According to EurActiv, “the law changes the government's obligatory purchase of electricity produced from renewable energy generators at high, fixed prices, which has led to a jump in projects totalling over 6,000 MW - well above the country's grid capacity”.
Since Bulgaria’s government calculates that the country only needs 2 GW of new renewable capacity to meet its 2020 target, it has enacted a new law capping wind and solar projects in an attempt to limit the negative impact it believes an excessive uptake of renewable power could have on household incomes in what is the EU’s poorest country.
The new law tightens up conditions in the market, requiring investors to pay a connection fee of 50,000 levs (€25) per planned megawatt when signing a preliminary contract. EurActiv also reveals that it calls for the preferential price to be fixed at the time that the wind or solar energy park is built, and not when a preliminary contract is signed, as the initial law draft envisioned.
The previously established obligatory long-term purchase power contracts are also being shortened from 25 to 20 years for solar energy and from 15 to 12 for wind.
The government said the measures would scare away speculators and also encourage investors to speed up projects and not wait for solar panels and wind turbine prices to drop.
Nikola Gazdov, chairman of the Bulgarian Photovoltaic Association, told EurActiv that "We have lost two years, hoping that this government will support renewable energy development. What we see now is that the new law is closing the door for new projects".
Meanwhile, the Sofia Echo cited John Clark, country manager of Enel Bulgaria, saying that Italian companies, including Enel Green Power, have warned they may halt investment in renewable energy projects in Bulgaria as a result of the new law. Enel Green Power operates two 21-megawatt wind farms in northeast Bulgaria.
Despite the gloomier outlook for wind and solar, the new law does offer better incentives for biomass and waste-to-energy projects, which government officials estimate will create more jobs than their more popular counterparts.
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