Bulgarian electricity export tariff to rise 15% from 1 July

05 June 2014 07:00 Source:ICIS

The Bulgarian electricity export tariff is expected to rise less than the country’s grid operator had asked for, it has emerged. Traders think prices will be unaffected by the 15.5% rise from the new regulatory period starting 1 July.

The prices to access the grid and transmit power – the two components of the export tariff – are foreseen to increase to Bulgarian Lev (Lv) 7.98/MWh (€4.08/MWh) in total from the current Lv6.91/MWh (€3.53/MWh), according to a preliminary report for the upcoming regulatory period published by the country’s energy regulator SEWRC last week.

However, traders active in east European power markets do not expect a final decision before the end of June.

One source said that if approved the increase would not have a big impact on the market. “I don’t think the market will feel it [the increase],” he remarked.

The expected increase is lower than what grid operator ESO had previously asked for.

In April ESO said it had asked SEWRC to restore the price of the two components to the previous level of Lv9.71/MWh ( see EDEM 10 April 2014 ).

The levy has been changed several times over the past two years.

After a shock 50% rise to €17.52/MWh in July 2012, the level has gradually decreased to first €6.37/MWh as of 1 August 2013 and then €3.53/MWh as of 1 January 2014.

Changing demand

In the report, the regulator stated there is a deficit of electricity on Bulgaria’s free market and at the same time as a surplus on the regulated market.

High and medium voltage customers are sourcing their electricity from the free market, with low voltage customers also preparing to enter the market soon.

In addition, demand from industry and end-users is expected to drop by 9% in the next regulatory period, according to SEWRC’s report. As a result Bulgaria’s regulated market would need 26% less electricity for that period.

This is one of the reasons for the regulator to ask for renegotiation of long-term supply contracts between state-owned utility NEK and two private coal-fired producers ( see EDEM 4 June 2014 ).

NEK as a public provider has an obligation to buy a certain amount of electricity at fixed prices from private and state-owned conventional and renewable electricity producers.

This electricity is then sold to private suppliers who in turn supply end-users at regulated prices. Irina Peltegova

By Irina Peltegova