A stable trend for increase in the traded volumes is observed on the Day ahead market of IBEX

A stable trend for increase in the traded volumes is observed on the Day ahead market organized by Bulgarian Independent Energy Exchange (IBEX). This was the main point in the presentation “Liquidity on the Power Exchange and the reasons for its volatility” of Mr. Nikola Gabrovski, a member of the Board of Directors of IBEX, during the discussion organized by “Utilities” magazine.

While in the first nine months of 2016 the traded quantities of day ahead market of IBEX represented just over 7% of the total electricity consumption in the country, this ratio was 11.3% in 2017. Compared to the free electricity market in Bulgaria, which is 50-60% of the total consumption, this share is over 20%, which is comparable with the volumes traded on the Day ahead market of the European energy exchanges.

From the launch of the Day ahead market segment of IBEX (January 2016) by the end of October 31, 2017, total traded volume is 6.3 TWh.

In the region in the first nine months of the 2017 there was an increase in the prices of electricity traded on the Day ahead market compared to the same period of the previous year. For IBEX, this increase is on average 10.34 EUR/MWh while on the Hungarian energy exchange HUPX the average increase is 19.01 EUR/MWh and the Romanian OPCOM 18.52 EUR/MWh.

The factors that can explain the short-term price change in the Day ahead market are changes in the domestic consumption of electricity, seasonality, climatic factors as well as the inelasticity of the consumption against the price changes. The price levels of the closest market Day ahead zones also have strong impact on the results of IBEX. The Bulgarian day ahead market is under strong influence by the neigboring markets – 4 MMC coupling project of Romania, Hungary, Slovakia and Czech Republic, as well as the power markets in Turkey and Greece.
Long-term electricity contracts are also a signal for price trends in the medium term. Last but not least, the impact on price is due to a psychological factors such as expectations, including changes in the market model and regulations.

Summarizing, the drawn conclusion was that the so called volatility of the reached clearing prices and volumes, is a natural outcome of objective events and not a result of the subjective factors.