Large energy users to be allowed to sign energy contracts with  producers 

ArmInfo. Large electricity consumers in Armenia will have the opportunity to directly sign  contracts with electricity producers. At its session on March 19, the  RA National Assembly Committee on Economic Affairs issued a positive  opinion on the amendments to the Law on Energy submitted in the first  reading by a group of NA deputies.

As the co-author of the presented document, Chairperson of the NA  Committee on Financial, Credit and Budgetary Affairs Tsovinar  Vardanyan noted in her speech, the legislative reforms that came into  force in 2018 initiated the process of gradual liberalization of the  electricity market and the transition to a new regulatory model. As a  result of these reforms, currently about 30% of the consumed  electricity is sold in the competitive segment of the market.  However, as Vardanyan emphasized, the electricity market still  requires large-scale reforms to make it accessible to all consumers,  including individual residents, which will increase the number of  electricity buyers and, consequently, the volume of electricity sold.

According to the current Law on Energy, currently, the rule of  guaranteed purchase of electricity for 20 years by Electric Networks  of Armenia CJSC is in effect for small hydropower and renewable  energy facilities. At the same time, these generating facilities do  not have the right to terminate a contract with ENA after signing it,  which limits their ability to find new buyers of services. Currently,  about 22 suppliers have received licenses to participate in the  electricity market, but only six of them actually operate in the  market. From the above, it can be concluded that, despite the  interest in the market, there are difficulties and restrictions in  the activities of these licensees, who face a number of obstacles. It  is also worth noting that the trading volumes of the companies ranked  first through third in terms of trading volume out of the six  suppliers differ by more than five times. According to available  data, the MP noted, the first of the listed suppliers is a company  affiliated with ENA. The trading volumes of the other three suppliers  are very small compared to the first three.

Based on the new initiative, it is proposed to grant the right to  large buyers of electricity to directly contact consumers themselves.  To do this, these facilities must have the status of a qualified  consumer, which will be able to directly enter the market. Such  consumers may include individuals and legal entities connected to  substations with a voltage of 6 (10) kV and higher and a capacity of  over one million kWh, who used more than 12 million kWh of  electricity in the previous year. Another change grants small  hydropower and renewable energy facilities the right to refuse  guaranteed payments for two years from the date of signing contracts  with ESA in order to directly enter the competitive market without  restoring the right to guaranteed purchases.