The Annual Energy Conference on the energy market liberalisation in Bulgaria and the new trends in the sector, organised by local business weekly Capital, took place on Mar 22, 2016 in Sofia Hotel Balkan.
At turtle speed. That is how the liberalisation of the Bulgarian energy market was developing in the past two decades and it is not surprising that Bulgaria is one of the last countries in the European Union (EU) which hasn’t fully liberalised its energy market yet. The first major steps toward the long-awaited liberalisation were made in 2015 when the local government carried out part of the needed regulatory and structural reforms. For now, the most important achievement in liberating the energy market, more specifically the electricity market, is the launch of the Independent Bulgarian Energy Exchange (IBEX), which is fully operational since January 2016. According to market representatives, IBEX performs well – a total of 32 companies trade an average of 7,500 MWh a day.
Despite the revival of the liberalisation process, it will take between three to five years for the market to be fully liberalised. And that is for the electricity one only. The liberalisation of the natural gas market is shrouded in mist, although the responsible institutions and the state-owned incumbent companies claim to support it and even a deadline is set – May 2016. A major issue for the liberalisation process and the national gas market as a whole is that Bulgaria is highly dependent on Russian gas imports, which account for more than 95% of the local consumption.
The forthcoming developments on the energy sector liberalisation include:
- The World Bank will present the draft of its consultancy report on the full liberalisation of Bulgaria’s energy market in April 2016. Following the report, the Bulgarian government will carry out public consultations with all stakeholders on the future development of the liberalisation process, including the protection of the so called vulnerable consumers;
- IBEX will launch a platform for trading with long-term contracts in July 2016;
- The bourse will introduce a segment for trading natural gas in 2016;
- IBEX will launch also intra-day power trading by Q1 2017.
Having in mind these developments, the dawn of the Bulgarian energy sector’s liberalisation is becoming more cloudless. However, the government should keep the pace of the reforms and initiatives for supporting the liberalisation. Bulgaria’s population, as a whole, is still unaware of the options and benefits, which it provides and a wider informative campaign is necessary. Also, the country’s energy regulator should strictly monitor the electricity and gas traders and sanction those who violate the free market procedures and good practises.