How To Become An Electricity Supplier: Market Of Bilateral Agreements
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One of the main agreements that shall be concluded by and between the electricity market contractors is the Electricity Trading Bilateral Agreement.
This raises a question:
- Are these agreements mandatory? Can’t I just sign a direct agreement with Energoatom, SE, for example, or Ukrhydroenergo, PJSC?
Our energy lawyer will answer all these questions.
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Why do you need an Electricity Trading Bilateral Agreement to operate in the energy sector?
The fact is that the new electricity market operates as an auction. The Law on Electricity Market provides that participants shall carry out their activities on the basis of contractual relations.
But the legislation of Ukraine prescribes a special procedure for the so-called electronic auction for purchasing electricity from state-owned enterprises.
Participating in the auction requires the participants:
- To make an appropriate application;
- To sign a Participation Agreement with the organizer, which is determined by a special commission. We can tell you how to execute the agreement and what it shall specify.
The ordinary transactions (between private companies) on the electronic exchange of bilateral agreements may be signed only upon the company accreditation.
How to pass accreditation for signing bilateral agreements on the electricity market?
The question often arises, Where and how to pass accreditation in order to be able to sell electricity under bilateral agreements.
Today, according to one of the tenders, the organizer of auctions (bilateral agreements) on electricity and a number of other resources (fuel, coal, gas) is the Ukrainian Energy Exchange (hereinafter - the Exchange).
In order to participate in auctions, it is necessary to undergo the so-called accreditation, or as it is also called - the registration on the Electricity Exchange. This process involves a number of formal and bureaucratic procedures, which can hardly be successfully passed on the first try. Thus, in order to save time and launch business within the shortest possible time, it is better to consult a lawyer.
Related article: How To Accede To Oblenergo?
The procedure for joining the Exchange consists of a number of preparatory steps:
- To find premises, to develop a website in compliance with the licensing requirements;
- To obtain an Electricity Trading/Supply License;
- To sign a Transmission Services Agreement;
- To sign an Imbalance Settlement Agreement;
- To open a special bank account and obtain corresponding electronic digital signatures.
Read also: Website Requirements For The Electricity License
You must admit that without the assistance of an experienced energy lawyer who can register you on the electricity exchange on a turnkey basis, the whole procedure can take a long time.
An alternative to a lengthy procedure may be the purchase of a shelf company that has already obtained the necessary license and passed 4 stages.
As for the very essence of the Exchange, the concept of “bilateral agreements” implies the conclusion of transactions on free terms, with free order and prices for the period set by the parties.
After signing, such an agreement shall be registered in the system of the transmission operator, that is, Ukrenergo, NPC.
If you want to know more about the aspects of registration on the electricity market and conclusion of all the necessary agreements, don’t hesitate to call us.
We are ready to help you!
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