What is a bilateral electricity contract?

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Bilateral electricity contract is a contract that is concluded for the direct sale of electricity from the supplier (retail company or power plant) to the consumer. In the current practice, subscribers with a contractual demand above one megawatt can provide all or part of their electricity consumption through a bilateral electricity contract with the supplier. The bilateral electricity contract is registered under the direct supervision of the independent operator of the electricity market (Iran Electricity Network Management Company) and has a very high flexibility.

All electricity subscribers with a power of more than one megawatt are required to supply the electricity (electricity) they need through bilateral electricity contracts or other common methods in the energy exchange.

Also, in the bilateral electricity contract, despite the transactions of the energy exchange, there is no price discovery. The advantage of Asiawatt company compared to power plants is that it is able to provide electricity to subscribers from a basket of several different suppliers with different conditions and prices, while all the risks in the energy exchange and bilateral electricity contracts are directed to Asiawatt company.

Therefore, according to the approval of the Minister of Energy, the subscribers who receive their electricity from Asiavat Company will be placed in the last priority of blackout and will be exempted from the fine at the rate of 1.2 of the maximum electricity market price. It should be noted that payment of the transit fee to the regional electricity companies and distribution in the bilateral electricity contract is the responsibility of the electricity consumer. Consumers can get the lowest price from this company in concluding a bilateral electricity contract

Advantages of bilateral electricity supply contracts:

  • Preventing the imposition of fines with a factor of 1.2 of the maximum electricity market price
  • It is possible to announce the consumption amount of each period at the end of the consumption period
  • Determining an agreed price that is more economical from an economic point of view and leads to a significant reduction in costs
  • Determining the payment due date in an agreed and flexible manner
  • Failure to discover the price
  • The possibility of buying electricity from the desired supplier
  • Being in the last priority of consumption management (shutdown)
  • Guarantee of electricity supply by Mirit Iran’s electricity network in case of interruption of electricity production by the producer of the contracting party to receive

Disadvantages of bilateral electricity supply contracts:

  • Lack of possibility to buy electricity in open form (low-load, short-load, high-load)
  • Necessity of enforcement of proxy extension with the network owner (regional electricity or distribution company)