Bulgaria looks to Limit the Deluge of Green Energy Projects Fueled by Generous Subsidies

East European Countries are having a hard time as they try to meet European Union Target of 20% Renewable Energy by 2020.Poorer East Europeans are the hardest to be hit as they are the least capable of affording the subsidies given to green energy producers.The Czech Republic  has cracked down hard on the Feed in Tariffs given to support Renewable Energy while Estonia is looking to curb Wind Power Growth.Czech has become a poster boy for how not to design Green Energy Subsidies as its power prices increase by 15-25% in 2011 to pay off higher tariffs to solar energy producers.

Bulgaria has also now decided to cap Renewable Energy Growth with around 12.5 GW of Green Energy applications lying in the backlog.Poorly designed and implemented subsidies are the root cause for such booms and busts.Poor Governance mechanisms are behind these Green Disasters.Bulgaria is the poorest European Union Country and can ill afford higher electricity prices.The government is targeting a 16% RE target by 2020 for which it wants to fix targets for different Green Energy Sources.The power grid operator has already warned of blackouts in case even half of the 12 GW Renewable Energy applications are actually constructed.Solar and Wind Energy have been incentivized with high FITs with global heavyweights like Siemens and Suzlon rushing in to build wind farms.

Bulgaria plans caps on new green energy assets – Reuters

Bulgaria plans to put limits on new renewable energy assets to avoid a spike in sensitive energy prices and a collapse of its aging power grid, Economy and Energy Minister Traicho Traikov said on Friday.Traikov said the Balkan country can add up to 2,000 megawatts of new solar, wind and hydro power plants by 2020 without jeopardizing the security of power supply and keeping the energy prices at affordable levels.gy’s share of total power consumption to 16 percent by 2020.

“We will meet our target. But we also aim to have the energy from renewable sources at an affordable price,” Traikov told Reuters in an interview.

Dozens of Austrian, Spanish, American and German companies have rushed to build new wind and solar energy plants, bringing the wind energy capacity to 336 megawatts (MW) this year from 103 MW in 2008 and solar to 9 MW from 1.4 MW from two years ago.The guaranteed preferential purchase prices and lax laws have boosted wind and solar projects to over 12,000 MW, well above the aging grid’s capacity, and have clogged the system frustrating both investors and power distributors.

The new law also plans to fix the feed-in tariff for already installed solar energy parks, a legal pitfall that had prevented a steeper growth of photovoltaic assets, Traikov said.At present, the guaranteed for 25 years preferential power purchase price can drop by an annual 5 percent for both new and old installations.