BULGARIAN Minister of Energy Roumen Ovcharov and British ambassador Jeremy Hill opened the Renewable Energy Workshop in Sofia on January 24. To ensure harmonisation with the EU accession legal framework, the EU has flagged renewable energy as a priority issue.
The workshop aimed to help UK renewable energy companies build partnerships with organisations in new member states. It was organised through the collaboration of the Ministry of Economy and Energy, DTI Renewable Energy Trade Promotion Service, the Open University’s ‘New Europe, New Energy’ project, UK Trade and Investment, and the British embassy, as well as the DTI new and renewable energy programme and the Investment Power scheme.
Bulgaria
Kostadinka Todorova of the Ministry of Economy and Energy outlined Bulgaria’s goals concerning renewable energy sources (RES). These are governed by EU policy and directives as well as by Bulgarian policy. EU directives dictate fulfilment of Kyoto agreement obligations. These are to:
* Reduce CO2 emission by eight per cent in the period 2008-2012, compared to 1990;
* Double the percentage of RES used in total power production by 2010, from six per cent to 12 per cent ; and
* Increase energy effectiveness by 18 per cent by 2010 compared to 1990.
Another EU directive calls for minimisation of the use of oil.
Bulgarian policy aims to create conditions for full compliance with the requirements of the Common Energy Market in Europe, develop the sector in a planned way and harmonise with EU standards.
Todorova outlined Bulgaria’s recent policy. The Energy Act was passed in 2003, this was followed by a period of ‘two year’s experience’, which led to a ‘new vision’, resulting in amendments to the act. The latest amendments concern the promotion of power generation from renewable and combined sources, with a target of 11 per cent of power coming from RES by 2010.
Bulgaria had potential for greater use of renewables, said Todorova. There was “a lot of room for improvement” in exploiting wind generation and hydroplants also held lots of potential. Other targets included using more biomass, then to move on to solar energy, and possibly the use of geothermal energy for heat.
Under the biomass directive Bulgaria is obliged to promote biomass and biofuel, which is not done to a great extent under current legislation. Another target was to cut Greenhouse emissions by using transport powered by biofuel.
Todorova emphasised the need for the decentralisation of energy generation. Ways in which this decentralisation was being promoted was through a market-led approach as well as a scheme of incentives. Incentives included the guarantee of preferential prices for renewables from registered generators to licensed suppliers. Purchase of RES energy at preferential prices, to be fixed each year, was to be mandatory for eight years. Other incentives included connection to the grid free of charge and the issuing of green certificates.
A new legislative framework was to be developed by November 11 2006. Legislation had been “somewhat fragmented till now,” said Todorova.
The need to gain experience in the generation and buying up of electricity was underlined and a round table discussion was scheduled to take place between UK and Bulgarian consultants and suppliers to discuss the legal aspects of the electricity act on January 25.
Invest Bulgaria, the executive agency with the Ministry of Economy and Energy, gave a presentation entitled Investment Review and Opportunity in the Energy Sector. Under new laws to encourage investors, foreign and domestic investors would be treated the same, they said. Infrastructures subsidies granted in 2005 totalled two million euro, and 13 million euro was planned for 2006. Bulgaria’s macroeconomic data was good and compared well with other countries in the region. The reasons Bulgaria was attractive to investors in the energy sector were low corporate taxes, only 15 per cent; low operational costs and tax rates in a European market economy; duty free trade of industrial goods between Bulgaria, the EU, EFTA, CEFTA and Turkey, and access to 500 million consumers through EU membership.
UK
John Buckley of the UK’s DTI Renewable trade promotion services talked about the UK’s experience with RES. He outlined the drivers in the UK for increasing RES as the White Paper on energy, including the Kyoto agreement, energy diversity and security and cost-competitive energy supplies. UK RES policies took a market approach, with an obligation for 10 per cent of electricity to come from RES by 2010. Grants were being given for early implementation of technology.
Buckley also highlighted the main challenges that RES faced in the UK. Public acceptance was the biggest of these, with issues concerning the planning process, especially for wind farms, being the most problematic. Nonetheless, he said that they expected two thirds of RES capacity to come from wind farms by 2010, and the remaining third from biomass, small-scale hydro plants and other sources.
