March 15, 2013 / 9:57 AM / 6 years ago

Bulgarian court overrules hefty fees on renewable energy

* Court says fees discriminatory, lack backing

* Green energy producers call for total scrap of the fees

* Energy regulator to appeal

SOFIA, March 15 (Reuters) - A Bulgarian court ruled in favour of three solar energy developers that appealed the hefty fees which the state energy regulator imposed on renewable energy installations last year, producers said on Friday.

The rulings are the first in a series of appeals by hundreds of renewable energy developers in Bulgaria which took the regulator to court after it imposed new grid access fees.

The fees effectively cut solar energy producers’ revenues between 20 to 40 percent in September. Cuts for wind power farms account for about 10 percent.

Protests over high electricity bills - partially due to a surge in expensive green energy - toppled the government in the European Union’s poorest country. The new rulings are likely to deepen the crisis in its troubled energy sector.

A three-member panel of Supreme Administrative Court however, revoked the regulator’s decision on grid access fees only on solar and wind energy producers saying it was discriminatory, was not taken transparently and lacked proper backing.

The energy regulator said it would appeal.

But if the rulings are upheld, the companies can seek compensation, which may cost the state budget millions of levs.

Seeking to meet its 2020 target to have 16 percent of its energy coming from renewable sources, Sofia offered preferential tariffs for green energy and dozens of Austrian, Italian, American and South Korean investors rushed in.

The total installed capacity of photovoltaic parks in Bulgaria soared to more than 900 MW at present, a huge gain from the 134 MW in operation at the end of 2011. Wind energy farms have about 700 MW in operation.

Growth in installations outpaced forecasts, putting pressure on the ageing power grid and electricity prices in Bulgaria, which has been trying to cool down demand for green energy installations since last year.

The imposing of such fees were part of this effort.

Bulgarian Photovoltaic Association (BPA) welcomed the rulings and called on the regulator to scrap altogether the fees that have dealt a heavy blow to the industry and could cost the taxpayer millions of levs.

“The regulator has to revoke its decision to avoid the situation in which producers that sued it will not pay the illegal fees, but the others will still have to do it,” said Nikola Gazdov, BPA’s chairman.

Aware of huge public discontent with soaring prices, Gazdov said renewable energy producers would support the setup of a solidarity fund to help the poorest pay their electricity bills, but added all energy producers should participate.

The outgoing government has cut regulated energy prices for households by 7 percent and started a process to revoke the power distribution licences of Czech CEZ in a an attempt to quell discontent.

Both investors and consumers complain about lack of transparency in the regulator’s work.

The European Commission last November reported that both Bulgaria’s electricity and gas markets ranked in the bottom two across the EU for trust and overall satisfaction. (Reporting by Tsvetelia Tsolova; Editing by Alison Birrane)

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