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Ministry forsees EUR 62.37 million more in revenue

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November 13, 2015

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Published:

November 13, 2015

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Draft budget of the Ministry of Energy for next year provides a good opportunity for undertaking main activities and performing functions, said Bulgarian minister Temenuzhka Petkova at a joint sitting of the parliamentary committee on energy and the committee on overseeing the activity of the Energy and Water Regulatory Commission (EWRC), Focus news agency reported. Both committees discussed the 2016 draft budget of the Republic. Minister Petkova introduced main envisaged parameters. According to her, it is planned the revenues of the ministry in 2016 will amount to BGN 244.26 million (EUR 124.9 million), compared to EUR 62.5 million from this year. There is a trend of recovery and stabilisation of the National Electricity Company (NEK), she said.

“That is one of the basic, maybe the biggest and most serious problem, which is undoubtedly linked with the energy security. Financial collapse of the system would inevitably resulted in insecurity in the energy system. That is why we have fully focused our efforts on seeking possibilities and means for financial stabilisation of the sector,” Petkova said. In her words, recently adopted amendments to the Energy Act were in the same direction. All passed amendments were for stabilising the sector including the decision of the Energy and Water Regulatory Committee to change prices as of August 1, which results are yet to be seen, the minister added.

“The intercompany indebtedness in the sector is indeed very serious. NEK’s obligations to Kozloduy nuclear power plant already run to EUR 70.55 million. The only possible option to unblock the system and to overcome the intercompany indebtedness is to pour in fresh resources,” the minister said.

The strongest recommendation of the World Bank is for gradual process for liberalisation of the Bulgarian energy market, she stressed „Functioning of an independent energy exchange will place the Bulgarian energy in a completely new situation. We realise that this is the only way. The only option for unbiased price of electricity is demand and supply.“ The Bulgarian independent energy exchange (IBEX) is planned to start operation on December 8 and this will be a significant breakthrough, Petkova stated.

In terms of the liberalization model of the Bulgarian energy market and its implementation, the minister said that the country relies on the expertise of the World Bank, with which the Bulgarian Energy Holding has concluded an agreement. “The recommendation of the World Bank is the liberalization process to be implemented gradually, as the objective is for identification of unprotected consumer groups first, to think of them first and then to seek the best and most adequate model for full liberalisation of the energy market,” she specified.

In her words, the other very important point is the compensatory mechanism, which will have to cover the obligations of NEK under the long-term agreements, the Renewable Energy Sources Act, and the power plants and heating utilities. “I expect the pricing decision of the Energy and Water Regulatory Commission of August 1, 2015 to have positive effect on NEK,” she told journalists.

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