Other challenging aspects he drew attention to were the technical and commercial interface between generators and distributors; upgrade of the transmission system; the supply chain for infrastructure and equipment, and technical challenges encountered through operation in new environments, such as offshore wind farms.
The most important finding so far was the importance of market policy, said Buckley. Quality control and accreditation were also important areas and there was a need to adopt worldwide norms and standards to ensure reliability and traceability of components. Costs also needed to be standardised through mass production.
Anaerobic digesters, energy crops, waste and landfill gas, grid connected and off grid onshore and offshore wind farms were presented as some of the projects the DTI is involved in the UK, where some boat building factories are being converted for windmill-blade manufacturing purposes.
Greece
Greece’s Network consulting group gave an overview of the development of renewables in their country. As with Bulgaria and the UK, Greece was driven by national targets and obligations to EU directives in its development of RES. A 2001 directive stated that 20.1 per cent of Greece’s energy should come from RES by 2010.
Greece has a high RES potential, particularly in wind energy, which has witnessed a big growth since 1999.
Greece already has instruments for promoting renewables in place. A 1999 law opened the electricity market to private companies and the RES field is now at the forefront of private investments in Greece. Transmission system operators are obliged to grant priority access to RES electricity. In return, RES producers are obliged to contribute two per cent of sales to the grid. There were also supplemental laws concerning licensing and financial support. In January 2006, new amendments to these were presented as the licensing system is at present “too complex”, especially in wind power generation.
Major obstacles were the licensing procedure, grid connection issues and public attitude - the NIMBY, or ‘not in my back yard’ syndrome whereby the public generally approved of RES, but didn’t want, for example, wind farms, built in the immediate vicinity. In an attempt to counter this, land bills were being drafted that would allocate geographical zones for the building of RES generators.
A Greek company presented their project to exploit landfill gas. They experienced a similar problem to that in Sofia, of a high population concentration with limited landfill capacity. However, there were technical risks involved in the process of exploiting the gas, as well as bureaucratic difficulties, and more incentive mechanisms were needed.
Ukraine
Dr Geletukta of the Academy of Science and Institute of Engineering put forward Ukraine’s RES experiences. One of the main drivers for the RES industry in Ukraine was an increase in traditional energy prices. Geletukta cited the example of the recent increase in natural gas prices, which until recently had been $80 a 1000 cu m, but had risen now to $120 a 1000 cu m.
Other drivers were: increasing energy independence, development of the local economy, growing possibilities for biomass export, the Kyoto protocol, strengthening of ecological norms and reduction of unemployment.
In 2005, the RES Ukraine concentrated on were sunflower seed husks, landfill gas extraction and wood-fired boilers. Ukraine is also involved in development projects for other countries, such as the licensed production of US wind turbines since 1996, and private businesses. Ukraine hoped bioenergy would replace natural gas, currently its most critical fuel, and also reduce Greenhouse gas emissions.
The solutions business
A variety of companies presented their strategies and solutions concerning RES.
UK company Biojoule offers renewable fuel to power electricity generators and other biomass fuel users in the form of wood pellets. Raw materials from the forestry, wood processing and agricultural industries are used to produce the pellets. Biojoule also grows its own energy crops and has a trial plot in Romania. They cited one advantage of using energy crops as a way to dispose of sewage as a fertiliser, which couldn’t be used on food crops.
The processing plants used to make the pellets are about 30m by 10m large and can be moved to sources of raw material so that only pelletised material is transported, giving the lowest possible transport cost in the fuel supply chain. This meant that small, isolated resources and seasonally available resources could be used in the fuel supply chain without excessive cost. The company envisages wood pellets could be used in Bulgaria to co-power power coal or lignite-fired stations, provide green fuel for heating and put to effective use wood waste from factories or the forestry industry.
The Bulgarian subsidiary of the UK’s Energy for Sustainable Development (ESD) presented their RES design and consultation services. They said that Bulgaria was lagging behind countries such as Ukraine in the use of agricultural biomass and that crops such and straw and maize provided good possibilities, but had not yet been sufficiently exploited. So far, there was only one place in the region using maize, Hungary.
