Serbian electric power exchange SERPEX to be created by end of year 2010

At the panel discussion on trade in electric power, which was held on Friday, November 20th, 2009, at the Belgrade Stock Exchange's conference "Upgrade in Belgrade", the attention of the participants was drawn by the presentation held by Miloš Mladenović, the Assistant to the Director General of public company "Elektromreža Srbije" for transfer system management and electricity market.

As Mr. Mladenović explained, Serbia has an excellent geostrategic position and it is an ideal place for trade in electric power in the region, while Serbian power supply system has connections with the largest number of power supply systems in Europe. Namely, Serbia is connected with eight power supply systems, mainly through 400 kV grid. That is why such geostrategic position in the field of energy is unique in Europe.

- When we take a look at the trade in electric power in 2008, we can see that the cross-border turnover has significant share in total turnover. Namely, total amount of energy taken from the system of the Electric Power Company of Serbia in 2008 was about 35 TWh, while the transit through Serbian power supply system exceeded 7 TWh, which is not a small amount at all - Mladenović pointed out.

The analyses for the needs of creation of Serbian electric power exchange were started two years ago, and more significant engagement in implementation has been registered over the last year. The feasibility study is being made, and it is expected to be finished by the end of year 2009. Following the elaboration of the study, all the interested parties (the Ministry of Energy, the Energy Agency of Serbia, Public company EPS - potential market market and others) will be consulted and strategic partner will be selected.

That will be followed by: upgrade of the primary energy legislation in Serbia, designing of the "day ahead" market, establishment of the function of the exchange operator, secondary legislation (the rules governing the market's work), definition of internal procedures, specification of IT system, implementation of IT system and, in the end, making of manuals for participants in the market.

- We would like to "skip" the steps related to specification and implementation of IT system, that is, to select strategic partner who would bring existing, quality IT system in the partnership - Mr. Mladenović told eKapija and added that he expected everything to be completed by the end of year 2010.

According to Mladenović, some of the advantages that the formation of SERPEX will offer to the participants in the market are:

· efficient and customer-oriented business infrastructure
· simple access to the market in whole region
· higher liquidity
· financial security and risk hedging
· lower costs (less administration, modern technologies, smaller contracting risk)
· joint modern technology
· portfolio of high-quality services in the electric power market

Mladenović pointed out that SERPEX would contribute to better and more efficient use of cross-border transfer capacities. In addition, it will contribute to promotion of implicit short-term (day-ahead) auctions for cross-border transfer capacities and enable forming of price zones, as well as the market's merger with the neighboring exchanges/markets.

SERPEX will enable high level of transparency and standardized and efficient aproach to calculations, guarantees, taxation, financial responsibility and balancing.

- Standardization of the national market models and regulatory frameworks is, also, one of the benefits that the formation of SERPEX would introduce - Mladenovic said at the end of his presentation.