|©THE HEREN REPORTS - Bulgaria’s NEK to unbundle grid business for EU accession|
|Bulgaria’s national power utility has proposed splitting its activities between two companies to liberalise its power markets for EU accession in 2007. |
The board of directors of Natsionalna Elektricheska Kompania (NEK) has suggested that NEK set up a subsidiary to take over the functions of operating and maintaining the transmission system and administering the balancing market. This will be wholly-owned by NEK, which will also continue to own the transmission system itself.
NEK itself will continue with its supply and trading functions separately, and will continue to control generation assets, including the 34 hydropower plants in Bulgaria owned by NEK, with a total capacity of 2,567 MW. It will also develop the Belene nuclear power plant (NPP) project, which is likely to become operational in 2011-12.
This model will be submitted to Rumen Ovcharov, the minister for economy and energy, for approval, so amendments to legislation can be made to meet the deadline for unbundling at the end of 2006.
According to local news sources, NEK and the government disagreed over which of the new companies would inherit NEK’s assets and licences. The control of the Belene project was also at issue.
NEK’s hydropower plants produced 2,692 GWh of power in 2004, used for balancing the system. It also has long-term agreements with privatized thermal power plants Maritsa East 1, 2 and 3, as well as preferential prices with renewable energy sources and combined heat and power plants.
NEK is currently making a loss on power sales to the distributors, compensated for with exports, although these will decrease when the Kozloduy NPP is decommissioned in 2007. NEK reportedly plans to file a request for a 30% tariff increase to the State Energy and Water Regulatory Commission later in 2006.
(THE HEREN REPORTS - EDEM 10072 / 12 April 2006)