(ADPnews) - Dec 13, 2010 - NEK, the owner of the power transmission network in Bulgaria, will not connect any new renewable energy capacities to the grid before July 2011, the utility's CEO Krasimir Parvanov was quoted saying by local daily Dnevnik.
Regional electricity distribution companies were advised to follow suit due to insufficient grid capacity, he added.
NEK has not stopped reviewing requests for grid-connection. It is even signing preliminary contracts with developers but actual grid connection will take place only after the new law on renewable energy sources enters into force, Parvanov said.
The law, transposing the EU Renewable Energy Directive into national legislation, was initially due by December 5, 2010 but that deadline was missed. After passing the public consultation stage, the law is still pending the approval of the Bulgarian Council of Ministers before being submitted to voting in Parliament.
According to information obtained by ADPnews from government officials at the beginning of December, the draft law will go to Parliament by March 2011 at the latest. However, Kostadinka Todorova, currently advisor to the Parliament Commission for Economy, Energy and Tourism, was more pessimistic. "If regular administrative procedures are strictly followed, the new law could be delayed to November 2011, she told a solar power conference held in Sofia on December 6.
The draft bill requires renewable energy investors to pay in advance a flat connection fee to the tune of EUR 25,000 (USD 35,000) per installed megawatt. The measure was designed to help NEK overcome one of the major challenges for renewable energy capacity build-up -- weak infrastructure in the areas which attract most investors -- northeastern and south-central Bulgaria.
According to NEK that fee could not cover grid upgrade expenses. The company has calculated that construction of one kilometre of grid infrastructure costs about BGN 150,000 but sometimes a substation is also needed and the price tag for that facility could be in the millions range. The company wants renewable energy investors to take on all the costs related to the grid-connection of their projects.
NEK needs to invest at least BGN 150 million (USD 101.4m/EUR 76.7m) a year to revamp the power grid. For 2011, it has planned to spend BGN 80 million, Parvanov said, adding that the company intended to boost the amount to BGN 130 million via bank loans and electricity sales revenues.
Interestingly, NEK is planning to call tenders for the construction of its own wind and solar parks next year. "The parks will have a capacity of up to 50 megawatts (MW) and will be located on sites with an existing power grid," Krasimir Parvanov said.
(BGN 1 = USD 0.675/EUR 0.511)
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