Market Management System Best fit Energy Market Model

Market Management System Best fit Energy Market Model for Kingdom of Saudi Arabia Prepared By: Abdullah Matar Al. Harbi Saudi Electricity Company Riyadh , Riyadh 51922 Saudi Arabia eng 2772@hotmail. com

Due to some critical situation in my business it seem to me difficult to attend the conference , I'm sorry for that. Supported By: Abdullah Melfi Alharbi National Control Division Manager Saudi Electricity Company Riyadh 51922 Saudi Arabia Email: NCSCRDV@ngrid. sa Mob: +966563439994

Best fit Energy Market Model Abstract • This paper deals with the preparative works undertaken to accomplish Spot Market in Kingdom of Saudi Arabia. Popular Market Models will be analyzed and a best fit market model for Kingdom of Saudi Arabia will be identified and recommended. This paper aims to initiate active discussions among member countries of GCCIA (Gulf Cooperation Council Interconnecting Authority), RTOs such as GCCIA &PAN Arab Interconnecting Authority and Policy makers such as ECRA (Electricity & Co-generation Regulatory Authority) to form a coherent market model for the Middle East Countries.

Best fit Energy Market Model Proposed Electricity Market Model in KSA • Creation of Electricity Market raises number of fundamental questions concerning market structure, mandatory / voluntary participation, auctioning method, pricing discovery mechanism, market abuse, market monitoring cell, market rules, regulation & enforcement, rule change committee, dispute redress, energy audit, credit risk, finance audit and etc. , • Countries which have well established Market Models have undergone this painful exercise and are still updating. • ECRA (Electricity and Cogeneration Regulatory Authority) have prepared the road map for Competitive Wholesale Electricity market in KSA as shown in Fig. 1 and Fig. 2.

Best fit Energy Market Model Figure 1: Proposed Electricity Market Model in KSA

Best fit Energy Market Model The Proposed KSA Road Map for the Market Model • Stage 1, Institutional development such as forming ISO (Independent System Operator), PB (Principal Buyer) and restructuring of SEC will happen. • Stage 2, Fuel price reforms and Tariff reforms for large customers. • Stage 3, Shadow / full spot markets will be introduced. • Stage 4, Capacity Market begins • Stage 5, fully liberalized Markets with competing retailers will be envisaged. KSA is passing through Stage 1 and preparing for Stage 2.

Best fit Energy Market Model Figure 2: Chronograms Electricity market

Best fit Energy Market Model Figure 3 : KSA Proposed Future Electrical Interconnections

Best fit Energy Market Model Figure 4 : Power Market Around The World

Best fit Energy Market Model Conclusion: Benefits Of Market Coupling Through Implicit Auctioning: • Reducing risk 'levels the playing field' and makes it easier for smaller participants to benefit from crossborder access; • Capacity is optimally used, particularly for periods when the positive price direction is uncertain at the time of nomination of capacity; • The market value of the transmission connection is exactly identical to the price difference between the areas. • When there are no transmission constraints, the markets will converge entirely and the Power Exchange prices will be identical. • The potential for hoarding capacity is reduced. Transmission capacity is automatically used to the maximum extent possible. • The uncertainty regarding the eventual use of explicit interconnection capacity options obliges the TSO to put certain safety margins into place.

Thanks