ADB supports Azerbaijani delegation’s study visit on electricity prices and rates in liberalized electricity markets to Germany

On 14-18 October 2019, an Azerbaijani delegation including Mr. Samir Akhundov, Chairman of the Board of Azerbaijan Energy Regulatory Agency (AERA), representatives of the Ministry of Energy, Ministry of Economy, Tariff Council Secretariat, Azerenerji OJSC and Azerishig OJSC held a series of meetings in Germany as part of a study visit organised in the framework of the Technical Assistance project “Developing a Power Sector Financial Recovery Plan”, financed by the Asian Development Bank (ADB). The study tour aimed to increase the knowledge of the Azerbaijani delegation about liberalised electricity market design in Germany.

The delegation visited the Power Exchange EEX in Leipzig, Germany to gain more knowledge about the electricity wholesale market functions, how wholesale electricity prices are determined and how generators compete against each other. They also visited a System Operator (TSO)’s Grid Lab in Berlin where they learned about long-term network planning, system operation under conditions of power stations’ self-dispatch, the challenges related to the need to integrate renewable energy, and about the market and prices for balancing energy. Furthermore, the delegation attended the session on the impact of the liberalised market on electricity generators, as well as visited the municipal utility in Wuppertal town to learn about how the end customer tariffs are designed in a competitive market. The delegation paid a visit to the Bundesnetzargentur, the Federal Regulatory Agency in Bonn and held discussions on how an independent regulator fulfills its role in regulating the tariffs of the natural monopoly elements (networks) and watching over the competitive elements – through market monitoring. The study tour concluded with a final meeting with representatives of DNV GL consulting company in Bonn focusing on renewable energy and its pricing, as well as its influence on the electricity market.