UPDATE 1 - Bulgarian renewable power producers rally against plans for 20% revenue fee

Renewable power producers staged on Monday a protest rally in Bulgaria's capital against plans to impose a 20% charge on revenues from wind and solar power generation as of January 1.

The protest saw several hundred gather in front of the building of the energy ministry, according to a video broadcast posted on the website of the state-run Bulgarian National Television.

The new fee, which was proposed last week by the leader of the ultra-nationalist Ataka party, Volen Siderov, will be debated as part of the 2014 budget bill that is currently being reviewed by the MPs.

“In essence, the adoption of this decision for a 20% fee on our investments is tantamount to nationalisation of our capital, our labour, and our efforts to turn Bulgaria into a modern state,” the Bulgarian Photovoltaic Association said in a press release last week. It will drive away foreign and local investors from the most successful sector of the Bulgarian economy, in which over 4.0 billion euro ($5.4 billion) have been invested and thousands of jobs created, it added.

Another industry group, the Bulgarian Wind Energy Association (BGWEA), said last week the planned measures may permanently undermine the future development of the Bulgarian energy sector and the economic welfare of the country.

The introduction of openly discriminatory measures towards producers of electricity from wind and solar energy will lead to the destruction of the small and medium-sized private businesses in the energy sector and will halt the process of diversification of energy sources in the country with serious consequences for both energy security and the price of electricity for consumers, BGWEA said in a statement.

In a press release issued later on Monday, the economy ministry said that in the event of a change in the business environment the legislature has the right to introduce new fees for the power purchased at preferential prices.

The power producers have chosen to trade on the regulated market at preferential prices, the state has granted them preferential treatment and requested from the public supplier to buy all of the electricity they generate, the economy ministry said.

For 2013, the energy regulator has set the preferential purchase price for electricity from renewable sources at up to 353 levs ($245/180 euro) per megawatt-hour (MWh), as compared to 37.75 levs/MWh for power generated by the Kozloduy nuclear power plant, and 63.14 levs/MWh for electricity produced by the Maritsa East 2 thermal power plant.

In this sense, the proposed fee will have a balancing effect on the electricity system, the ministry added.

Over the weekend, news portal Dnevnik.bg quoted the German-Bulgarian chamber of industry and commerce, AHK, and the local association of Italian entrepreneurs, Confindustria Bulgaria, as voicing concern over the proposed measures, saying they would undermine investor confidence in the country. They described the proposed fee as "discriminatory" and “unacceptable”, adding that it would have a dramatic retroactive effect on the economic parameters of local renewable energy businesses.

($ = 0.735 euro)

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