Bulgaria plans 20% wind levy

BULGARIA: Bulgaria's budget commission has passed a proposal to levy a 20% fee on revenue from wind and solar projects in the country.

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

The charge would be applied to established as well as new projects. The Bulgarian Wind Energy Association (BGWEA] said its believes this would halt all wind developments.

BGWEA executive director Mariana Yaneva said: "The impact would be devastating. Such a charge would lead to the bankruptcy of many producers since the rate of return for projects is currently around 9%."

The amendment has now passed its first reading. But BGWEA said this occurred in unusual circumstances. During a late session, the amendment was added to the 2014 budget proposals at the last minute without any consultation with the industry or experts.

It is not clear whether the government will support the amendment, which was proposed by the right-wing Attack party. BGWEA has expressed concern that the government has refused to take a stance against the fee.

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

Widespread protests over the cost of living 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.

Significantly, the proposal is for a charge on revenue, rather than a tax. This means that even a loss-making company would be required to hand over 20% of its income.

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