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Bulgaria's TPP AES Galabovo operator cuts 2018 profit on GHG emission costs

Author Mario Tanev
Bulgaria's TPP AES Galabovo operator cuts 2018 profit on GHG emission costs Author: AES Galabovo Licence: All Rights Reserved

SOFIA (Bulgaria), July 16 (SeeNews) - Bulgaria's AES Maritza East 1, which operates coal-fired power plant AES Galabovo, said that its net profit fell to 94.2 million levs ($54.2 million/48.2 million euro) in 2018 from 111.6 million levs the year before, due to an increase in expenses for greenhouse gas emission allowances.

AES Maritza East 1's expenses for greenhouse gas emission allowances grew to 143.1 million levs last year from 53.2 million levs in 2017, the company said in an annual financial statement.

The greenhouse gas emission allowances are part of the EU Emissions Trading System, which works on the “cap and trade” principle. Within the cap, companies receive or buy emission allowances which they can trade among themselves as needed. Each year companies must surrender enough allowances to cover all their emissions, otherwise fines are imposed.

The power plant's output fell to 2,981,827 MWh in 2018 from 3,100,342 MWh in 2017. Power reserve capacity offered to the Electricity System Operator (ESO) declined to 4,755,270 MWh last year from 4,880,103 in 2017.

However, AES Maritza East 1's revenue rose 12.84% to 656.8 million levs, as the price of electricity sold increased. The rise on the electricity price was due to the higher price of emission allowances, which are taken into account when determining the power price.

The plant operator's fuel expenses edged down to 96.9 million levs from 99.4 million levs in 2017, while expenses for hired services decreased to 114.8 million levs from 119.0 million levs. Amortisation costs remained flattish at 64.7 million levs.

The company's financial expenses fell to 67.1 million levs from 73.5 million levs the year before.

AES Maritza East 1 is controlled by U.S.-based energy conglomerate AES Corporation. In 1999, a unit of AES Corporation purchased the majority interest in the Maritza East 1 project, renamed AES Galabovo in 2009. The company completed the full acquisition of the 600 MW thermal power plant from Ireland's Consolidated Continental Commerce Limited (3C) in 2005.

(1 euro = 1.95583 levs)