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The Energy Market and Prices of Electricity in Bulgaria

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  • Svetla Boneva

Abstract

The research describes the Bulgarian electricity market and the specificity of electricity pricing in Bulgaria. The factors influencing the wholesale and retail energy markets have been analysed. The research explains the transmission network infrastructure availability, the maintenance of transfer capacity, the capacity of the border interconnecting points of Bulgaria with Romania, Serbia, Greece, Macedonia and Turkey and the open tenders of the Bulgarian Electricity system operator (ESO) and the respective Independent Transmission Operators (ITOs) of neighboring countries. The basic ides, lying in the Transmission agreements have been explained. The process of liberalization of the electricity market has been presented as well as the measures, undertaken by the Energy and Water regulatory commission (EWRC) for the participation of industrial electricity consumers at the freely negotiated prices electricity market. The stages of electricity pricing at both the regulated electricity market and the freely negotiated electricity market are explained. The dynamics of the final consumer and the wholesale industry electricity prices for the period 2003-2014 has been analysed. The mechanism of formation of the average electricity price (the so called “price of the electricity mix”) has been explained. The elements of the final electricity selling price: the base price; the supplements (the “green energy” supplement, the supplement for highly efficient electricity production, the supplement for non-recoverable costs); the price addition for transfer through the transmission network and the price addition charge for access to the transmission network. The obligations of the National Electricity Company (NEK EAD) concerning its’ obligation to purchase electricity at the regulated market by electricity generating companies in Bulgaria as well as the problems for NEK EAD after the new electricity price was introduced in Bulgaria after 01.07.2015 have been discussed as well.

Suggested Citation

  • Svetla Boneva, 2016. "The Energy Market and Prices of Electricity in Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 90-128.
    • Handle: RePEc:bas:econst:y:2016:i:2:p:90-128
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    References listed on IDEAS

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    1. Erdogdu, Erkan, 2010. "Electricity Market Reform: Lessons for developing countries," MPRA Paper 27317, University Library of Munich, Germany.
    2. Erdogdu, Erkan, 2011. "The impact of power market reforms on electricity price-cost margins and cross-subsidy levels: A cross country panel data analysis," Energy Policy, Elsevier, vol. 39(3), pages 1080-1092, March.
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    More about this item

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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