Hundreds of owners of photovoltaic systems blocked a major road to urge authorities to revise the methodology for determining balancing prices. They claim the recent changes would bankrupt them and affect consumers and the banks that finance their projects.
Invoices for May showed that solar and wind power producers are suffering serious losses, threatening financial devastation across the sector. Local groups in the Pleven area and their peers from other parts of the country, briefly blocked the Rousse-Sofia road. Owners of photovoltaic systems are demanding the recent changes to the methodology for calculating balancing prices to be scrapped.
At the protest, near the village of Yassen, they pointed out that they would go to the capital city the next time.
Solar power producers are disproportionately burdened
A solar power boom is underway in Bulgaria, burdening the grid, which lacks storage capacities. Peak daily output doesn’t match the highest levels of consumption, so the downward pressure on market prices is rapidly intensifying. In addition, photovoltaics depend on sunshine, so sudden bouts of cloudy weather can lead to deficits in the electricity system.
The regulatory body is due to address the issue by the end of the week
Notably, renewables pushing power prices lower make coal plants unprofitable. All the said phenomenons incur costs and destabilize the equilibrium between supply and demand. The Energy and Water Regulatory Commission (KEVR) has a new methodology for balancing prices since last month. It appears to have disproportionately burdened solar power producers.
The balancing prices mechanism boosted the levels last month to as high as EUR 1,370 per MWh for surpluses and a stunning EUR 3,238 per MWh at one point for performance below plan. The numbers are from a recent open letter from the Free Energy Market Association (ASEP) and Association of Traders with Electricity in Bulgaria (ATEB).
Balancing prices now halving wind power revenue
Ivo Brezoev, one of the protest organizers, claimed for Iskra.bg that if a 30 kW plant earns EUR 230 per month, it owes EUR 255 for balancing. The sum doesn’t include network fees. The new situation will also affect banks as entrepreneurs finance PV plants mostly with loans, he argued.
As for wind power plants, balancing prices eat away 50% of revenue, according to protesters. If the anomaly leads to massive bankruptcies, electricity prices will surge and imports will jump, together with the risks for the country’s energy security, they asserted. It would hit consumers and fuel inflation.
KEVR is due to issue an opinion by the end of the week, Acting Energy Minister Vladimir Malinov said. Yordan Vatkovski from the Association of Photovoltaic Plant Owners told BNR that balancing prices have jumped tenfold.
The Bulgarian energy industry will only recover when politics are out, in his view. “We have not used European and national funding. We don’t get a subsidy,” Vatkovski noted.
More battery energy storage systems (BESS) and pumped storage hydropower plants would calm prices, but the balancing market is still poor on the producer side as well. Progress requires transparent reporting and entering the European Union’s joint market in the segment.
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