Bulgaria's Energy Minister: 13% Electricity Price Spike Was Avoidable

Energy Minister Delyan Dobrev has argued that the 13% increase in electricity prices from July 1 could have been avoided if Bulgaria had postponed its renewable energy commitments until after 2015. Photo by BGNES

Bulgarian Energy and Economy Minister Delyan Dobrev has explained that Bulgaria could have postponed its renewable energy commitments to the EU for a period after 2015, which would have prevented the current electricity price spike.

Speaking Wednesday in an interview for the morning broadcast of private TV station Nova TV, he said that Bulgaria's commitments to purchase alternative energy had caused power rates to increase by 13% rather than the initially planed 10%.

The upwardly revised power tariffs, which were announced some two days before their entry into force on July 1, caused a number of NGOs and civic organizations to stage protests, which were backed by nationalist party Ataka.

Protesters demanded explanation for the last-minute increase in the tariff update to 13%, given that the State Commission for Energy and Water Regulation (DKEVR) should have calculated the scheduled increase in the renewable energy surcharge much earlier.

In his Wednesday statement, Dobrev admitted that DKEVR had failed to demand comprehensive information from power distributors about the volumes of renewable electricity they would buy, which had caused the additional increase.

Bulgaria's Energy Minister made clear that 8% of the latest 13% increase in power tariffs were due to the mandatory payments for electricity purchased from photovoltaic systems connected to the grid over the last two months.

Dobrev reminded that Bulgaria had agreed to include renewable electricity in its total energy mix through the Renewable and Alternative Energy Sources Act passed in 2007, adding that Bulgaria could have followed the example of other EU countries of postponing the commitment.

He argued that renewable electricity would grow substantially cheaper by 2015 due to the decreasing cost of the technology and equipment used in the production of energy from renewable sources such as the sun, wind and water.

Dobrev noted that since Bulgaria had already made the commitment to buy costly renewable electricity, the only thing MPs could do was to decrease the ceiling of the tariffs.

He clarified that the initial provisions of the law had allowed Bulgaria to launch wind farms and solar parks with a total capacity of 12 000 MW, which would have burdened consumers with a huge price spike.

Dobrev specified that the high cost price of electricity from photovoltaic installations had resulted in a tariff of BGN 850 per MW in 2007, which had subsequently dropped to the current BGN 250 per MW and was expected to fall to BGN 50 per MW, or about the same as the cost of the cheapest electricity produced by nuclear power plants.

Bulgaria's Energy Minister stressed that if the Cabinet had failed to take the necessary steps in 2010 and 2011, the latest price electricity price spike could have reached 30%.

He informed that the option of cancelling subsidies for photovoltaic plants with a capacity of over 30 KW was being discussed.

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