AES 'Committed to Bulgaria' as Power Purchase Agreement Challenges Loom

Brussels — US company AES remains committed to its Bulgarian power assets as it deals with changes in market structure, in its generation agreements and in air quality controls, the president of AES Bulgaria, Olivier Marquette, told S&P Global Platts in an interview.

AES is the largest foreign investor in Bulgaria's power sector, with 846 MW or about 7% of the country's total installed capacity of around 12 GW.

It has invested Eur1.3 billion in the 690 MW modern coal-fired Galabovo thermal power plant, also known as Maritza East 1, in south-central Bulgaria, and Eur270 million in the 156 MW Saint Nikola onshore wind farm near Karvana in the northeast.

Both assets have agreements that are having to adapt to market reform (renewables) or state aid scrutiny (Maritza East 1). Further, Maritza East 1 is readying itself for tougher air quality rules under the EU's industrial emissions directive.

Bulgarian power demand has been flat or shown slight growth -- under 1% per year -- in the last 10 years, less than average GDP growth, Marquette said. "There is a structural change in the Bulgarian economy, with industry becoming less energy intensive."

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Author Siobhan Hall