Electricity

Bulgaria to remove electricity export tariff from July 1, take 750 MW of renewables to free market

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Published

April 3, 2019

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Published:

April 3, 2019

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Bulgaria’s electricity export tariff will be abolished from July 1, according to a draft proposal of changes to the energy law, the ICIS portal reported.

The changes will also bring 750 MW of renewable capacity to the free market, creating more competition and liquidity.

Some changes are related to how quotas for the regulated market will be set and would bring more transparency to the quantities that state-owned generators Kozloduy and Maritsa East 2 will have available to sell to the free market on a monthly basis.

As Balkan Green Energy News reported in January, the state was forced at the time to introduce measures to stabilize power prices. The day-ahead market (DAM) prices increased by 50% in December 2018 compared to December 2017, skyrocketing 200% year-on-year in January 2019.

Export tariff finally scrapped

The export tariff comprises a fee for accessing the transmission system and a fee for distribution through the network and currently stands at €5.03/MWh, the ICIS portal reported.

The draft says that these fees will only be paid by power producers, distribution system operators, and end users but will not apply to other participants from July 1.

Since Bulgaria is planning to initiate an intra-day market coupling with Romania in June, it was imperative that the tariff was scrapped.

More renewables come to the market

In 2018, the energy law was changed, removing the feed-in tariffs (FiT) for producers with 4 MW or above-installed capacity and replacing it with what was called contracts for premiums.

These generators were obliged to sell all electricity on the IBEX exchange, while separately receiving a compensation set by the Energy and Water Regulatory Commission (EWRC) up to the amount of their initial FiT.

The law will now move all renewable producers of 1 MW and over to the premium contracts scheme, effectively bringing 750 MW of renewable capacity to the free market.

Regulated quota changed

Currently, the state-owned Kozloduy nuclear plant and Maritsa East 2 coal-fired plant are obliged to provide a certain amount of electricity to power utility NEK at a set price, for the purpose of supplying customers on the regulated market.

However, the quantities are not broken down by months depending on the expected demand.

This means that NEK may request more or less electricity from the producers on short notice for the purposes of covering demand on the regulated market.

As a result, Kozloduy and Maritsa East 2 tend to be conservative with the quantities they offer on the free market through long-term auctions.

The new changes envisage EWRC setting regulated quotas on a monthly basis, enabling producers to better plan sales on the free market, ICIS reported.

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