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Bulgaria

Bulgaria

Bulgaria - Zero growth on the cards as access charge imposed

BULGARIA: Bulgaria's wind energy prospects are looking bleak in 2013, as the government has continued with measures penalising the renewable energy sector.

"I don't know if I should says we've reached rock bottom, or if it might actually get worse," says Mariyana Yaneva, deputy executive director of the Bulgarian wind energy association (BGWEA). BGWEA is expecting close to zero new wind capacity will be brought online this year.

One measure making market participants glum is a grid access charge, retroactively imposed on operational wind and other renewable energy producers in September. The fee was supposed to be temporary, Yaneva says, but now has been extended until at least June. There are expectations that the fee could be reduced after June but not removed. For wind, the fee is equivalent to 10% of the feed-in-tariff (FIT).

"We don't know of any wind company that is in the bankruptcy stage yet, although certainly there are some producers that are in financial trouble," Yaneva says. "It's not clear how long they will be able to hold out." The grid access charge is among the latest in a series of increasingly restrictive measures that have been slapped on renewable energy producers since 2011.

Zornitsa Pavlova, policy co-ordinator of Bulgarian renewables energy association APEE, expects little will happen to boost the country's renewable energy sector, at least until elections take place in July.

"If there is a change of the ruling party we could hope for some movement on renewables post-elections," she says.

bulgaria pieDespite the negative backdrop, Bulgaria's installed wind capacity reached 657MW in November, figures from APEE show. This is some 153MW more than Bulgaria's installed wind capacity at the end of 2011. Yaneva says all commercial-scale projects that were in an advanced stage before the regulatory backdrop worsened have now been completed.

In December, European Union commissioner Guenther Oettinger confirmed a fast-track procedure was underway to identify whether the Bulgarian grid access fee was compatible with EU law. If irregularities are found, the European Commission could launch infringement proceedings and ask that the fee be revoked. BGWEA and other renewable associations have also taken their case to court in Bulgaria.

No new major wind farms are being planned, market participants say, and almost no operational wind farms are changing hands either. One exception last year was the purchase by Lukerg Renew - a joint venture between the renewable units of Italian energy group ERG and Russia's Lukoil - of a 40MW wind farm from renewables investor, Raiffeisen Energy & Environment.

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