ENERGY KEEPS US MOVING

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ENERGY KEEPS US MOVING
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About Us

• The joint stock company ENERGY PARTNERS is a
  licensed trader of electricity. On February, 27,
  2006 the company obtained license No. L-202-15
  for trade with electric energy, issued by the
  State Energy and Water Regulatory Commission for
  a period of 10 years.
• The main shareholder of ENERGY PARTNERS JSC is
  ENERGY HOLDING S.R.L. The company is the
  biggest trader of electric energy in Romania with
  over 14 market share.
• ENERGY PARTNERS JSC and our team of
  professionals offer
• Security of supply
• Competitive and stable price
• Correct and loyal relations with clients
• Consulting and cooperation on matters regarding
  market participation.
• ENERGY PARTNERS main goal and mission is to
  fully respond to the requirements and challenges
  of the liberalized electricity market by
  defending the business interests of its clients.
  This provides a real opportunity for ENERGY
  PARTNERS to strengthen its position on the
  electricity market as a reliable and preferred
  partner.

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Objectives of Market Liberalization /1/
During the last decade we have witnessed
fundamental changes and restructuring in the
sphere of energy in the EU-member states as well
as on a world-wide scale. The processes of
liberalization and deregulation of energy markets
started in the beginning of the 1990 and the
first steps were made in Chile, Great Britain
/AngliaWales Pool/ and the Scandinavian
countries /Nord Pool/.
With the introduction of new market models and
mechanisms the electric energy turned into a
commodity, traded under non-discriminative and
competitive conditions.
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Objectives of Market Liberalization /2/

• Estimated results from liberalization
• Removal of the monopoly on potentially competing
  activities such as generation, trading and supply
  

• Generation
• Transmission/Power System Control
• Distribution
• Trade/Supply

• Competition tendency towards reduction of the
  production costs
• Free cross-border trade introduction of a
  uniform effectively functioning system for
  capacity allocation
• Improvement in the quality of services and the
  security of supply
• Stimulation of the measures towards
  environmental protection.

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EU Legislative Framework

• Directive 96/92/?C Member-states are obliged to
  change their legislation and to start a gradual
  opening of the power market.
• Directive 2003/54/?? Introduction the model of
  regulated third party access to the electricity
  transmission and distribution networks, thus the
  Single Buyer model, allowed by the old
  directive, was abolished.
• Milestones in Directive 2003/54/??
• Introduction of conditions for
  non-discriminative, transparent and fairly
  evaluated access
• Independence of the TSO and the network
  operators in regard to the generation, trading
  and supply activities
• Issuing and implementation of an adequate
  pricing system valid for all users connected to
  the respective network
• Security of supply and improved service quality.

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BG Legislative Framework /1/

• Energy Law in effect since December 2003
• Introduction of a new market model of bilateral
  contracts and balancing market, based on a
  regulated third party access to the network
• Last Energy Law Amendments in effect since
  September 2006
• Legal separation of Electricity System Operator
  from 04.01.2007
• Introduction of Balance Groups market model
• Generators Quotas for the internal market
  /vulnerable customers/
• Changes in the Transmission Tariff Methodology.

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BG Legislative Framework / 2 /

• Secondary Legislation in effect since 2003
• Electricity Price Ordinance
• Grid Access Rules
• Electricity Market Rules
• Transmission Grid Code
• Distribution Grid Code
• Metering Code
• All the Rules are in process of adaptation to the
  new Energy Law amendments. The revised secondary
  legislation is expected to be approved in the
  beginning of 2007.

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BG Market Model

• Bilateral Contracts with associated Balancing
  Market
• Replaces the previous Single Buyer model
• It was brought into use in nearly all EU
  Countries
• Market Players trading at freely-negotiated
  prices
• Generators /licensed/
• Traders /licensed/
• Eligible Customers
• Regulated Parties
• Electricity System Operator /licensed/
• Wholesale Public Supplier /licensed - NEK/
• Transmission Company /licensed - NEK/
• Distribution Companies /licensed/
• Public Providers /licensed/

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Electricity Market Overview /1/

• 2004
• Market opening First supply contract at
  freely-negotiated prices registered between NPP
  Kozloduy AD and Umicor AD on 18th September 2004.
• 2005
• Total traded quantity on the free market 2 711
  609 MWh
• 18th September 2005 1 year market operation
• 21 registered market players
• - 6 Generators
• - 13 Eligible Customers
• - 2 Traders

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Electricity Market Overview /2/

• 2006
• Total traded quantity on the free market 4 140
  555 MWh
• 18th September 2006 2 years market operation
• 36 registered market players
• - 6 Generators
• - 20 Eligible Customers
• - 10 Traders /8 active/
• 2007
• 1st March 2007
• 51 registered market players
• - 6 Generators
• - 33 Eligible Customers /31 active/
• - 12 traders /10 active/

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Role of the Electricity Traders

• The key role of traders as a main binding unit
  between generators and consumers interests is
  to allocate the price risk between generation and
  demand side
• The competition among traders together with
  their flexibility is one of the basic
  prerequisites for market development and
  dynamics.
• The consolidation of market participants leads
  to increased efficiency of the market operation.
• Aggregation of big number of schedules with
  different load profile - trading with large
  amounts with flat resultant load, which benefits
  the reduction of both the supply price and the
  level of imbalances.

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Market Share of Energy Partners
60 Generators
The significant market share of the electricity
producers is due to the fact that there was only
one active trader till the beginning of 2006.
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Market Structure after 01.07.2007
ESO NDC ?M?
Generators Condense-type TPP
Generators RES ? Co-Gen.
NEK Transmission Public Supply Gen HPP
High Voltage Eligible Customers
High Voltage Customers
Traders
DSO
Vulnerable Customers
Public Provider
Middle/Low Voltage Eligible Customers
Middle/Low Voltage Customers
Regulated Supply Contracts
Access Agreement /system services/
Transmission Agreement
Non-regulated Supply Contracts
Combined Non-regulated Supply Contracts
/transmission and access fee is included/
Access Agreement to for Distr. Grid
Ancillary Services Agreement
RES Renewable Energy Sources DSO
Distribution System Operator ESO Electricity
System Operator /TSO/ EMO Electricity Market
Operator Note Balancing Agreement and Special
Account Agreement are not shown on the scheme.
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Market Rules Amendment after 01.07.2007

• Introduction of balancing groups /BG/ - they are
  represented by coordinators /CBG/, who according
  to the Energy Act can be licensed traders or
  generators of electric energy.
• Day-ahead contract notification
• Web-based information exchange
• Revision of Balancing Price Mechanism.

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THANK YOU FOR YOUR ATTENTION
Rumiana Georgieva Executive Director Energy
Partners rumiana.georgieva_at_energybulgaria.com For
contacts 7, Sheinovo Str. 1504 Sofia, Bulgaria
Tel. [phone] Fax [phone]
office_at_energybulgaria.com www.energybulgaria.com