Bulgarian parliament approves 20% fee on renewable revenues

05 December 2013 14:56 Source:ICIS

The Bulgarian parliament has voted for the introduction of a 20% fee on the revenues of solar and wind electricity producers on Thursday, according to information on the parliament’s website.

The revenues from the fee would be used for investments in the Bulgarian electricity system which is facing a big deficit, Bulgaria’s prime minister Plamen Oresharski said during recorded parliamentary debates on Wednesday.

The fee was proposed last week as Bulgaria struggles with an overload of renewable production in the grid and financial problems facing state-owned utility NEK ( see EDEM 28 November 2013 ). NEK is obliged to buy all renewable generated electricity at set preferential prices.

Renewables outcry

Renewable lobby groups have previously warned that if the fee is approved it would harm investment in the country.

Renewable producers’ representatives have been protesting against the proposal since the end of last week.

The Bulgarian Photovoltaic Association (BPVA) is waiting for the European Commission’s position on the 20% fee, the association said in a statement on Thursday.

The tax would mean that a total of 43% of the renewable producers’ revenues will be cut because of additional restrictions on their hourly production, BPVA added.

The lobby group is hoping the Bulgarian president, who has to approve the bill for it to become law, uses his right to veto it.

Ministry’s position

On Monday, the Bulgarian energy ministry defended the proposal in a statement quoting similar measures taken by the governments of the Czech Republic and Greece.

The ministry also pointed out that according to European Commission’s guidelines, preferential purchase prices are introduced in order to keep the risk of investments in new technologies low. With the development of these technologies their market share gets bigger which should mean this kind of governmental protection is no longer needed.

Bulgaria’s 2020 target is to have a 16% share of renewable production in the final gross energy consumption. The country has already reached 15% with 1GW of solar and 680MW of wind capacity currently installed, according to the ministry.

Grid access fee

Meanwhile, EVN Bulgaria Distribution has officially asked energy watchdog DKER to impose a fee on generators that access the company’s distribution network for all electricity producers.

The fee calculated on the basis of contracted capacity would be Bulgarian Lev (Lv) 0.01650/kW per day (€0.0084/kW per day) and would cover the expenses created by the producers for the distribution network, EVN said in a statement on Monday.

Such a fee is already imposed on business clients connected to EVN’s network. EVN considers that such a fee should be put to all producers on equal terms, it added.

Last year a retroactive grid access fee was imposed only on renewable producers in a bid to compensate dispatching and balancing expenses accumulated by grid operator ESO and Bulgarian distribution companies. But this was later overturned by a court ruling ( see EDEM 15 March 2013 ). Irina Peltegova

By Irina Peltegova