site.btaEnergy and Water Regulatory Commission Adopts Changes to Power Exchange Operational Rules, Limiting Financial Risk for Energy Exchange

The Energy and Water Regulatory Commission (EWRC) adopted a decision approving amendments and additions to the Power Exchange Operational Rules (PEOR), the regulator said. The changes were proposed by Independent Bulgarian Energy Exchange (IBEX).

A new mechanism for managing and limiting the financial risk for the operator is being regulated, EWRC added. A trading limit is introduced on the short-term market segments, where the exchange operator will no longer set required collateral. The limit will be common to the Intraday and Day-ahead market segments. In this way, the risk of failure to fulfill monetary obligations on the part of commercial participants is minimized, since with the limit set by them, they will better plan their offers, concluded deals and cash flows. The risk for the exchange operator in the event of bankruptcy of a trading participant is reduced. The financial obligations of the participants will be repaid by means of the quick-liquid collateral provided in favor of IBEX, which will prevent possible adverse consequences for the organized electricity stock exchange market.

With the adopted changes in the PEOR, the parameters of the products for trading in the Intraday and Day-ahead market segments are fully regulated in Instruction number 6 - "Specification of the traded products". In this way, the exchange operator will react as adequately as possible to sudden changes in the market situation or in the regulatory framework governing the relations of participants in market associations. The procedure for registration of new commercial participants in the stock market was also simplified.

With the change in the rules, the operation of the Continuous Trade screen, part of the Bilateral Contracts market segment, which the management of IBEX has repeatedly insisted on, ceases. In this way, the risk of concluding pre-agreed deals is removed and greater transparency is ensured in the wholesale energy trading market.

The amended rules also introduce the possibility of temporary removal of commercial participants from the Intraday market segment, in cases where they enter into transactions for the purchase of electric energy without counter-consumption ensured. The deterrent mechanism was imposed due to the actions of individual participants observed in recent months, which threaten the functioning of the balancing market and the secure operation of the electricity system. The measure will lead to more balanced supply schedules and prevent extreme power surpluses from occurring. Exhaustion of the regulation range of the power system, as well as an increase in unplanned exchanges with neighboring market zones, will not be allowed. The change increases security of supply and continuity of supply, the announcement further states.