Serbia, Hungary to start market coupling within weeks

The first goal of Adex Group is to conduct electricity market coupling between Hungary and Serbia. Chief Executive Officer of HUPX Mátyás Vajta announced that a memorandum of understanding would be signed in days or weeks.

The cooperation between Elektroprivreda Srbije (EMS) in Serbia and its fellow electricity transmission system operator MAVIR of Hungary is about to enter another phase. Mátyás Vajta, CEO of Hungarian power exchange HUPX, told the audience at Belgrade Energy Forum that a memorandum of understanding on market coupling would be signed within days or in a few weeks.

It is the first task of Adex Group, he pointed out. The two TSOs formed the first regional electricity exchange operator with Slovenia’s ELES and EPEX Spot.

Energy Community’s first link with EU single market

“We hope that this will be one of the first, if not the first coupling between the EU and the Energy Community countries, serving as a pilot project, providing a good example of how this can be done in a smooth, fast and professional way,” Vajta stated. The TSOs are running organized electricity markets through HUPX, Serbia’s SEEPEX and the Slovenian BSP SouthPool Energy Exchange.

Market coupling with the European Union’s single market is one of the conditions to exempt electricity generated in Western Balkan countries from the CO2 import tariffs under the EU’s Carbon Border Adjustment Mechanism (CBAM), until 2030.

Algos are next challenge

Vajta said that, with renewables, the focus is shifting from the day-ahead to the intraday electricity market. In technology terms, most newcomers on HUPX are already trading only through algorithms, he underscored. Tackling the said issues in the region will be challenging, in the view of the head of Hungary’s power exchange.

Market coupling is the key goal to focus on, according to him, while the CEO of Adex Group and BSP SouthPool Anže Predovnik expressed satisfaction that it finally became the next point to negotiate. In addition, the regional power exchange operator will help its partners in Montenegro and North Macedonia through the market coupling process, he stressed.

There are four levels of decision there: ministries, TSOs, electricity exchanges and national regulators, Predovnik explained and urged all sides to cooperate.

The moderator of the panel, Chief Operating Officer of SEEPEX Dejan Stojčevski, said negative power prices need to be allowed in Western Balkan markets to enable market coupling. Additionally, the Law on Value-Added Tax in Serbia must be changed so that electricity is treated as a service, he underscored.

Adex Group is the sole shareholder of BSP SouthPool, HUPX and SEEPEX.