Monday, May 27, 2013

Who is Going to pay for green energy in Bulgaria?

(Sofia, May 27) - The Green energy installations again appear to be a pain in the neck for the energy sector in Bulgaria, following a huge increase in the number of such facilities shortly before July 1st 2012.
Logically, the increase led to almost threefold increase of the so-called green energy subsidy, which increased the consumer price of electricity in Bulgaria by as much as 14%. But the quantities of green electricity generated in the period July 1st 2012-June 30th 2013 is not going to be fully used, because of the lower consumption of electricity in the country, on the one hand, and - on the other - because of the regular restrictions imposed on the renewable energy installations that compel them to work at just 40% of their capacity.
When the state energy and waters regulatory commission calculated last year?s consumer prices of electricity, it forecast at least 40 billion kilowatt hours of electricity to be carried through the national power grid.
However, these calculations proved inaccurate, and a 700-million-lev-gap opened in the energy sector, because the state needed an extra 1.2 billion levs to buy the generated green energy at the preliminarily-negotiated preferential prices.
This gap is to be compensated by the state energy utility NEC, which has been in a hapless financial condition for quite some time now.
Paradoxically, energy experts say that the green energy subsidy in Bulgaria may even go up as of July 1st 2013.
So that not to trigger a hike in the final price of electricity in Bulgaria, the abovementioned increase should be compensated by lowering some of the other subsidies that form the so-called grid service, or the price of electricity itself.
And while the former will affect industrial electricity consumers and households alike, the latter affects just the households, because the electricity for industrial consumers sells at prices not regulated by the state?s watchdog.
The only reasonable solution appears to be intensifying the export of electricity to third countries that may pay for part of the subsidies, paid by the Bulgarian state to green energy producers.