Bulgaria Plans Pricing Talks with Green Energy Producers, Maritza East

Business » ENERGY | August 18, 2014, Monday // 15:09
Bulgaria: Bulgaria Plans Pricing Talks with Green Energy Producers, Maritza East Interim Economy Minister Vasil Shtonov. Photo by BGNES

Bulgaria will launch talks with green energy producers and power stations Maritsa Iztok 1 and 3 to draft a new model for setting electricity prices, a cabinet minister has said.

According to caretaker Economy and Energy Minister Vasil Shtonov, the new pricing model should benefit both the state and the energy companies.

"Legislation has permitted for the installation of renewable energy sources, there is no way back. But renewable energy producers also realize that this [situation] is unsustainable because there is no money in the system,” Shtonov said in an interview for 24 Chasa daily.

A boom in licensing solar and wind energy producers in the period 2009-2012 has resulted in bringing on stream more than 1,600 MW of photovoltaic installations and wind farms.

Bulgaria is obliged to buy electricity generated from renewable energy stations under long-term contracts with owners of photovoltaic plants and wind farms at preferential rates that are much higher than those it pays for electricity generated by its Kozloduy nuclear power plant. The same holds true for Bulgaria’s contracts with Maritsa Iztok 1 and 3 power stations owned by U.S. companies AES and ContourGlobal.

Power price hikes have long been a sensitive issue in Bulgaria, the EU’s poorest member. To address it, Bulgaria’s energy regulator DKEVR in May urged the National Electricity Company to renegotiate contract terms to cut the cost of electricity generated by AES by at least a third and ContourGlobal's by a fifth.

DKEVR also proposed to change legislation in order to halve the preferential feed-in rates Bulgaria must pay for electricity generated by solar power plants and wind farms.

According to Shtonov, there is no way to bridge the current gap of some BGN 3 B in Bulgaria’s energy system in a month or two but a plan could be drafted that would allow  to restore the balance in the following years if the next Bulgarian governments stick to fulfilling it.

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Tags: Maritsa Iztok, DKEVR, green energy, renewable energy, Vasil Shtonov, energy
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