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Bulgaria to adopt electricity balancing market rules by 15 April - minister

26 Mar 2013 16:45:29 | edem

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Bulgaria will adopt all necessary rules for the start of the country's electricity balancing market by 15 April, the country's interim energy minister, Asen Vasilev, said on Tuesday.

According to one trader, the balancing market could officially launch from 1 May, but there remain uncertainties that must be clarified beforehand: "For example, we are still trying to find out whether or not you [as a trader] need to have a balancing group in order to be able to transit electricity."

This is one of seven proposed measures to be implemented immediately in a bid to stabilise the country's power sector.

The start of the balancing market will be the first step towards liberalisation of the market, according to Vasilev. He explained that, until now, state-owned utility NEK and, by extension, all end-users have been paying for imbalances in the system - a situation that the minister said was going to change.

Energy watchdog DKER will be required to recalculate the level of the controversial export tariff in order to boost electricity exports.

All relevant institutions will work on mechanisms for abolishing restrictions on electricity exports to Turkey.

Current available capacity on the Turkish-Bulgarian border is limited to 266MW, as the flows are still carried out in a testing environment, but volumes have been expected to increase after Turkey completes its tests with the European synchronous zone (see EDEM 16 November 2012 and 16 January 2013).

Further measures

Around 40% of wind and solar producers have failed to provide the grid operator with real-time production data and, as a result, they will be denied temporary grid access.

The lack of real-time data has imposed severe difficulties in the management of the electricity system, especially during times of overproduction, according to Vasilev.

Additionally, there will be changes in the way in which electricity produced by co-generators is purchased by NEK. At the moment, they sell 100% of production to NEK at preferential rates and then buy back from NEK the quantities to cover their own needs.

This practice is accumulating additional Bulgarian leva 50m (€25.5m) worth of expenses, which are being paid by end-users.

"This is against EU directives. NEK should only be buying the excess production from these power plants, not their whole production," Vasilev remarked.

Another proposed measure would reduce the availability of cold reserve to 840MW from the existing 1,040MW because of reduced demand. Furthermore, cold reserve providers should be chosen through public tenders.

Some components of the export tariff are designed to offset expenses for purchasing co-generation production and cold reserve.

As a final measure, DKER should propose a new mechanism for approval of the regulated price at which NEK buys electricity and then provides end-user suppliers. The existing price is not based on the cheapest possible production.

"The energy sector is inefficient. The installed capacity [12GW] is about two-and-a-half times more than demand in the country [4.7GW] and the export [300MW maximum]. These are only short-term measures, and won't solve all problems in the energy sector, but they will set the process in motion," the energy minister said.

Sceptical

"I don't really know what to think. On one hand, it sounds a bit short-sighted. On the other hand, they are forced to fulfil their EU commitments," one Bulgarian trader said.

"When you've been disappointed so many times, you learn not to get your hopes too high, especially when it comes to political decisions," another trader remarked.

"There is at least the intention of positive change," a third added.

Earlier in the month, the new interim government vowed to work towards more transparency in the country's energy sector after protests against high end-user electricity bills lead to the previous government's resignation (see EDEM 14 March 2013).

Power traders have previously expressed concern that political uncertainty in Bulgaria could further delay the opening-up of the country's power market (see EDEM 25 February 2013). Irina Peltegova

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