Bulgaria: Day-ahead market, fifth year of operation

, SEE Energy News

Bulgarian day-ahead market has established itself as the most preferred by market participants and almost every month it sets a record in terms of volumes of electricity traded,during its fifth year of operation.

The good results are due both to the efforts of all market participants and institutions involved in the process of liberalization and coupling of the electricity markets in the European Union and the favorable for the market legislative changes over the past years, which taken as a whole have ensured transparency, equality, non-discrimination and security for electricity market players. The volumes of electricity traded in July 2020 set an absolute record reaching 1,505,000 MWh, which is more than a two-fold increase compared to the same period in 2019 and 42 % more compared to June 2020.

After real trading was launched in January 2016, the volumes traded have marked the impressive nearly seven-fold growth to 1,505 GWh in July 2020. The liquidity growth has established day-ahead market as the most preferred one by market participants and the clearing prices arrived at have started to be used as reference ones for the condition of the whole market. The high level of transparency and guaranteeing equal access to the information IBEX provides have sharply increased competition in the sector which proves beneficial both to consumers and electricity generators. Market players’ conduct is also changing, more attention being paid to short-term markets. Despite the delay in economic activity during the first two quarters of 2020 as a result of the crisis provoked by the coronavirus spread and the sharp decrease of prices of all energy resources, day-ahead market has remained unaffected. On the contrary, during the unprecedented period of uncertainty and lack of predictability even in the short term, market players selected this segment for trading relying that the clearing price arrived at is as fair as possible and correctly reflects the market state of affairs at any time. Therefore, the volumes traded since the beginning of 2020 have marked a steady growth, wherein most months the traded volumes exceed 1 TWh. All this keeps attracting the attention to this segment in particular not only of registered but also of new market participants.

Following the strong growth of registered market participants over the first three years of operation of the market, it can be stated that their maximum number has almost been reached considering the level of liberalization and the existing legal framework. Regardless of the lack of a clearly expressed upward trend with respect to registered participants, the fact needs to be noted that their number is relatively big in relation to the size and level of liberalization of the electricity market.

The number of active participants on the segment, which is one of the prerequisites to arrive at fair reference prices, exceeds that in most countries in the region. Thanks to the integration of the Bulgarian market area with the neighbouring ones through the operations of the registered electricity traders, there is also a positive correlation of the prices arrived at which is a main criterion for the correct functioning of the market.