Bulgarian Blow-Up – Thousands in Power Price Protests see PM Lose Scalp & Wind Power Subsidies Slashed

bulgaria

Peeved power punters, as far as the eye can see.

 

Depriving ordinary people of something long considered a basic necessity of life, is one sure fire way to get their backs up.

When that ‘necessity’ is something that people have rightly come to assume will always be available to them, at an affordable price, and the price suddenly escalates without reasonable explanation, confusion tends to frustration.

When the “explanation” is that the price has escalated due to a deliberate government policy, which sees billions of dollars tacked onto power consumers’ bills (or filched from them as taxpayers) and transferred to wind power outfits, “frustration” turns to marching in the streets; and even violent protests.

In Australia, tens of thousands of homes have been disconnected from the electricity grid, simply because retail power prices have escalated as a result of the Large-Scale Renewable Energy Target and the great wind power fraud, which was born under its ‘lucky subsidy star’. 34,000 homes were chopped from the grid in Victoria last year, alone; these days, more than 50,000 homes in South Australia do without electricity altogether, and thousands more are lining up for unplanned, candle-lit suppers (see our posts here and here).

As STT has pointed out, once or twice, the LRET is unsustainable; both economically, and politically.

This is a policy that, from hereon, over the life of the LRET, will achieve nothing more than the transfer of $50 billion from power consumers – either to wind power outfits as a unparalleled industry subsidy (in the form of Renewable Energy Certificates) – or the Federal Government as a “stealth” tax (ie, the shortfall charge). Adding $50 billion to power consumers’ bills as the LRET target rockets to 41,000 GWh from 2020 and beyond will, of course, “achieve” a couple of certainties: spiralling retail power bills, and a growing number of angry Australian voters who can’t afford to pay them.

CPI and electricity

Thanks to the LRET, for Australians this is just the beginning.

 

In a TV cooking show “here’s one we’ve prepared earlier” moment, let’s take a look at Bulgaria, where mass ‘protests’ (read ‘borderline riots’) over skyrocketing power bills a couple of years back, and continued pressure from hostile power consumers since then, have led to subsidies for wind power being slashed.

Over the last five years, the Bulgarian government has thrown mountains of subsidies at wind power outfits to generate an intermittent, unreliable and, therefore, unmarketable power source – which has resulted in spiralling retail power costs; and out of control government debt.

As power punter disquiet quickly went from “rumble” to “roar”, the government faced the choice of quelling more riots, or deciding to throw up the white flag and retreat.

In a policy “no-brainer”, the subsidies have been slashed in order to bring power prices back under control; and to prevent a full-blown, power price driven revolution.

We’ll kick off with the decision to scrap the subsidies; and follow on with how the government was forced to that response by country-wide protests and un-quelled voter anger, that also claimed the Bulgarian Prime Minister’s scalp, and his government with it.

Bulgaria scraps incentives for new renewable energy installations
Euractiv.com
27 February 2015

Bulgaria’s parliament scrapped preferential prices for new renewable energy installations on Thursday as the country is struggling to cut deficits in the energy sector and keep a lid on consumers’ utility bills.

Wind power farms and photovoltaic parks mushroomed in 2011, after Bulgaria introduced generous subsidies for renewable energy, guaranteed for 20 years and committed to buy all the energy produced by them.

But the incentives have weighed on the power costs in the European Union’s poorest country, which has met its 2020 target for a 16% share of renewable energy at the end of 2013.

The granted incentives will still be valid for already operational wind and solar energy plants.

The amendments of the energy law, approved by the parliament, also envisioned that the public power provider NEK will not be obliged to buy power at preferential prices from heating power plants that cannot prove energy efficiency.

The renewable energy boom, incentives for co-generating power plants and high costs under long-term power purchase agreements, have soared NEK’s deficit to 3.3 billion levs (€1.65 billion), the energy ministry has said.

Last week, US power companies AES and ContourGlobal agreed to negotiate lower prices for the electricity they produce in Bulgaria.

The parliament also approved changes to boost the independence of the energy regulator, and its members will be appointed by parliament, and not by the government, as at present.

High utility bills had sparked protests which toppled the government of Prime Minister Boiko Borissov in February 2013.
Euractiv.com

Now for the reasons why the government decided to slash subsidies to wind power outfits, here’s a couple more reports from Euractiv.com.

Electricity bills set Bulgaria on fire
Euractiv.com
18 February 2013

Tens of thousands of Bulgarians protested in more than 20 cities on Sunday (17 February) against high electricity bills and called for Prime Minister Boyko Borissov and his centre-right government to resign.

