The Bulgarian Commission for Energy and Water Regulation (KEVR) adopted a decision according to which the balancing market will be tied with dayahead market (DAM) starting from 1 February 2018.
The price cap for shortages will be determined as 2.5 times the baseload price on the day-ahead market of the Independent Bulgarian Energy Exchange (IBEX). The surplus price cap remains at 0 euros/MWh. These price caps will not be applied for balancing energy purchased or sold from neighboring energy systems under bilateral agreements or on a regional balancing market.
Initially it was planned that these regulations come into force on 1 January, electricity transmission system operator ESO argued that this should happen a month later. The reason for the delay 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. Besides, ESO also 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.
According to KEVR, the new pricing will not lead to the increase of balancing market participants’ costs on an annual basis. According to the data from IBEX, the expected annual average baseload price for 2018 is around 41.2 euros/MWh, which means that the annual average price cap for upward regulation will remain close to the current price cap of 103.3 euros/MWh.
