Bulgaria has already exceeded the EU targets for production and consumption of electricity from renewable sources. Now normalization of electricity prices is in the offing.

Eurostat announced recently that Bulgaria had not only reached, but it exceeded the targets for production and consumption of electricity from renewable sources set in the Europe 2020 strategy. In 2016 the country’s electricity consumption from renewable sources stood at 18.8% and the target was set at 16%. In the past 12 years the consumption of electricity from renewables literally doubled in this country. 8% of the electricity in Bulgaria is produced from solid waste and biofuels, whereas electricity produced from geothermal resources was only 0.2%. Electricity produced from photovoltaic systems was only 0.8% and electricity from wind was only 0.7% of the total electricity output. The share of renewable energy in the total electricity consumption in the Czech Republic, Denmark, Estonia, Croatia, Italy, Lithuania, Hungary, Romania, Finland, Sweden, Latvia and Austria is also very high. In Sweden the electricity produced from renewables forms 53.5% of the total electricity output, in Finland (38%), Latvia (37%), Austria (33%) and Denmark (32%). According to the EU target, the share of electricity produced from renewable energy sources should reach 20% in 2020 and at least 27% in 2030 in all EU countries.

However, the Bulgarians are not so happy with the high share of electricity produced from renewable sources, because its price is still high. That is why in 2017 the government announced that it was planning to make amendments to the Energy Act, in order to abolish the controversial pricing supplement Obligations to Society. This supplement is contested both by the Bulgarian employers and consumers. The Bulgarian employers even threatened to launch protests on February 28 over the high prices of electricity sold on the free energy exchange. That is why Bulgarian MPs promised to vote amendments to the Energy Act at the National Assembly. According to the planned amendments, as of July 1 this year all installations for electricity produce from renewable sources, cogenerations and thermal plants with a capacity of at least 5 MW will sell their electricity on the free energy market only. The margin between the price set at the free market and the preferential tariffs set by the Bulgarian energy regulator will be paid by the Electricity System Security Fund. Thus, the vulnerable consumers will be protected through preferential prices set for certain electricity consumption. This is a very difficult task and changes have been delayed, because the liberalization of the electricity market should be preceded by some final analyses of the World Bank. Moreover, the liberalization of the Bulgarian electricity market should be fully harmonized with the model of the European Commission. There are nearly 1.1 million vulnerable consumers in Bulgaria. These people will be able to stand the future increase of the electricity price only if energy benefits allotted by the state increase from EUR 45 million to EUR 70 million per year.

The good news is that the burden on the electricity price placed by renewables will fall in the future. In the past two years the price of electricity produced from renewable sources fell by nearly 50% due to the lower expenses for renewable facilities.

English version: Kostadin Atanasov