The Energy and Water Regulatory Commission held a second public consultation on a draft amendment to the Electricity Trading Regulations (ETR). Following the public consultation of the ETR on 27.11.2019, comments from the stakeholders were submitted to the Commission for significant changes to the draft, which required additional discussion.
Individual participants in the discussion disagreed on issues related to the newly proposed balancing energy methodology, with a hasty transposition of European directives, and the need to assess the impact of the changes. Representatives of the electricity distribution companies, electricity traders, NEK, ESO and IBEX proposed postponement of the 15-minute settlement period, which is expected to be introduced on the balancing market.
ATEB was concerned about balancing energy prices. ATEB’s chairman – Martin Georgiev explained that introducing a 15-minute settlement will administratively increase the cost of imbalances four times. In addition, the cost of balancing in general, especially for end customers and RES producers will increase significantly. In general, this will affect the final cost of electricity. ATEB`s chairman explained his concerns about the effect of this change leading to an increase of the electricity price by 10 percent.
“The introduction of 15-minute settlement for the balancing market will increase the amount of imbalances by almost 4 times.”
“The second problem is the new formula for balancing energy prices. In this formula, ESO charges the market a quantity of a particular participant at the price it has paid to that participant – the real price. Under the new formula, if several participants are activated in the same settlement interval, ESO will pay one 200 levs, to another 300, and charge the market the highest price (300 in this case). In this way, quite striking differences can occur if a cold reserve is activated. In case of a cold reserve activation, the prices paid to a supplier are twice and a half the price on IBEX. Usually, when the cold reserve is needed, the prices on the power exchange are high, there is a need for supply and if we say at one hour the price is 200 BGN on IBEX the cold reserve will cost 500 BGN. If another participant is activated on the balancing market, which is at the price of IBEX plus fixed 100 BGN, which is the marginal price according to the decision of the EWRC, the energy will be purchased at the amount of BGN 300, but on the market all quantities will be charged at BGN 500.
This will have an impact on the costs of end-consumer rising to at least 10 BGN per MWh. So far it is 2, 3, 4 BGN per MWh depending on the season and by the balancing group. An increase of at least BGN 10 is now possible, which is 10% on the electricity prices as soon as the Electricity Trading Rules come into force. This will affect not only the electricity prices on the liberalized market but also the regulated ones, as the electricity distribution companies also pay balancing costs. But the effect on the free market will be more significant, “said Martin Georgiev.
Responding to the questions raised, Plamen Mladenovski, Head of the Working Group and Director of the Electricity and Heat Power Directorate at EWRC, emphasized that our country is currently in a delicate situation with regard to the liberalization of the electricity market, which on one hand must happen in accordance with the law and regulations, and on the other – with European legislation. According to him, the price of balancing energy is increasing, but as the market improves, the shortages and surpluses decrease during the 15-minute settlement period. He agreed on the need for a single price for balancing energy and predicted that it would become a reality in 2021.
The full draft of the Electricity Trading Rules can be found at: