The Bulgarian Supreme Administrative Court has overruled a decision by the country’s energy regulator of June 2012 concerning the preferential prices for wind-generated electricity, the Bulgarian Wind Energy Association (BGWEA) said on Monday.
In June 2012, the State Energy and Water Regulatory Commission (SEWRC) determined preferencial prices effective as of July 1, 2012, for wind-generated electricity which were up to 23% lower than the previous pricing period.
The court has decided to cancel the regulator’s decisions since they “not only do not allow the investors to receive any return from their share in the financing [...], but in practice the investors will lose part of the invested money”, BGWEA said in a press notice, quoting the court’s decision.
Moreover, the regulator has also determined that the rate for return on capital set for wind farms by the regulator, which was lowered to 7.0% from 9.0%, is in contradiction with the laws as it based on non-objective criteria, non-transparent pricing elements and irregular financial indicators, according to BGWEA.
The court’s decision, which was taken on June 5, came after the members of BGWEA filed a lawsuit against SEWRC, the association added.
The regulator’s latest draft decision on the pricing of wind-generated energy provides for a reduction of the preferential prices for electricity from wind by 21% to 23% and a 7% rate of return on capital, BGWEA said. According to the association, SEWRC’s decisions are yet again not based on actual market data.
“Moreover, in the formation of the prices, the Commission does not consider the impact of this year’s introduced restrictive measures on wind and photovoltaic power plants – the 20% tax on income from the production of electricity, as well as the limitation on the amount of electricity that can be purchased at preferential prices,” BGWEA said in the press notice.
“The short-sightedness of the institutions in the implementation of energy policies in the country and the lack of meaningful dialogue with stakeholders, sooner or later will lead to a wave of claims by investors for compensation for damages,” it added.