Liberalising the electricity market in Bulgaria

Liberalising the electricity market in Bulgaria

The European Commission has published Bulgaria’s implementation plan which sets out the proposed reforms to liberalise its electricity market. The reforms were developed based on Frontier’s review of the market, which was published alongside Bulgaria’s implementation plan.

The implementation plan is part of Bulgaria’s strategy to introduce a ‘capacity mechanism’, which would remunerate owners of electricity capacity for guaranteeing their availability.

According to the EU Electricity Regulation, before introducing a capacity mechanism, Member States must:

  • Develop an ‘implementation plan’, setting out reforms to eliminate any remaining regulatory distortions or market failures that could lead to inefficient market functioning and adequacy concerns (that is, insufficient electricity capacity available to serve demand);
  • Identify why the market would not deliver sufficient capacity without the mechanism in place, even following identified market reforms; and
  • Quantify system adequacy concerns (that is, analyse why there may not be enough electricity capacity available to serve demand).

Frontier’s report sets out advice for Bulgaria on each of the above aspects. Based on our report findings, Bulgaria’s implementation plan contains a number of important reforms such as phasing out regulated contracts in the wholesale market and limiting the role of regulated prices in the retail sector.  The Commission’s consultation on the implementation plan closed on the 11th of February, and the Commission has until May to issue its opinion.

Frontier regularly advises on questions of design and implementation of energy policy in Central and Eastern Europe.

For further information please contact or call +44 (0) 20 7031 7000.