Bulgaria implements EU regulation on intervention to address high energy prices

Bulgaria

Bulgaria has implemented Council Regulation (EU) 2022/1854 of 6 October 2022 on emergency intervention to address high energy prices through amendments to &8 and &9 of the Law for the 2023 Bulgarian state budget, which was published on 30 December 2022 (https://dv.parliament.bg/DVWeb/showMaterialDV.jsp?idMat=182628).

Below is a summary of the amendments to this law:

The changes affect all renewable energy producers with installed capacity exceeding 1 MW.

The changes apply for the period between 1 December 2022 and 31 June 2023.

The amount of the contribution to the state budget will be calculated for each transaction on a monthly basis.

For the renewable energy producers:

Without a Feed-In Tariff (FiT): the monthly contribution will be the positive difference between the market-based monthly income (VAT excluded) and the ceiling for the respective technology, which remains to be determined by the Bulgarian Council of Ministers;

With FiT and active premium, which exceeds 0,00 BGN / MWh (for PV plants with FiT of BGN 699.11 / MWh the premium is BGN 303.44 / MWh, and for those with FiT of BGN 485.60 / MWh the premium is BGN 89.93 / MWh in accordance with Decision C-17/01.07.2022 of the Energy and Water Regulatory Commission or EWRC): the monthly contribution will be the positive difference between the market-based monthly income (VAT excluded) and the estimated market price under Decision C-17/01.07.2022 of EWRC (for PV producers the Decision Ц-17/01.07.2022 of is 395.67 BGN / MWh). Therefore, the monthly contribution will be due only if the average monthly income for the period 1 December 2022 and 31 June 2023 exceeds BGN 395.67 / MWh.

With FiT and active premium, which is BGN 0.00 / MWh: the monthly contribution is set at 90% of the positive difference between the market-based monthly income (VAT excluded) and the FiT under the Contract. (For PV plants, which were put in operation immediately after 30 June 2012 and with installed capacity up to 10 MWp the price is BGN 237.05 / MWh). As a result, these producers will be liable for 90% of the positive difference BGN 237.05 / MWh.The producers will file declarations to the Security of the Electricity System Fund by using a template to be approved by the Ministry of Finance by 15th day of the following month.

The monthly contributions will be recognised as ongoing expenses for the purpose of tax treatment of renewable energy producers.

Failing to file a declaration will result in a sanction of between BGN 10,000 to BGN 20,000.

In case of delay of payment, the producers will have to pay interest and an additional sanction of 10% for each delayed contribution.

For further information on Bulgaria's emergency energy intervention, contact your CMS contact or local CMS experts: Kostadin Sirleshtov, Borislava Piperkova, Elena Yotova-Yordanova and Diyan Georgiev.