Bulgaria Starts Electricity Export to Turkey April The National Electric Company (NEK) will start the export of power to Turkey as of April. Sources of the Electricity System Operator confirmed that Turkish power distribution system would be harmonized with the Bulgarian one in about two months. This is the last obstacle before the start of electricity export from Bulgaria to Turkey, which was supposed to start end-2010. Meanwhile, the Turkish national electric company published a report, according to which, the power consumption in Turkey will increase by between 5% and 7.5% year-on-year till 2019. Thus, even in 2016, Turkey will face a serious shortage of power, which increases Bulgaria's chances to get better revenues from power export, Bulgaria energy experts reckon.
Source: Standart (14.01.2011)

The energy exhange to be launched for testing on April 1 "As of April 1, the Bulgarian energy market is expected to start test operations," said yesterday Elisaveta Mihailova, Head of the Energy Policies, Strategies and Projects Direction at the Ministry of Economy, Energy and Tourism. She explained that the trading platform was supplied by the German Siemens company. Now it is being installed by the Electricity System Operator (ESO), which will administer the energy exchange. "The tests will be carried out without actual payments," said Mihailova. According to her, as of the beginning of next year, electricity producers in Bulgaria would be obliged to sell certain percentage of their product on the energy exchange. "Initially, the energy exchange will be national, and subsequently it can be extended to Romania," said Mihailova. Before the new platform starts to function, the new rules governing hourly trade, those for the operation of the balancing energy market and for the subsidiary services would have to be implemented. According to Mihailova, if 20% of the electricity produced in the country is offered on this market, the energy exchange would be liquid. Before its start, groups, balancing the market have to be created. The electricity distribution companies, the producers of electricity from renewable energy sources, the National Electricity Company (NEK) and ESO are expected to form these. Amendments in the Energy Act would also stipulate new criteria for protected users. Up to now, these were companies with up to 50 employees and EUR 10 mln annual turnover. In the future, only companies with electricity consumption of 1 GWh per annum and with installed capacity of 200 kV would remain on the regulated market. The other businesses will purchase electricity from the free market. The State Energy and Water Regulatory Commission will continue to set up the electricity prices for households and small enterprises. The amendments to the Energy Act are expected to be approved by the Cabinet in February and to be passed through Parliament by the end of March.
Source: mediapool.bg (25.01.2011)

Electricity to be traded in real time At the electricity spot market, transactions can be concluded mainly one hour to one day before the actual supply, wrote Investor.bg. The Electricity System Operator (ESO) is envisaged to play a leading role in the organisation of this kind of market, as it is aware of the availability and consumption of electricity at any moment and with the surplus (deficit) and options for redirecting them accordingly. This is the model intended to begin operation in Bulgaria within a few months. The Energy Exchange being organized by ESO will be the place for conclusion of spot market transactions, said Executive Director of the Sofia Commodity Exchange (SCE) Simeon Elazarov. Producers and traders of electricity (some companies combine both) currently being designated as primarily the three electricity distribution companies (EVN, E. ON, CEZ), the National Electricity Company (NEK) and some electric power plants will submit their bids in a given day in order to be considered the next one. The sellers' offers will contain the quantity of electricity that can be sold (for the next day), the actual time of supply and price of electricity. Since the current estimates indicate that the aggregate amount of electricity ordered by purchasers will be much higher than that total amount offered, in practice, the bid will be carried out on the principle of the open auction," considered Simeon Elazarov. On its part, ESO will coordinate these supplies technically, i.e. depending on the capacity of the electricity grid in order to be avoided overloading of a certain transmission line at a given moment. The next day, during the course of the auction itself, the purchasers will bid on each newly-filed offer submitted by the sellers. Upon opening the Energy Exchange, electricity will be sold at the maximum offered price reached during the auction and not at the so-called single spot price for a given period of time (hour or several hours) which represents the "equilibrium" price for that period. As it might be expected, the electricity price at peak hours of the day will be the highest, and at night - the lowest.
Source: Class (09.02.2011)

Bulgaria to export 400 MW of electricity to Turkey as of June Bulgaria and Greece will export some 400 MW of electricity to Turkey as of June 1, announced the Electricity System Operator. This is when the last tests for the parallel operation of Turkish power system and the Pan-European transmission network would start. Turkey, in turn, could export up to 300 MW electricity to Europe, explained representative from ESO. For the first quarter of 2011, ESO registered a profit of BGN 65.8 mln, which is a triple increase compared to last year's profit, announced also the operator. For the above-stated period, the total revenues of ESO increased by 35.45% and reached a total of BGN 144.735 mln for the first quarter of this year. For 2010, the Operator, which is a NEK's (National Electric Company) subsidiary, registered a gross profit of nearly BGN 86 mln.
Source: Class (10.05.2011)

