After one week of operation of the Bulgarian day-ahead market, it is noticeable that the settlement prices on the Bulgarian power exchange IBEX are very volatile, however they have started to normalise in the last few days, said Martin Georgiev, Chairman of ATEB. Nevertheless, there are still some problems that need to be tackled, and a late clearing hour is one of them.
Georgiev explained that he sees two important factors for the volatility on IBEX. The first is the late hours for bidding and publishing of the results, respectively 12:00 and 13:00 CET. ʺThe majority of traders close their day-ahead positions before 13:00 as all daily auctions and day-ahead markets settle earlier. In this respect, IBEX appears as a last resort clearing opportunity without back-up solutions (besides the intraday and the balancing markets) in case of unexpected settlement prices. Thus, the majority of the traders prefer to clear their positions on other regional exchanges and avoid risking on IBEX. This factor limits the integration of IBEX in the regional market and isolates the Bulgarian day-ahead market from the neighbouring day-ahead markets,ʺ explained Georgiev.
The other factor for the volatility lies in the fact that the selling liquidity on IBEX is provided by the three power generators owned by the state-owned Bulgarian Energy Holding (BEH) – the Maritsa Iztok 2 thermal power plant (TPP), National Electricity Company (NEC), and the Kozloduy nuclear power plant (NPP) – following an agreement with the European Commission.
According to Georgiev, from the perspective of traded volumes, the start of IBEX is exceeding traders` expectations, as there was no publicity on the volumes which will be offered by the subsidiaries of BEH. However, Georgiev expects that there is no big potential for growth of the traded volumes in 2016, unless the clearing hour is changed to an earlier one and IBEX integrates better in the regional market.
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Source: Energetika.net