Axpo Bulgaria: SEE countries must push for common EU energy trading market

Axpo Bulgaria: SEE countries must push for common EU energy trading market

Axpo Bulgaria was established in 2006 as part of Swiss energy company Axpo Group. The group covers the entire energy value chain and is a marketer of renewable energies in Europe. In 2007, Axpo Bulgaria received a power trading licence and since then has been a participant in the power markets in Bulgaria and its neighbouring countries. In 2011, the company expanded by building a service centre that offers operations and various back-office services to the Axpo Group. Milena Videnova has been Axpo Bulgaria’s Managing Director since August 2020.

Ms Videnova, Axpo Group is the largest producer of renewable energy in Switzerland and in Bulgaria it is present through its other core business - energy trading and the marketing of solar and wind power. Can you tell us a bit more about your portfolio of services for Bulgarian clients?

Axpo Bulgaria EAD, a subsidiary of the Axpo Group with headquarters in Switzerland, has been conducting business activities in Bulgaria for 16 years. Axpo is the largest producer of renewable energy in Switzerland and an international leader in energy trading and the marketing of solar and wind power.

More than 6,000 Axpo employees combine their professional experience with their passion for innovation to develop cutting-edge energy solutions for customers in almost 40 countries across Europe, the US and Asia. With an initial focus on electricity, the company now also focuses on gas, given the emergence of new gas markets in Southeast Europe.

Axpo Bulgaria is an active wholesale trader in 15 European markets. We offer renewable producers innovative, tailor-made derivative solutions with physical delivery or without i.e. only financially. We are active in trade with guarantees of origin and we offer tailor-made power purchase agreement (PPA) solutions. Our expertise in asset optimisation services for renewables is unique, and Axpo Bulgaria’s presence in many energy markets in Europe means we offer market access and cross-border solutions to our customers.

Is the Axpo Group active on other SEE markets, either through RES projects or trading operations?

Axpo Group, through Axpo Solutions and its Origination Western & Eastern Europe Division, is a pioneer in the SEE markets with benchmark PPA transactions in Romania, Greece, Croatia, Hungary and Serbia.

Since March, 2021 Axpo Bulgaria is offering origination services to Bulgarian RES investors and companies. In contrast to wholesale energy trading, the origination service related to RES projects is a local business and Axpo has origination operations in the main SEE markets. In addition, Axpo Group also offers a turnkey RES project management solutions through its subsidiaries Urbasolar for photovoltaic (already present in Poland) and Volkswind for wind (established last year in Romania).

Moreover, Axpo has recently expanded its business activity in long-term PPAs for renewable energy in south-eastern Europe by signing its first-ever PPA in Serbia. The long-term deal has been signed with Ivicom Energy doo Zagubica, a renewable energy project co-owned by Serbia’s MK Group and Slovenia’s ALFI Green Energy Fund.

Under the 10-year agreement, Axpo hedges will support the ongoing construction of the 105MW wind farm in Krivaca. The farm, situated about 150km east of Belgrade, will produce enough green power for more than 75,000 households, saving 115,000 tonnes of CO2 emissions annually. Delivery will begin in January 2024. Construction of the Krivaca farm commenced in 2021, with commissioning scheduled for the end of 2023. The project will feature 22 turbines from the Nordex Group, each with a capacity of 4.8MW.

There are considerable differences between countries in the SEE region when it comes to the adoption of renewables in the energy mix and the ease of trading. Some argue that the reason for this is national regulatory frameworks which do not match the ambition of the European Green Deal. What is your view on this?

The EU’s Green Deal Industrial Plan for the Net-Zero Age is currently under revision. In addition, many national energy transition and green strategies will be updated and aligned as well.

My view is that every country in the SEE region, including Bulgaria, should work for the further development of a common EU energy trading market based on free trade. To boost RES projects, we need to invest in strengthening the infrastructure of the electricity transmission network as well as in increasing the administrative capacity, so that a fast track can be provided for the authorisation and construction of these projects. For example, in Bulgaria there are extremely favorable metrological prerequisites for solar projects, and also for hydro and wind in certain regions. What is difficult to predict are the regulatory changes and the ambiguities surrounding their implementation, which negatively affect the investment climate. As you know, in December 2022 the parliament approved an upper limit for RES producers based on the European directive. All the ambiguities in implementation, as well as new regulations, create uncertainty among investors.

In addition, if the Green Deal is still high on the agenda, long-term PPAs should be exempted from additional crisis taxation, as well as the upper limits for limiting prices. Thus, prices will be regulated on a market principle.

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