Bulgaria: Electricity market landscape, traders and shares

13. September 2015. / SEE Energy News

With the liberalization of the energy market the role of power traders in Bulgaria has started to gain importance. The trading subsidiaries of the electricity distribution companies – CEZ, EVN and Energo-pro – report the most dynamic development for 2014 with incomes significantly higher than the year before. CEZ posted 73% up and ranks first by revenue. EVN is third with doubled incomes and Energo-pro ranks sixth with 2.25 times higher revenues.

One of the reasons for the aforementioned trend is the requirement from mid-2013 for all medium-voltage power consumers to exit the regulated market. They were allowed to stay with their supplier but at a higher price. According to data of the ESO (Electricity System Operator) 4,867 industrial energy consumers have now chosen a provider on the liberalized market. Their number by the end of 2012 was only 107, followed by 1,666 by the end of 2013.

Increased revenues are reported by all companies from the top 10 of power traders, although not all of them gain as fast as the EDCs. Number 2 in the ranking is the Energy Finance Group, which reported twice lower profit on an annual basis. Nikolai Vuzev, member of the company’s board, commented before Capital Daily that he expected 2014 to be a bad year for EFG because there were foreign bidders in the electricity tenders arranged by power producers, which raised the price artificially. Besides, in mid-2014 the credit lines of the company in Corporate Commercial Bank, which lost its banking license, were frozen, which caused the liabilities of EFG to soar further.

EFG mostly relies on solid contracts for export to Greece, Turkey and Serbia. In 2014 Energy Finance Group realized good sales of 250-300 MW on the domestic market thanks to medium-voltage power consumers who entered the free market.

The only company reporting a decrease in incomes for 2014 in comparison to the year before is United Energy Traders (UET), which topped the revenue ranking in 2013. The company manager Angel Bozhilov told Capital Daily that the company actually improved its trade volumes but this couldn’t be reflected in the financial results because it now trades only on the European exchanges European Energy Exchange and EPEX SPOT. Because of the futures specifics there is only a financial settlement (payment according to the contract’s term), which doesn’t allow including these revenues in the accounting records right away, he explained.

In Bozhilov’s words the company is preparing to exit the Bulgarian market in 2 years. Bozhilov explained this decision with the fact that physical trade in Bulgaria has no future. “Our system has problems with deep roots and is deviated. They are trying to transfer deficits in the system, which are mostly in NEK (National Electric Company), and thus hold someone else liable,” he commented, adding that this is why traders work in an unpredictable environment and it is not clear when and how much the fees they pay will rise. Now the company operates in seven countries in Europe, as well as in Turkey through a subsidiary.

Among the top 10 companies is also Sonia Kadieva’s Energy Supply, which is the only company reporting a loss for 2014 despite the increased revenues. Energy Market, related to Borislav Lorinkov, made less than the EDCs and reported 11% up in revenues for 2014.

DANS Energy, co-founded by Alexei Istatkov – spouse of ex NEK head Ekaterina Istatkova, also reports an increase in revenues by 20%, although the up is not as impressive as in 2013. The other two in the top 10 are Axpo Bulgaria and Energy MT, which report a significant increase in their incomes by 37% and 49% y/y, respectively.

GEN-I Sofia – Trade and Sales of Electric Power oddly dropped out of the ranking. The company is 100% owned by Slovenia’s GEN-I, which is the second biggest provider of electricity in Slovenia and operates in 18 countries in Europe. The company set foot in Bulgaria in 2010. The logical explanation for its weak performance (BGN 4.8 M revenue vs. BGN 315,000 loss) is probably that the company trades on international markets entirely. The company’s report for 2014, however, reads that the group foresees to enhance its presence in Bulgaria in 2015 by focusing on attracting large-scale end customers and then medium-sized and small consumers as well. , transmits serbia-energy.eu

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