Bulgaria to collect 2.1 bln euro for energy security fund in 2023

The largest share of contributions, or 2.65 billion levs, is projected to come from the sale of greenhouse gas emissions quotas, the government said in a press release after approving the budget of the Electricity System Security Fund (ESSF).

The collected funds will be used to cover costs of the National Electric Company (NEK) for previous regulatory periods stemming from its role as a public supplier. Some of the fund's generated revenues will also be allocated as incentives to district heating plants, cogeneration facilities, and facilities with a total installed capacity of 0.5 MW and above, in accordance with the provisions of renewable energy laws.

Compensations for high prices of electricity or natural gas are also expected to be paid out of the fund in 2023.

In addition to carbon emissions charges, the fund collects 5% of the monthly revenues from the sale of electricity by producers and importers in the country, as well as fees for access to the grid and transmission of electricity and natural gas, along with fees for access and storage of natural gas. ESSF was set up in 2015 to offset the costs public supplier NEK incurred from purchasing power at preferential prices.

Bulgaria's 2023 budget enacted taxation on excessive profits of electricity producers with the aim of topping up the state fund so that it is able to pay out compensations to businesses if power prices exceed 200 levs per MWh.

Last week, the EU Commission extended by six months to June 30, 2024 the provisions of its Temporary Crisis and Transition Framework, allowing member states to provide targeted and limited financial support to businesses affected by energy price increases resulting from the war in Ukraine during the winter season.

(1 euro = 1.95583 levs)