Business warns: Due to high electricity prices and market distortions, gradual shutdown of industrial facilities begins

Energy / Bulgaria
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The Association of Bulgarian Employers' Organizations (AOBR) warned that if the responsible state institutions do not take the necessary measures to ensure liquidity in the free electricity market and balance electricity prices, they will organize national protests to protect the interests of the hundreds of thousands working in the industrial sector in Bulgaria.

Systematically, a deficit is created on the electricity market in Bulgaria, mostly provoked by limited supply. In recent days, from August 1, 2021, the situation has deepened negatively and gained volume, which dramatically worsens the competitive position of companies and especially industrial electricity consumers in Bulgaria in the context of the European market, which is unacceptable and irresponsible behavior of the competent institutions, the employers' organization points out in an open letter to the Prime Minister Stefan Yanev.

The analysis of the experts shows that the average base price of active electricity, market "day ahead" according to the Bulgarian Independent Energy Exchange EAD for the period is 130.95 Euro / MWh, and for August 4, 2021 is 169, 10 Euro / MWh, (in the afternoon crossing the limit of 200 Euro / MWh). For comparison, the prices of electricity in Bulgaria for the period exceed those of the main export markets of Bulgarian industrial products (Germany, Italy, France, Austria) by over 50%, with the average excess for Wednesday exceeding 70%.

AOBR points out that energy-intensive industrial consumers comply with their requests, taking into account climatic conditions, trade activity and high levels of energy consumption, but the behavior of state and municipal companies, including inadequately assessed periods for repair programs provoke systematic market distortions.

According to the business, instead of adequate measures, at the moment:

- the capacities of the state company TPP Maritza East 2 EAD are loaded below 25% - in the absence of technical, resource and organizational obstacles for full load;

- the export of electricity to Greece is in full capacity - direct and indirect (through the Republic of Northern Macedonia);

- Insufficient capacity for integration with the pan-European electricity market through Romania, Hungary, the Czech Republic and Slovakia.

“As responsible, nationally represented employers' organizations, we have repeatedly signaled and warned about the potential risks to the electricity market in Bulgaria. Alas, the limit of tolerance has already been passed and after discussions with the management of major energy-intensive companies, our members, we inform you that we are starting a phased shutdown of production facilities, starting at 0.00 am on August 4, 2021, "said in the letter to Prime Minister Yanev from AOBR.

The business association insists, through the operational capabilities of institutions such as the Ministry of Energy, Bulgarian Energy Holding EAD, Electricity System Operator EAD and in coordination with the regulatory authorities, to take the necessary urgent and adequate measures to:

- ensuring full load of the state company TPP "Maritsa East 2" EAD;

- temporary restriction on electricity exports - by the way, Greece has already taken such action with regard to its cross-border exchange capacity with Italy;

- support for the affected energy-intensive industrial consumers, given their objective inability to function due to inadequate and non-market institutional solutions; as a result of market associations, and this is beyond the possibilities for management and planned behavior of the Bulgarian non-state economic entities.

"As obviously the responsible institutions and their leaders show an inability to deal with the situation, you should, as a principal, demand immediate resignations and provide resources, incl. personnel to deal with the problems that have arisen before the Bulgarian business to provide enough energy for the normal functioning of the Bulgarian economy. We declare our readiness to organize national protests to protect the interests of the hundreds of thousands working in the industrial sector in Bulgaria, "said AOBR.

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