Our 5th issue of the MEMO series now takes stock of the first 12 months of operation under the new wholesale market.
NPP electricity generation in May was significantly below the economic efficient level. This cannot be explained by Covid-related demand decrease or a high RES generation share.
Increasing electricity imports from Russia can help to improve competition, reduce prices and reduce emissions. But it should be regulated to minimize adverse effects.
Market power remains strong and starts exploiting balancing market. Changes to PSO does not help the competition. Prices in the IPS start to drop as nuclear power ramps up production.
Prices are stable as the market shows no signs of effective competition. Increase of import to the BEI does not affect prices. Price caps are higher than the estimated marginal costs of coal generators.
The market opening on July 1st may have negative impact on final prices for industries and economy as a whole. With little time left, at least critical risks should be mitigated.
Analysis of implementation challenges related to wholesale market reform, in particular preparation, coordination, issues of market design, concentration and liquidity.