Bulgaria Mulls Options for Coping with Renewable Energy Boom

Business » ENERGY | October 8, 2013, Tuesday // 16:56
Bulgaria: Bulgaria Mulls Options for Coping with Renewable Energy Boom Photo by BGNES

Bulgaria is considering a number of options for addressing the renewable energy boom and its impact on electricity prices, according to Deputy Energy Minister Ivo Ayolov.

Ayolov presented the scenarios to journalists on Tuesday before speaking at the 4th Regional Energy Conference of the Bulgarian Energy and Mining Forum, devoted to the development and integration of energy markets.

He announced that the options included the introduction of a tax on renewable energy power plants, a grid access fee, or the inclusion of these power plants in balancing groups for electricity trade and requiring the producers to file daily power production schedules whose nonobservance is punishable by reduced prices of the electricity supplied to the grid.

Ayolov, as cited by mediapool.bg, noted that the final decision was to be in place by next Wednesday and the government was to receive concrete proposals for changes to the Energy Act and the Energy from Renewable Sources Act.

Ayolov said that the authorities were seeking a balanced technical-economic solution to the worrying energy predicament which had been caused by the coincidence of the peak of the economic crisis and the renewable energy boom in Bulgaria.

He specified that the aim was to prevent devastating blows to the power grid, investors, or household incomes.

Bulgaria's Deputy Economy and Energy Minister explained that the aim was to solve the problem without affecting the interests of investors who were functioning in an unpredictable environment.

He refrained from commenting on the proposal of Biser Boev, head of the Bulgarian Energy Holding (BEH), for imposing a 30% tax on revenues of photovoltaic plants, but added that such taxes were in force in a number of countries.

Ayolov refused to specify whether a tax would be imposed on the revenues of renewable energy power plants.

He said that the other option was to make renewable energy power plants pay a fee for accessing the power transmission and power distribution grids and reminded of the attempt of the State Commission for Energy and Water Regulation (DKEVR) to introduce temporary tariffs for grid access fees in September 2012.

However, the fees were appealed by renewable energy investors, who said that DKEVR had fabricated them out of nothing.

Bulgaria's Supreme Administrative Court (VAS) subsequently revoked a number of components of these fees and now power distributors and the state-owned power transmission grid operator will have to pay back a part of the total of BGN 150M collected through grid access fees.

Ayolov made clear that it was most likely for renewable energy power plants to be required to join balancing groups on the electricity market. He explained that the producers participating in these groups will have to submit information to the Electricity System Operator (ESO) about the amount of energy they would supply to the grid, while companies would have to submit information about the electricity volumes they would need. As a result, ESO would be able to achieve a better balance of the load of the power grid, while the participants in these groups who had failed to get their calculations right would suffer penalties.

The restrictive measures for renewable energy power plants were necessitated after it turned out that the installed renewable capacity had grown from 341 MW to 1651 MW in the period 2009 - end-2012, of which 675 MW from wind farms, and 976 MW from photovoltaic plants. Only in the first quarter of 2013, the production of renewable electricity went up by 52%.

Meanwhile, Bulgaria's Deputy Prime Minister in charge of economic issues, Daniela Bobeva, announced that Bulgaria's energy sector had yet again reached a critical phase due to serious political mistakes and poor calculations.

She said that the current government had managed to "extinguish the fire" through timely steps.

She reminded that the Parliament had tasked Economy and Energy Minister Dragomir Stoynev with preparing a new draft energy strategy and informed that Bulgaria would also seek international expert assistance for the preparation of the document.

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Tags: Renewable Energy Act, energy act, State Commission for Energy and Water Regulation, DKEVR, Bulgarian Energy Holding, BEH, Electricity System Operator, photovoltaic plants, wind farms, Daniela Bobeva
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