Anton Ivanov: The price levels of energy sources will probably remain at this level in the winter

As early as August, the prosecutor's office began checking the record high electricity prices after a signal from one of the employers' organizations. This was explained to BNR by Anton Ivanov, an energy expert from the Bulgarian Energy and Mining Forum.

"Evidence of market manipulation is being sought. This is a topic that developed especially sharply in August. When the prices on the Balkan Peninsula were significantly higher than the European average, but this was a relatively short period.

We now see that prices are high everywhere in Europe. It is good to analyze the data from the stock exchange, it is good to analyze in depth the trade practices in order to limit the attempts for manipulation, but the fact about the increased electricity prices remains. And it is not only valid for Bulgaria, but for the whole world at the moment. "

How did you get here?

"Increased demand after the Covid crisis mainly for natural gas and other energy raw materials has led to a shortage of natural gas in the markets. Inability to restore supplies so quickly, especially to Asia and from there to Europe. This has led to skyrocketing prices of natural gas, and hence the connection to electricity, which has also increased its values ​​significantly compared to what we are used to seeing.

From the point of view of stock trading, where it is carried out in our country through the stock exchange on several platforms, there can always be doubt. Here, too, it is important to have sufficiently strong mechanisms to control trade players. "

Control

"Several years ago, when the issue of the lack of external control over the actions of commercial players in connection with dubious transactions was raised sharply, special legislative amendments were adopted, a special regulation called REMIT was introduced.

It is a European regulation. However, there is no special dynamics in its application. Ie they start, files are opened on specific signals, but they last too long.

Obviously, the expectation in society is to have a much faster reaction and clarity whether there is manipulation, whether there are punished. In this regard is the reaction of the prosecutor's office and SANS, which enter with the expectation to enter the matter faster and to establish whether and who is manipulating the market. "

Aid proposals for businesses and households

"Incentive and support packages are being considered in many EU countries. Bulgaria will not be an exception in this trend.

When we have some exceptional circumstances in terms of price levels of basic sources, such as electricity or natural gas, we should look for opportunities to support and compensate the industry mainly at this time, because they operate in the free market and are the strongest exposed to this price storm. "

Households

"For households, the problem is not yet complicated in terms of electricity and heat, but it will become a factor in the winter months when prices need to be revised."

According to the support proposal, businesses that have suffered 20% losses from high prices will be entitled

"There will probably be debates, the employers' organizations that have the best monitoring should be directly involved. These debates are similar to those that took place for the 60/40 measure.

The measures that were implemented in connection with the coronavirus crisis will continue, but now with regard to the prices of natural gas and electricity. I think this is the right way, technically it is a conversation about which model to choose and how exactly it will be justified.

It is important to cover those companies that actually produce a product for the market and suffer significant damage from high prices. Such mechanisms must be applied carefully so as not to give an advantage to anyone who does not contribute to market prices. "

On October 1 last year, small and medium-sized businesses had to enter the free electricity market. What are the observations a year later? From 50 companies on the free market information is received that some of them are in a very difficult financial situation?!

"These 50 companies are free market traders. There are two issues here. One is the entry of small businesses into the free market, which happened very inertly, rather did not happen. Mainly due to the lack of a targeted information campaign to explain the model. .

When in the summer prices jumped significantly on the free market, and most of the companies remained in the segment - supplier of last resort, which is the most expensive segment of the market, there is already a search for opportunities for contracts with electricity traders.

However, electricity traders, especially smaller ones, have great difficulty in providing electricity to their customers due to high price levels. Here we must clarify that the trader actually buys the electricity, provides it immediately to his customers, and receives the money from them a month behind.

When prices jump sharply, traders must be able to provide much higher working capital. This is difficult for small traders. Banks do not always seem to help provide such capital.

The need to provide working capital puts many companies at risk of not being able to provide it.

The electricity distribution companies are entrusted with the function of supplier of last resort. EWRC made a change in the methodology for pricing a supplier of last resort a few months ago to limit the possibility for electricity distribution companies to set excessively high prices. However, this segment of the market is the most expensive. "

The forecast

"The next months are winter, and in the winter we usually see increased demand and correspondingly increased electricity prices. There are no indications for a decrease in natural gas prices, I do not expect a change in electricity price levels.

I do not expect a significant increase compared to what it is now, but it is also quite high. Rather, these price levels will be maintained in the winter, and only in the spring will we see some reverse process of normalization, of the demand for the new normal."