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Public discussion on setting a marginal price for concluding of transactions on the balancing energy market.

News • Nikolay Chavdarov •
Public discussion on setting a marginal price for concluding of transactions on the balancing energy market.

The Energy and Water Regulatory Commission held a public discussion in connection with a draft decision about setting a marginal price for concluding of transactions on the balancing energy market. The power of the Commission annually to set a price limit for transactions in the balancing energy market stems from the provisions of Art. 21, para. 1 of the Energy Act. In accordance with the regulatory requirements, the draft decision was published on the EWRC website. The regulator sent formal invitations to participate in the public discussion to the interested parties within the meaning of Art. 14, para. 2 of the Energy Act. Representatives of ESO EAD, NEK EAD and the Bulgarian Photovoltaic Association were present at the discussion. 

The draft decision setting a marginal price for concluding of transactions on the balancing energy market foresees a change in the current model in the light of the new circumstances of the energy market and in accordance with European practice. The marginal price for concluding of transactions on the balancing energy market for the provision of an upstream regulatory system service is estimated to be + 100 BGN / MWh, where the day-to-day market price is equal to Independent Bulgarian Energy Exchange EAD. The draft decision stipulates that the marginal price for concluding transactions in the balancing energy market for the provision of a downstream systemic service shall be 0.00 (zero) BGN / MWh. The marginal prices provided for in the draft decision shall not apply to the conclusion of balancing energy transactions purchased / sold from / to neighboring energy systems under bilateral agreements or from a regional balancing market. 

According to the analysis of the Commission experts, the draft decision is the result of a careful evaluation of the pros and cons of the various options on the balancing energy market in order to find a working model that satisfies the market participants. The application of this model for determining the price of balancing energy providers will provide preconditions for the stability of the sector, security of supply, as well as compliance with the principles of Art. 23, Art. 24 and Art. 31 of the Energy Law. In their speeches, the participants in the public discussion expressed support for the proposed new model of setting a marginal price for concluding balancing energy market transactions and identified it as an adequate and timely step in the right direction. According to them, the positive measure is the application of hourly prices for the supply of balancing energy, as well as the fixing of the upward adjustment price with a solid additive rather than a coefficient. 

At the same time, some concerns were expressed about the extent to which the proposed supplement of 100 BGN would satisfy the individual market participants. Responding to the questions raised, the head of the working group Plamen Mladenovski, director of the Electricity and Heat Power Directorate, emphasized that the proposed pricing model significantly balances the interests of stakeholders and does not allow excessive incentives to be at the expense of all market players. Within 14 days, the participants in the public discussion may sent their written submissions on the draft decision to set a price limit for concluding transactions in the balancing energy market. The regulator will give a reasoned opinion on them in its final decision in closed session on 23.12.2019.