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Bulgaria

Bulgaria

Bulgarian parliament passes 20% wind levy into law

BULGARIA: The Bulgarian parliament has voted into law a 20% fee on revenue from renewable energy projects.

Enel's 21MW Shabla wind farm in Bulgaria
Enel's 21MW Shabla wind farm in Bulgaria

The Bulgarian Wind Energy Association (BGWEA) has warned that this could mean the end of the wind industry in the country since the levy applies to already established projects.

On top of the fee, the parliament voted to limit the amount of energy that would be bought from renewable projects at a preferential price. Beyond this threshold, energy will be bought at below market price at a price set by the regulator.

The threshold will be decided by the energy regulator.

BGWEA executive director Mariyana Yaneva said: "There has been a reaction of shock from the wind industry. These two measures combined could mean a 50% reduction in revenue for some projects.

"No wind farm could survive a 20% cut in revenue let alone a 50% reduction. This will mean bancruptcy for many if not all wind projects."

BGWEA estimates the average profit margin for Bulgarian wind farms to be around 9%.

Significantly, the new fee, which was voted in as part of the 2014 budget approval, is not a tax on profit, but a levy on revenue, which even a loss-making project would be subject.

The change in the law was proposed only last week by the far-right Attack party without consultation with the industry or experts, BGWEA claims.

While previously supporting the renewables industry, in the recent years the socialist government has taken measures to curtail its expansion due to concerns over the rising cost of domestic energy bills.

This led to the government imposing a grid access charge last year for renewable energy producers only. This was later ruled to be illegal by the courts, and this latest proposal is seen as an attempt to levy the charge through a different route.

"Most of the people in Bulgaria live in energy poverty, but the renewables industry is not to blame for this and only accounts for 6% of bills," said Yaneva.

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