Protestors shut down roads and intersections, hurled eggs and bottles at public buildings and burned their electricity bills, some shouting ‘mafia’.

Electricity bills for January sparked mass outrage, news reports said. Many Bulgarians say that they are unable to pay their bills, which average more than €100. Bulgaria has the lowest average salary in the EU, €387 a month. The average pension stands at €150, and the base pension is €76.

The protestors accused three foreign-owned energy companies of raking in windfall profits and didn’t buy the explanation that January had been an exceptionally cold month.

Bulgaria’s power distribution market is divided into three regions, controlled by Czech firms ČEZ and Energo-Pro and Austria’s EVN.

The country privatised its energy distribution network during the government of former Prime Minister Simeon Saxe Cobourg-Gotha (2001-2005).

On 24 January, the European Commission referred Bulgaria to the European Court of Justice for failing to fully transpose the EU energy market rules.

Many Bulgarians suspect complicity between the utilities and the government. During Sunday’s “Let’s set on fire the monopolies”, demonstrators also protested against Borissov’s government and the political class in general, Dnevnik, the EurActiv partner in Bulgaria, reported.

Polls show support for Borissov’s Citizens for the European Development of Bulgaria, or GERB party, is declining. With parliamentary elections due in July, GERB was trailing the opposition Socialists led by Sergei Stanishev, who is also the leader of the Party of European Socialists.

Bulgarians blame Borissov for the decline of standards of democracy and media freedom since he took office in 2009, and for his inability to tackle corruption. In a recent debate in the European Parliament, Bulgaria was described as “the weak link” in terms of decline of democratic standards and a threat to European values across the continent.

Energy Minister Delyan Dobrev appeared in a hastily organised news conference on Sunday, promising to publish the utilities’ agreements with the Bulgarian state. As these agreements are secret, reports say that the Bulgarian state has guaranteed them a profit of 15%. Also, according to rumours, the utilities report massive fictive activities, aiming at paying lower taxes.

Stanishev stopped short of asking the re-nationalisation of the utilities, saying that he would insist that the Parliament look into the implementation of their privatisation agreements.

Riding the wave of public anger is the nationalist Ataka party, which called for the re-nationalisation of the utilities, and advised citizens not to pay their bills and to destroy their electricity meters.

Positions:

Asked by EurActiv to comment, Marlene Holzner, spokesperson to energy Commissioner Günther Oettinger said that the Commission’s position was that if there was a market and the market was working, then the customers should have the best possible prices.

In the case of Bulgaria, Holzner said that the Commission had issued last year a country report in which two issues were identified.

The first, she said, was the wholesale market in electricity, which in her words was not completely liberalised in Bulgaria. “There are quotas, there is a dominant player and there are no free prices”, she said.

The second problem identified in Bulgaria was that the country’s regulator was not fully independent, in spite of the recommendations of the Commission. In Bulgaria there were regulated prices for small and medium enterprises and also for end users. The Commissions’ position was that Bulgaria should have market prices, but also regulated prices for very vulnerable consumers.
Euractiv.com

Bulgarian Prime Minister Borisov reacts during confidence vote debates in parliament in Sofia

Boyko Borissov: another wind power price surge ‘victim’.

 

Bulgarian prime minister quits following mass protests over electricity bills
Euractiv.com
20 February 2013

Bulgarian Prime Minister Boyko Borissov resigned today (20 February) following boisterous public protests in the capital and several other cities over the price of electricity.

Just hours after he had declared his intention to continue as prime minister, Borissov told the Bulgarian Parliament that he was stepping down and that the government as a whole would resign by lunchtime.

“The people gave us the power, today we return it to them,” he told the assembly.

Borissov said he had no intention of participating in a caretaker government.

“Yesterday we did a maximum to satisfy the demands of the protestors. From now on there is nothing we can do to help them,” he said.

Protests against high electricity bills began last weekend and grew in the days since, with TV coverage showing chaotic scenes. Several demonstrators were reportedly arrested.

Borissov sought to defuse the tension by announcing at a press conference at midday on Tuesday that the Czech utility ČEZ, which controls power distribution in Western Bulgaria, would be stripped of its license.

Bulgaria’s power distribution market is divided into three regions, controlled by Czech firms ČEZ and Energo-Pro and Austria’s EVN.

Borissov also said that the price of electricity would be reduced by 8% from 1 March. Normally the power regulator is sets the price of electricity. The European Commission has recommended that the regulator in Bulgaria should be fully independent.

The statements by Borissov failed to defuse the tensions and demonstrators began calling for his resignation.

Many carried banners calling Borissov a mafia boss and burned his portrait. Several people were wounded in clashes with the police.

