The State Duma of Russia approved the electricity demand management bill in the first reading

The State Duma approved amendments to the law “On the Power Industry” in the first reading, which determine the work of electricity demand aggregators and tighten the financial discipline of energy supply companies.

The amendments fix the legal status of an “electricity demand management aggregator” and introduce a new type of “services to manage changes in the electricity consumption regime.”

In addition, the bill proposes introduction of a new mechanism to strengthen financial discipline of guaranteeing suppliers and power supply companies in the wholesale market.

“With regard to guaranteeing suppliers and power supply companies, it is proposed to establish requirements for compliance with financial discipline indicators in terms of payment for power supply services,” Anastasia Bondarenko noted.

She clarified that non-compliance with these indicators will serve as the basis to deprive such companies of the status of a wholesale power market entity.

Aggregators uniting groups of power consumers manage their aggregate demand and can change power consumption. By reducing power consumption at a certain time, aggregators and a group of their consumers receive payments from the wholesale power market. The use of demand aggregators allows reducing the load on the power system during peak hours.

Anastasia Bondarenko recalled that demand management has been implemented now as a pilot project of the National Technological Initiative in the EnergyNet area. The bill became the next stage in the development of a demand management plan, which proved to be effective at the pilot project stage.

“The adoption of the bill will make it possible to expand the scope of the electricity demand management mechanism, ensure the replacement of inefficient expensive generation during the peak period, reduce prices for consumers during peak hours, and smooth out the loads on the energy system,” Anastasia Bondarenko explained.

She also emphasized that this measure will have a positive impact not only for consumers who’ll get a decreased cost of electricity during the peak period, but also for the energy system as a whole through a reduced load on generation facilities.