Green energy firms to take Bulgaria to court over new fees

SOFIA Wed Sep 19, 2012 8:53am EDT

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SOFIA (Reuters) - Renewable energy developers will take Bulgaria's energy regulator to court and alert Brussels over what they called "illegal" new fees on wind and solar installations that will deal a heavy blow to the sector, they said on Wednesday.

The Balkan country's energy regulator has effectively cut preferential feed-in tariffs for electricity generated by wind and solar power parks for already operational installations by imposing new grid access fees.

The move will cut the preferential feed-in tariff for the photovoltaic projects completed by June 30 this year by 40 percent, and by 20 percent for projects completed before December 31, 2011. Wind power plants tariffs will be reduced by about 10 percent.

Investors said the cuts breach legal requirements as the regulator did not hold a public discussion on them and did not inform the companies concerned.

They also complained of a breach of competition rules by the regulatory authority, which they said was abusing its dominant position.

"We will file a legal appeal to the Bulgarian court next week, and we are preparing a separate complaint to the European Commission too," Bulgarian Wind Energy Association's Executive Director Sebastian Noethlichs told a news conference.

Dozens of Austrian, German, Japanese, Chinese, South Korean and U.S. companies have rushed to take advantage of sun and wind power potential in Bulgaria, which also offered lucrative incentives for green energy.

But growth in installations has outpaced forecasts, putting pressure on the ageing power grid and electricity prices in the EU's poorest member state, which has been trying to cool down demand for green energy installations since last year.

Investors, who have borrowed funds to build new solar and wind energy parks betting on high and guaranteed tariffs, say the regulator's move was a clumsy attempt to reverse past decisions and claw back subsidies at the expense of private capital.

"The amount of loans from local banks only is 2 billion levs ($1.33 billion), without taking into account the international funding," added Noethlichs.

The Czech Republic recently won court backing for a tax on solar projects, while Spain plans to raise an additional 6 billion euros ($7.8 billion) or so a year from new taxes on power generation.

The total installed capacity of photovoltaic parks in Bulgaria soared to more than 700 MW by the end of August, a huge gain from the 134 MW in operation at the end of 2011, industry officials said.

The surge of solar parks, however, has pushed consumer prices up 13 percent in 2012 as the government seeks to recoup the cost of the subsidies. ($1 = 1.4982 Bulgarian levs) ($1 = 0.7660 euros)

(Reporting by Angel Krasimirov; Editing by Hugh Lawson)

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