We are actively working on connecting the Macedonian exchange with regional and European markets

Zoran Gjorgjievski
Manager
National Electricity Market Operator - MEMO LTD Skopje

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EVN Supply: How has the electricity market changed since the Macedonian Electricity Exchange began operating?

Gjorgjievski: The Macedonian Electricity Exchange, managed by the National Electricity Market Operator – MEMO, has been operating successfully for almost two years and has significantly contributed to the modernization and development of the market in our country.

Official trading on the domestic electricity exchange began on May 10, 2023 with 22 companies, and today there are already 37 reputable registered participants actively trading. The establishment of the Macedonian Electricity Exchange has led to higher transparency and better price formation based on supply and demand. This has allowed participants to better plan their purchases and sales, as well as more efficiently manage costs.

Through regular trading on the day-ahead market, Macedonia has obtained a reference price for electricity, which provides the economy with a relevant price signal necessary for all analysis and planning, while also strengthening the stability and predictability of the wholesale market. In addition, the stock exchange has stimulated increased competition, resulting in better supply conditions, greater liquidity and more secure access to electricity for all participants.

EVN Supply: How important is the role of MEMO in the modernization of the energy sector in North Macedonia?

Gjorgjievski: MEMO has a key role in the modernization of the energy sector in our country, especially through the development of market mechanisms, increasing transparency and integration with regional and European markets.

This role was also noted in the annual “Report on the Implementation of the Energy Community Legislation”, which highlighted the importance of the introduction of the day-ahead market and the activities undertaken in the process of integration with the single European electricity market.

MEMO is actively working to achieve the goal set by the Government and the Ministry of Energy and Mineral Resources – the creation of a competitive and integrated electricity market, which will be part of the wider European system. This implies full connectivity with the electricity markets in the region and the European Union, which will enable greater stability, lower costs and better efficiency in the supply of electricity.

With the continuous improvement of trading infrastructure, digitalization and expansion of market segments, MEMO remains a key driver of the energy transition and economic development of our society.



EVN Supply: What are the main challenges you faced in the past year and how did you overcome them? What are the biggest successes?

Gjorgjievski: In October last year, we celebrated 18 years since the establishment of the Electricity Market Operator and 5 years since the transformation into the National Electricity Market Operator (MEMO). Let me mention that in addition to the electricity exchange, MEMO integrates several functions related to the management of the market with bilateral agreements as well as the integration of renewable sources into the electricity market.

The two anniversaries we have celebrated are significant and reflect our dedicated work over the years. Thanks to the team of professionals working at MEMO, as well as with the support of our partners from EPEX - the largest electricity exchange in the European Union and BSP - the Slovenian Energy Exchange, the Secretariat of the Energy Community, the Ministry of Energy, Mining and Mineral Resources, as well as all stakeholders in the energy sector in our country, we are realizing significant processes and managing to turn challenges into opportunities.

One of our major successes in the past period is that MEMO has begun the process of establishing and introducing the registry and issuance of Guarantees of Origin of electricity from renewable sources. To this end, we have become an observer member of the Association of Issuing Bodies (AIB), strengthening our commitment to monitoring and transparency of renewable energy.

We believe that the interest will be great, because the Guarantees prove that the energy comes from renewable sources, which is especially important for domestic companies exporting to the European market.

EVN Supply: What are the benefits for companies from trading on the day-ahead market?

Gjorgjievski:  The growth in the number of companies trading on the Macedonian Electricity Exchange is an indicator of the growth of confidence in trading on the day-ahead market. It is a confirmation of the established security and relevant prices for each hour of the day, as well as competitiveness with the electricity exchanges in the region.

For companies, participation in the day-ahead market represents a strategic opportunity to better manage energy costs, increase competitiveness and reduce risks associated with the volatility of electricity prices.



EVN Supply: How are electricity prices determined on the Macedonian Stock Exchange and what factors influence them the most?

Gjorgjievski: Electricity prices on the Macedonian Electricity Exchange are determined based on the principles of supply and demand, through an auction mechanism where producers and suppliers submit bids for the sale and purchase of electricity. This market model allows for transparent and competitive price formation in real time and is identical to the model used in the EU.

Additionally, the platform used in MEMO is the same platform used by the largest electricity exchanges in Europe. From the very first day of trading on the electricity exchange, we had trading every hour of the day, which achieved satisfactory quantities of traded electricity at real market prices.

Since then, quantities of electricity have been traded on the exchange every hour, seven days a week, and supply and demand have been constantly growing, which is a good indicator of the growth of a young electricity exchange such as the Macedonian one.

EVN Supply: What are the next steps for the development of the electricity exchange in Macedonia? Do you plan to introduce new trading products?

Gjorgjievski: The development of the electricity exchange is a continuous process, aimed at greater liquidity, regional integration and the introduction of new trading mechanisms. One of our main goals, as I have indicated, is to connect the Macedonian electricity market with the single European market.

In December last year, we signed an Agreement with the Slovenian Energy Exchange (BSP) for technical support that will enable the accelerated implementation of market coupling.

In this way, we are intensifying cooperation in current and future projects with a focus on market coupling in Southeast Europe within the framework of the initiative (Southeast Europe Electricity Market Initiative - SEE MC). Market coupling brings benefits to participants in the organized electricity market, end users of electricity and the national economy. This will enable better competitiveness, more efficient price formation and access to a larger electricity market.
We are also working on the development of an Intraday Market and as mentioned above on guarantees of origin of electricity from renewable sources.

EVN Supply: How do you see the future of the Macedonian electricity market in the next 5-10 years?

Gjorgjievski: In the next decade, we believe that we will implement the planned projects in order for the Macedonian electricity market to become more dynamic, fully integrated with the region and the EU, and more sophisticated in terms of trading and risk management.
The main challenges also depend on global flows and energy turmoil, which will have a significant impact on the Macedonian market.

One of the main priorities will be to balance market liberalization and protection of end consumers from price fluctuations.

With the development of demand management, the balancing market, with full integration with regional and European markets and the improvement of regulation, we expect a stable, transparent and competitive electricity market that will contribute to sustainable economic growth and secure electricity supply.