Bulgarian Biomass Market Handbooks for Investments 2012/2013
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Transcript of Bulgarian Biomass Market Handbooks for Investments 2012/2013
Handbook for Investments 2
012/2013BULGARIAN BIOMASS MARKET
Inea Consulting is well established renewable energy advisory firm focused to emerging markets of South East Europe. Through its analytical arm Inea Research, the company provides independent renewable sectors watch, customized analysis, market outlooks and sector studies. What makes us different is the quality and accuracy of information, which is interpreted in the best way to take your investment decisions.
www.ineaconsulting.eu
BULGARIAN BIOMASS MARKET: HANDBOOK FOR INVESTMENTS 2012/2013
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This Handbook represents complete, unique and the most complete guide for
investments in Bulgarian biomass market. If you already have some background
information about the market but you are wondering how to take decision to invest,
then this is the Handbook you can use. In view of maturing biomass markets in Germany,
Austria, France, UK, Czech Republic, Slovakia and Italy, Bulgaria represents a stable
investment environment in South-East Europe with clear rules and fair FIT rates. The
report provides a complete picture of the market situation, dynamics, current issues and
future prospects. It contains 200 pages of valuable information in this very detailed and
in-depth investments guide. With comprehensive up-to date market data this handbook
brings clear and concise insights, to help investors in their decision making process. For
your convenience we offer opportunity for orders with customized book content.
Reasons to buy this handbook include:
Bulgarian political and economic environment overview, including PEST Analysis Biomass resource potential in Bulgaria Historical data provided from 2007 to 2012 and forecasts until 2020
Overview of Bulgarian biomass market development 2000 ÷ 2020 Grid connected and major upcoming biomass installations for 2012/2013 Development scenario of Bulgarian biomass sector until 2020 Current market prices of biomass projects with scenario to 2020 Porter Analysis, SWOT Analysis Detailed overview of Bulgarian legal and regulatory framework for RES generation Key organizations affecting development of the biomass sector Detailed review of most relevant financing and supporting incentives
You will receive 4 free updates of this handbook for 1 year period.
At next pages you will see the full table of content of this Handbook. For sample report
pages request, please do not hesitate to contact us. To order this report just fill in and
send us the enclosed at the last page order form. If you have any other questions please
do not hesitate to call us on ++359 887 342 475 or write an e-mail to
BULGARIAN BIOMASS MARKET: HANDBOOK FOR INVESTMENTS 2012/2013
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TABLE OF CONTENTS
FOREWORD ................................................................................................................ 9
1. METHODOLOGY .............................................................................................. 10
2. EXECUTIVE SUMMARY .................................................................................... 12
3. BULGARIAN POLITICAL AND ECONOMIC ENVIRONMENT. PEST ANALYSIS ........ 17
3.1. Basic country data ............................................................................................... 17
3.2. Political Climate and Ruling Party ....................................................................... 20
3.3. GDP and Economic Growth ................................................................................. 21
3.4. Labor market and unemployment rate ............................................................... 24
3.5. Electricity Imports and Exports. Electricity prices for business and households 25
3.6. Industrial Output and Private Consumption ....................................................... 27
3.7. Foreign direct investments (FDI) ......................................................................... 27
3.8. Taxes .................................................................................................................... 29
3.8.1. VAT ............................................................................................................... 29
3.8.2. Income and Corporate Taxes ....................................................................... 30
3.8.3. Property Tax ................................................................................................. 31
3.8.4. Transfer Tax.................................................................................................. 31
3.8.5. Types of corporation in Bulgaria .................................................................. 31
3.9. Inflation ............................................................................................................... 32
3.10. Monetary indicators ............................................................................................ 34
3.11. Banking and Credit Market ................................................................................. 35
3.12. Monetary Indicators ............................................................................................ 37
3.13. Ease of doing business in Bulgaria ...................................................................... 38
4. EUROPEAN BIOMASS ENERGY MARKET ........................................................... 40
4.1. Installed capacity ................................................................................................. 40
4.2. Key facts and trends ............................................................................................ 41
5. DRIVERS OF THE BIOMASS ENERGY MARKET ................................................... 43
5.1. Co-firing and cogeneration.................................................................................. 43
5.2. Livestock and livestock growth ........................................................................... 44
5.3. Agriculture ........................................................................................................... 45
5.4. Forestry ............................................................................................................... 47
6. RESISTANCE AGAINST BIOMASS POWER MARKET ........................................... 49
6.1. High capital costs ................................................................................................. 50
