Bulgarian wind and solar farms could go out of business because of a new power grid connection fee that went into effect on September 19, industry representatives say.
The extra spending comes on top of reduced revenue after the energy regulator reduced, earlier in the summer, the price at which electricity utilities are required to buy power from renewable sources.
“A large share of the [renewable energy] projects are not only failing to make a profit, they cannot service their bank loans,” the head of the association of solar power producers in Bulgaria, Nikola Gazdev, said as quoted by television channel bTV.
“Under the guise of a so-called fee what is happening is outright theft. Literally, up to 40 per cent of the revenue of small, medium and large companies is being taken and given to other companies,” Gazdev was quoted as saying.
Renewable energy companies planned to challenge the introduction of the new fee in court, all the while attempting to renegotiate their bank debts, which run to between 500 million leva and 700 million leva for the entire industry, bTV reported.
Renewable energy has become a lucrative business in recent years in Bulgaria, thanks to the generous subsidy from the state in the form of high purchasing prices for electricity generated from wind and solar parks. This led to a veritable explosion of renewable energy projects – if all were to be completed, it would strain the country’s power grid beyond its breaking point. As a consequence, Bulgarian authorities have embarked on a policy course meant to weed out the more speculative projects.
“I don’t think that [renewable energy firms] would go bankrupt, but of course their revenues would decrease,” the head of the State Energy and Water Regulatory Commission, Angel Semerdjiev, said.
“We will always defend public interest when the issue is balancing out interests. The power grid and end-users are being overloaded needlessly,” he said, as quoted by bTV.
(Photo: Clive Leviev-Sawyer)