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Special Report Europe 2020 - New member ambition - Investors move into emerging markets - Bulgaria attracts investors but weighs up alternatives

With a stable market framework now in place and requests to connect some 6 GW of wind power to the grid already submitted to Bulgaria's National Electric Company, wind power is expected to represent a significant proportion of Bulgaria's electricity supply mix in 2020.

Sensible pricing policies and a stable framework means the projects are there if Bulgaria wants them.

With a stable market framework now in place and requests to connect some 6 GW of wind power to the grid already submitted to Bulgaria's National Electric Company (Windpower Monthly, March 2009), wind power is expected to represent a significant proportion of Bulgaria's electricity supply mix in 2020. The country's Association of Producers of Ecological Energy (APEE) says at a minimum, around half of the applications pending could be installed by 2020, driving cumulative capacity to 3-3.2 GW, up from 158 MW at end-2008, If so, the sector could generate about 6.7-7 GWh of electricity a year, it says, and meet as much as 13.5% of the 52 GWh forecast electricity demand. In 2008, wind met just 0.3% of electricity demand.

Weighing the options

The government, though, is still weighing up its options, as it plans its strategy to meet its EU directive goal for 16% of energy sources to come from renewables by 2020. In its recently published Energy Strategy by 2020 draft report, it suggests that at most, 2000 MW of wind capacity could be installed, producing about 4 GWh of electricity year, or roughly 7.7% of final electricity demand. But it says a more feasible option is for all renewables to account for 25% of all electricity, 1.3 GWh, with wind accounting for 25-33% of the renewables share. That puts wind's contribution to the country's overall electricity supply at just 3.25-4.29%. While deemed a more feasible option, the report does note that this would be the minimum requirement, and would need to be revised should overall energy demand be higher than expected.

Understanding potential

Meanwhile, the government is showing signs that it does indeed understand wind's potential. In another recent document on energy strategy through 2020, it suggests 3400 MW of wind capacity could be installed, more in line with APEE forecasts. The worry is that if the government opts for one of the less ambitious scenarios outlined in the draft strategy, it may signal an end to its current support system, a system that has seen investor confidence flood into Bulgaria. Under the wind power support mechanism, utilities are obliged by law to buy all wind-generated electricity at a fixed rate for 15 years. This is set at BGN 0.186/kWh (EUR0.096) for electricity produced during the first 2250 hours of operation at the equivalent of full load each year (equivalent to a capacity factor of 25.7%). Once the production cap is reached, the purchase rate drops to BGN 0.168/kWh (EUR0.086) for the rest of the year. The rate is reviewed every April and the industry is optimistic it will remain at a strong level next year.

Heather O'Brian, Windpower Monthly

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