Athens, 10.05.2018

Independent Bulgarian Energy Exchange EAD (IBEX)

Content

Structure of the Bulgarian power marketCurrent structure, market concentration, share of the liberalized market, forthcoming changes.

IBEX presentation and role on the Bulgarian power marketCompany structure, ownership structure and market position.

DAM and IDM model in charts and figuresDAM and IDM set up, development and offered services.

CMBC model in charts and figuresCMBC set up, development and offered services.

Market coupling and cooperation possibilitiesDay ahead and intraday market perspectives in SEE region

CMBC +IDM + DAM

=IBEX

Athens, 10.05.2018

HV clients

NPP

TPP MI2

TPP AES

TPP Contur Global

RES

CHPs

NEK’s HPPs

Market

pric

e

Market price

Energy traders

MV clients

HV clients

LV clients

LV clients

End suppliers

Reg

ula

ted

p

ric

e

Reg

ula

ted

p

ric

e

Regulated market Liberalized market

Network

services

Mixed price of the NEK (PS)

Athens, 10.05.2018

Power market design

Energy ActPlanned changes as

from 01.07.2018

IBEX as a market operator (the NEMO) has a legal monopoly – there could be only one license for the territory of Bulgaria.

RES production could be sold on the free market only in Q4 – after the defined by the NRA number of allowed production hours with feed-in tariff have been completed.

As per the last amendments in the Energy Act all the generators selling on the free market with installed capacity of 5 MW and more must sell all their production on IBEX platforms.

The legal monopoly of IBEX will be kept unchanged, but due to the stronger monopolistic position of IBEX it is possible than the operator will be fully regulated.

All the RES with more than 4 MW installed capacity will sell their energy on the free market (IBEX) though the CfDmechanism.

Current market design Expected Challenges

The 5 MW limit for selling on IBEX will be reduced to 4 MW.

Athens, 10.05.2018

TSO and DSO losses to be procured from the market.

IBEX achievements

Q1 2014г.

IBEX incorporation as a 100% owned by BEH EAD company and its licensing by the NRA

24.10.2016

Launch of the

second IBEX segment – CMBC (based on the contract with Trayport ltd.

09.01.2018

IBEX withdraw from its

CCP role on the “Auction” screen of the CMBC market

19.01.2016

Go-live of the first organized market segment in Bulgaria – Day Ahead Market (based

on the Nord Pool service agreement)

22.12.2017

Energy Act amendments defining the mandatory participation on IBEX

11.04.2018

Intraday market Go-live (based again on the service agreement with Nord Pool)

Q2

2018Q1

2018

Q4

2017Q4

2016Q1

2016Q1

2014

01.07.2018

Changed market design with higher liquidity on IBEX.

Q3

2018

Athens, 10.05.2018

Structure and staff evolvementStructure and staff evolvement

CEOAdministration

Organizational support and book keeping

Project management

New projects planning and implementation.

Market operations

Finance, Accounting and Settlement

Legal

Management board

Includes the CEO and two additional members

BSE - Sofia AD

100% capital owner

Company representation and management

Contractual relationships, procedures, etc.

Market operations of all segments

Payments, accountancy, human resourcing etc.

IT and organizational support

IT manager

Market surveillance

Regulations and market surveillance

IBEX staff evolvement:

2015 – 5 employees;

2016 – 13 employees;

2017 – 19 employees.

Athens, 10.05.2018

Collateral Unit

Collaterals and risk management

Ownership structure

Initial and current:

Requirement according to the Commitment of BEH EAD toward the EC (DG-COMP) under case AT.39767;

The scope was to be independent from the state owned producers;

The buyer was a Bulgarian Stock Exchange (50,05 % owned by the Ministry of Finance);

Effects for IBEX:

No more potential influence on from the key market players (the state owned producers);

No changes in the strategic company goals as a holder of the license for “organization of the power

exchange” for the territory of Bulgaria;

Benefits with respect to the experience and know-how sharing between BSE-Sofia and IBEX.

Future plans for derivative markets and other common initiatives (for instance Clearing house)

Athens, 10.05.2018

Day Ahead (DAM) and Intraday (IDM) – set-up, achievements, goals

Price and volumes

calculation(MCP, MCV,EUPHEMIA)

Technical support

“First line”support

Settlement and risk

management

Customer acquisition

process

Market development

Market surveillance

IBEX responsibilities

“Service provider” responsibilities

IBEX Operational rules

Admission of exchange members

Registration procedure, withdrawal and suspension

Trading principles and products

Price calculation and results publication

IBEX Settlement rules

Collaterals – types and timetable

Collateral update

Payment deadlines

Collateral release

IBEX Market conduct rules

Types of information

Information provision

Good business practices

Market manipulation and abuse

Investigation and penalty procedures

Energy Act (primary legislation)

Market Rules (secondary legislation)

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DAM and IDM settlement, nomination and invoicing cycle

Athens, 10.05.2018

14:00CET

D-14 12:55 CET

Bidding

The ETS-DAM allows offering up to 2

weeks prior to D day

DAM Market Results

MCP publication and portfolio allocation

(MRC)

Invoicing

Invoices issuing towards the DAM net buyers for next D day and for the IDM buyers for last

D day

Collateral adjustment

Common DAM and IDM collateral adjustment according to the

collateral call

GCT

DAM Bidding process, gate closure time and auctioning

(MRC timing)

Nomination vs TSO

Deadline for nomination of the DAM trades toward

the TSO. The IDM nominations are

continuous.

Net buyers payment

Deadline for payment for the net buyers from DAM

and IDM

Net seller obligation settlement

Deadline for payments towards the net sellers on

both segments

D - 1 D

14:30CET

15:00CET

D + 1

10:30CET

10:30CET

13:00CET

12:00 CET

IDM products GOT

XBID compliant platform and organization.

