The Commission for Protection of Competition announced the results from electricity sector analysis
The Commission for Protection of Competition (CPC) approved sectorial analysis of the competition environment of the electricity generation, trade, transmission and distribution markets in the Republic of Bulgaria. The analysis explores the characteristics of the vertically integrated electricity market at each level, focusing on the problems, which could hinder the development of a free and competitive electricity market.
The document examines the applicable national market regulations regarding the requirements of the Third Energy Package of EU measures and the conditions necessary to be present in order full liberalization to be achieved.
In the course of the proceedings the CPC requested information to be presented by the competent public authorities, energy companies engaged in activities subject to licensing according to the Energy Law, as well as final customers in the free market. The Commission identified problems, affecting to a different extent the vertical structure of the economy sector under survey.
CPC defined the existence of a quota principle and long term fixed price Power Purchase Agreements, as well as the high concentration of market power in BEH as an obstacle for the development of an effective competition in the electricity generation market.
The Commission considers that further efforts are needed towards guaranteeing unhindered equal access and connection to the transmission and distribution networks, considering their statute of essential facilities, as well as efforts towards effective unbundling of the activities of “generation”, “supply”, “transmission” and “distribution”.
Problems are also distinguished related to the development of the trade at freely negotiated prices and the exercise of the right of every consumer to choose freely its electricity supplier, which are fundamental prerequisites for achieving full market liberalization. In this regard, CPC recalls that together with the sectorial analysis performed, there are proceeding initiated in the Commission for investigation of possible violations on behalf of energy companies on all levels of the market concerned, regarding the procedure, the conditions, and the management of the supplier switching process.
Another fundamental obstacle for the favorable conditions for development of effective competition is the lack of truly working electricity market exchange.
CPC will present the sectorial analysis to the competent public authorities.
Source: Commission for Protection of Competition
