The high and medium voltage industries, as well as other large consumers with an annual consumption in 2021 of more than 13 kWh and the Demand Response CSR (Consolidated Representative Bodies of Azerbaijan), which will also represent large consumers, will bear the brunt of the mandatory demand reduction. electricity at the rate of 5% from December 1, 2022 to March 31, 2023, provided for by the European regulation.

Load reduction, according to the draft ISA, which is expected to be signed in the coming days and known “K”will be carried out on a voluntary basis and through two types of auctions ADMI. There is a maximum compensation limit in the region of 500 euros/MWh, and the maximum total amount of compensation for reduced demand to be paid to participants, which will be provided by the Energy Transition Fund, will not exceed 80 million euros. euros for the duration of the measure.

Measured consumption for each peak hour per month and for each portfolio will be measured either against the maximum monthly average of the sum of the hourly measured energy consumption of the portfolio for the corresponding hour of the corresponding month of the previous year, or against the monthly average of the sum of the measured hourly energy consumption relative to the consumption points of the portfolio for the corresponding time in September 2022.

KYA is a continuation of the creation of the electricity demand reduction service, which was introduced in the previous days in accordance with the legislative regulation. According to KYA, the condition for the participation of beneficiaries in the auctions is their registration in the register of electricity demand reduction service providers, which will be maintained by ADMIE.

There will be two types of auctions: quarterly and monthly. As for the first type, ADMIE will hold three auctions, one at each peak hour for the entire four-month period. The quantity to be auctioned at each peak hour and each calendar day of the specified period will be 150 MWh.

For the second type, ADMIE will hold twelve auctions, one for each peak hour and one for each monthly period from the beginning to the end of the period. Peak hours will be from 18:00 to 21:00 every day during the weather-critical quarter.

In the event that suppliers reduce demand by more than the amount provided to them, they will be entitled to additional compensation. The MLA also provides for non-compliance charges in the event that suppliers who have been awarded a certain reduction in demand for one peak hour per month do not achieve this reduction during peak hours, at least to the agreed level, or shift demand to another peak hour of that the same month. The fees charged are calculated for each portfolio as the product of the difference between the measured demand for electricity and the maximum agreed demand, multiplied by the weighted average of the auction prices.