Тhe Energy Committee presented their plans for amendments in the Energy Act, which will continue the liberalization process of the electricity market. They include:
- Business consumers with a capacity of 30kW or more to be obliged to enter the liberalized market (54,998 such consumers, 2,053,941 MWh, 12% of the consumption on the liberalized )
- Household consumers with a capacity of 50kW or more to be obliged to enter the liberalized market (approx. 3,000 units, 27,339 MWh)
- Regulator (EWRC) will create an online platform to compare the conditions offered by the retailers
- New texts will be implemented that do not allow customers to return form the liberalized to the regulated market
- Changes should take effect from 1 July 2020.
The reason for the urgent implementation is that the European Commission will notify the capacity mechanism for Bulgaria if the electricity market aligns with the requirements of the European regulations and directives.
In addition, Ministry of Energy stated that they will publish the new Bulgarian Energy Strategy by the end of March 2020.
More details about the plans of the government for energy market liberalization can be found in the interview of the Chairman of the Energy Committee – Valentin Nikolov, published in Economic.bg:
– Mr Nikolov, as of July 1, part of the business and some households are expected to enter the liberalized electricity market. Initially, however the information was that the change would be retroactive from January 1, which confused people.
– From 1 July, non-residential customers connected to the distribution network with an installed capacity of 30 kilowatts and household with a capacity of 50 kilowatts or more will enter the libralized electricity market. However, the data on the affiliated capacities to which the entities are related – whether domestic or non-domestic – will be taken as of January 1, 2020, because if taken as of July 1, 2020, they may look for an alternative to avoid this obligation.
Only household with significant energy consumption will be affected. Here is an example – a sauna is usually heated by about 4 kilowatts, the solarium – by 2 kilowatts, the boiler is about 2 kilowatts, electric steam for a house is between 4 and 6 kilowatts. That is, the houses that will be affected by the change, the ones that are using significant power.
– The liberalization of the electricity market for residential customers has been talked about for years and every deadline set has not been respected. What is the reason for deciding so quickly now that it is time to continue the market liberalization? Is there a need for the introduction of the Capacity Mechanism?
– The reason for this step is not that we need to take advantage of the Capacity Mechanism, which requires complete liberalization of the market, since this is due in 2025. It took a little more courage. No politician wants to force households to enter the free market because it is not clear what will happen because it is very volatile. The problem of vulnerable consumers has not yet been resolved. On the other hand, this liberalization always hinders elections, and therefore no politician wants to take responsibility for it. After talking to business, we came to the conclusion that this cross-subsidization in the sector could not continue anymore and the richer should take the initiative. With a regulated market, we can neither promote energy efficiency nor the processes of using renewables energy in the homes, and finally energy subsidies wrongly subsidize those who can afford them.
We have found an option to start liberalization and prepare the society. We bring to the free market 56,000 companies that do business and should be well-positioned in a market environment. No big information campaign is needed for them. Even most of them were once on the free market but returned to the regulated.
The complete interview is available at: Economic.bg
Source: Economic.bg