The six illegal wind farms, specifically mentioned in the European Court of Justice’s judgment on Kaliakra, have been subsidized by the Bulgarian State with BGN hundreds of millions since their creation until today. This money has been paid by all electricity consumers at higher preferential prices, which is a State aid scheme.
However, Bulgaria has lied to the European Commission (EC) in a letter titled “Support for renewable energy generation in Bulgaria ” (see here) claiming that State aid for these projects had not been provided. On the contrary, it was and for huge amounts, an investigation by Bivol has found.
Delayed and incorrect information to the EC
According to European rules, as early as the adoption in 2007 of the Renewable and Alternative Energy Sources and Biofuels Act (ZBAEIB) and then the Energy from Renewable Sources Act (ZEVI) in 2011, Bulgaria was mandated to notify the EC of the measure for the preferential prices for green energy. This was done only in 2016. The estimated total budget of the aid scheme in this notification is BGN 13 227 144 000 (EUR 6 772 419 550). Until 2016, the aid was simply unregulated.
The preference prices are defined in article 21 of the letter, which also lists preferential prices by year for the various facilities.
For the different types of equipment within each technology group, the Bulgarian authorities have set specific preferential purchase prices (e.g. different prices for small wind farms and large wind farms). For all types of Renewable Energy Sources, the calculated levelized costs of electricity (LCOEs) are equal to the preferential purchase price. LCOE also exceeds the average market price.
Article 86 of the 2016 notification letter includes an explicit paragraph on wind farms, which are the subject of the case against Bulgaria at the Luxembourg Court. Here we read the following:
As regards judgment of the Court of Justice in case C-141/14 Commission vs Bulgaria24, the Bulgarian authorities informed that none of the wind installations falling within the scope of the notified aid scheme are covered by the above mentioned judgment. Therefore, the Commission takes note of the fact that, as the Bulgarian authorities stated, none of the wind installations covered by the said judgment will be granted aid under the notified aid scheme.
The projects listed in the court judgement as unlawfully built are “AES Geo Energy”, “Kaliakra Wind Power”, “Disib”, “Longman Investment”, “EVN Enertrag Kavarna” and “Vertikal – Petkov and CIE.”
With this text, Bulgaria tells the EC that none of Kaliakra’s controversial wind farms has long-term electricity purchase contracts; do not benefit from preferential prices and de facto sell their electricity to private traders in a free market at market prices. However:
Contracts for 12 years with the National Electric Company (NEC) are a fact
The declassified information about the long-term contract of NEC with AES Geo Energy, which built the largest in our country wind farm with a total capacity of 156 megawatts, is available in open access. The contract is for 12 years. The generators were put into operation in 2010 and the contract provides for the purchase of electricity by NEC at prices of BGN 185.95 per megawatt for 2,250 hours per year or over BGN 65 000 000 per year.
Here is the math – BGN 780 million in 12 years; BGN 455 million for the seven years since the wind farm was put into operation in 2010 to date.
If NEC would buy at the non-preferential price of an average of BGN 70 per megawatt, the amounts would have been BGN 294 million in 12 years and BGN 172 million to date.
The difference of BGN 283 million is actually the State aid to date for this wind farm, which was concealed from the EC, and this is only for one of the companies!
EVN Enertrag Kavarna also sells its green energy to NEC under a long-term (12-year) contract and the preferential price at the signing of the contract in 2012 was BGN 191 per megawatt without VAT.
The contracts of the other four illegal projects are not public, so one can only speculate on the basis of declared capacities and average prices in the table included in the letter.
Rough estimates show that NEC’s cost for subsidizing these illegal projects is about BGN 70 million per year. If they stay in operation until the end of their long-term contracts, the electricity bill for consumers will approach BGN 1 billion.
Obviously, the government’s goal now is to rescue and maintain at any cost the illegal wind farms so that they continue to receive subsidies from taxpayers’ pockets. The chaotic actions and the mixed messages of the government so far show that the plan is to preserve the existing wind generators at the expense of local farmers and fishermen. There is nothing surprising in this. It is enough to take a look at the owners of the wind farms, among whom is the former live-in girlfriend of Bulgarian Prime Minister Boyko Borisov – Tsvetelina Borislavova.
We are still to find out how the European Commission will react to the lie in the letter.
This post is also available in: Bulgarian