site.btaHigher Electricity Prices Will Make Industries Non-competitive - Sectoral Organizations

Higher Electricity Prices Will Make Industries Non-competitive - Sectoral Organizations

Sofia, September 30 (BTA) - The sectoral organizations in
industry have warned in a protest declaration that a rise in the
price of free-market electricity due to the higher price tagged
"obligations of society" will make companies non-competitive.

The obligations-of-society price is a surcharge for green
energy, combined heat and power generation, and long-term
electricity purchases from the US-owned AES Maritza East 1 and
ContourGlobal Maritsa East 3.

Bulgarian manufacturers in the base industries, who are the
biggest industrial customers of electricity, strongly oppose the
proposed change in the obligations of society, says the
declaration signed by the Bulgarian Federation of Industrial
Energy Consumers, the Bulgarian Association of the Metallurgical
Industry, the Bulgarian Chamber of Mining and Geology and the
Bulgarian Chamber of Chemical Industry.

The proposed rise would lead to a 2.2 per cent price hike for
medium-voltage customers and 1.6 per cent for high-voltage
customers in the free market. These industries, which are still
working, will be killed, the declaration says.

The organizations identify their key problems: lack of
predictable long-term supplies; cross subsidizing; and steep
costs to the public. While no measures are taken to boost the
export of Bulgarian goods, jobs and value added are exported to
neighbouring countries through electricity export at feed-in
tariffs.

The export-oriented economic sectors, which can ensure the
fastest growth, are more energy intensive, therefore growth can
be achieved only through competitive prices of electricity and
natural gas, the organizations said. Free-market electricity
went up 10 percentage points this year as the price of
regulated-market electricity was reduced because the lower
prices for domestic customers of electricity were offset by
higher starting prices at the free-market tenders for
electricity from the Kozloduy Nuclear Power Plant and the
Maritsa East 2 Thermal Power Plant.

Bulgaria's neighbours have cheap nighttime tariff rates, while
this country charges the same prices around the clock, although
consumption falls by half during the night, the industrial
organizations say. As representatives of the largest employers,
they call for a revision of the State's attitude to the
strategic economic sectors.