Launch of Intraday organized electricity market at SEEPEX

Author: Legal trainee Stefan Mićić, Law Firm “VUK” Tax Attorneys

Date: 1st August 2023

In accordance with the Energy Law, the company “SEEPEX” a.d. Belgrade (“SEEPEX”) manages organized electricity market in the Republic of Serbia, and in this regard it is responsible for organizing electricity exchange. Participants can buy and sell electricity on the exchange according to market conditions, on a day-ahead, as well as on the intraday organized market, upon these markets are established. On 16th June 2022, Serbian Government appointed SEEPEX as nominated operator of the electricity market, which in accordance with the Energy Law, is the entity designated to implement merger of Serbian day-ahead and intraday organized electricity market with neighbouring organized electricity markets.

After the establishment of the electricity exchange, more precisely since the end of 2015, the day-ahead organized market is successfully functioning in the Republic of Serbia. However, launch of the intraday organized market was long awaited, so that on 25th July 2023, SEEPEX would successfully launch the intraday organized electricity market, thus uniting all aspects of the organized market in the Republic of Serbia. The launch of an intraday organized electricity market should contribute to greater competitiveness on the electricity market, but this fact also has an impact on the development of renewable energy sources (RES) in Serbia, with its own formal and legal reach and significance.

Namely, the Law on Amendments to the Law on the Use of Renewable Energy Sources (the ”Amendments to the Law on RES”), which entered into force on 7th May 2023, amongst other defines the duty of the guaranteed supplier to take over balance responsibility for privileged producers that are in the market premium system. However, this obligation of the guaranteed supplier in accordance with the Amendments to the Law on RES ceases at the end of six (6) months from the date of the merger of the Serbian organized intraday market with the single European organized intraday market, or at the end of 30 months from the date of establishment of the organized intraday market in the Republic of Serbia, whichever term expires first. The function of the guaranteed supplier in the Republic of Serbia is assigned to Elektroprivreda Srbije A.D. (“EPS”), and in accordance with the quoted legal provision, EPS is obliged to take over balance responsibility for privileged RES producers (which are in the market premium system), but for a limited period. As the Serbian organized intraday market is still not merged with the single European organized intraday market, and the intraday organized electricity market was established in Serbia on 25th July 2023, EPS, as a guaranteed supplier, will be obliged to take over balance responsibility for privileged producers which are in the market premium system until 25th January 2026, unless merger with the single European organized intraday market occurs earlier.

In connection with the aforesaid, the provisions of the Decree on taking over Balance Responsibility and Model Agreement on taking over Balance Responsibility (the “Decree”) are also relevant. Namely, the Article 3 of the Decree defines that the producer who is in the market premium system has the right to transfer its balance responsibility to the guaranteed supplier until the expiration of the period of 30 months from the day of establishment of the organized intraday market in the Republic of Serbia. Additionally, the Decree defines that the producer who transfers its balance responsibility to another balance responsible party, freely regulates mutual rights and obligations with that balance responsible party, and thereafter has no rights and obligations defined in the Decree. Therefore, EPS has the obligation to take over balance responsibility for privileged producers who are in the market premium system within 30 months from the establishment of the organized intraday market in the Republic of Serbia, but only if the privileged producer wants to transfer the balance responsibility to EPS as a guaranteed supplier. However, the privileged producer can opt to transfer its balance responsibility to another market participant who fulfils conditions for the balance responsible party, in the subject period. If the privileged producer wants to transfer its balance responsibility to the guaranteed supplier, he is obliged to conclude an agreement with guaranteed supplier on taking over balance responsibility, and respective model agreement is an integral part of the Decree.

We also add that 16 traders out of total of 20 registered traders, participated in the first auctions for electricity trading on the intraday electricity market at SEEPEX. During the first day of auctions, seven (7) transactions were concluded, while the reference base price, which represents the average weighted price of all concluded contracts on a daily basis, reached a value of 99.53 EUR per MWh, as published by SEEPEX on its website.

Our Law Firm will promptly and carefully monitor all upcoming activities in the energy market, in order to effectively assist clients with our significant experience and professional analysis in eliminating all ambiguities in practice.