Implementation of the measures of Council Regulation (EU) 2022/1854 of 6 October 2022 on the revenue cap of electricity producers

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On 30.12.2022, the State Gazette published the texts of the Law on the Implementation of Provisions of the Law on the State Budget of the Republic of Bulgaria for 2022, by which Bulgaria implements the measures of Council Regulation (EU) 2022/1854 of 6 October 2022 on an emergency intervention to address high energy prices.

According to the promulgated texts, electricity producers with power plants with installed capacity of more than 1 MW, whose market revenues are obtained from the sale of electricity produced from sources under Art. 7 of Regulation (EU) 2022/1854, and for energy produced from coal and hydroelectric plants according to Art. 8, Para. 1, (c) and (e) of Regulation (EU) 2022/1854, make target contributions to the Electricity System Security Fund, representing the positive difference between the calculated market revenues without VAT and the determined revenue cap, calculated by applying the values ​​for the respective type of producer, with a delivery period from December 1, 2022 to June 30, 2023, with the exception of transactions with balancing energy necessary for the balancing needs of the electricity system by ESO EAD. The target contribution amount is calculated for each transaction. The values ​​used to calculate the revenue cap for the relevant type of producer are determined by an act of the Council of Ministers.

Producers with power plants with installed capacity of more than 1 MW, with contract for compensation with premiums, effective as of October 8, 2022, whose market revenue is obtained from the sale of electricity produced from sources under Art. 7 of Regulation (EU) 2022/1854, make target contributions to the Electricity System Security Fund from the accrued market revenue from each transaction without VAT concluded at freely negotiated prices with a delivery period from December 1, 2022 to June 30, 2023, excluding balancing energy transactions. The target contribution amount from each transaction is calculated as:

1. the positive difference between the calculated market revenues at freely agreed prices (achieved market price) for the relevant transaction without VAT and the determined revenue cap, calculated by applying the estimated market price according to the price decision of the Energy and Water Regulatory Commission, which determined the current premium for the respective producer, for producers for whom the amount of this premium is different from BGN 0.00/MWh without VAT, and
    
2. 90 percent of the positive difference between the calculated market revenues at freely agreed prices (achieved market price) for the relevant transaction without VAT and the determined revenue cap, calculated when applying the preferential price, determined by the decision of the Energy and Water Regulatory Commission, according to the contract for compensation with premiums, for producers for whom the determined amount of the effective premium is BGN 0.00/MWh without VAT.

Electricity producers by the 15th of the month:

1. submit to the Electricity System Security Fund a declaration according to a form approved by the Minister of Finance, for all their market revenues from sold electricity at freely agreed prices, as well as for the target contributions due for the previous month;
    
2. make the target contributions to the Electricity System Security Fund for the previous month.

The measures of Council Regulation (EU) 2022/1854 of 6 October 2022 on an emergency intervention to address high energy prices will apply from 01/12/2022 to 30/06/2023.

The promulgated texts of the Law on the Implementation of Provisions of the Law on the State Budget of the Republic of Bulgaria for 2022 can be found HERE.