6.2. Need for secure biomass stock supply ................................................................ 51
6.3. Significance of unconventional gas ..................................................................... 52
6.4. Liquid biofuels for transport ............................................................................... 53
7. BIOMASS ECONOMICS .................................................................................... 54
8. BULGARIAN RENEWABLE ENERGY MARKET ..................................................... 56
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8.1. General electricity market information .............................................................. 56
8.1.1. Electricity Consumption and Production ..................................................... 57
8.1.2. RES targets ................................................................................................... 57
8.1.3. Bulgarian renewable energy action plan ..................................................... 61
8.2. Country attractiveness index for renewable investments .................................. 62
9. BULGARIAN BIOMASS ENERGY MARKET ......................................................... 64
9.1. Summary ............................................................................................................. 64
9.2. Bulgarian biomass energy market ....................................................................... 64
9.2.1. Biomass in Bulgarian energy mix ................................................................. 65
9.2.2. Porter Five Forces Analysis .......................................................................... 70
9.2.3. Renewable energy support schemes ........................................................... 74
9.2.4. Overview of Bulgarian biomass market development ................................ 76
9.2.5. Market prices for biomass projects in Bulgaria ........................................... 78
9.2.6. Key biomass project developments in Bulgaria ........................................... 79
9.3. Biomass supply .................................................................................................... 83
9.3.1. Biomass from agricultural land and by products ......................................... 84
9.3.2. Biomass from forestry .................................................................................. 85
9.3.3. Biomass from waste sector .......................................................................... 87
9.4. Heat from biomass .............................................................................................. 88
9.4.1. General overview ......................................................................................... 89
9.4.2. District heating and cooling ......................................................................... 90
9.5. Electricity from biomass ...................................................................................... 91
9.5.1. Generation ................................................................................................... 92
9.5.2. Combined Heat and Power (CHP) ................................................................ 94
9.6. Biofuels for transport .......................................................................................... 96
9.6.1. Overview ...................................................................................................... 97
9.6.2. Bioethanol and biodiesel ............................................................................. 98
9.7. Pellets .................................................................................................................. 99
9.7.1. Pellets production ...................................................................................... 100
9.7.2. Pellets trade ............................................................................................... 101
9.7.3. Pellets consumption................................................................................... 102
9.8. Biogas ................................................................................................................ 103
9.8.1. General overview ....................................................................................... 104
9.8.2. Resource potential ..................................................................................... 105
9.8.3. Biogas for electricity .................................................................................. 106
9.8.4. Biogas for heat ........................................................................................... 107
1.1.1. Key biomass companies operating on Bulgarian market .......................... 108
10. EUROPEAN RENEWABLE ENERGY POLICY LANDSCAPE ................................... 111
10.1. Bulgarian RES Regulations and EU Directives ................................................... 111
10.1.1. Precedent EU regulations .......................................................................... 111
10.1.2. Most recent EU renewable energy policy developments ......................... 112
10.2. Renewable energy mandatory targets for Bulgaria set out by the EU ............. 113
10.2.1. Interim targets set out by the EU .............................................................. 113
10.2.2. National support schemes flexibility allowed by the EU ........................... 114
10.3. RES LEGAL Project ............................................................................................. 115
11. BULGARIAN RENEWABLE LEGAL AND REGULATORY FRAMEWORK ................ 117
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11.1. Main laws and regulations ................................................................................ 118
11.2. Zoning, planning and construction related authorizations ............................... 119
11.2.1. Availability of Land ..................................................................................... 120
11.2.2. DZP ............................................................................................................. 120
11.2.3. Change of Designation of Agricultural Land .............................................. 121
11.2.4. Design Visa ................................................................................................. 121
11.2.5. National Institute for Protection of Immovable Cultural Valuables .......... 121
11.2.6. Parcel Plans for Power Lines ...................................................................... 122
11.2.7. Approval of an Investment Project ............................................................ 122
