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Turkey,United Kingdom : Turkey to launch new algorithm for power spot prices
Publish Date : 30-May-2016
Turkish power market operator Epias will launch a new algorithm for the calculation of day-ahead prices as of the start of June that will change the optimisation objective to total welfare from the current producer-focused method.
Epias has been testing the algorithm since March. Some participants expect the new algorithm to support prices. But on the downside, some participants said day-ahead prices could settle below levels calculated with the current algorithm as block bids and offers are expected to be better managed with the new algorithm. Epias declined to comment on how the algorithm would affect day-ahead prices.
Along with the new price calculation approach, the board of energy regulator EPDK has approved new rules on the management of block bids and offers that will come into effect after being published in the official journal.
The block offer price will automatically be accepted if its average is below or equal to the calculated final day-ahead market exchange price (NPTF). If the block offer price exceeds the NPTF, then it will only be accepted if in line with the optimisation algorithm. Similarly, the block bid price is automatically accepted if above or equal to the NPTF, but if the bid exceeds the NPTF it may only be accepted if the yielded final price is in line with the optimisation algorithm.
The balancing fund or "fark fonu" system will continue to exist, but the way payments are distributed to producers will change, Epias said. Among the amendments, market regulator EPDK will transfer authority of collateral rules to Epias, but Epias does not expect to make any changes in the short term.
