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02.01.2018 16:46
The Balancing Market Will Be Tied to the Day-Ahead Market from 1 February

  • The EWRC took its decision on the new mechanism for pricing shortages on 29 December 2017.

The balancing market will be tied to the Day-Ahead Market (DAM) starts from 1 February as it is apparent from a decision by the Energy and Water Regulatory Commission (EWRC), taken on 29 December 2017.
According to it, the price cap for shortages will be determined as 2.5 times the baseload price on DAM on the Independent Bulgarian Energy Exchange (IBEX).
The surplus price cap remains 0.00 BGN per MWh.
The shortage and surplus prices caps will not be applied for balancing energy, purchased (or sold) from neighbouring energy systems under bilateral agreements or on a regional balancing market.
The EWRC planned for this tying of the shortage price to the DAM baseload price to start on 1 January, but the regulator has taken into account the Electricity System Operator’s (ESO) arguments that this should happen a month later. The rationale behind it is that according to current ESO contracts with power plants, which provide balancing energy, the January prices are provided until the 15th of the previous month, i.e. 15 December 2017. Besides that, ESO requires time to renegotiate with balancing energy suppliers about clauses, which should provide for sending of a coefficient, instead of a price, and subsequent invoicing of the electric energy for upward regulation. The technical period of implementation of the new pricing in the Market Management System (MMS) has also been accounted for by the EWRC when taking its decision to postpone the new mechanism.
According to the regulator, the new pricing will not lead to the increase of balancing market participants’ costs on an annual basis. The EWRC also said that the most recent results from the auctions, conducted on IBEX, show that the expected annual average baseload price for 2018 is around 80.52 BGN per MWh, i.e. the annual average price cap for upward regulation (80.59 x 2.5 = 201.48 BGN per MWh) will remain close to the current price cap of 202 BGN per MWh.

TAGS: balancing market | electricity | EWRC | ESO | decision | Day-Ahead Market | price 

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20.03.2022  Teodor Bobochikov, Managing Partner, V-Ridium
Energy Transformation – Trends and drivers
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