The implementation of the 15-minute settlement period in the balancing market started today, October 1st. Until now, the settlement period was 1 hour. The introduction of a settlement period of 15 minutes is in accordance with Regulation (EU) 2017/2195 of 23.11.2017 and is a commitment made by Bulgarian government in the National Recovery and Resilience Plan.
ESO was ready with the introduction as early as July 1, but a postponement was necessary due to a lack of readiness by the market participants, the delayed change in the regulatory framework that would regulate the introduction of the 15-minute settlement period, as well as because IBEX lacks 15-minute trading products.
Conducted training in a test environment with market participants gave incomplete and contradictory results. Due to the lack of complete 15-minute data and the non-participation of a number of market participants, the tests were insufficient to assess the impacts on the market. Accordingly, the market participants failed to analyze the changes based on real data and to reconfigure their systems and processes accordingly, thereby minimizing the risk of negative consequences for their customers caused by haste to introduce the new model. As a result, the introduction of the 15-minute settlement period is expected to create a prerequisite for a drastic increase in the costs for balancing in the most difficult winter period.
Despite a number of requests to postpone the introduction of the 15-minute settlement period, this is no longer possible as the launch of IBEX’ 15-minute trading. The derogation granted to the Regulator (EWRC) expires by the end of 2023 or until the introduction of 15-minute trading products by the Bulgarian energy exchange. Since the latter condition is fulfilled as of October 1, the derogation is terminated. According to the regulation, EWRC has no right to request a second derogation.
Although not always a significant part of the invoices, balancing costs can make up to 5%-10% of the final price of electricity. With the expected high prices in the coming months, their absolute value will also increase. Therefore, it was very important to test the new model in advance, and not to have the testing in real environment from October 1st. The expectation is that the 15-minute settlement will initially lead to increased balancing costs until balancing coordinators adapt.