Банкеръ Weekly

Briefs

SOFIA CENTRAL HEATING UTILITY DEMANDS PREFERENCIAL PRICES FOR NATURAL GAS

In the second half of 2004 Bulgargas may be expected to demand from the SCER a hike of natural gas due to the increased oil prices, Energy Minister Milko Kovachev announced recently. This, in his words, will bring natural gas prices back to their level from the beginning of the year. In 2004 the SCER reduced on two occasions natural gas prices by a total of 11% due to the low USD/BGN exchange rate. Currently, Bulgargas sells 1,000 cu. m of gas at BGN213. The Sofia Central Heating Utility will insist that the State Commission for Energy Regulation (SCER) sets preferential prices for the natural gas it uses. Our company consumes more than 30% of the total consumption of gas in the country - more than 1 billion cubic metres - and at the same time we pay for it the same price as firms which use considerably less quantities, the Executive Director of the Sofia-based utility Valentin Dimitrov said. He took part in the second regional conference on energy, called Central and Southeastern Europe: Transborder Power Industry, held in Sofia during the week. The average consumption for heating 1 sq. m of housing area in Bulgaria is twice as much as that in Western Europe. E.g. 130 gigajoules of energy is necessary for heating a flat of 100 sq. m in our country during the winter season, while only 60 gigajoules are spent in Denmark. According to Mr. Dimitrov, prefab blocks of flats should be rehabilitated in order to reduce losses of heat. In addition, the outworn heating network and distribution stations should be replaced by new facilities. In 2003 the Sofia Central Heating Utility launched a large-scale 4-year rehabilitation programme, worth EUR114MN, and 36 km of heating conduits were replaced by the year-end. Within a few weeks repairs will begin of another 38 km, Mr. Dimitrov promised. According to plans for the next two years, 92 km more should be changed, too, and all the 15,000 heating distribution stations are to be replaced by new ones till the year 2006. The Sofia Central Heating Utility provides heating energy to 378,000 households, or about 63% of all housings in the country that use central heating. Installed capacities amount to 5,000 megawatts, which generated more than 7 million megawatts of heating energy within a year, while 2,000 megawatts per hour were fed in pick hours of the past winter season. Along with that, the company owns 310 megawatts of electricity producing capacities which ensure about 16% of the electricity, sold in the capital city. For the time being there are no worries that the forthcoming installation of gas supply to Sofia could endanger the company's positions. Both foreign and domestic experience shows that it is cheaper to rehabilitate the existing central heating stations instead of installing gas supply, Mr. Dimitrov pointed out. Natural gas, he believes, is undoubtedly an alternative of central heating, but is still too expensive both for the investor and the end consumer.

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