11.2.8. Construction Permit ................................................................................... 122
11.2.9. Operating Permit ....................................................................................... 123
11.3. Environmental related authorizations .............................................................. 123
11.3.1. Ecological Assessment ............................................................................... 123
11.3.2. Environment Impact Assessment .............................................................. 124
11.3.3. Natura 2000 Network ................................................................................ 125
11.3.4. Joint Implementation ................................................................................. 126
11.4. Energy law authorizations ................................................................................. 127
11.4.1. Power Generation Licensing ...................................................................... 127
11.4.2. Grid Interconnection .................................................................................. 127
11.4.3. Power Off-Take .......................................................................................... 129
11.4.4. Feed-in tariff (FIT) ...................................................................................... 130
11.4.5. Guarantees of Origin .................................................................................. 131
11.4.6. Scheme of Administrative procedure for biomass energy plants in Bulgaria 132
11.5. Ten key points in new Bulgarian RES Act .......................................................... 133
11.6. Financial Incentives and Support for RES electricity ......................................... 135
11.7. Future market pricing mechanisms................................................................... 136
11.8. Key Co-financing opportunities ......................................................................... 137
11.8.1. Bulgarian Energy Efficiency and Renewable Energy Credit Line ............... 137
11.8.2. Measure 311 .............................................................................................. 142
11.8.3. Measure 312 .............................................................................................. 143
11.8.4. European Local Energy Assistance ............................................................. 143
11.8.5. Operational Program Competitiveness ..................................................... 144
11.8.6. Implementing Energy Saving Technologies in Enterprises Scheme .......... 145
12. KEY ORGANIZATIONS AND INSTITUTIONS ..................................................... 145
12.1. Government ...................................................................................................... 145
12.1.1. The Ministry of Economy, Energy and Tourism (MEET) ............................ 146
12.1.2. The State Energy and Water Regulatory commission (SEWRC) ................ 146
12.1.3. Agency for Sustainable Energy Development (ASED) ................................ 146
12.1.4. Ministry of Agriculture and Food ............................................................... 147
12.1.5. BEH ............................................................................................................. 147
12.1.6. NEC ............................................................................................................. 148
12.1.7. ESO ............................................................................................................. 148
12.1.8. MOEW and RIEW ....................................................................................... 149
12.1.9. MOH and RIPCP .......................................................................................... 149
12.1.10. Napoitelni Sistemi EAD ......................................................................... 150
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12.2. Electricity Distribution Companies (EDC’s) ....................................................... 150
12.2.1. EVN ............................................................................................................. 151
12.2.2. E.ON Bulgaria/ Energo-Pro ......................................................................... 151
12.2.3. CEZ .............................................................................................................. 153
12.3. NON-GOVERNMENT ORGANIZATIONS ............................................................. 154
12.3.1. National Biomass Associations (BGBIOM) ................................................. 154
12.3.2. APEE ........................................................................................................... 155
12.3.3. Energy Utilization Biomass Association (EUBA) ......................................... 156
12.3.4. ABEA ........................................................................................................... 157
12.3.5. American Chamber of Commerce – RES Group ......................................... 158
12.4. Key biomass companies operating in Bulgarian market ................................... 159
12.5. Lobby groups ..................................................................................................... 161
12.6. Stаkeholder Аnаlysis ......................................................................................... 161
13. RISKS ABOUT RENEWABLE INVESTMENTS IN BULGARIA ................................ 163
13.1. Risks Associated with the Renewable Energy Industry in Bulgaria ................... 164
13.1.1. Regulatory Risk ........................................................................................... 164
13.1.2. Competition within the Renewable Energy Industry................................. 165
13.1.3. Public Attitudes towards Renewable Energy Projects ............................... 166
13.1.4. Emerging Market Risk ................................................................................ 166
13.1.5. Insurance Risk ............................................................................................ 166
13.1.6. Force Majeure Risk .................................................................................... 167
13.2. Risks Associated with the Investor’s Finance Arrangements ............................ 167
13.2.1. Asset Sale Risk ............................................................................................ 167
13.2.2. Borrowing Risk ........................................................................................... 167
13.2.3. Foreign Exchange Risk ................................................................................ 168
