What are the immediate and the long-term goals of the new Bulgarian Government in the energy sector
Following three General elections (held in April, July and November 2021), on 13 December 2021 the new 47th Bulgarian Parliament approved the 4-party coalition Government led by Prime Minister Kiril Petkov.
The Coalition Agreement contains a detailed overview of the immediate and the long-term goals of the new Bulgarian Government and below we provide a snapshot of the priorities in the Energy sector (attached is the full list of these priorities):
Immediate goals of the new Bulgarian Government in the energy sector:
- Support with the escalating energy prices (energy allowance scheme to 200 KWh / month per household; offering the possibility of paying energy bills by equal instalments; support to State and Municipal institutions that provide public and social services to pay their bills by the Central Budget; supporting long-term contracts at IBEX; optimising existing business support mechanisms; establishing a formal definition of "energy poverty" and preparation of a 5-year plan for overcoming the energy poverty in Bulgaria, etc.);
- Audits and changes (audit of all state-owned energy producers and grid operators, the Electricity System Security Fund, energy traders and the Energy Exchange; analysis of the reasons for the large number of budget organisations receiving energy from the platform of last resort provider; full transparency in the investigation of cartel practices by the Commission for Protection of Competition through a change in its composition and an increase in the Regulator's expert capacity; overhaul the way energy efficiency projects are financed; publicity and optimisation of all costs in the state energy sector etc.);
- Alignment with the EU (taking adequate measures to close infringement proceedings against Bulgaria in the energy sector; transparency and control of all European Commission instruments; developing a national position on “Fit for 55”; negotiations with the European Commission on the possibility of limiting electricity exports at certain times (other than under force majeure conditions) to guarantee quantities needed for the domestic market are at affordable prices and a derogation is granted for this; transparency and control of all European Commission instruments, etc.);
- Security and diversity of energy supply (construction of the Greek gas interconnector in 2022; ensuring different sources of gas supply to Bulgaria through a 6-month expert review of gas purchase contracts with a view to diversifying sources, achieving lowest price and allowing flexibility in the choice of supplier; review of the requirements for the establishment, operation and analysis of access to tax warehouses to encourage greater competition, etc.)
Long-term goals of the new Bulgarian Government in the energy sector:
- Strategic documents (adoption of a new Sustainable Energy Development Strategy with compatibility analysis and Environmental Impact Assessment (EIA) and other national strategies; development of a national strategy for Bulgarian oil and gas extraction; annual reports on mining, radioactive waste, oil and gas and decarbonisation strategies, etc.);
- Energy studies (study and assessment of Bulgaria's overall hydropower potential; exploring the energy potential of the Black Sea; complete mapping of the country's geothermal resources; analysis of options for, and consequences of, restructuring or closure of Bulgarian Energy Holding (BEH); etc.);
- Changes to the legislation (seeking political consensus and comprehensive analysis of the 3rd Liberalisation Package (considering its impact on energy prices) and the Green Deal and necessary measures at national level, in the context of achieving the EU's 2050 targets; preparation of modalities for the transition to the capacity mechanism; enhancing the administrative capacity of the EWRC to control REMIT; amendments to the Public Enterprises Act and changes to the statutes of state-owned energy companies, management and control contracts based on best practices; amendment of the Concessions Act to protect Bulgaria's interests relating to current, granted, and future production concessions; expanding the capacity of the EWRC to handle individual complaints; review of the options, contracts, and regulatory documents (European and Bulgarian legislation) for limiting the reserved capacity to 50% from any one gas supplier; removal of administrative barriers to facilitate self-supply of RES, etc.);
- Focus on strategic investments (maintenance and development of nuclear capacity at Kozloduy NPP and an independent expert analysis on potential new nuclear projects; safeguarding of the Maritsa East energy complex; support for renewable energy producers: prioritization of the projects based on cost of energy produced and strategic importance if they meet environmental requirements, notification regime instead of authorisation regime for captive renewables (without being able to feed back into the system), removal of administrative barriers to facilitate self-supply of RES, 1 or 2 pilot capacities built and to use the thermal potential; focus on green hydrogen and energy storage, etc.; ensuring a modern and affordable district heating service; security of natural gas supply and its diversification;
- Making energy efficiency a national priority (special structure in the Council of Ministers - Deputy Prime Minister for Climate; building smart grids with interactive management by users and producers, etc.).