For its liquidity IBEX will rely on the state-owned power plants, namely Kozloduy NPP and Maritsa East 2 TPP, to provide electricity volumes for trading which should cover up to ten percent of the electricity consumption in the market zone via the electricity exchange, or some 300 – 400 MWAUTHOR: publics.bg
Bulgaria will have an operating power exchange as early as December 8, 2015. Initially it will only include business consumers, with no set date for households to go off the regulated tariffs it emerged during the first of a series of discussions about the energy market liberalization which took place in Sofia on September 29.
Since April of this year the Independent Bulgarian Electricity Exchange (IBEX), a 100% subsidiary of the state-owned Bulgarian Energy Holding (BEH), has been working with Nordpool Spot on forging the exchange platform and the rules related to its use. The wholesale exchange, using the Euphemia algorithm, will first offer a day-ahead trading option to electricity sellers and buyers. Parttaking in the Price Coupling of Regions (PCR) and the Multi-Regional Coupling (MRC) would come at a next stage when intraday trading is established, Konstantin Konstantinov, CEO of IBEX, told journalists.
For its liquidity IBEX will rely on the state-owned power plants, namely Kozloduy NPP and Maritsa East 2 TPP, to provide electricity volumes for trading which should cover up to ten percent of the electricity consumption in the market zone via the electricity exchange, or some 300 – 400 MW. One of the state-owned power plants is expected to join IBEX at a later stage, while tests with Maritsa East 2 would take place in November, Konstantinov explained. State-owned power plants would not be obliged to trade at the exchange all their electricity, but rather respect their obligations to the European Commission which require trading certain quantities at the day-ahead market.
“This would be a good start, one which would allow us to say that we have an actual market price”, Konstantinov stated, adding that the anticipated market coupling with neighboring countries should also add to the liquidity of IBEX.
Nevertheless, IBEX could not yet present a solution to the question of electricity being produced under PPAs or sold at feed-in tariffs. IBEX would await until November, for the proposals of the World Bank which is expected to forge, together with Bulgarian institutions, a model for the full liberalization of the energy sector.
IBEX could also gain in liquidity, if the Bulgarian energy ministry modifies the Energy Act, so that electricity bought by the Electricity System Operator (ESO) and distribution network operators for covering their technical losses, is traded at the exchange.
Another particularity of IBEX is that it would not use a clearing house for payments, citing the practice in a number of European exchanges which also chose not to use this service. Payments would be instead covered by bank guarantees and deposits. IBEX will also count on attractive participation fees in order to allow more participants to join it.
IBEX will also offer paid services to market participants for the REMIT reporting which is expected to start on October 7.
Konstantinov invited all market participants to share their opinions at www.ibex.bg.