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Bulgarian import capacity cut confirms export tariff increase, say traders

15 Jun 2012 15:49:53 | edem

Reduced cross-border import capacity for electricity at Bulgarian borders signals that the country's transmission system operator (TSO) ESO plans to raise the export tariff, according to traders.

The regulator DKER is looking at whether to increase some of the tariff's components, which could result in a 34% rise in the overall tariff rate effective from 1 July (see EDEM 31 May 2012).

"They will be forcing us to buy expensive Bulgarian energy as we won't be able to make transits of cheaper electricity from somewhere else," one Bulgarian trader said. He added that this meant that the regulator was going ahead with the increase of the export tariff.

ESO is offering 10MW import cross-border capacity from Romania for July. In previous months, however, it has averaged around 110MW, according to data on its website. Import capacity is also down from Serbia (60MW) and Macedonia (10MW).

"There are four electricity lines on the Romanian border which can take up to 1,000MW capacity, so there is really no (other) explanation for the huge cut," Dichev said.

He highlighted the gradual rise of Bulgarian export tariff since 2005, when it stood at €4.80/MWh, and that it could reach €15.74/MWh from 1 July.

Market participants insisted that the export tariff be scrapped, at a recent meeting between Bulgarian traders and DKER, according to Dichev, but the regulator said this was not affordable as it would raise end-user electricity prices.

But scrapping the export tariff will only boost end user prices by 2-3%, while stimulating electricity producers' exports, according to Dichev.

Market participants polled by ICIS had a mixed view of the impact that the curtailed capacity would have.

"I don't think ESO's strategy [to cut import capacity] will be successful because people have enough import capacity from the yearly auctions," one Balkan trader said.

A third source disagreed, saying there were few companies that had managed to get yearly cross-border capacity, because state-owned utility NEK was holding most of it, so the cut in monthly capacities posed a big problem. IP

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