Recent amendments to the Electricity Trading Rules (“Trading Rules”), which entered into force on 15 December 2017, introduce the legal framework for the electricity intraday market segment of the Bulgarian energy exchange. This segment is expected to start in early 2018.
The amendments were long expected, including by renewable energy producers (“RES producers”). The possibility of RES producers to participate on the intraday market will allow them to make more precise production forecasts and to decrease their costs for balancing.
The Trading Rules now allow coordinators of balancing groups to have a common financial settlement,as well as one coordinator to transfer the responsibility for balancing to another coordinator. Тhe Trading Rules remove the previous requirement of hourly production forecast schedules. Now, the independent transmission system operator will be able to determine settlement intervals based on explicit instructions. The transmission system operator shall also issue instructions for notification, validation and registration procedures of production, consumption and exchange schedules.
The amendments to the Trading Rules were recently used by the Bulgarian Supreme Administrative Court as an argument to sustain the Trading Rules’ validity, allowing the Supreme Administrative Court to reject RES producers’ appeals against the Trading Rules. The main argument for the court to reject the appeals was that the appealed provisions were amended and do not exist in their original version. Hence, RES producers lost their interest to appeal the rules.
The appeal started in 2013, less than one month after the Bulgarian energy regulator adopted the Trading Rules in their original form. Under the original form of the Trading Rules, RES producers suffered huge losses due to incorrect production forecasts. Therefore, RES producers joined efforts to defend their rights in court as they did in many other cases of adverse measures, imposed by the Bulgarian energy regulator. The regulation of the day ahead market, the mechanism for calculation and aggregation of imbalances and their financial settlement did not consider the fact that RES producers are not able to make precise forecasts of their production on a day ahead basis. This is because the production of electricity from wind and solar power depends significantly on the volatile meteorological conditions. RES producers perceived the settlement mechanism as “punishment” for incorrect forecasts.