Банкеръ Weekly



One promise the retired minister of energy Miroslav Sevlievski gave when entering into office more than five months ago was to increase transparency in the companies he was in charge of. As a matter of fact, at the end of his ruling these companies started giving reports more frequently. After Bulgargas presented its six months financial and production figures last week, it was the turn of the National Electricity Company (NEC) to come to light.NEC's accounting profit for the first half of 2005 amounts to BGN40.5MN, the company's Executive Director Vassil Anastassov said. Much of that money, BGN28MN, came as revenues from the major business, while the rest was due to interests, dividends, positive changes in exchange rates, etc. Still, the reported result is much poorer than the one attained in the same period of 2004 when the company made BGN56MN. The State Commission for Energy and Water Regulation (SCEWR) appeared at the bottom of it. In just one year it increased the prices at which producing power plants sold electricity to the NEC by 12 per cent. The liberalisation of the energy market was the other reason - it allowed privileged consumers (companies that consume over 40 gigawatthours a year and owe nothing to the NEC) to buy the power they need directly from the producer.At least according to the figures announced, that should be the end of the company's troubles. Since the beginning of the year power plants throughout the country have produced 22.2 billion kilowatthours, 1.2 billion kilowatthours more than the amount they produced in the first half of 2004. Curiously, the share of electricity produced by hydroelectric power plants is already 2 billion kilowatthours (50% more than in 2004), and according to NEC experts' forecasts, that source will be producing approximately 4.5 billion kilowatthours a year.End consumption in the country is up by 239 million kilowatthours, reaching 13.7 billion kilowatthours. The increased usage is mainly caused by the construction, chemical and machine-building industry which have spent 19.6, 12.6 and 4.1% more electricity respectively compared to the first half of 2004. The results for domestic purposes consumption are just the opposite, however. Since the electricity price went up by 10% (on July 1, 2004), consumption by the population has logically shrunk by 1.1 per cent. A small growth was only reported by Electricity Distribution - Metropolitan and Electricity Distribution Sofia Region. The rest of the distribution companies reported a negative trend.Regardless of the fluctuations in the domestic consumption, NEC's major revenues source is still the export. Traditionally, the company did not announce its export profit but said export had grown by more than 1.1 billion kilowatthours compared to the same period of 2004 and had reached 3.5 billion kilowatthours. Export to Greece has grown most - it is up from 34.5 to 42.3% for one year only. Bulgaria's southern neighbour compensated the reduced amount of export to Romania (down from 31.9 to 26.1%) and to Serbia (from 33.6 to 31.4%). NEC managers are already rubbing their hands that by the end of 2005 electricity export will have reached 7 billion kilowatthours, a quota record high for the past five years.The perfect picture is partially dulled by the continuing high losses of electricity along the network. If export and domestic consumption are deducted from the total amount of electricity produced, it turns out that more than 4 billion kilowatthours are lost somewhere along the line. In 2003, technical losses amounted to 18%, in 2004 - to 14.2%, and now they are down to 12.4 per cent. It means that in six months we've managed to reduce them by 6.4%, or by 175 million kilowatthours, Vassil Anastassov said proudly. But the NEC manager is well aware of the fact that losses are logically smaller in the summer, since consumption of electricity is lower, too. Whether or not the company is successful in fighting against thefts and technical losses will be seen when the winter season starts. Until then, NEC will be trying to collect its money back from the debtors. As of June 30, debts to the electricity company amounted to BGN219MN, of which BGN69MN were current payments. The remaining BGN150MN were old duties. On top of the debtors' list there is Kremikovtsi (owing BGN70MN), followed by Chimco (BGN33MN), the Bulgarian State Railways (BGN27MN), and the Electricity Distribution Company Sofia Region (BGN12MN).

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