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New amendments to the Energy Act may blow the free electricity market and raise the price of electricity.

News • BPVA •
New amendments to the Energy Act may blow the free electricity market and raise the price of electricity.

New, scandalous changes to the Energy Act may further aggravate the situation of the free electricity market. Between the two readings of the Bill on Amendments and Supplements to the Energy Act, the Chairman of the Parliamentary Energy Commission Valentin Nikolov, who is also the originator of the draft bill for amendments to the Energy Act, voted at first reading, together with the deputies Dimitar Boychev and Alexander Nenkov, an additional proposal for changes. The new texts, which raised concerns among market participants and producers of renewable electricity, envisage limiting the rights of renewable energy producers to sell electricity under long-term contracts. 

The proposal for amendments to the draft law before the second reading states that "the producers with a total installed capacity of 1 MW and above 1 MW under the Renewable Energy Act, carry out transactions on an organized stock market exchange in segments: „Day ahead“  and „intraday“. Such a market constraint will create new problems for RES producers and also shows the  unwillingness of the legislator to develop this environmentally friendly production in our country. Another important point is that originator of the draft offer balancing groups in the future not be able to combine with a common financial settlement. Such a restriction could be detrimental to part of the RES companies in the country because at present the producers of different types of electricity such as sun and wind, for example, managed to unite to jointly balance their productions. This improves the performance of the power system and does not disturb its balancing by dispatchers. At the same time, both industry and ESO as a network operator minimized the financial implications of the different RES groups. The changes do not bode well for green energy producers, commented the industry. Such restrictions on transactions in long-term contracts will bring financial instability to companies because companies will not be able to secure long-term means of their work. The restriction is also contrary to free energy market rules, experts recall. In their opinion, instead of going to the end of the process of liberalizing the market in Bulgaria, the administrative regulation is being sought through these changes. 

Changes made to the market since last year have actually helped to develop it, and green and brown energy producers have already begun to adapt to new conditions. The current request for changes will collapse anything that has been achieved and will discriminate against market participants. It is important to know that these are just suggestions, on which September, will be sought opinions from the Ministry of Energy, as well as business associations and after consulting the European Commission. This was explained by the proposer and Chairman of the Energy Committee in Parliament Valentin Nikolov