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From Bulgaria

27.01.2012 17:41

Industry Pleas for Transparent Free Electricity Market, Legislation Changes

Electricity prices in Bulgaria would rise due to CO2 emissions and renewables, deputy energy minister Delyan Dobrev said

AUTHOR: Atanas Georgiev

© Kozloduy NPP

Bulgarian industry representatives insisted that there must be clear rules for state-owned electricity producers such as Kozloduy nuclear station, Maritsa East 2 thermal station and the National Electricity Company, when they organize tenders for electricity on the non-regulated market.

This became clear during a meeting organized today by professional syndicates (KNSB), the Bulgarian Industrial Association (BIA), the Confederation of Employers and Industrialists in Bulgaria (CEIBG) and the Bulgarian Federation of Industrial Energy Consumers (BFIEC). The organizations discussed the matters of the free electricity market with government representatives, members of the energy regulatory auhtority SEWRC, electricity traders and power plants representatives. The occasion of the meeting were the last electricity tenders on the liberalized market, held by Kozloduy NPP, which caused a negative reaction by the industry, who criticized the lack of transparency in the procedure.

The general discontent of the industry was summarized in the much delayed reforms in the energy sector in order to maintain low electricity prices for households. The industry also disputed the policy for cheap electricity export of Kozloduy NPP's electricity, which created internal energy deficit. The problem will become harsher when smaller enterprises are forced to enter the liberalized market by the new Energy Act. This will raise the non-regulated sales to 40% stake of the entire internal energy sales, and more companies will have problems with deficits, BFIEC's Konstantin Stamenov said.

Kozloduy NPP free market sales officer Martin Tafrov deemed the expectations on the nuclear plant to cover 100% of the entire internal market are irrelevant. Tafrov pointed out that Kozloduy is also responsible for the regulated electricity market, stating that the all additional electricity quantities will be lanced on the free market.

CEZ Trade Bulgaria’s Vladimir Ditchev commented that it is crucial whether Kozloduy will take on Maritsa East 2 practice of joint electricity tenders for both internal and external markets. Ditchev highlighted the need for reforms in the regulated market quotes model for the regulated market.

Nikolay Minkov, representative of the Srednogorie industrial cluster, which consumes 25% of the electricity on the liberalized market, stated that if economy and energy continue being managed by one ministry, this would not allow a positive and balanced outcome of the situation. The same is valid for the parliamentary commission, where both sectors are also managed together. Minkov added, that industry has its guilt as well for this development, as even though its revenues are 5 billion BGN (in opposition to energy sector's exports of 800 million BGN), its lobbying capacity has proved to be weaker.

Energy regulator member Evgenia Haritonova reminded that the State Energy and Water Regulatory Commission does not have the right to influence the free market. That would be possible only after changes have been made to the Energy Act, which foresee more regulatory rights for SEWRC. She quoted a new regulation (Regulation 1227/2011 of the European Parliament and of the Council on Wholesale Energy Market Integrity and Transparency - REMIT) approved by the European commission which would allow the SEWRC to sanction any lack of transparency on the non-regulated market as of 2013.

Deputy energy minister Delyan Dobrev said electricity prices in Bulgaria would rise imminently due to CO2 quotas prices and the considerable growth in the renewables sector (although no new preliminary contracts for connecting for new generators have been signed as of July, 2011). He also pointed out the ascending natural gas prices. Dobrev promoted energy efficiency for both industry, energy generators, and households. Minister Dobrev invited the concerned parties at a meeting next Tuesday in order to discuss changes to the Energy Act that would then be discussed in the parliament.

Reporting by Atanas Georgiev

Text in English by Lyudmila Zlateva