Bulgaria is facing some serious challenges: smog, regions that rely completely on coal for jobs, and serious energy poverty. Genady Kondarev takes a look at why it’s so hard for the country to break free of fossil fuels.
Bulgaria is the poorest member of the rich men’s club – a role that became somehow comfortable and self-perpetuating over the last decades. The usual excuse for why renewables and energy efficiency are not possible in the country is the lack of wealth to cover for the initial investment cost. This excuse has kept the energy system frozen in a stage more suitable for the 1970’s than 2018.
The energy system has been on brink of bankruptcy for years. But that hasn’t stopped the government from generously spending billions of euros they do not have on energy adventures, such as keeping inefficient coal jobs, mines and capacities, and paying Russia for the ordered but failed Belene nuclear power plant project.
The energy mix of the country is roughly 40% coal, 35% nuclear, 19% renewables and some co-generation from district heating companies and industrial plant surpluses.
The new Regulation for EU Electricity Market Design will impose stricter emissions limits, sending the country into a panic over how to keep its coal power plants running. Bulgaria is gearing up to approve massive derogations: this is a special situation in which a member state chooses not to enforce EU law due to its internal circumstances (typically a state of emergency).
Recently, the state announced they are buying the carbon allowances for the biggest state-owned lignite power plant Maritsa East 2. The government claims that it is a fair and desperately needed deal to save the industry’s biggest power plant. However, this would not be in line with the EU long-term climate strategy and possibly would also infringe EU state aid guidelines. In a nutshell: Bulgarian Energy Holding is covering the necessary GHG allowances of the state owned power plant to the amount of 300 million BGN (150 million Euros). And this is the bill for 2018 only. 2019 comes with even grimmer perspectives as the price of carbon on the markets is projected to rise even further.
The existence of old polluting power plants is justified with energy poverty and inadequate social measures. Subsidies in cash are provided to over 200 000 households every single heating season to provide for the energy needed to heat the homes of the energy-poor. But these subsidies are used only for the purchase of low quality coal, wood, and inefficient electric heating. These payments are perpetuating the poverty and further aggravate the air pollution in towns as there is no incentive for the households to change their fuel base and heating.
The last census in the country showed that almost 60% of Bulgarian households rely on coal and raw wood for their heating. 40% of the households use electric heating, with an EU average of just 11%. This highlights the systemic deficiencies that have not been tackled for decades. Coal and raw wood are not subject to any safety standards, meaning that it is often of very poor quality and emits sulphur and fine particles which can be deadly. Households that heat with electricity are often very inefficient. The government portrays heating as a zero-sum game: they must keep the price of electricity cheap or people will be forced to move to primitive stoves and burn trash. They do not speak of a third way – energy efficiency in houses and energy efficient heating.
The over-reliance on electricity brings another problem. Although Bulgaria is a southern country, the annual temperature differences are significant. A few weeks of severe winter forces the state to provide capacity payments. These are coming at the expense of all customers and pour into the pockets of power plant operators with dubious reputations. In previous years some of those power plants failed to provide energy when needed because of technical disruptions. Although the consumers paid, they did not get the service they paid for.
Further down the production chain of electricity, things do not look better. The grid system is in a poor state leading to huge losses when energy is transported. The country burns tens of millions of tons of the poorest quality lignite annually. The monstrous Maritsa East Mines are designed to swallow 240 sq km of the most fertile land in the country. The expansion of the operations will lead to the resettlement of two villages in the next years. The mines employ over 7000 workers and produce annually 30 million tons of coal which feeds the four power plants in the complex. That is just over 4 tons of lignite per capita if you divide it to the population of Bulgaria – an invented index that aims to show the significant footprint. No wonder that the per capita ecological footprint of the country is very high for its relatively low GDP.
Maritsa East Energy Complex has led to the mono-sectoral economic development of its entire region: everything relies on coal. The complex is so big that is has become self-encapsulated. People live and work in that regional social and economic bubble and claim to believe that coal will provide for them and their families forever. Speaking of a possible end of coal is heretical there. And so to date there are no specific national or local programs for transition of the coal-dependent regions.
In 2019 Bulgaria, like every other EU member state, will have to finalize its energy and climate plan until 2030. As EU climate ambition has been raised, the logical move for Bulgaria would be to close down soon the most polluting power plants and plan to gradually phase out all coal industry in the next decade or so. This will free a lot of public resources and incentivize investments in energy efficiency, as well as provide incentives for small scale renewables that have been suppressed as a result of heavy bureaucracy requirements. Finally, it will bring predictability, a clear focus and long-term perspective for the investors.
Genady Kondarev is an economist and environmentalist and working with Za Zemiata (Friends Of The Earth Bulgaria). He has devoted his career to promoting clean energy development in the region. Over the years he has worked on projects implementing renewable energy and energy efficiency to advocacy for low carbon development. He has been monitoring the energy sector in Bulgaria for over 12 years, and is currently focusing on problems in its coal industry, promoting a coal phaseout.