Bulgarian independent energy exchange (IBEX) plans to launch a collaboration project for market coupling on day-ahead basis on at least one border. This announcement came from Nikola Gabrovski member of the Board of directors of IBEX during the forum “Liquidity and price levels on the Bulgarian electricity market”, organized by Utilities magazine and supported by Association of traders with electricity in Bulgaria (ATEB). According to Mr. Gabrovski’s words the realistic options are two – coupling with Romania and/or Serbia. The coupling project will start in the middle of 2018 and is expected to finish in 2019, when the official launch of the DAM coupling is planned to be completed. Alongside in July 2018 the power exchange will start cross-border trading on intraday basis as well as trading of energy (technological) losses on the liberalized market. Regarding the intraday market IBEX plans to join the third wave of XBID at the end of 2019.
The total traded volumes on day-ahead market since the launch of IBEX in January 2016 till 30.09.2017 are 5.960 TWh. IBEX reports an increase of the traded volumes on yearly basis. In 2016 the electricity traded on the day-ahead market was 7.15% of the total consumption in the country and in 2017 the percentage is 11.30 %. Taking into consideration the fact that the electricity traded through the exchange is meant only for the liberalized market, which is 55% of the total market in the country, in reality the traded volumes on IBEX are actually more than 22% of the consumption on the liberalized market.
Furthermore Mr. Gabrovski presented the main factors considered by IBEX team to have an influence on the prices of day-ahead market:
- Variations in the internal consumption (seasonal and daily variations, climatic conditions, lack of demand response meaning that when the prices are high the demand does not change and the other way around);
- Regional market influencing the prices on day-ahead market (OPCOM, HUPX, LAGIE, EPIAS etc.);
- Psychological factors (expectations, changes in the market model, regulations and others).
Mr. Gabrovski pointed out that the water reserves in 2016 have been lower than the average levels, but the current data from ENTSO-E shows that from the beginning of October 2017 there is a tendency for increase of the water reserves. “It means that if one of the factors contributing for higher electricity prices in the beginning of 2017 compared to 2016 was the lack of available water resources, from October this factor won’t be of any significance”.
The last presentation of the event was held by Mr. Vladimir Dichev – Executive director of CEZ Trade Bulgaria and deputy chairman of ATEB. He highlighted the changes that took place on the wholesale power market and the factors influencing the regional market. Mr. Dichev emphasized on the “the new basis of the wholesale market”:
- Higher capacities reserved by the network operators for emergency events;
- Retaining flexible capacities to ensure the proper operation of Renewable energy plants;
- Decoupling of wholesale markets in some time intervals;
- Increase of the prices for coal, natural gas, crude oil and carbon emission;
- Changes in the legislation framework on European and regional level;
- Psychological reactions of the market participants to specific events on the wholesale market;
The role of the spot market (day-ahead) was discussed and its purposes related to closing daily positions, provision of reference price, standardization of trading and future coupling with regional markets. It was noted that some of those purposes haven’t been fully met by IBEX due to price volatility, small number of generators and the large share of the spot market as part of the liberalized market. DAM is normally supposed to cover between 5-10% of the consumption where IBEX’s DAM covers more than 22% of the consumption of the liberalized market and has become a main channel for energy trading due to the lack of liquidity on the forward market.
Short-term measures to improve the market situation were proposed aiming to reduce the price pressure on traders and end consumers. Some of the measures include: restoring the forward market liquidity (offering 1-12 month products) through auctions organized by the main generators (NPP, TPP, NEK) for base load and peak load as well as reducing the pressure on the spot market; adequate participation of the main electricity generators on the spot market through stepwise bids above the base liquidity to avoid electricity price spikes.
Source: Publics.bg, Bulgarian Independent Energy Exchange, CEZ Trade Bulgaria