Day Ahead market (DAM) achievements (1)

Maximum average daily volume: 857 MWh/h (20 568,2 MWh) reached on the 06.06.2017; Maximum hourly volume: 1275,9 MWh; Average price for the period 01.2016 / 12.2016: 31,46 EUR/MWh Average price for the period 01.2017 / 12.2017: 39,32 EUR/MWh Total traded volume since Go-live: 8,41 TWh

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0,0 €

10,0 €

20,0 €

30,0 €

40,0 €

50,0 €

60,0 €

0 GWh

50 GWh

100 GWh

150 GWh

200 GWh

250 GWh

300 GWh

350 GWh

400 GWh

450 GWh

500 GWh

IBEX traded volumes in [GWh] Traded volume (GWh) Average price in EUR/MWh

Day Ahead market (DAM) achievements (2)

Average DAM share for 2016: 7,05% from the total consumption; Average DAM share for 2017: 11,24% from the total consumption; Average DAM share for 2018 (01.01-30.04): 12,74% from the total consumption

Athens, 10.05.2018

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

12,00%

14,00%

16,00%

18,00%

20,00%

0 MWh/h

1000 MWh/h

2000 MWh/h

3000 MWh/h

4000 MWh/h

5000 MWh/h

6000 MWh/h

7000 MWh/h

IBEX DAM share compare to the average system load

Average monthly traded volume (MWh/h) Average montly system load (MWh/h) Percentage of the traded volume from the average load

Day Ahead market (DAM) – set-up, achievements, goals (3)

Athens, 10.05.2018

1.2016 2.2016 3.2016 4.2016 5.2016 6.2016 7.2016 8.2016 9.2016 10.2016 11.2016 12.2016 1.2017 2.2017 3.2017 4.2017 5.2017 6.2017 7.2017 8.2017 9.2017 10.2017 11.2017 12.2017 01.2018 02.2018 03.20181.4.201

8

Generators 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 5 5

Consumers 0 2 2 3 4 4 4 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 6 7

Local Traders 16 17 19 20 21 21 21 21 22 22 22 22 23 23 23 24 24 24 25 25 25 25 24 23 23 22 22 23

Internatioal traders 3 7 9 11 11 11 13 14 16 16 17 18 19 19 19 19 19 20 21 21 21 21 22 25 25 25 25 25

TOTAL 22 29 33 37 39 39 41 43 46 46 47 48 50 50 50 51 51 52 54 54 54 54 54 56 56 55 58 60

0

10

20

30

40

50

60

70

Customer database evolvement

Generators Consumers Local Traders Internatioal traders TOTAL

Centralized market for Bilateral contracts (CMBC) – set-up, achievements, goals (1)

Trading platform

Technical support

“First line”support

Settlement and risk

management

Customer acquisition

process

Market development

Market surveillance

IBEX responsibilities

“SaаS* provider” responsibilities

*- Software as a service

Auctions mechanism

IBEX is not a CCP;

Anonymized offers and counterparties;

Pay as bid;

Customizable products;

Continuous trading mechanism

IBEX is not a CCP, but effectuates risk management;

Standard products;

Customizable products;

Click trading;

Anonymized offers;

Eligibility lists trades.

Rules for CMBC

Number of registered participants: 40

Athens, 10.05.2018

Centralized market for Bilateral contracts (CMBC) – set-up, achievements, goals (2)

Total number of conducted auctions: 214; Number of auctions with traded volumes (successful): 117 ; Total traded volume in MWh since Go–live: 13,15 TWh BASE product has been traded predominantly;

Year Delivered q-ty in TWh

Average load in MW

2016 0,01 n/a

2017 3,99 455,4

2018 3,65 1161,4

TOTAL

DELIVERED 7,65

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3 3 2 0

1618

12

18

14

6

19

2

12

4

1720 20

26

2

21 1 0

108 7

13

83 3 1 6 3

1411

16

8 2

0

5

10

15

20

25

30

Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18

Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18

Number of organized Auctions 3 3 2 0 16 18 12 18 14 6 19 2 12 4 17 20 20 26 2

Number of successful Auctions 2 1 1 0 10 8 7 13 8 3 3 1 6 3 14 11 16 8 2

Activity on the Auction mechanism

Centralized market for Bilateral contracts (CMBC) – set-up, achievements, goals (3)

Total number of conducted deals: 13 (first deal on the 28th of June 2017;

Number of traded products: 7;

Total traded volume in MWh since Go – live: 1,308 TWh;

Amendments in the CMBC rules in internal risks assessment process –

standardized contracts, risk management optimization, etc.

Total traded volume on the CMBC market segment: 14,46 TWh;

Activities on the Continuous trading mechanism

Athens, 10.05.2018

Others

4MMC members

Full MRC members

IBEX and the EU Integration process

Memberships

MRC full membership since Jan. 2016;

PCR associate membership since Dec. 2016;

EUROPEX full membership since Feb. 2016;

XBID accession stream membership since Mar. 2016;

NEMO designation for the BG market zone – Jan. 2016;

WEST BALKAN 6 and BG-MK coupling – Apr. 2018 MOU signed

Athens, 10.05.2018

EU Member countries with commitment to joining the EU single market target model

Active and liquid markets

Good levels of cross-border interconnection

MARKET COUPLING OPORTUNITIES

GREECE ROMANIAMACEDONIA

MoU signed

WB6 and Energy Community support

Macedonia is not a member of EU

No operational PX

Not a member of MRC or PCR

Athens, 10.05.2018

Thank you for your attention and looking forward to potential future cooperation!

IBEX EAD

www.ibex.bg

E-mail: office@ibex.bg