Bulgaria's Energy Minister Mulls Levying Energy Exports

Energy | April 14, 2015, Tuesday // 12:01|  views

Photo by BGNES

Electricity generated for exports and for the domestic market should be equally levied with the "liabilities to society" tax, Bulgarian Energy Minister Temenuzhka Petkova has said.

Petkova said in an interview with daily Standart that the current regime was working to the disadvantage of Bulgarian businesses, since their competitors from neighboring countries are able to purchase cheaper energy.

For years Bulgaria has been selling electricity to neighbors with a per kW/h price that could be up to 30% lower than energy sold on the domestic market. On the other hand, the price of electricity used by industrial consumers within the country the "liabilities to society" tax.

She repeated that the measure to remove the "liabilities to society" tax on exported electricity had not stimulated exports and had failed to pour funds into the energy system, against expectations of previous governments.

In her words, it is currently "a few dozens of energy traders", and not certain power plants, that benefit from the difference in price levels.

Asked whether a second agreement with CountourGlobal and AES thermal power plants is possible, Petkova said the deal secured last week is just a part of "the set of short-term and midterm measures which should stabilize the energy system and tap financial holes", and that further moves, including market liberalization, are envisaged to tackle long-standing problems.

Sofia recently amended contracts with owners of both AES Maritza East 1 and ContourGlobal Maritsa East 3 TPP, reducing the price paid by state-owned National Electricity Company (NEK) to the TPPs for the energy they produce by BGN 1 B on a ten-year basis. Numerous governments had come under fire for failing to take the step, which some experts believe could reduce the burden on debt-ridden NEK, where dues worth billions of BGN have been piling up for years.

Commenting on the recent developments regarding the construction of the Kozloduy NPP's Unit 7, with the Bulgarian cabinet failing to approve a shareholders' agreement with US-based Westinghouse on the unit, Petkova said Sofia insisted that work with Westinghouse continue and that a mutually beneficial solution be reached in next rounds of talks.

"Bulgaria has not closed the door to the construction of Unit 7 of the Kozloduy NPP, but there should be a strategic investor," the minister explained. Thus she echoed the words of Prime Minister Boyko Borisov, who earlier said in Parliament the country was unable to uphold the shareholders' agreement unless Westinghouse entered the project as an investor. He explained that otherwise Bulgaria would not be able to afford the construction.

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Tags: Temenuzhka Petkova, liabilities to society, energy, Kozloduy NPP, Boyko Borisov, NEK, Westinghouse


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