Electricity Market Development: Dry Run Process Model For Energy Regulators

April 2022 - With support from the United States Agency for International Development (USAID) Bureau for Europe and Eurasia, the National Association of Regulatory Utility Commissioners (NARUC) has developed the publication "Electricity Market Development: Dry Run Process Model For Energy Regulators."

This dry run model document is aimed at assisting the National Regulatory Authorities (NRAs) of Europe and Eurasia in their undertakings of market liberalization and reforms and increasing their understanding of how to plan and prepare for an introduction of live market operations. Due to the sophistication of market designs that have been introduced in the region, stakeholders need training on appropriate mechanisms and tools to cope with the complexity of the market models.

In order to ensure the successful implementation of competitive electricity markets in the region, it is important to develop methodologies for designing and implementing an effective dry run process to establish a robust market operation at the initiation of the nascent markets. Conducting a dry run can increase market stakeholders’ understanding and acceptance of a new market structure, mitigate risks, and ensure a smooth go-live process.

The document structure is based on key focus areas identified as important for planning and conducting a dry run:

Chapter 2: Presents the rationale and potential objectives of dry runs, provides a high-level description of the different dry run sub-processes, and explains the overall process flow
Chapter 3: Presents design stages for a dry run, including identifying involved stakeholders and market segments in which dry runs are typically executed
Chapter 4: Deals with preparations for a successful dry run and creating a plan for execution, including designing dry run exit criteria
Chapter 5: Details the execution of a dry run and highlights the different processes and steps needed
Chapter 6: Guides NRAs on how to interpret and analyze the outcome of the dry run
Chapter 7: Elaborates a summary of key recommendations for a dry run from the NRA perspective
The annex presents some recent examples of dry run processes in different countries (i.e., Georgia, Turkey, Greece, and Ireland)

You can access it here.