Action Plan For The Development Of A Competitive Market For Electric Power
Country
Year
1998
Summary
Report by Charles F. Zimmermann
Bechtel Consulting, Vilnius, Lithuania
In this paper the electricity market in the Baltic countries is considered to have the potential to develop at least six submarkets: (1) bilateral long-term contracts, (2) a monthly spot market, (3) a daily spot market, (4) ancillary services, (5) seasonal regulation and annual regulation, and (6) a futures market. One of the difficulties with implementation of the concept of electricity market liberalization according to the EU Electricity Directive is the absence of a large number of buyers and sellers. In particular submarkets (1) and (2) do not have enough sellers, and submarkets (4) and (5) are not very well suited to a competitive market structure. This paper is intended to present a realistic appraisal of the potential for competition to develop in each submarket, and a discussion of steps that could be taken to manage submarkets (4) and (5) where competition is unlikely to develop in the near future.