Bulgaria's Energy Sector to Remain State-owned A big part of the energy companies in Bulgaria will remain state-owned, the trade unions in Bulgaria, PM Borissov, Finance Minister Simeon Djankov, and Energy Minister Traycho Traykov have come to terms. The Confederation of the Trade Unions in Bulgaria (CITUB) and Confederation of Labour Podkrepa have demanded that the big energy companies like the National Electric Company, Electricity System Operator, Thermo-power plant Maritsa-iztok 2, Kozloduy NPP and its replacing capacity Chaira Hydro Power Plant, for which PM Borissov personally insisted, to become state-owned and the state to have a dominating role in the sector. Bulgaria's cabinet has supported the proposal. "There will be no privatization of a big energy company and such rumours are groundless," Energy Minister Traykov announced after the meeting.
Source: Standart (31.05.2011)

Bulgaria will rely on the sales of minority stakes in local state-owned energy companies to secure funds for the sector's overhaul and for investment, in particular power grid operator ESO and coal-fired power plant Maritsa East 2. The move was discussed at a meeting held between the country's Prime Minister Boiko Borissov, Finance Minister Simeon Djankov, Economy Minister Traicho Traikov and representatives of local mining and energy trade unions. The state may also decide to seek private investors for minority stakes in electricity distributors, Djankov said. Meanwhile, the country's Privatisation Agency said on May 30 that nine investment intermediaries had submitted bids to manage the sale of the Government's stakes in E.ON Bulgaria Networks and E.ON Bulgaria Sales, both units of power distributor firm E.ON.
Source: Dnevnik (31.05.2011)

Bulgaria to set four conditions for the contract for the construction of Belene NPP On June 1, Bulgaria sent an official letter to the Russian contractor for the construction of the Belene NPP that no agreement has been reached on the final contract for the plant's construction and set four conditions, announced the Minister of Economy, Energy and Tourism, Traicho Traikov on NTV yesterday. It is necessary for the technical project to reflect EU safety requirements in the light of the new criteria, as well as the stress tests. The revision of the draft contract is aimed at attracting an external investor. Besides, a new financial model is also needed which must include an updated market research, a funding structure and a method for cost determination. "We also demand details on the financing scheme proposed by Russia," stressed Traikov. The Minister also pointed out that the task of the HSBC financial consultant is to attract foreign investors for the project and ''in order for this to happen, there must be a real contract in compliance with the international standards followed regularly by investors, different than the current inefficient one". The Russian contractor Atomstroyexport has not received any proposal from the Bulgarian authorities to amend the initial agreement for the construction of the NPP, said yesterday the company's Vice President Gennady Tepkyan, who attended the International Nuclear Forum near Varna, organised by BULATOM (Bulgarian Atomic Forum). According to him, the HSBC project consultant had not mentioned anything about amending the original agreement during negotiations. Tepkyan added that, currently, 91 % of the contract on the plant's construction is ready. He warned that any postponement of the project for half a year could rise its cost by 4.5 - 5%. According to him, at the moment, there are no grounds for changing the construction contract which has not been signed yet. "At this point, the contract is under discussion. We have been doing this for several months. Negotiations continue. Should we receive an official proposal for the contract amendment, we will discuss it and try to negotiate. This is the normal process of contract conclusion," explained also Tepkyan. At present, the construction of the NPP could begin as early as March next year.
Source: Class (03.06.2011)

Ivan Yotov, head of Bulgaria's state-owned power grid operator ESO, said on June 22 2011 that the country would continue to export electricity to strike-hit Greece as emergency power aid during the day to avoid potential power cuts in the neighbouring state. Greece requested additional 800 to 900 MWh to be exported in the course of the day, or about 100 MW an hour, he said. Greece's power grid operator asked Bulgaria to send emergency electricity aid on June 20, when employees at the local power generating company went on strike. Between June 20 and 21, Bulgaria exported 2200 MWh of electricity to Greece. Apart from the emergency deliveries, Bulgaria continues to export its regular amounts of power to Greece.
Source: Dnevnik (23.06.2011)

