Bulgaria's renewable energy investors to pay EUR 25,000 per MW for grid connection

(ADPnews) - Nov 3, 2010 - Renewable energy investors will pay EUR 25,000 (USD 35,100) per installed megawatt (MW) to connect to the Bulgarian electricity grid, according to a draft law released for public discussion this week.

However, the money, to be paid to the grid operator at signing of a grid-connection contract, will be repaid doubly if the operator fails to connect the plant within the agreed time frame, says the draft law on renewable energy, which is slated to pass through parliament by December 5, 2010.

On a positive side, the draft law also envisages photovoltaic (PV) and geothermal power plants to sign power purchase agreements for 25 years. The output of installations using other renewable energy sources will be contracted for 15 years.

On the other hand, business organisations complained that the draft says the State Energy and Water Regulation Commission (SEWRC) will decide which renewable energy projects will be built if grid capacity turns out insufficient but sets no criteria for selection.

The law should give guidelines on how investors will be sifted out. Otherwise, the selection process remains completely untransparent, said Velizar Kiryakov, president of the association of producers of ecological energy (APEE).

Selecting which projects will be built according to what grid capacity is available puts an artificial "hand brake" on renewable energy development as grid operators are not stimulated to invest in expanding grid capacity, Nikola Gazdov, chairman of the Bulgarian Photovoltaic Association (BPvA), commented.

(EUR 1.0 = USD 1.405)

Choose your newsletter by Renewables Now. Join for free!