Changes to Bulgarian Energy Act


Bulgaria's parliament has just approved amendments to the Bulgarian Energy Act, which include opening the free market to small power producers, removing power export charges and mandating smart meters for industry, that is bringing further liberalisation to the nation's energy market.

As a result of amendments to the Energy Act that go into effect on October 1, electricity producers with installed capacity between 1 MW and 4 MW are able to enter the free market. Long-term power purchase agreements (PPA) for energy producers between 1 MW and 4 MW will be terminated and their electricity will no longer be purchased under Feed-in Tariff prices. Instead, these producers will sign Feed-in Premium Agreements (FPA) with the Energy Security System Fund (ESSF) similar to larger power producers with capacities of 4MW and above.

All producers of 1 MW to 4 MW must sign FPAs with the ESSF no later than 31 August 2019, officials state. And FPAs will enter into force no later than 1 October 2019, the date that the new rules officially go into effect. (Initially, these changes were to be implemented on July 1, the start of the new regulatory period. Due to delays in amending the Energy Act, however, producers were given a three-month grace period.)

The amendments also remove the current export charge. At present, Bulgaria is still the only country in the EU that imposes a charge – transmission and grid access charges paid by the exporter and not by the final consumer – for domestically produced electricity destined for export. The fee's amount is just over 5 EUR excluding VAT per MW/h, or about 10 to 15% of the current electricity price on the energy exchange market.

Lastly, new regulations in the Energy Act also require electricity distribution companies to install smart meters to industrial clients if requested. The aim is to be able to monitor power consumption in real time so that companies can take energy-cutting measures if deemed necessary.

For more information on changes to the Bulgarian Energy Act and the nation's energy sector, feel free to contact one of our CMS energy experts in Bulgaria.