IBEX electricity jumped by 67%

The Bulgarian Federation of Industrial and Energy Consumers (BFIEC) objected in an open letter to the extremely high prices on the energy exchange in Bulgaria of the Day Ahead segment. The big business association reminds about the problems that exist in the work of the Bulgarian Independent Energy Exchange, as well as about the measures that can be taken to improve the energy market in our country.

So far, the Energy and Water Regulatory Commission, the IBEX and the Ministry of Energy have not commented on the issues raised by BFIEC.

According to the BFIEC: “The achieved price for the base load of the market segment "day ahead" of IBEX EAD with delivery day December 2, 2020 amounts to BGN 183.57 / MWh, as the highest achieved hourly price for the day is BGN 251.06 ./MWh. The price of the Bulgarian energy exchange for this day is the highest in all of Europe (Chart 1). Compared to the value for December 1 of BGN 110.54 / MWh, the price of traded electricity with a delivery day on December 2 increases by nearly 67%. Today also marks the maximum value for 2020 so far (Chart 2). As can be seen from the graphs, the sharp jump in the price for the day of delivery on December 2, 2020 does not correspond to the smooth growing trend, nor to market conditions - no accident at significant production capacity, no system power line, no extreme weather events, no sharp jump in demand. But there is a reduction in supply. Achieving extremes in price levels is becoming a traditional element for the Bulgarian electricity market. This strongly affects both large industrial consumers and the whole business.”

In response to a question from 3e-news about the high price levels, the executive director of the IBEX Konstantin Konstantinov said that they are one to one according to the offers submitted by the trade participants.

The price levels of the Bulgarian energy exchange are tied to those of the European energy exchanges. It is for them that energy analysts have warned in recent days that prices are expected to increase in the Day Ahead segment. The reasons for this are complex, but leading among them was the lack of wind and enough sunshine in Europe. This leads to the inclusion of the basic capacities, and the cold weather outside increases the consumption for both business and household consumers.

This year is special for the energy markets in Europe and because of the coronavirus crisis - this has led to changes in consumption, and in the case of lockdown consumption and market prices even collapsed in the spring. Future sharp changes in electricity levels can also be expected due to the planned exit from the UK energy markets. It will happen at the end of this year and will also affect stock prices.

In all probability, during the current winter season it is possible to expect sharp changes in prices, as the factors for this purpose are complex. Unfortunately, they rarely depend only on the Bulgarian energy market, which is still in the process of liberalization.