13.3. Risks Associated with the Development of Renewable Energy Plants ............. 168
13.3.1. Variability in the Source of Renewable Energy .......................................... 168
13.3.2. Development of the Project and Construction Risk .................................. 169
13.3.3. Capital Cost Risk ......................................................................................... 169
13.3.4. Permits ....................................................................................................... 169
13.3.5. Land Options .............................................................................................. 170
13.3.6. Construction ............................................................................................... 170
13.3.7. Dependency on Suppliers .......................................................................... 171
13.3.8. Technology Risk.......................................................................................... 171
13.3.9. Operation and Maintenance Risk .............................................................. 172
13.3.10. Market Price of Electricity ...................................................................... 172
14. SWOT Analysis .............................................................................................. 173
15. CONCLUSIONS .............................................................................................. 179
16. LIST OF ABBREVIATIONS ............................................................................... 182
17. REFERENCES ................................................................................................. 185
18. DISCLAIMER .................................................................................................. 195
19. APPENDIX I. BIOMASS MAPS OF EUROPE AND BULGARIA ............................. 196
BULGARIAN BIOMASS MARKET: HANDBOOK FOR INVESTMENTS 2012/2013
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LIST OF MAPS, CHARTS AND TABLES
Map 1: Where is Bulgaria on the European map............................................................... 17
Map 2: Major transport corridors passing through Bulgaria ............................................. 18
Map 3: Bulgarian regions ................................................................................................... 19
Map 4: Biomass potential of Bulgaria ................................................................................ 73
Map 5: Biomass potential in Bulgaria according to Bulgarian Academy of Science ......... 76
Map 6: NATURA 2000 areas in Bulgaria ........................................................................... 125
Map 7: Districts covered by EVN Bulgaria ....................................................................... 151
Map 8: Districts covered by E.ON Bulgaria/ENERGO-PRO .............................................. 153
Map 9: Districts covered by CEZ ...................................................................................... 154
Chart 1: Real GDP growth for the period 2000-2012 (including estimates) ...................... 22
Chart 2: Bulgarian GDP growth compared to EU-27 for the period 2002-2011(Q1) ........ 23
Chart 3: Unemployment rate in % from 2000 to 2011 ...................................................... 25
Chart 4: Electricity imports and exports for the period 2004-2011 (in million MWh) including estimations ......................................................................................................... 26
Chart 5: FDI for the period 2000-2011 (in million EUR) ..................................................... 28
Chart 6: Lowest corporate income tax rate in Central / Eastern Europe ........................ 31
Chart 7: Inflation Rate per year for the period 2004-2012 ................................................ 34
Chart 8: Structure of Bulgarian electricity market ............................................................. 56
Chart 9: Gross electricity production 2011 ........................................................................ 57
Chart 10: Bulgarian RES targets in % set by the EU ........................................................... 58
Chart 11: Biomas indices May 2012 by E&Y analysis, ........................................................ 62
Chart 12: Comparison of the recent biomass installations growth (in MW) in the EU including estimations ......................................................................................................... 68
Chart 13: Trajectory to reach share of renewable energies in the EU in 2020 ................. 70
Chart 14: Biomass equipment supply in Bulgaria in % by countries for 2012 ................... 85
Chart 15: Cumulative developments of biomass power plants in Bulgaria in MW from 2000 to 2020, including estimates ..................................................................................... 87
Chart 16: Scheme of administrative procedure for biomass energy plants in Bulgaria .. 132
Chart 17: BEERCL structure .............................................................................................. 138
Chart 18: Structure of BEH ............................................................................................... 148
Chart 19: Market Shares by Sales of the Major Utility Companies in Bulgaria in 2011 .. 150
Chart 20: Structure of ENERGO-PRO Bulgaria ................................................................. 152
Table 1: Electricity prices for business and households .................................................... 26
Table 2: Support schemes for RES generation in the EU countries ................................... 69
Table 3: Market prices for biomass projects in Bulgaria for 2011 ..................................... 79
Table 4: Selected operational, under construction and planned biomass projects in Bulgaria .............................................................................................................................. 82
Table 5: Market prices for biomass equipment supply in Bulgaria in 2012 ...................... 86
Table 6: Feed-in-tariffs for electricity from biomass sources in Bulgaria ........................ 131
Table 7: Types of Renewable Energy and Energy Efficiency Projects Financed by BEERECL .......................................................................................................................................... 139
Table 8: Benefits of renewable energy and energy efficiency projects .......................... 139
© 2012, Inea Consulting Ltd., Bulgaria; All rights reserved. Last Edition on 18.06.2012