Work on the upcoming Bulgarian day-ahead electricity exchange is going as planned with launch expected by the end of the fourth quarter. However, the associated planned forward trading platform is likely to face delays, head of IBEX Konstantin Konstantinov has told ICIS.
In April IBEX signed a cooperation agreement with Nordic exchange Nord Pool Spot to start a day-ahead platform by the end of the year (see EDEM 22 April 2015).
Nord Pool Spot will deliver the trading system and it will operate the day-ahead market as a service provider.
IBEX is considered by industry stakeholders as a crucial step towards full liberalisation, improved liquidity and the integration of the Bulgarian power market with the rest of Europe.
The exchange is planning a workshop with market participants in September, Konstantinov said. Testing will be done immediately before the launch.
“We are getting great support from Bulgarian Energy Holding and the government institutions. There are no delays,” Konstantinov said.
IBEX is also working with energy regulator EWRC to make the needed changes to trading rules in time for the launch.
The exchange has applied to become a member of the Price Coupling of Regions (PCR) – the initiative of seven European power exchanges, to develop a single coupled price, and to allocate cross border capacity on a day-ahead basis. Market coupling can be achieved through PCR.
Bulgaria will be aiming to join the Europe-wide Multi Regional Coupling (MRC) initiative in the future, although there is no set timeline for this yet.
There is already a regional market coupling initiative – the 4M – comprising of neighboring Romania as well as Hungary, Slovakia and the Czech Republic which is also expected to join the MRC at some point. However, IBEX is planning to directly join the MRC rather than link with the 4M first.
Forward platform delayed
IBEX is planning to launch a second platform for forward trading which was initially expected as early as the end of Q2, provided that it managed to secure liquidity by attracting companies as founding members or market makers (see EDEM 24 February 2015).
However, work is now focused entirely on the day-ahead platform which has pushed the forward trading platform to the background for the time being, according to Konstantinov.
“We are working on the day-ahead platform now, the other [platform] is going more slowly. However, the most important issue is to provide the necessary financing and trading volumes. Probably it will launch right after the day-ahead platform,” he said.