Bulgaria to focus on small renewable power projects

 To encourage small solar and biomass installations.  Likely to cut incentives for solar energy in July

SOFIA, April 24 (Reuters) - Bulgaria will now focus on small renewable energy projects, Energy Minister Delyan Dobrev said on Tuesday, as the Balkan country tries to avoid a jump in power prices and prevent its grid from overloading due to a surge in bigger projects.

A number of investors including U.S. company AES, South Korea's SDN and Austria's EVN have rushed to take advantage of higher tariffs that Bulgaria began offering in 2007 for power output from renewable projects, with the costs passed through to consumers. Dobrev said the Balkan country was on track to meet its target to get 16 percent of its final energy consumption from renewable energy sources by 2020 and should now shift its focus away from big wind and solar power investors.

"At present, we are exceeding our mid-term green target. The installed renewable energy capacity is over 1,000 megawatts. But by July 1, it will grow by a two-digit percentage," Dobrev told a green energy forum. "From now on we have to concentrate on projects that are most beneficial for the country and for the society. We will be backing small projects," Dobrev said.

Dobrev said the small rooftop solar installations or small biomass and hydro projects were best for the European Union's outdated power grid, because their output is usually consumed on spot, without requiring new power infrastructure. Bulgaria, European Union's poorest member state, already has amended its renewable energy law to slow the surge in solar and wind power projects.

While the country offers plenty of sun for solar energy, government officials say the costs are too high and want to limit its use mainly to small roof panels rather than construction of large solar energy parks. Investors turned to southeastern Europe after countries, including Germany and the Czech Republic began slashing generous feed-in tariffs to rein in booming solar sectors, which raised fears of skyrocketing power prices and grid overload.

Electricity prices are politically sensitive in Bulgaria, where power bills eat away a huge part of monthly incomes, especially during winter months. Sofia cut by 30 percent the preferential prices for energy from photovoltaic installations last July and is likely to further cut the incentive this year, industry officials say.

Bulgaria has about 600 megawatts installed in wind farms and about 400 megawatts in solar energy parks, industry officials say.