The National Electricity Company (NEK) reported a net profit of 139 million levs for 2024. This is a significant increase compared to a year earlier when the company notched up a profit of 95 million levs. The good result is due to significantly higher sales revenues as a result of high prices at the end of last year, the company's final financial report shows.
Among the factors are the increased revenues from electricity sold by end suppliers and from the exchange market. NEK participated in the market with larger volumes and sold 83.3% more electricity on the exchange compared to the previous year. In the first half of 2024, prices were stable (at levels of around 145 - 150 lev/mWh), after which there was an increase, which by the end of the year reached values of an average of 240 - 260 lev/mWh.
The reason for these significantly higher prices was the persistently hot weather during the summer months, the drier second half of the year, which further limited production from hydroelectric power plants, periodic system restrictions between borders, and electricity demand from Ukraine, etc., NEK reports.
Despite this seemingly good financial result for 2024, NEK warns that it may still experience cash problems. The company emphasizes the agreement with TPP "ContourGlobal Maritsa-East 3" that expired at the beginning of last year, after which NEK now has less generating and balancing capacity to participate in the market.
The company wrote that it was "heavily dependent on the determined price levels and regulatory conditions, as well as on the compensatory mechanisms of the Electricity System Security Fund (ESSF) in connection with the reimbursement of the costs incurred by the public supplier for the mandatory purchase of electricity in the event of a future partial reimbursement of funds due from the ESSF to NEK and in the event of a possible impaired liquidity of the fund". As such, it went on to note "a real risk of delays in payments by the company to electricity suppliers and payments on loans to BEH".
NEK also draws attention to the wholesale liberalization from July 1, emphasizing that the company will continue to purchase electricity under the agreement with the AES-3S Maritsa-East 1 TPP and sell it on the exchange along with that produced by its own hydroelectric power plants and hydroelectric power plants through the trading license.
Three billion reasons why
Total expenses decreased by 9% to 3.1 billion levs (from 3.4 billion levs a year earlier). This is mainly due to purchased electricity and availability, which are 89.6% of all expenses for the year.Reported sales revenues increased by 20% to 2.1 billion levs (from 1.7 billion levs a year earlier). This is due to the growth in revenues from end suppliers and the increase in revenues from sales on the IBEX platforms in 2024. A decrease is reported in revenues from electricity sold to the so-called supplier of last resort, as well as in balancing energy. Revenues from sales to end customers increased by 30% and for 2024 are 1.6 billion levs compared to 1.2 billion levs in the previous year, the report also shows.
Boom of coal and nuclear
The quantities of electricity supplied by the Kozloduy NPP in 2024 are 27.5% more than those purchased the previous year. Purchases from the other quota power plant - Maritsa-Iztok 2 TPP - for the year are 3,233,218 MWh of electricity, which are in accordance with the quantities calculated by the Energy Regulatory Commission in the price decisions for the regulatory periods 2023-2024 and 2024-2025. "It should be noted that the power plant did not supply electricity to NEK in the first half of 2023, as there were no quantities provided for in the price decision for the previous regulatory period 2022-2023," the company also wrote.In short, the total electricity purchased by NEK from quota power plants increased by 3,579,873 MWh, or 73.8% more than in the 2023 report, compensating for the reduced quantities purchased from the ContourGlobal Maritsa-East 3 TPP, NEK emphasizes.
The National Electricity Company (NEK) reported a net profit of 139 million levs for 2024. This is a significant increase compared to a year earlier when the company notched up a profit of 95 million levs. The good result is due to significantly higher sales revenues as a result of high prices at the end of last year, the company's final financial report shows.
Among the factors are the increased revenues from electricity sold by end suppliers and from the exchange market. NEK participated in the market with larger volumes and sold 83.3% more electricity on the exchange compared to the previous year. In the first half of 2024, prices were stable (at levels of around 145 - 150 lev/mWh), after which there was an increase, which by the end of the year reached values of an average of 240 - 260 lev/mWh.
