| ©THE HEREN REPORTS - Bulgaria aims for coordinated cross-border auctions from January 2007 |
| 2010-04-06 |
| Bulgaria’s power incumbent NEK has stated it will recommend monthly explicit coordinated auctions for cross-border capacity as part of market liberalisation in the South East Europe region. Mitiu Hristozov, manager of national dispatching at NEK, told the fourth annual Energy Markets in Central and Southeast Europe conference in Sofia: “These issues must be solved by both sides of the border for interconnector capacity. Currently, each of the TSOs will allocate capacity according to its own rules, but our intentions are to carry out coordinated tenders for the allocation of capacity with all our neighbours, Serbia, Romania and Greece, and we’re already actively working towards this.” He told The Heren Report that this method of providing transparent and equal access still had to be agreed between the parties, but NEK was proposing to recommend annual auctions for part of these capacities, as well as monthly auctions, depending on the specific forecast for each month for cross-border trade. Which transmission system operator (TSO) would run it, or whether it would be a joint venture, was still undecided. When asked if he was confident of gaining agreement by the beginning of next year, he stated: “We have to do it by the beginning of next year. My thinking is that with Romania and Serbia it will be ready, but there may be more problems with Greece. I hope that we’ll remove all obstacles and have in place a coordinated system for explicit tenders by 1st January next year.” In 2005, the company sold 34.2 TWh, of which 7.6 TWh were exports. This volume accounts for 75% of exports across the whole SEE region. Bulgaria tends to export to Serbia in the winter and Greece in the summer, and NEK is actively investing in cross-border capacity, including a second 400 Kv interconnector between Bulgaria and Greece. It is also investing in a new tri-directional interconnector between Bulgaria and Macedonia. While the legal side of liberalisation of the energy markets is well underway in South Eastern Europe, in practice, there has been little clarity about how cross-border trade will develop up until now. Ken Lefkowitz, managing partner of investment firm New Europe Corporate Advisory told The Heren Report that some of his clients were interested in trading, but access to cross-border connections is not so clear, and nor is the timing. He stated: “It’s quite easy to get licences, but the question is, can you use them? One of my clients said to me, can I get a licence and catch the first auctions? But there was no certainty there would even be auctions.” From 1st January 2007, Bulgaria is committed to full liberalisation of its markets under the Energy Community Treaty signed in Athens in 2005. This includes opening its transmission system, including its borders, to third-party access to allow trading. Up to now, it has only been possible to export from Bulgaria by contracting with NEK for the Bulgarian part of the exports, as NEK owns all the capacity. However, it is possible to contract with NEK for transit capacity through Bulgaria. Bulgaria’s deputy minister of economy and energy, Galina Tosheva Grigorova, stated from the beginning of next year, a trader could sign contracts safe in the knowledge that there will be no monopoly on cross-border trade. Despite NEK’s continuing ownership, she commented: “Producers will get access; it’s not dependent on ownership for third-party access.” From January, foreign entities can also apply for licences to trade in Bulgaria. Until then, foreign firms planning to trade in the Bulgarian market have to set up subsidiaries registered in Bulgaria, for example, Czech Republic power provider CEZ, which won the tender for thermal power plant Varna. Zsolt Böjtös, portfolio manager for CEZ in the region, commented that the border capacity in the SEE region appeared to be adequate. He stated: “What we’d like to do is to build up infrastructure where CEZ is able to move energy generated and consumed between all its assets, all around Europe. The biggest constraint is the lack of cross-border capacity and the difficulty in coordination. It’s not yet possible to shift power there and back.” The Central and Eastern Europe region, where CEZ is based, has daily capacity auctions, and Böjtös commented that this helped to balance the supply and demand for power. He commented: “It’s a lot of money to buy monthly capacity that you may not use, so daily auctions would be good in the SEE region too.” While NEK expects 2006 exports to reach 7.8 TWh, this will fall when the remaining two 440 MW units of its Kozloduy nuclear power plants are decommissioned at the end of this year. (THE HEREN REPORTS - EDEM 10185 / 25 September 2006) |
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