State Aid Clearance for the Bulgarian Renewable Feed-in-tariff
McGregor & Partners has represented Bulgarian renewable energy producers in their Complaint in 2014 to the European Commission for alleged unlawful state aid resulted from the 20 % levy on the preferential purchase prices of wind and photovoltaic projects being discriminatory vis-a-vis other renewable producers and producers of conventional energy. More than two years later, in October, 2016 the European Commission notified the complainants that it terminates the procedure under the Complaint, referring to its Decision of August 4, 2016, by which EC resolved on the notification for state aid in the form of support scheme for renewable energy generation in Bulgaria (the “Decision”).
In its Decision EC has referred to a number of complaints and letters received from Bulgarian participants in the renewable energy market: (i) from Bulgarian RES producers alleging that the 20% fee to photovoltaic and wind installations is discriminatory; (ii) from the Bulgarian Energy Regulator claiming overcompensation in case of feed-in-tariffs awarded to wind and photovoltaic projects using the national support scheme; (iii) from industrial associations claiming that the release of the exporters of electricity from the electricity surcharge is discrimination regarding the Bulgarian producers and consumers; (iv) from Bulgarian Photovoltaic Association in relation to the reduction of the mandatory offtake quantity (the net specific production of electricity) introduced in 2015.
As regards the 20% fee over the preferential prices EC briefly observes that this measure was repealed by the Bulgarian Constitutional Court in 2014, but fails to give particular assessment and reasons for the termination of the proceedings for alleged unlawful state aid.
The main objective of the procedure has been to assess whether or not renewable energy producers in Bulgaria have been receiving unlawful state aid through the national feed-in tariff (FiT). Such support scheme, which started in May 2011 and will end on 31 December 2021, is with estimated total budget of EUR 6 772 419 550.
Luckily for the Bulgarian investors in renewables EC decided that despite the fact that the Bulgarian renewable FiT constitutes State aid, it is compatible with the internal market – hence, EC will not raise objections to such aid.
Links to the full text of the Decision can be found here: