In addition to the public consultation on the natural gas trading platform, EWRC also held a public consultation on a Draft Agreement for the Implementation of a Natural Gas Release Program.
EWRC had a public discussion on the proposal for Gas Trading Platform submitted by Bulgartransgaz EAD and the report of EWRC’s Working Group prepared in this regard. The public consultation process was conducted with the participation of the following stakeholders – Bulgartransgaz EAD, Gas Hub Balkan EAD, Bulgarian Natural Gas Association, Bulgarian Gas Association, BFIEC and BCCI.
EWRC`s report on the natural gas trading platform and the rules for operation of the trading platform of Gas Hub Balkan EAD are published on the Commission`s website: HERE
According to the amendments to the Energy Act from 8.10.2019, the Energy Regulator approves the Gas Trading Platform based on a proposal of the transmission system operator. The platform must meet certain criteria – providing sufficient support for network users and transmission system operators; ensuring transparent and non-discriminatory access; provision of services on equal terms; ensuring trade anonymity until a transaction is concluded; providing all business participants with detailed information on current offers for purchase and sale.
The multilateral platform is online based and contains different functionalities: trading platform, risk management, market data, transaction review, and administration by Gas Hub Balkan EAD. On it bilateral trading will be conducted between market participants, including Bulgartransgaz EAD, for short-term standardized products within the next hour; during the day; products for the day ahead / weekend / single day / holidays and time products. All traded products on the trading platform have a continuous trading mode, with a minimum transaction size of 1 MWh / h, with delivery points – the virtual trading point (VTP) in the national gas transmission network, VTP in gas transmission network for transit and all local points (at the initiative of Bulgartransgaz EAD).
The implementation of the platform is foreseen to be made step by step by developing and launching service packages: trade package (initial package), second package (including everything except risk management and reporting under Regulation No 1227/2011 on wholesale energy market integrity and transparency), package risk management and reporting.
To the application of Bulgartransgaz EAD for the Gas Trading Platform, the Rules of Operation of the Gas Hub Hub Balkan EAD Natural Gas Trading Platform have been submitted. They regulate the membership criteria for the trading platform and the membership acceptance order, the technical access requirements, the trading platform and market area trading terms and conditions, and the relations between members and between members and the Gas Hub Balkan EAD.
During the discussions, the proposal was made and accepted in the upcoming days Gas Hub Balkan EAD to organize an explanatory workshop on the functionalities of the trading platform with the interested parties.
In accordance with the requirements of the Energy Act, EWRC also held a public consultation on a Draft Agreement for the implementation of a natural gas release program.
The report on the draft agreement for implementation of the natural gas release program is published on the Commission website: HERE
The report states that the draft Agreement submitted by Bulgargaz EAD envisages that the public provider will offer for sale on the organized natural gas market relevant quantities of natural gas specified in the Energy Act. Bulgargaz EAD proposes that natural gas be auctioned in the form of annual and monthly contracts for the supply of natural gas at the following basic product parameters: offered quantities on lots; period, start date, profile, place, and delivery cost. The offering of the products is planned to be carried out by conducting two auctions for release of natural gas meant for purchase from end suppliers or customers connected to the gas transmission system of the Republic of Bulgaria, as well as subsequent auctions with participation of customers in and/or outside the country. The draft Agreement proposes a calendar for the auctions for the first year of the release program. For each subsequent year, the exchange market operator shall, after consultation with the public provider, publish the auction calendar on its website. The public supplier (Bulgargaz) foresees that the starting price of the subsequent auctions should be higher than the starting price of the last auction conducted for release. A price update will be made on a quarterly basis of the price at which the purchase is settled, taking into account the change in the costs of the public supplier forming the initial price. For each month of the physical delivery period, the respective updated price is applied, to which the margin received in the auction is added.
In the report of the EWRC on the gas release program there are remarks on the pricing of the subsequent auctions. The report suggests additions to the program aiming at clarifying the procedure for purchase and delivery of the quantities and balancing. Another proposal is to include an option for reporting under REMIT.
Within the next two weeks, the participants in the public consultation and other interested parties may submit written positions to the Commission on the gas trading platform and gas release program.
EWRC will hold a meeting to approve the Gas Trading Platform and designate a trading platform operator, as well as to approve the Agreement for the implementation of the natural gas release program on 29.11.2019.
A complete recording of the public consultation is available at: https://www.youtube.com/watch?v=SNT-MWG1bZY