FIRST TRADING DAY ON DAY-AHEAD MARKET

Transitional Model

Effective July 1, 2024, a Transitional Model of the electricity market was launched, enabling the trading of hourly products on both Day-ahead and Intraday markets, alongside the existing model for balancing electricity.

JSC "Georgian Energy Exchange" (GENEX) operates the Day-ahead and Intraday markets in accordance with the "Day-Ahead and Intraday Market Rules" approved by the National Energy and Water Supply Regulatory Commission of Georgia.

First Day of Trading

For trading on July 1, 2024 (for the physical delivery day of July 2, 2024), four participants were registered, each having the opportunity to place electricity purchase/sale orders one day in advance. The list of registered participants, as per market rules, is published on GENEX's website.

Trading results are also published on GENEX's website in accordance with market rules. The published information includes aggregated supply and demand curves, which allow interested parties to estimate the amount and price of electricity available for trading at any particular hour.

Registered participants placed their respective orders. Although there was an intention to both buy and sell electricity for every hour of the delivery day, no trades took place because the prices offered by electricity sellers were higher than what buyers were willing to pay.

The figure shows aggregated electricity purchase and sale orders for the period of 18:00-19:00 on July 2, 2024. It can be seen from the diagram that electricity was available at a price of 140.51 GEL/MWh (14.051 Tetri/kWh), while buyers were willing to pay no more than 122.75 GEL/MWh (12.275 Tetri /kWh). Similar patterns were observed for other time periods.

What Determines the Price?

In the transitional market model, participants have the opportunity to buy or sell electricity that could not be traded on the exchange through bilateral contracts or as balancing electricity in future periods. Accordingly, the bid price (the price at which participants are willing to buy or sell) reflects this opportunity. Since trading on the exchange should be financially beneficial for participants, they are inclined to sell at a higher price or buy at a lower price compared to bilateral contracts or balancing electricity.