About the Project
Country:
Armenia
Sector:
Energy, Wholesale Electricity Market
Solution:
Energy Exchange, Market Management System
The Armenian Energy Exchange Market Management System (AEX MMS) was developed for the Government of Armenia via the Settlement Center CJSC (a company owned by the Ministry of Territorial Administration and Infrastructure that acts as an Electricity Market Operator (EMO)). The project was funded by USAID/Armenia, and the prime contractor for the project was Tetra Tech EC, Inc.
- The Settlement Center CJSC is a company in charge of the calculations of electricity and management of all transactions within the Armenian WEM (Wholesale Energy Market). The AEX MMS is hosted and operated within the Settlement Center.
- The Ministry of Territorial Administration and Infrastructure is the government body which oversees the development of utility/energy services provided within the country.
- USAID/Armenia is the funder of the project through the Market Liberalization and Electricity Trade program (MLET). The project has the goal of facilitating cross-border energy trade, increasing private investment in the electricity sector, accelerating the transition to clean energy, and making energy markets more efficient and transparent.
- Tetra Tech EC, Inc is an engineering and consulting firm with specialized expertise in energy market management. Synergy created the AEX via subcontract from Tetra Tech in the framework of the MLET program.
The Challenge
- Limited energy resources that can meet only a fraction of the total demand for energy from domestic resources. Armenia does not have oil or natural gas reserves and is thus highly dependent on imported energy resources.
- Low levels of energy efficiency compared to developed countries.
- Lack of competition leading to fewer clean energy investments.
- Unattractive energy sector for foreign investors due to the lack of transparency, accountability, and competitiveness.
- Narrow opportunities for cross-border energy trade with neighboring countries.
The Solution
- Fully compatible with all other energy-related applications and tools utilized by EMO. Read more about the AEX software here.
- Supports the liberalization of the Armenian electricity market with a state-of-the-art web-based system.
- Assists the Government of Armenia and market participants in shaping a conducive energy investment climate, fostering competition in the domestic market, and creating new opportunities for regional electricity trade through re-engineering of the existing business processes in WEM.
- Provides digital tools to monitor market processes with the aim of continuous improvement and ensures fair market participation.
The Results
- The exchange is publicly available and has undertaken the WEM operation and management functions. After the system launch, nearly 213 private companies with more than 400 daily users trading on AEX MMS.
- About 285 million kW*h have been contracted through the AEX MMS in the Day-ahead and non-regulated markets in February-May 2022, which is about 5% of the country’s annual consumption.
- Cross-border energy trade between Armenia and Georgia reached a record-breaking high after the system launch.