Electricity rate for the business sector up by 3.5%. Night rate to rise by 10% The businesses sector will pay up to a 3.5% higher electricity rate as of next month, announced yesterday on BNR (Bulgarian National Radio) Angel Semerdjiev, Head of the State Energy and Water Regulatory Commission (SEWRC). The night rate for household electricity will rise by 10% as of July 1, specified Semerdjiev later at a roundtable on electricity prices, which will become effective as of July. The household electricity rate is expected to increase by about 1% - 1.5% next month. In order for the night rate to increase, the daily electricity rate should become as cheap as possible. This price policy will give incentives allowing district heating companies to function and will facilitate the operation of the Electricity System Operator (ESO) SPJSC. Nearly 64% of the electricity price paid by Bulgarian citizens is based on expenditures incurred by power generators, such as nuclear power plants (NPP) and thermal power plants (TPP). On top of it, about 18% of the costs are borne by network operators and taxes charged, explained Ivanka Dilovska, Chairwoman of the Energy Management Institute. She recommended that competition in electricity generation be intensified. Each user pays BGN 38.4 / MWh energy to energy distribution companies, while out of the revenue BGN 17.5 / MWh are allocated to NEK (National Electricity Company). SEWRC explained that the rate of return of Bulgarian power plants varies between 0.5 - 1%. It is higher for Bobov Dol TPP (12%) and Varna TPP (12%). For the U.S-operated TPP AES Galabovo TPP, the current refund rate is 9.8 %. As to NEK (National Electricity Company), profits are 6%. As for ESO -10%; CEZ, E. ON and EVN, the rate of return is 12%. Dilovska commented that, for the moment, a huge amount of funds is being allocated for electricity generation based on CHP (Combined Heat & Power co-generation) without any clear evidence as to the efficiency of this process.
Source: Class (23.06.2011)

The State Energy and Water Regulatory Commission (SEWRC) will discuss in open session whether to grant a license to two companies for trading electricity, reported the institution. For the right to buy and sell electricity are applying the companies Energo-Pro Bulgaria Trading and Future Energy. The sole owner of the first is the Czech company Energo-Pro and Future Energy is owned by Axis 7 Ltd. According to the opinion of the Electricity System Operator (ESO) both companies have the necessary equipment to ensure the trade and the working group of the regulator proposes to be granted licenses.
Source: Dnevnik (19.07.2011)

GERB party MP: NEC to buy assets of energy companies in the region National Electricity Company (NEC) to acquire assets of energy companies in Southeast Europe and to become a player in the region. This was proposed by the deputy chairman of the parliamentary group of GERB party and a member of the Parliamentary Committee on Economy, Energy and Tourism Valentin Nikolov. Before 3E he explained that the utility company can buy shares from the Greek PPC. Because of the crisis Greece sells assets that can be acquired at a lower price and the Bulgarian state company can take advantage of the situation. MP believes it is possible NEC to establish subsidiaries across the region which can apply for licenses to trade power. MP said that NEC currently delivers electricity at a lower price than the price at which it sales in Bulgaria. New companies will allow it to get more profit from the export. At the same time Greece buys power from the electric company and then exports to Italy. In his words thus will be eliminated intermediaries in trade. Once again, energy traders are confused by intermediaries. Realization of the idea is rather an attempt to be removed the traders who are the backbone of EU trade in the liberalized energy market. Most experts have criticized the idea of Nikolov arguing that NEC may buy negligible stake because of financial resource constraints. However, they recognized the advantage of possible buying of assets at a lower price. "More important for the NEC is to take action for the divesting of Electricity System Operator (ESO) – this is a requirement of the EU third energy package. The company should invest in developing and maintaining infrastructure to ensure the security of supply said Lachezar Bogdanov from "Industry Watch" think-tank. He added that it should be decided whether the company will have hydro power stations and will participate in the construction of "Belene". "The state must declare its strategy for development of the company,” said Bogdanov. In his words, until now the government has not announced a strategic idea of buying assets from companies in the region. Such ambitions previously had Bulgarian Energy Holding, part of which is NEC. (3e-news.net)
Source: Other (25.08.2011)

