stocks to the side and an electronic invoice;
• forms an act of reconciliation of mutual settlements to identify the balance of debt of subjects of the balancing electricity market for the past billing month;
• forms a register of offsets between the subjects of the balancing market (the document in which the name of the subject of the balancing market of electric energy having the right to claim monetary obligations, the name of the subject of the balancing market of electric energy having monetary obligations, the amount of monetary obligations, the billing period will be indicated).

The procedure for mutual settlements between entities of the balancing market is carried out in accordance with paragraph 17 of the Rules for the Functioning of the balancing Electricity Market, approved by Order No. 112 of the Minister of Energy of the Republic of Kazakhstan dated February 20, 2015 (hereinafter referred to as the Rules).

According to subparagraph 22) of paragraph 2 of the Rules, register of offsets between balancing market entities – a document formed by the settlement center of the balancing market, on the basis of which the subjects of the balancing market of electric energy carry out mutual settlements on obligations incurred by the subjects of the balancing market of electric energy in the balancing market of electric energy of the Republic of Kazakhstan, and is also a document confirming the right of claim and the existence of monetary obligations of the subjects of the balancing market of electric energy.

After the implementation of the actions provided for in paragraph 136 of the Rules, the settlement center of the balancing market forms a register of offsets between the subjects of the balancing market.

By virtue of paragraph 139 of the Rules, the register of offsets between the subjects of the balancing market is approved by the settlement center of the balancing market, is not subject to appeal and is accepted by the subject of the balancing electricity market without any comments and objections.

According to paragraph 145 of the Rules, the register of offsets between the subjects of the balancing market is formed by the settlement center of the balancing market and contains the following information:

• the name of the entity of the balancing electricity market that has the right to claim monetary obligations;
• name of the entity of the balancing electricity market that has monetary obligations;
• amount of monetary obligations;
• billing period.

In accordance with paragraph 144 of the Rules, mutual settlements on obligations arising as a result of the targeted distribution of financial obligations between participants of the balancing electricity market are carried out directly between participants of the balancing electricity market on the basis of the register of offsets between subjects of the balancing market.

After the approval and publication of the register of offsets between the subjects of the balancing market, the subjects of the balancing market carry out mutual settlements in accordance with this register of offsets.

From which it follows that according to the register of offsets between the subjects of the balancing market, the subject of the balancing market having monetary obligations pays its obligations to the subject of the balancing market having the right to claim.

Also, in accordance with paragraph 147 of the Rules, mutual settlements on monetary obligations are carried out by the subject of the balancing electricity market on a monthly basis, but no later than thirty calendar days after the end of the month of purchase of balancing electricity and negative imbalances in the balancing electricity market.