© ICIS HEREN – Bulgarian export tariff to rise 11% from 1 July – regulator

The Bulgarian electricity export tariff could rise by 11% from 1 July, according to a proposal by the energy regulator EWRC. The move would mean that exports of Bulgarian produced power would be curbed further.
EWRC revises the country’s electricity tariffs at least once a year with each regulatory period running from 1 July until 30 June of the following year.
These include the fee for transmission through the electricity system (Bulgarian Lev (Lv) 6.62/MWh) and the fee for access to the transmission system (Lv 1.36/MWh) – the two components of the export tariff.
The proposal foresees that the first would increase to Lv 7.66/MWh while the latter would tick down to Lv 1.20/MWh. This would bring the full amount of the export tariff to Lv 8.86/MWh (€4.53/MWh), up from the current €4.08/MWh.
The market had been on its toes as various rumours about a potential increase of the controversial levy from 1 July had been circulating since early April (see EDEM 15 May 2015). This was despite EWRC claiming that there were no plans for an upward tariff change (see EDEM 28 April 2015).
Producers hit the hardest
Traders have been lobbying for years for the tariff to be scrapped as it is pricing Bulgarian electricity out of the central and eastern European markets.
State-owned producers cannot lower their selling prices enough to compensate for the tariff and to make exports of Bulgarian electricity profitable, thus their sold volumes have gone down.
“We have been insisting that an increase of the tariff would only hit the producers,” one local trader remarked. “They [producers] have been struggling to sell anything lately.”
Another local trader added that a slight move of the tariff up or down did not matter much, only its full scrapping would make a difference.
In any case there was always an uncertainty that the current proposal may be changed last minute and the tariff could go even higher.
This was the case in July 2012 when a last minute decision saw the tariff soar 50% to €17.52/MWh. The figure was adjusted down to €6.37/MWh as of 1 August 2013, then to €3.53/MWh as of 1 January 2014.
The last adjustment was made from 1 July 2014 when the tariff was increased by 15% to €4.08/MWh.
The regulator would hold a public discussion of the proposal on Thursday but it is not clear when an official decision will be published.
At times when the export tariff was higher some 500MW were being transited via Bulgaria compared with only 25MW under the lower tariff, according to data from the Bulgarian electricity traders association ATEB.

(Source: © ICIS HEREN - THE ICIS HEREN REPORTS - EDEM 19103 / 01 June 2015; www.heren.com)

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