Bulgaria: big FIT reduction following a blooming year

BulgariaUnited Kingdom

Following a booming year for the renewable energy sector in Bulgaria and a 13% increase of the end-customer electricity prices, on 01.07.2012 the utility Regulator introduced two major changes in the sphere of renewable energy sources. Decision Ц-018 on 28.06.2012 of the State Energy and Waters Regulatory Commission (“SEWRC”) decreases the feed-in tariff (“FiT”), mainly for the photovoltaic and wind power projects. Furthermore, on 29.06.2012 the SEWRC allocated no new capacity for large renewable projects by July 2013.

Currently Bulgaria offers a FiT of support for electricity generated from renewable sources such as wind, sun, water, biomass, etc. The Bulgarian laws implemented Directive 2009/28/EC according to which Bulgaria has to reach a level of renewable power equal to 16% of the total energy in the country. The FiT is dependent on a number of factors, e.g. rate of return, inflation, investment costs, etc., with some elements which have been steadily decreasing from in the recent years.

The SEWRC has undertaken a number of measures to restrain the growth of the renewables energy sector in two respects – by substantially reducing the FiT and by forbidding the access of big and mid-sized newly developed projects to the electricity grid. Here is a comparison table of the rates of purchase prices as per the sectors of renewables with most significant changes.

Following the rapid increase in construction and connection of wind and photovoltaic projects in the recent years, the new regime on renewables pursues the aim of reducing the number of solar and wind plants, which have been the main renewable energy projects to this moment. The only type of renewables still receiving incentives under the amended legal framework is biomass projects but they have not been largely developed in Bulgaria yet.

According to SEWRC Bulgaria is already reaching the level required by Directive 2009/28/EC so that there is no remaining spare capacity of the grid and further connection of projects may affect the security and stability of the electricity system. The next date of review of the grid connection availability is July 2013.