New power markets increase activity in Balkan energy exchanges

The development of new markets in Balkan energy exchanges leads to better opportunities for market participants and better prices for consumers.

Konstantin Konstantinov, CEO of the Independent Bulgarian Energy Exchange (IBEX), and Miloš Mladenović, Managing Director of the South East European Power Exchange (SEEPEX) in Serbia, spoke during the 13th SE Europe Energy Dialogue in Thessaloniki about developments in energy exchanges.

High volumes and new products between Bulgaria, Greece and Romania

Konstantinov noted that full coupling between the Bulgarian and Greek Day Ahead Markets (DAM) would take place in the second half of this year. Furthermore, by October, new 15-minute products will be offered as part of the intraday market between Bulgaria and Romania.

Konstantinov: There are now good volumes in the day-ahead market with Greece and Romania, with almost 100,000 MWh per day

According to Konstantinov, the benefits from developing the intraday market will be huge market depth, hourly and block products as well as 15-minute products for the BG-RO border and order anonymity. They allow for the adjustment of forecast demand and supply and lower financial risk and losses from participation in the balancing market.

There are now good volumes in the day-ahead market with Greece and Romania, with almost 100,000 MWh per day, IBEX’s CEO said.

Market in Western Balkans to develop through ADEX

The Western Balkans are another region of interest for power exchanges. Miloš Mladenović, Managing Director of the South East European Power Exchange (SEEPEX) in Serbia, spoke about the efforts to develop the ADEX Group (Alpine/Adriatic-Danube Exchange).

Mladenović: The goals of ADEX are to create a preferred spot power exchange in Central, Eastern and Southeastern Europe, to enhance cooperation between TSOs and NEMOs and to benefit from synergies among existing power exchanges

It is a common effort between Slovenia’s nominated electricity market operator (NEMO) BSP SouthPool and SEEPEX, the first power exchange in the Western Balkan region, which was established in 2015. ADEX’s infrastructure is open to both existing exchanges and new day-ahead market areas in Central, Eastern and Southeastern Europe (CESEE) to join during the next stage of development.

The goals of ADEX are to create a preferred spot power exchange in the said region, to enhance cooperation between transmission system operators (TSOs) and (NEMOs) and to benefit from synergies among existing power exchanges, Mladenović said.

ADEX aims to become a one-stop shop for CESEE market participants using the best available practices, he added. The use of harmonized rules and systems eliminate entry barriers from the markets, while harmonization allows for more cost-efficiency for ADEX members, in his view.

According to Mladenović, the Serbian day-ahead market is to be established in the short term through the coupling of all of the country’s borders with single day-ahead coupling (SDAC). The next stage will be intraday integration. It should be also noted that the European Commission has pledged its commitment to market coupling.

Why new markets are important for consumers

The development of regional power markets and exchanges goes hand-in-hand with the building of new interconnections between countries in the Balkan region.

Through these parallel developments, markets will become more coordinated and price signals in one market will lead to a rise or drop in prices in neighboring markets.

This means that the region as a whole will progressively have a more similar price instead of intense fluctuations between its countries. Cheap production in one country, for example through renewables or hydro, will reduce prices for the entire Balkan area in the future. At the same time, producers will be able to have more tools at their disposal in order to protect themselves and be able to realize their goals in terms of new production capability and supply.