The Energy regulator (DKEVR) approved new detailed instructions for trading license applicants

On 19 August 2014 the State Energy and Water Regulatory Commission (SEWRC or Regulator) issued and published on its Internet site а new form of Application for electricity trading license together with detailed instructions to the applicants regarding the required documents and information to be provided by them.

The new instructions concern applicants for a trading license, as well as already licensed traders, who would like to amend their trading license, in order to include the rights to act as a coordinator of a balancing group. The new instructions shall apply not only to future applicants but also to applicants in pending procedures before the Regulator for issuance or for amendment of electricity trading license, respectively.

Together with the up-dated form of application the SEWRC approved detailed instructions on the minimum legal, technical and economic requirements to be complied by the applicants. The minimum requirements are developed on the basis of the provisions of the effective Ordinance No 3 of 21 March 2013 on licensing of activities in the energy sector.

Compared to the past practice of the Regulator, there are certain additional (new) requirements introduced with the new instructions.

Some of them concern the structure and contents of the Business Plan, which should be developed by the applicant and presented to SEWRC. The Regulator explicitly requires that the Business Plan should include, among all:

Detailed analysis of the electricity market in Bulgaria;
Analysis of the opportunities for development of the applicant on the Bulgarian energy market – internal, external, export and transit opportunities, including:

Regarding the internal market – analysis of the sale prices and determining a segment, to which the applicant shall concentrate its activities, relations with end customers, relations with other traders;
Regarding the export – analysis of the price levels in neighbouring markets, opportunities for trade and export to other countries;
Regarding the transit – opportunities for transit of electricity through Bulgaria, analysis of the energy streams in the region;
Analysis of the electricity prices and the sources, from which the Company intends to purchase electricity.
SWOT analysis (strengths, weaknesses, opportunities, threats) of the candidate.
The Regulator needs the applicant to present detailed information about its management and organizational structure, including detailed description of the functions and activities of the departments and structural units within the company and the number of employees hired in each unit, and about the outsourced activities.

SEWRC requires the applicants to provide more documents evidencing the material resources of the company for performing the trading activities.

Should you require any further information or clarifications on the issues discussed above, please do not hesitate to contact us.