Bulgaria: The future of energy company NEK and electricity prices

1. April 2015. / SEE Energy News

National Electric Power Industry of Bulgaria NEK believes that the company can be profitable with current electricity prices said NEK CEO Petar Iliev.

Demanding an electricity price increase was his biggest issue but then, the announcement of Standard & Poor’s about NEK’s reduced credit rating ensued.

Several days after this announcement, he said that NEK could be a public supplier even with the profit achieved through the current electricity price, but he added that there must be production quotas upon the purchase of electricity by NEK. He further added that, thereby, he also referred to the regulated market. The head of NEK, Petar Iliev, as well as other directors of power distribution companies and the ESO, will be questioned by the members of the parliamentary group for energy because of the large defects in the power distribution system caused by snow.

According to the head of NEK, the amount of electricity for the regulated market needs to be increased, and this includes an increase in the quantities purchased from the nuclear power plant Kozloduj and the thermal power plant Marica Istok 2. Of 5.7 MWh, the nuclear power plant Kozloduj sells on the regulated market at the price of 30 levs for one MWh. Of this quantity, only 1.7 million MWh [belonged] to NEK, whereas the rest [belonged] to power distribution companies, said Iliev. According to him, at least one half of energy from the nuclear power plant should pass through NEK and be sold on the regulated market, because the hole in NEK needs to be reduced, because this company is currently at a loss.

By the amendments to the Energy Law, it has been decided that NEK is not obliged to purchase the electricity generated from renewable resources and by the so-called factory stations and district heating systems that exceed the defined annual quotas, Iliev believes. He added that, until then, some stations had been producing even up to 75% more energy than the defined quota and this energy had been purchased.

Otherwise, the current deficit of NEK is more than 1 billion levs, together with the debts towards producers, the executive director of NEK said. According to him, they are most indebted towards the American thermal power plants.

The Electricity Transmission System of Bulgaria (ESO) currently charges the transmission fee amounting to 1.36 levs for one MW. According to the words of the executive director of ESO, Ivan Jotov, this fee is not the reason for a drastic increase in the electricity price. According to him, the deviation from the price should occur during the distribution in the very companies within the system and in the manner which enables the reconstruction of the power transmission system, Jotov pointed out.

According to him, the fees charged by the ESO provide the funds for investments in the ESO network. He added that the ESO had prepared its ten-year development plan and that it would be in the spotlight at the state regulator meetings (DKEVR).

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