The final amendments to the Energy Act passed second reading at the National Assembly. The main objective of the bill is to address two of the most critical problems in the energy sector in Bulgaria – the high indebtedness of NEC and the lack of public trust in the regulatory body – the State Energy and Water Regulatory Commission (SEWRC). To a large extent, the changes also affect investors in renewable energy sources.
The first change introduced by the amendments is in the status of SEWRC and its members. In the new version of the law the word ‘State’ is deleted from the name of the Commission, and the members of EWRC will be elected by the National Assembly, but not by the Council of Ministers. The other change is in the number of members – they will be nine, divided into two sectors, but headed by the same chairperson. For the achievement of better transparency, it is decided that the way of voting for the individual members of the Commission will be publicly announced.
In order to reduce the financial burden on the National Electricity Company, the National Assembly adopted a series of changes in the mechanisms of preferential payment. First, it revoked the obligation for purchasing at preferential prices the electricity produced by low-effective heating companies and power plants, and also provided NEC with the option to renegotiate the parameters of the long-term contracts concluded with certain thermal power plants.
Another step, particularly concerning investors in renewable energy sources, is the abolishment of many privileges for producers of renewable energy. As per the amendments to the provisions for encouragement under Art. 18, the new powers of above 1.5 megawatts will not be sold at a preferential price anymore, which means that preferential price will be granted only to small power plants of up to 30 kilowatts, as well as the power plants of up to 1.5 megawatts operating with a combined cycle and using biomass. The changes will affect not only future investment projects, but also those that are still unfinished at the time of entry into force of the law. Besides, the amendments release small power producers from the obligation to provide online data of their production, and this change concerns RES power plants of up to 200 kilowatts. Other amendments are planned to be adopted by an additional ordinance, aimed at reduction of the surcharges for RES power currently paid by industrial power consumers.
For the purpose of reducing the non-effectiveness of the policy of preferential prices hitherto, such will be paid to heating companies and power plants only for highly effective energy with a certificate of high effectiveness.
An additional change aimed at increasing the control in the sector is the provision granting powers to the Public Financial Inspection Agency (PFIA) to inspect all power plants of above 1 megawatt which operate on the regulated market at preferential prices.