Bulgarians blame Borissov for the decline of standards of democracy and media freedom since he took office in 2009, and for his inability to tackle corruption. In a recent debate in the European Parliament, Bulgaria was described as “the weak link” in democratic standards and a threat to European values across the continent.

Prague asks the Commission to react

In Prague, Czech Prime Minister Petr Nečas said in a statement that he expected Bulgaria to keep its international obligations as well as the investment protection agreement in its dispute with ČEZ.

The problem of high prices of electricity in Bulgaria is politicised and statements by Bulgarian representatives regarding ČEZ are “non-standard,” Nečas said, quoted by the ČTK news agency.

“I expect Bulgaria as a member of the European Union to keep international obligations, the European law as well as its own laws, including those regarding foreign investment protection,” Nečas said.

Industry and Trade Minister Martin Kuba said he intended to discuss the situation in the European Commission. The Czech minister called Bulgaria’s conduct unprecedented.

‘Systemic violator’

A Bulgarian prosecutor said ČEZ was a “systemic violator” of its contract with the Bulgarian authorities, citing among other things that the utility had assigned its procurement to its own subsidiaries, Dnevnik, the EurActiv partner in Bulgaria, reported.

The Bulgarian energy and water regulator DKEVR has opened a procedure for withdrawing the license of ČEZ, based on 17 irregularities, it was announced.

Economy and Energy Minister Delyan Dobrev said he could not comment if ČEZ would lose its license, saying it was the responsibility of the regulator.

“If the [regulator] decides to do so – this is a process which requires more than one single step, it is a process which begins with a notification, and ČEZ will have time to respond,” Dobrev said.

Marlene Holzner, spokeswoman for Energy Commissioner Günther Oettinger said that the Commission, said was “a little bit early” to react to the threats against the Czech utility.

“It is the responsibility of the member state and the regulator to give a license and to withdraw a license,” Holzner said.
Euractive.com

A man is detained by police during a protest against high electricity prices in Sofia

Wind power subsidies become a ‘pressing’
issue for Bulgarian power punter.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. luisadownunder says:

    Well, that was two years. What has changed?

    A centre-right government was toppled and a nationalist (read Socialist) government took its place. So, what changed?

    Privatizing power does not bring down costs or reduce back-room deals.

    As a matter of fact, a socialist government is guaranteed to bring back the old socialist regimes, which essentially take power (play on words) away from the people then watch electricity really go up.

    • luisadownunder says:

      “Privatizing power does not….”
      I meant to say: “Nationalizing power does not bring down costs, etc.”

      • … I didn’t look up your post but when I look at the countries around me (central EU), those with de-facto nationalized power providers simply DO HAVE the lowest base price for electricity. Countries with a privatized energy market (like Germany or the UK) have much higher prices for electricity. Now you can’t directly compare Bulgaria with the UK (very big difference in average income) but you CAN compare Germany with France, where the state-owned EDF/GDF dominates the market: the French pay 30% LESS – and the same can be observed in almost any category, be it train networks, water or garbage removal.

  2. The world made the mistake of believing the resurection of obsolete wind energy would work the second time around. It does not and did not.

  3. Reblogged this on ajmarciniak.

  4. David Mortimer says:

    The people of Bulgaria are obviously a force to be reckoned with.;

    Now, how do we get past the “she’ll be right mate” attitude we seem to have in this country and gather together a truly meaningful protest march, or do we still have to wait until power prices really hit the hip pocked nerve… or… is it happening “softly softly” and our pollies don’t know and won’t know it is happening until it all blows up in their faces?

    There’s a few faces I would like to see the s-miles wiped off, by George. 😉

    • luisadownunder says:

      The Australian Labor government introduced something stupid called the Carbon Tax. Go figure!

      This immediately put the price up for all power by approximately $550 per year, for the average household This has now been removed and the price has come down.

      The inclusion of wind-power into the grid which, as this site has pointed out ad infinitum, will increase power costs to consumers (and not do a single thing for the “environment”), is what we should be fighting against. This, and only this, will increase our power bills exponentially.

      Central Europe still has the socialist system in place (even in the Czech Republic the new government is once again socialist) and their power is state-owned and heavily tax-payer subsidized.

      They also have good relations with Russia and receive the gas from them at better prices than Western Europe – who refuse to see the error of their ways. CE countries also do not build wind turbines at the drop of a hat.

      Germany may be balancing its books, but it is committed to building more and more wind turbines, and the exorbitant cost of this Quixotic quest is added to the cost of consumers’ utilities.

      The madness will eventually end, but the cost for this and future generations will have no equal.

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