Bulgaria: Adopted amendments to the Energy Law will allow energy company NEK to reduce deficit

11. March 2015. / SEE Energy News

After amendments to the Energy Law, adopted late last week by the Bulgarian parliament, the measures for reducing the deficit of the Bulgarian national energy company NEK, have also been adopted.

The changes relate to the conditions under which state energy company and suppliers to final customers purchase the electricity.

Only companies with a certificate will get preferential prices. National regulatory body will designate how much electricity NEK will be able to buy from these producers. The rest of the electricity can be sold in the open or in the balance market.

Revenue from the sale of quotas for the trading of greenhouse gas emissions will go into the budget of the Ministry of Energy and will be used to cover the expenses of purchasing the green power.

Changes will go in several directions – removal of thermal power plants, the purchase of energy only from highly efficient production, transfer of carbon that will be returned to the level from 2013. Only on this basis revenues of around 180 million euros will be provided.

The transitional provisions predict the removal of preferential prices, thus reducing the costs by additional 180 million euros.

Preferential prices for power plants using new renewable sources are abolished, as the country seeks to reduce the deficit in the energy sector and reduce the growth of electricity bills.

A large number of wind farms and photovoltaic power plants were built after 2011, after Bulgaria introduced generous subsidies, guaranteed for a period of 20 years, and has committed to purchase all the electricity produced.

However, these incentives are heavy burden to one of the poorest member of the EU, which met its 2020 goal (16 per cent share of renewable energy sources) even in 2013.

Approved incentives will be valid for solar and wind power plants that are already operational.

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