Bulgaria: Great Expectations For Electricity Trading

The launch of effective electricity trading has been expected for several years. It seems the regulator might finally be ready.

New entrants to the free electricity market

The electricity market in Bulgaria has been fully liberalised, by law since 2007. But until recently electricity trading has been limited.

A new free market consumer group

In an attempt to achieve more effective liberalisation of the market (and keep regulated household prices low), in July 2012 the Parliament amended the energy law. Consumers connected to the middle-tension (средно напрежение) grid (mainly small- and medium-size companies) were excluded from the group of consumers entitled to purchase electricity at regulated prices. Instead, they were required to start purchasing their electricity on the free market, along with the big industrial companies.

A new last-instance supplier group

The new consumer group is expected to enter the free market without much experience in planning their electricity consumption, a key prerequisite for efficient performance and effective cost saving. Therefore, within the transition period (ie, from the amendment until the date the new consumer group will be excluded from the regulated-price consumer group) the law created a safety net for them in the form of the supplier of last instance (доставчик от последна инстанция), licensed by the energy regulator. This figure, set out in the Third Energy Package, is designated to ensure that these new free market entrants will have access to the electricity supply until they choose their electricity trader.1

Incentives for entering the free electricity market

The intended price incentive

Within a month after the suppliers of last instance are licensed, they should notify the consumers connected to their middle-tension grids about the terms and conditions of the electricity supply from them as a supplier of last instance. The consumers will then have two months to choose whether to stay with their current supplier under the notified terms and conditions for last-instance supply, or choose another supplier. If no choice is made, at the end of the two-month period, the terms of the supplier of last instance apply and the consumer must pay the electricity price, not at the regulated rates, but at the rates of the supplier of last instance. The reasoning of the model is to stimulate the expansion of the free market since that the prices of the last-instance supplier are intended to be slightly higher than the prices the consumer can find on the free market.

This idea was slightly reconsidered when, in July 2013, the energy law was amended again on the eve of the announcement of the new regulated electricity prices in the midst of social tension. After the amendment, the energy regulator could announce a decrease of the regulated electricity prices effective from August2013 at the cost of considerable revision of the pricing mechanism. According to it, until 30June2015, the suppliers of last instance must purchase electricity only from the public supplier at regulated prices. The latter are to be calculated pursuant to rules approved by the energy regulator, incorporating a mark-up for the public obligations of the National Electricity Company.

The missing market alternative

Determined to accelerate further the effective liberalisation of the electricity market, along with the energy law amendment, the energy regulator approved new electricity trading rules aiming to effectively launch an electricity stock exchange. They set out a new market structure that provides for hourly production forecasts and trade exchange forecasts in the new market management system. Even though the new rules are in place, the electricity exchange administrator is yet to be licensed before the system can be properly launched.

New investment opportunities

Without an organised electricity exchange, the new free market consumer group increasingly chooses to enter into agreements with an electricity trader instead of staying with its current supplier under the higher rates of the last-instance supply. The main advantage of the electricity trader is that it can offer lower rates; it can also provide a package deal – electricity supply and balancing to mitigate the risks of major deviations from the consumption forecasts of the client. A company interested in providing these services in Bulgaria should be licensed as an electricity trader and a balancing group coordinator (the procedure requires about three months), and an EU-based company can apply directly without establishing a Bulgarian subsidiary.

The market development perspectives

Since the amendments, there has been a considerable increase with more than 80% of the registered market participants, compared to the previous rates. In brief, as the middle-level tension consumer group is leaving the regulated price scope, there are sizeable opportunities for electricity traders to enter the market benefiting from the flat 10% income tax in Bulgaria.

Quote: As middle-level tension consumers are to come out of the scope of regulated prices, there are sizeable opportunities for electricity traders to enter the market and benefit from Bulgaria's flat 10% income tax.


1 In July 2013 the end suppliers and the public provider were licensed to operate also as suppliers of last instance.

This article was originally published in the schoenherr roadmap`14 - if you would like to receive a complimentary copy of this publication, please visit: pr.schoenherr.eu/roadmap.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions