June 12, 2024
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HomeUncategorizedRegion: Hungary to join regional electricity exchange ADEX

Region: Hungary to join regional electricity exchange ADEX

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Directors of the transmission systems of Serbia, Hungary and Slovenia and the European Power Exchange EPEX Spot signed an agreement on the integration of the three electricity exchanges under the Alpine-Adriatic Danube Power Exchange, or ADEX Group.

By signing this agreement, Hungary also became a part of the ADEX, the first regional exchange in Central and South-Eastern Europe. ADEX was founded in 2022 by Slovenia’s ELES, Serbia’s Elektromreza Srbije, EMS, and EPEX Spot.

Under the agreement, ADEX becomes the owner of the power exchanges BSP SouthPool in Slovenia, HUPX in Hungary and SEEPEX in Serbia.

Serbia’s Minister of Mining and Energy, Dubravka Djedovic Handanovic, said the deal would encourage investment.

“A common platform for trading on all three stock exchanges will further encourage the development of the regional electricity market and provide a strong and reliable market environment necessary for new investments,” she said.

Hungary’s Minister of Foreign Affairs and Trade, Péter Szijjarto, said the agreement would improve the security of supply, making the trade in electricity between the countries faster. “As it will be a bigger market and larger volumes, prices will be more favourable,” he said.

“This organised regional electricity exchange will significantly increase our security of supply and create the opportunity for the Central European region to lead the way, setting an example for energy integration across Europe,” he added.

“Let’s not forget that we are talking about cooperation between EU member states and a candidate country for EU membership, so we have taken another step towards the energy integration of the Western Balkans into the European Union,” Szijjarto continued, meaning Serbia.

As BIRN reported in July 2023, Hungary needs to secure more electricity to keep its economy growing. The two new blocks of the Paks nuclear power plant being built by Russia’s Rosatom are far behind schedule and may never be built, due to the war in Ukraine and sanctions. Meanwhile, the government is establishing Hungary as a European powerhouse for battery production – a highly energy-intensive industry.

EMS General Director Jelena Matejic said the merger would bring Serbia multiple benefits, and bring it closer to the single European market.

“There is another important benefit for Serbia – the realization of this merger of the stock exchanges has created the conditions for EMS to continue cooperating with the Hungarian transmission system operator, MAVIR, in the process of merging the day-ahead market with the single market of Europe, which is the fulfilment of one of the prerequisites for … Serbia for the abolition of the CBAM fee,” Matejic said.

In May 2023, the European Parliament and Council adopted the Carbon Border Adjustment Mechanism, CBAM, to catalyze energy transition and market integration. The Regulation imposes costs on importers of CBAM goods into the EU from third countries.

However, imports of electricity may be exempted from the CBAM fee if the third country’s electricity market is integrated with the EU market and meets certain conditions on climate and energy legislation. These include implementing an Emissions Trading System, ETS, by 2030. ETS should make polluters pay for their greenhouse gas emissions, help bring emissions down and generate revenues to finance the EU’s green transition.

This agreement is a part of the BlueSky project, related to the first regional electricity exchange for Central and Southeastern Europe, ADEX, founded in 2022. The headquarters of ADEX, which will manage the Serbian, Slovenian and Hungarian stock exchanges, will be in Budapest, balkaninsight.com reports.

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