They also recommended grouping together small hyrdo plants to attract international finance. Solar energy was also being worked with and the company successfully completed a project to provide solar energy to a retirement home in Silistra.
European Energy Investment’s founder Ian Stanley concurred that the strategy of grouping similar projects together into packages to attract foreign investors was the way forward: “Biomass projects and hydro projects are individually too small for foreign investors. So, group them together.”
His take on the RES industry in Bulgaria was that “many Bulgarian developers have good ideas, but unrealistic expectations.” He underlined the importance of well-structured projects that were understandable to investors. Currently, he said, landfill sites were all owned and managed by different municipalities and companies, meaning that trying to formulate any coherent projects was like “herding cats”.
Feasibility analysis was also not carried properly in many cases. Stanley recommended Bulgarian businesses clarify their objectives, make clear, comprehensive business plans and choose their partners carefully, as entering into a deal with a foreign investor was like entering into a marriage.
The second international congress on Energy Efficiency and Renewable Energy Sources will take place at the National Palace of Culture, Sofia from March 8 to 10. For more information go to: viaexpo.com.
Windmills of death?
The ever-controversial issue of wind turbines was very much on the agenda at the Renewable Energy Workshop with Greece and the UK both extolling the virtues of wind power, while admitting that wind farms caused problems in terms of public acceptance, licensing and land allocation.
A question mark was put over the potential of wind power in Bulgaria, while UK ambassador Hill made reference to the UK’s biggest wind farm, with 42 wind turbines, costing 1.32 million euro and reducing CO2 emissions by 200 000 tons a year.
Wind turbines caused protests from environmentalists in Bulgaria when construction of an electricity-generating wind farm was proposed near Balchik on the Black Sea coast. Members of the Bern Convention called on the government to stop construction of the farm in December last year. They claimed it posed a “major threat” to more than half a million migratory birds from across Europe. The secretary general of the Bern Convention, Mr. Eladio Fernandez-Galiano, commented that it was “one of the worst planned wind farms that I have seen in my life, and the government of Bulgaria must reverse its decision.”
Protestors argued that the official environmental impact assessment (EIA), which had already been approved by the Regional inspectorate of environment and water - Varna, was incomplete, and in some places missing entire sections of pertinent information and that the EIA did not take into account all the available data, and did not make an adequate evaluation of the foreseeable risk to birds that would result from the windfarm.
Various speakers at the Workshop reiterated this need for comprehensive feasibility assessments to be properly carried out in Bulgaria. In relation to the issue of wind farms, the ESD said it had carried out studies on wind energy and discovered alternate locations to the contested sites on the Black Sea. It said that the Balkan mountain range was a suitable location for wind farms. However, Ian Stanley, founder of European Energy Investment was not convinced. He argued that the problems with wind power were that there were only limited areas that were suitable in terms of wind speed. Then there was the problem of finding adequate electrical connection. In regard to the idea of the Balkan range as site for wind energy, Stanley argued that it would be extremely difficult to access in terms of construction and connecting to the grid.
Environmental stalwarts Greenpeace's stance is that: "Bulgaria has one of the best wind resources in Central Europe. The European Bank for Reconstruction and Development concluded that the practicable renewable potential by 2012 from wind, biomass and hydro amounts to around 8GW, which represents about two thirds of Bulgaria's current installed electricity capacity."
The latest development in the wind power saga is the signing of a US Trade and Development Agency grant to assist Karlovo municipality in obtaining a credit rating in connection with its pilot wind farm project. The US Trade and Development Agency (USTDA) will award a $36 000 grant to assist the central Bulgarian municipality in obtaining a credit rating to secure funding from financial institutions for implementation of the project. The amount is an additional subsidy to an original USTDA grant worth $38 4531, which co-funded a feasibility study on a municipal pilot wind farm project. The USTDA states its goal is to help "introduce the first commercial wind farm in Bulgaria and demonstrate that wind power is an economically viable source of energy that can be replicated elsewhere in Bulgaria."
The grant agreement was to be signed by US ambassador to Bulgaria John Beyrle and Karlovo Mayor Emil Kabaivanov on Friday January 27.
