© ICIS HEREN - Bulgaria TSO proposes switching off generation

Bulgarian transmission system operator (TSO) ESO is considering switching off one of the 1GW units of the 2GW Kozloduy nuclear power plant for months at a time if low domestic electricity demand and a lack of exports persist, ESO said on Thursday (6th June) evening.
ESO has been restricting all types of generation including nuclear since the beginning of April in a bid to balance the system (see EDEM 4 April 2013).
Wind and solar power plants in particular have seen their production capacity restricted by 40% throughout most of April and May, according to information from ESO`s website.
"The decreased consumption and exports from the country owing to the ongoing economic crisis, combined with the escalating prioritised renewable electricity production are leading to [the] unloading of conventional production capacities," ESO said in an e-mailed statement.
The rise of renewable production is creating technical problems with balancing the system and is also causing financial problems for the local coal-fired producers, according to ESO.
The coal producers of the Maritsa East basin are facing bankruptcy, according to a representative of the mines who was speaking at a meeting of Bulgaria`s energy council last Friday.
A recording of part of the meeting was published on the energy ministry`s website.

ESO`s proposals
ESO has proposed one or a combination of measures, which could solve the problem if the situation persists but could also lead to additional issues:

  • Switching off one of the Kozloduy units from spring to autumn, which may disrupt the working cycle of the facility;
  • Severe restriction of renewable production, which may lead to failure to fulfil Bulgaria`s indicative renewable targets;
  • Building of new pump-storage hydro power plants;
  • Increasing the number of switch-off/switch-on cycles in the coal-fired power plants, which may increase costs.

Although each of the measures would lead to drop in revenues and additional financial burdens ESO will do an analysis on the best options.

Scrap the tariff
Traders agreed that one easy solution would be to scrap the export tariff and make Bulgarian-produced energy competitive again. This would boost exports and solve the problem with system imbalances, they said.
Two separate sources also pointed out that the idea of switching off one of Kozloduy`s units should be reconsidered.
"This [measure] would lead to big losses for Kozloduy because they have some constantly running costs which will mean they will be producing at 40-50% higher price if one of the units is off line," one Bulgarian trader said.
A Romanian trader pointed out that it is generally dangerous to intervene with a nuclear reactor`s running time.
According to local media reports, Kozloduy has made a counterproposal which foresees that the excess energy is sold on the free market. However, Kozloduy did not respond to ICIS`s request for comment at the time of writing.
Bulgaria has been unable to export almost any electricity this year as regional oversupply has pushed prices in neighbouring countries and Hungary below the price of Bulgarian export energy because of the existence of the €17.52/MWh export tariff. This has turned Bulgaria from a net exporter into a transit country (see EDEM 21 February 2013).
Back in February the Association of Traders with Electricity in Bulgaria said that Bulgaria generators lost out on €153m worth of potential revenue from the drop in electricity exports in 2012 caused by the existence of the export tariff (see EDEM 14 February 2013).
The government is working on ways to reduce the tariff which was designed to offset expenses of state-owned incumbent NEK and the TSO. The earliest the tariff could be reduced is in September (see EDEM 21 May 2013 and EDEM 3 June 2013).
The European Commission recommended that Bulgaria build a dedicated high-voltage line from the coal-fired Maritsa East energy complex to the Turkish grid in order to boost exports (see EDEM 29 May 2013).

(THE ICIS HEREN REPORTS - EDEM 17109 / 7 June 2013)

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