BEH, NEC and ESO – all are too much The selected national model for spinning-off of transmission operators and production activities requires gas supply operator (Bulgartransgaz) and power energy operator (ESO) to be separated as two detached and independent legal entities which own as well grid assets. Recently adopted by the National Assembly Energy Strategy 2020 provides for: - the control on activity of these new companies to be carried out by their principal in the face of the Minister of Economy, Energy and Tourism; - restructuring to be completed as soon as possible before the deadline set in the EU directives - December 31, 2011, expires. When these intentions are met, at least one of the two major state energy companies - BEH or NEC - will go down in history. What is the current corporate structure? Gas transmission network and its operator are integrated into Bulgartransgaz - a subsidiary of BEH. ESO is subsidiary of NEC, which in turn is also subsidiary of BEH. Power grid assets are in the transmission company, which is also owned by NEC. By the spin-off of both operators along with grid BEH will lose a subsidiary, most of the assets in the second subsidiary company and its only "grandchild". Orphaned holding will remain with the capital of “Maritza Iztok" mines and two power generation companies – “Maritsa Iztok 2" and "NPP "Kozloduy", while NEC will retain only hydropower plants. Thus, in practice, both BEH and NEC will own and manage several power plants. How to avoid such duplication - whether coal, nuclear power plant and mines will merge with NEC or hydropower plants will merge with BEH – it is a matter of technology. It is clear that changes are inevitable and that the establishment of power generation company (or power generation companies) descending from the state power plants will run parallel with the processes of spinning-off of independent transmission operators for gas and power. It is not clear or at least is not mentioned in the energy strategy whether this serious restructuring will be accompanied by transformation of the grid companies into public ones and by issuing of their shares, what were the original ideas in the anti-crisis government programs. Pending is the issue of gas and electricity public supplier. These are Bulgargaz and NEC-Public Supplier. Their existence is reminiscent of the old model of single buyer, when a single intermediary centralized wholesale trade of gas and electricity. Yet their existence is dictated mainly by the presence of trade agreements to which they are party. The faster the processes of liberalization, the faster their functions will die down and they will pass in the history of the Bulgarian energy sector. (3e-news.net
Source: Other (02.09.2011)

More households use electricity for heating purposes A large number of households and small companies have switched to electricity in the heating season, boosting the 2011 electrical power usage stats, Mityo Hristozov, head of the Electricity System Operator’s Central dispatching management said. In his words, the Operator saw a 4% growth in the system usage against average increases of 1%-1.5% in the previous years. One of the reasons for the increased electricity consumption in the country is the fact that it costs less than the central heating. Energy experts say SEWRC has been acting in favor of electricity consumption in Bulgaria, twisting the market as a result. CEZ Distribution Bulgaria, however, explains the upbeat in household electricity consumption in November with the lower temperatures outside.
Source: Dnevnik (28.11.2011)

BEH to select a consultant for the separation of ESO from NEK The Bulgarian Energy Holding (BEH) will seek a consultant to make an analysis on the options for separation of the Electricity System Operator (ESO) from the structure of NEK (National Electricity Company), stated yesterday Deputy Minister of Economy, Energy and Tourism Delian Dobrev during the forum dubbed "The impact of low-carbon investment on the economy". The separation of the Operator should start by the middle of next year. The European Commission has set as final deadline the end of March 2012, but this could hardly happen. The reason for the delay is that the ESO assets were pledged as collateral for NEK's loans. The drafted amendments to the Energy Act will also regulate the separation of the System Operator in order to comply with the EU requirements, explained Dobrev. He expects the amendments to be discussed by the Council of Ministers in early December and the Bill to be debated in Parliament by the end of the month. By the middle of next year, it is expected that the contract clauses, signed with Gazprom for natural gas transit to our country, will be renegotiated. The Russian company is not willing to announce the spare capacity of the pipes in our country under the pretext that it is a trade secret. However, the EU instituted legal proceedings against Bulgaria for the lack of free gas market. According to Dobrev, 90 percent of the EC requirements have already been implemented and the rest will be fulfilled at the beginning of next year. In 2012, a new contract should be signed again with Gazprom for gas supply to our country. However, the negotiations on both contracts are not related, expressed confidence Dobrev. The current contract for natural gas supply expires at the end of 2012 and the negotiations on its resigning are chaired by Bulgargaz.
Source: Class (29.11.2011)

Private Investor to Take 49% from Maritsa-iztok 2 TPP A private investor may take up to 49% from the biggest thermal power plant in Bulgaria - Maritsa-iztok 2, Bulgaria's minister of economy, energy and tourism, Traycho Traykov, stated. In 2012, different in size minority shares from the state-owned energy companies may be privatized. A privatization strategy is being presently worked out. Bearing in mind the plans for the construction of new capacities in Bulgaria's biggest TPP - Maritsa-iztok 2, the state-owned shares may be reduced to 51% as there is an idea that the rest 49% be given to a private investor. "Only Kozloduy NPP will stay 100% state-owned," Minister Traykov is explicit. "The rest of the big state-run energy companies like the National Electric Company, Bulgargaz, Electricity System Operator may sell up to 34% of their shares but Bulgaria's state should keep its control on them," Traycho Traykov added.
Source: Standart (23.12.2011)