The launch of the Montenegrin electricity exchange is planned for April 26, Matija Medojević, director of the state-owned electricity exchange (BELEN), said for “Dan”. The company, whose owners are Elektroprivreda, the Montenegrin electric transmission system and the Montenegrin electricity market operator, was founded in the middle of 2017, and started working in the middle of 2002.
– Until now, only long-term market functioned on our stock exchange, which was mainly used for procurement to compensate for losses in the distribution and transmission network in accordance with the Law on Energy. The stock exchange will function in cooperation with the renowned French-German consortium EPEX SPOT and the Slovenian BSP South pool, which constitutes a guarantee for the quality and reliability of the services we will provide, which will be at the EU level – Medojević said.
As he stated for “Dan”, the aim of the formation of the electricity exchange in Montenegro is primarily to encourage transparency and competitiveness of the wholesale market.
– By starting these activities, a price signal is sent to all investors, as well as participants in the market itself, how much their investment and their activity is worth – adds Medojević.
To the questions of what the domestic stock market will bring to other producers of electrical energy in Montenegro, such as the owners of MHE that have left the incentive system, and how much better it will be for energy subjects from Montenegro to trade on the Montenegrin stock exchange compared to stock exchanges in other countries, Medojević answers :
– The current state of the global electricity market has created an ideal moment for small producers to get out of incentives, bearing in mind that in the past year the market price has been consistently higher by 50%, and even more, than the prices that were previously contracted. For energy entities from Montenegro that plan to sell electricity, the opening of the local stock exchange will make it much easier to enter the market, bearing in mind significantly lower costs than a possible listing on one of the stock exchanges in the region.
He also points out that the opening of the local stock exchange for energy entities from Montenegro will greatly facilitate its placement on the market, bearing in mind significantly lower costs than a possible listing on one of the stock exchanges in the region.
Speaking about the interest of traders from the region in the opening of the Montenegro electricity exchange, the interlocutor of the newspaper Dan says that this interest is always strategic and depends on business decisions.
– The presence in Montenegro is the presence on the cable with Italy, and it enables an additional connection of the region with Europe, which can potentially enable better prices than from some other area, depending on the market conditions – Medojević said.
As he states, the establishment of a competitive and transparent market one day in advance is of great importance not only for Montenegro, but also for the entire region.
– In addition to the fact that this is one of the main conditions for closing the negotiation chapter 15, it should be pointed out that the price that will be formed in a transparent manner on the Montenegrin stock exchange should serve as a signal for all investors who are interested in any economic-energy investments in Montenegro, and there is no doubt that the establishment of a functional market will be an additional incentive for producers of solar and wind energy to place it more easily on the Montenegrin market, without additional export costs, as already stated earlier – he explains.
Medojević also explained how the stock market will function.
– The stock market operates according to the principle of supply and demand of energy on an hourly basis, today for tomorrow (hence the name day-ahead market). By intersecting the supply and demand curve, the so-called the marginal price that is taken as a reference for that hour and for all participants in that hour who had a competitive offer. The income of the stock exchange is realized independently of the price of electricity, based on the commission charged for the realized trade, which is measured in cents. In the next phase, the plan is to move towards merging our market with the market of Europe or some of the neighboring countries in order to increase the competitiveness and liquidity of the market, which is in accordance with the activities provided for in the Energy Act and negotiation chapter 15, while depending on the demand and liquidity in the stages after that, the intraday market was launched.
The impact on consumers can be indirect
On the question of whether the opening of the electricity exchange will have an impact on consumers, i.e. to households, answers that, given that it is a wholesale market, it can be exclusively indirect.
– And that through potentially lower capacity prices, greater energy procurement in Montenegro than abroad, i.e. in the event that, through the creation of a transparent and competitive market, with all the potential that Montenegro has when it comes to energy, some more suppliers appear , as is the case in many European countries, where the end user has the option of choosing who to buy electricity from. However, I think that at this moment it is too early to talk about it, especially if you take into account that the price of electricity to households is regulated by the Energy Regulatory Agency – concludes Medojević.