The issue of green energy production has become increasingly relevant in recent months - both because of the targets set for EU member states under the so-called "green deal" and because of the growing energy crisis following the ongoing war in Ukraine.
The growing number of coordination procedures for the implementation of investment intentions related to the production of electricity from renewable energy sources in Bulgaria and the practice of processing these applications by the electricity distribution companies, raises questions about the legal connection of these "green power plants" to the electricity grid in the country.
According to the current legislation, the conditions and method of connection of renewable energy sources with a total installed capacity below 5 MW shall be determined by the respective local competent electricity distribution company, and for plants above this capacity - by the Electricity System Operator in Bulgaria - ESO EAD.
It is becoming a tendency for the electricity distribution companies to send for coordination with the ESO the conditions for connecting power plants with declared production of electricity with capacity below 5 MW, referring to the provision of Art. 53, para. 2 of Regulation No. 6 to the Energy Act - when the power plants are connected at medium or high voltage level. The above practice rightfully raises two significant questions - 1) should the ESO charge an additional fee for the performance of this coordination service, and 2) is there any statutory basis for the electricity distribution companies to perform such coordination, given that the plants in question are renewable energy plants.
The state regulator in the field of energy - the Energy and Water Regulatory Commission has already issued a decision in which it determined the above actions as unlawful. The latter was challenged by ESO EAD before the competent administrative court.
Decision No. 4193 of 24.06.2021 of the Administrative Court - Sofia as the first instance was ruled. In this decision, the Administrative Court confirms the reasons given by the Energy and Water Regulatory Commission, namely:
1) Generally, ESO EAD shall not be entitled to charge a fee for the coordination under Art. 53, para. 2 of Regulation No. 2. In this regard, the Administrative Court puts the following considerations:
- "The conclusions of the administrative authority are correct - the coordination of the distribution network operators with the transmission network operator of the conditions for the connection of a power plant to the medium voltage distribution network under Art. 53, para.2 of Regulation No.6 is not a study of the connection of the site to the transmission network and does not correspond to the costs included in terms of quantity and volume of the price approved by the Energy and Water Regulatory Commission for ESO EAD under item 2.1. "Study for the connection of renewable energy power plants with a total installed capacity of up to and including 15 MW" for BGN 7 748,00. Coordination under Regulation No. 6 is provided only for the purpose of informing ESO EAD about the emerging connection of the specific site of the producer, as the requirement of ESO EAD of paying a price by the manufacturer for the coordination of the opinion under Art. 53, para. 2 of Regulation No. 6 has no statutory basis and such a price is not set in due order by the Energy and Water Regulatory Commission... Therefore, both the requirement for payment of a price and the delay of the time limit for decision beyond the statutory 25 days leads to a violation of Art. 53, para. 2 of Regulation No. 6....".
2) On even stronger grounds and as far as it concerns a particular type of power plant generating electricity from renewable energy sources, the Administrative Court - Sofia concludes that such coordination should not be carried out in respect of this type of power plant:
- "The administrative authority has rightly held that in the present case Art. 53, para. 2 of Regulation No. 6, Chapter Four: "Procedure for the connection of power plants to the electricity grids outside those regulated under the Energy from Renewable Sources Act" does not include the requirement of ESO EAD for paying a price for coordinating the opinion of the manufacturer. The procedure for connection of plants for production of electricity from renewable energy sources is regulated in Chapter 5 of Regulation No. 6. The declared power plant for production of electricity from wind energy falls within the scope of production of "energy from renewable sources", according to § 1, item 8 of the Supplementary Provisions of the Energy from Renewable Sources Act" and the quoted Art. 53, para. 2 of Regulation No. 6 is not applicable in this case, as it is under Chapter 4 of Regulation No. 6."
At present, the appeal proceedings against the decision of the Administrative Court are pending and the case has been returned by the Supreme Administrative Court for retrial before the Administrative Court - Sofia. Our team will be monitoring the development of the case and will update on the matter on its final conclusion.
