Bulgaria to revise its renewable energy act

28 January 2011

Corporate Clients

The Bulgarian Parliament has started reviewing the Energy from Renewable Sources Act (“ERSA”).

Members of parliament have introduced several key amendments, relevant to the photovoltaic solar sector. We focus on two: the introduction of a fixed FiT level for the life of each Power Purchase Agreement and an attempt to introduce predictability in the capacity available for grid connections by agreeing detailed plans at the beginning of each 1 year period.

Our legal team finds that the approach of having a fixed price/FiT level for the life of each agreement or 25 years (whichever is the shorter) is superior to the existing approach to pricing and contributes to certainty.

We would expect that there is a substantial risk that authorities and the Regional Electricity Distributors (REDs) would experience uncertainty as to the legal position in advance of the coming into effect of the new legislation and would lose enthusiasm in implementing the existing position – we would strongly urge that the Bill contains an express statement (of the obvious point) that the applicable regime remains in place until a named future date.

As regards one of the other major innovations in the renewable energy sector — the introduction of a system of advance planning of the available capacity, we find this on the whole positive but would caution as follows:

  •  a flattening of the decision-making structure may be preferable;
  • a greater clarity and spelling out of procedure as to the planning process would be needed at the level of implementing regulations under the Statute (and no doubt is being planned);
  • we recommend an express obligation for REDs and SCEWR/NEC to make public specific data (eg, access maps by capacity and levels of connectible voltage) (eg, via the web as well as their offices);
  • mechanisms for private as well as private enforcement (carefully considered and agreed for their practicability with stakeholders) would be highly desirable.

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