Renewable Energy in Bulgaria

To contact the author: Sebastian Noethlichs in Sofia at [email protected]

Renewable Energy in BulgariaPart I: history + new RES law

Part II: price impact

Sebastian Noethlichs


Part I: history + new RES law

Renewable Energy in Bulgaria


• What happened?


BG max load7000 MW

Operating300 MW

Installed 500 MW

Licensed 1673 MW

‘Planned’14000 MW

Realistically:2000 – 3000 MW by 2020

Pre-Contracted3285 MW


• What happened?



• Result– Overburdening of authorities– Reaching of technical capacity– Fear of ‘overshooting the target’

Political backlash



• Political Backlash– Existential threats and uncertainties• Agricultural land ban threat to regional existence

• New renewable energy law increased development risk




All Agricultural Land 66,143 km2

Unused Land 7,800 km2

Category 1 - 4 Land 31,593 km2

Land for Renewable Energy 5.3 km²

100%12%

48%

0.02%

• Agricultural Land Ban

– Artificial obstruction– Threat to vast majority of projects under

development– Virtual freeze in North-Eastern region


• New Renewable Energy law– Shorter terms of feed-in tariff

– Frequent changes increase market risk– 12 years is second lowest in the EU


Solar

Wind

25 years

15 years

20 years

12 years


• New Renewable Energy law– Tariffs fixed for entire term– Tariff = 70 % retail price + premium– No more restrictions to downward revision

Mixed implications



• New Renewable Energy law

– Good for PV not for wind– Retro-activity endangers existing projects


Total

New FITBase

Premium


• New Renewable Energy Law


wind potential operationEIA

land rights land use

engineering

permitting construction

connectionwind potential operationEIA

land rights land use

engineering

permitting construction

connection

capa

city

al

loca

tion

connectionpre-payment

• Annual capacity allowances

• 2,500 EUR/MW• Non-refundable


max. 1 year

allocation risk



operation

construction

connection

connectionpre-payment


Financial CloseCosts fixed

Fixing of tariffIncome fixed

tariff risk


• Summary– more restrictions, more state control– Increased development risk– More speculation and higher costs– Less investment



Kehrtwende statt Energiewende

U-turn to the past instead of turning to the future



Part II: price impact



Wind Energy in Bulgaria




Месечен разход на домакинствоСобствена зелена енергия или внос през 2020

45.67 лева

+0.28 лева

+47.00 лева

+13.25 лева

-1 %

Средна месечнасметка за

ток

750 MW вятърна енергия

2 500 MW вятърна енергия

Непостигане нацелите на ЕСс 1 % за 2011

Непостигане целите на ЕС при липса на нови

вятърни и слънчеви мощности за 2020

+0.92 лева

45.95 лева 46.59 лева 58.92 лева 92.67 лева


The price of risk?




NPP Fukushima Evacuation Zone – 30 km

Recommended Evacuation Zone – 80 km

Distance of permanent prohibited zones from Chernobyl NPP – 250 km

NPP Belene planned location


And if we still have time:a small case study for the future



• Assumption1) Marginal production cost of electricity

varies






varies2) Load/consumption varies throughout the

day




Load on 3rd Wednesday of April (GW)




day3) Power prices (spot) vary with load







day3) Power prices (spot) vary with load4) In liberalized markets power prices (spot)

vary with load







• Wind energy1) Wind energy production varies throughout

the day





• Wind energy1) Wind energy production varies throughout

the day2) Wind energy variation follows daily patterns







• Result1) Load and wind energy are driven by a

common parameter (the sun)




Load on 3rd Wednesday of April (GW)


• Result1) Load and wind energy are driven by a

common parameter (the sun)2) The co-variation of load and wind energy

can save money









• Conclusion1) Liberalization of the energy market is good,

because it leads to real prices2) Liberalization allows us to realize the cost

saving potential of wind energy



Thank you for your attention!

[email protected]

1 Kuzman Shapkarev StreetSofia, 1000

Bulgaria


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Renewable Energy in Bulgaria