The Energy Committee of the Parliament proposes a postponement of the wholesale electricity market for one year

Energy / Bulgaria
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Deputies of the Energy Commission have united around the decision to postpone the wholesale electricity market for one year until June 30, 2025. This does not mean the cancellation of liberalization. The deadline for the liberalization of the market for household consumers from 2026 is preserved. The reasons for the three draft laws, submitted respectively by the parliamentary groups of the BSP, GERB-DPS and ITN, state almost the same reasons - unclear mechanism, uncertainty regarding the determination of the base price, what the invoices will be, how VAT will be paid, lack of funds in the FSES.

A report combining the proposal on all three bills will be prepared today and it will be submitted to the BSP bill, which is included in the weekly program of the National Assembly and will be discussed in the plenary hall on Friday, April 19.

In the framework of the debate, the MP from PP-DB Radoslav Rybarski commented that he does not see what will change in this one year to postpone the reform of the electricity market. On the other hand, according to him, the period between the liberalization of the wholesale market and that of the household market is shortening, which will cause difficulties for the population. He also expressed concern that the postponement of the reform will be reported by the European Commission (EC) and, accordingly, by the RSP. His expectation is that this will have a negative impact on the funds under the RSP. "The situation at the moment does not suggest a postponement," said Ribarski categorically.

The Chairman of the Energy Commission, Delyan Dobrev, for his part, reminded that even with the current model, anyone who wants can go to a liberalized market. "We are delaying the liberalization of the wholesale market. We are not canceling it," said Dobrev, reminding that there is no mechanism for payment with the electricity companies and the review of 4.7 million invoices, not sparing a reply about the funds from the RSP.

The Chairman of the Energy Commission also raised another important question - the lack of texts on the right of traders to participate in the market in the amended Law on Energy. “Traders must obtain licenses to trade in electricity. We are talking about 200 merchants," Dobrev reminded. Later, the chairman of EWRC, Ivan Ivanov, stated that no documents for a license had been submitted to them, as there is no such text in the amendments to the Energy Law.

Dragomir Stoynev from the BSP, for his part, reminded Radoslav Ribarski that a number of questions were raised even with the changes in the energy law - who will determine the average annual price in the Council of Ministers and who are these experts apart from EWRC and what is the formula in general, where will the funds come from for compensating the ERPs when buying energy from the exchange, as well as how the invoice will look like.

"You are proposing something that no one knows what will lead to, what will happen," Stoinev stated.

Radoslav Rybarski, for his part, said that the three proposed bills, for his part, offer nothing but postponement and expressed fears that "people will be forced into a liberalized market without compensation."

DPS deputy Ramadan Atalay reminded the PP-DB deputy that their proposed model practically brings back cross-subsidization in the energy sector. "Back in October, we explained to you that what you are proposing cannot happen," he said.

EWRC Chairman Ivan Ivanov also expressed concerns. He also questioned the need for a quick response by price submission companies in the event of a postponement of wholesale market liberalization.

According to Ivan Ivanov, the regulator is ready with a large part of the regulatory documents. "If the liberalization was in February, yes, but now it will make it difficult for us," he said, reminding that due to the progress on the regulatory documents, as well as due to a conciliation procedure with the EC for Regulation number one, the electricity distribution companies did not submit price applications. Postponing liberalization and keeping the still existing model will require companies to submit price applications by the end of April, and the required period for their review means that the price period will have to be postponed by a month. On the part of the three companies represented by Energo-Pro, Electrohold and EVN, which were also present in the hall, they stated that they would be able to fit into this deadline. Previously, in response to a question from the deputies regarding the postponement of the liberalization of the wholesale market for one year, Kalina Trifonova from EVN Bulgaria stated that indeed the proposed model has too many unclear moments. It is about the determination of the base price, invoices, rolling accounting, VAT, etc.

In their reasons for postponing wholesale liberalization, the deputies also draw attention to the dire state of the Electricity System Security Fund (FSES) and the lack of funds to compensate for the difference between the determined component of the EWRC-regulated price and the achieved market price.

In the bill of GERB-DPS is provided an opportunity until April 30 of this year for companies to submit applications through EWRC for approval of prices by the regulator for the price period from July 1 of this year to June 30, 2025.

During the meeting, the deputies from the energy committee rejected the proposal of Venko Sabrutev, Daniela Bozhinova and Vasil Todev to amend the Energy Law. The bill introduced by them, as presented by Bojinova, is aimed at increasing the integrity and transparency of the wholesale energy market and improving the effectiveness of EWRC as a control and investigative body in relation to insider trading.

The Chairman of EWRC, Ivan Ivanov, for his part, explained EWRC's actions under REMIT, as well as that it can self-report any suspected manipulation of the wholesale electricity market.

The executive director of the Electric Power System Operator (ESO) Angelin Tsachev and the director of the CDU Dimitar Zarchev were also heard, who explained the need for legislative assistance to overcome the serious situation in the country, due to the lack of sufficient balanced capacities.

"The situation is really quite serious, and in this regard, it is really necessary to take serious and quick decisions, which will allow the system to have a good resistance to changes in it," Tsachev pointed out.

"What prompted me to refer again is a report by ENTSO-E on frequency quality risks, and this report has also been presented to ACER, and they have asked to start reporting infringements from operators every month and there will be serious sanctions, both to the operators and to the regulators of the member countries, which violate the quality of the frequency. For 2023, 50% of the frequency violations in the "continental Europe" synchronous zone are caused by Bulgaria, 30% by France and the remaining 20% are caused by all other countries. This is due not to RES, but to the lack of balancing capacities. There are no balancing powers. We have been repeating this for 3 years. It is necessary to take the necessary actions to send the necessary investment and price signals to investors to invest in this type of capacity, which will give us the opportunity to adequately manage our electricity system," explained Angelin Tsachev. Zarchev supported his words with specific examples.

The Chairman of the Commission on Energy, Delyan Dobrev, for his part, stated that if the ESO has concrete proposals for legislative changes, they should present them on Monday at the latest. He hinted that an intention to limit RES will not be looked upon favorably, citing complaints, including to ASEP, about restrictions on RES producers in recent days and concerns about disrupting the country's investment climate.

"So, we hope, the solution that you offer us will be how to balance the system, without limiting either existing renewable energy sources or those that will be built from now on," said Dobrev.




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