On October 15, Sofia will host the international conference "Green Transition - Challenges and Solutions for Bulgaria", organized by Dir.bg and 3eNews. The main issues in the European Green Pact concern the energy transition. In order to comment on what is happening on the energy markets in the country and Europe, as well as the vision for the future, including the forthcoming steps for the full liberalization of the electricity market in Bulgaria, we are talking to the Minister of Energy Andrey Zhivkov.
Mr. Minister, the energy sector in Bulgaria is in a difficult period. Serious decisions are forthcoming from the point of view of the European vision for the green deal. What should be the recommended steps by the Ministry of Energy for a smooth transition through the energy transition?
Further decarbonization of the energy system is crucial for its future, as more than 75% of the EU's carbon emissions come from energy production. The ambitious policies set out in the European Commission's Green Deal aim to make Europe the first climate-neutral continent by 2050. The European Commission's intermediate goal is to reduce greenhouse gas emissions by 55% by 2030. The focus is on the transition to clean energy, ensuring secure energy supplies at affordable prices and building a fully integrated and digitalized energy market with energy efficiency priority. It is set to improve the energy performance of buildings and dynamic development of renewable sources.
The Ministry of Energy understands the importance of this ambitious climate policy and supports EU measures on the road to a zero-emission economy by 2050. A smooth and equitable socio-economic transition for all citizens remains a national priority. At the same time, we take into account the regional differences and the specifics of individual countries within the EU, as well as the need for targeted measures and incentives for change. We take the position that the right of the Member States to determine their own carbon-free and zero-emission solutions, tailored to their energy mix and guaranteeing their energy security and environmental integrity, should not be restricted. Individual solutions must best suit national needs, economic efficiency, technical feasibility and social acceptability.
Coal producers in our country face serious challenges. Coal has the largest share of local energy resources. Their presence is a guarantee for stability and security of our energy system. Local coal-fired power plants provide about 48% of electricity production. Local coal can provide this production for the next 60 years. In this direction are the active actions of the Ministry to update the National Plan for Recovery and Sustainability in accordance with the Green Deal, as well as to develop a strategy for a smooth transition of coal regions to carbon-free production.
Emphasis in this strategy is innovative technologies and the construction of modern infrastructure. The introduction of new technological solutions, such as safe and low-carbon hydrogen and other decarbonized gases, will take place in stages and with a balanced functioning of the internal energy market. The smooth energy transition will be supported by European mechanisms and financial instruments, which will make it easier for the country to implement reforms more easily and quickly. This will ensure a fair distribution of the costs and benefits of the transition.
You are on the verge of forming difficult decisions regarding the Maritza East complex, where several cases are intertwined. What will be your approach so as to achieve a balance for the people in the region and to ensure the sustainability of the country's energy system over a sufficiently long period of time?
Due to the significant share of energy produced from coal in the energy mix of Bulgaria and the high energy intensity of our economy, the transition to a climate-neutral industry is expected to cause serious social and economic consequences for the country.
Undoubtedly, the decisions we will have to make for the future of the Maritza East complex are not easy at all. Unfortunately, over the last 20 years, almost nothing has been done to provide security for the future of the people who have been working here for decades. We now need to take swift, decisive, but also sensible action in a very short time in order to start a gradual restructuring. What I can assure you is that all our solutions will be communicated with the widest possible range of stakeholders, in the first place - with the workers in the complex and the unions.
To support Member States and mitigate the negative effects, the European Commission has developed a Fair Transition Mechanism targeted at the regions most affected by the transition. The planned grant for Bulgaria is 1.178 billion euros.
The mechanism will finance in our country regions at the level of districts or parts of them, on the basis of territorial plans for fair transition approved by the EC. The Ministry of Energy is the department responsible for the activities related to their preparation.
In connection with the preparation of the territorial plans for a fair transition of the three leading coal regions in the country (Stara Zagora, Kyustendil and Pernik) under the EU Program for Support of Structural Reforms, a request for technical assistance was approved for their preparation. The contractor of the project is "PricewaterhouseCoopers Bulgaria". The three mentioned districts are covered and an assessment of additional territories is made, including the districts of Haskovo, Sliven and Yambol.
The consultant is developing socio-economic analyzes that will propose appropriate measures to mitigate the negative effects of the transition to a low-carbon economy. They will be focused on investments in economic diversification, circular economy, qualification and retraining of workers, assistance for job seekers and others.
For the consequences on the energy system from the transition to a carbon-neutral economy, an analysis will be made of the potential for replacement capacity, while ensuring the country's energy security. In this regard, the Recovery and Sustainability Plan of Bulgaria provides for the establishment of an Energy Transition Commission with broad stakeholder participation, which will develop scenarios for decarbonization of energy and a Roadmap to climate neutrality.
We work hard and look for the best solutions for the future of the complex and its employees. I can announce that there are already specific innovative project proposals, which we are currently analyzing and will announce at a later stage.
How do you see the energy of Bulgaria in 2035?
The Integrated National Plan in the field of energy and climate 2021-2030 is the main strategic document, which presents the further development of our energy. With the implementation of the measures set out in it, as well as the provisions of the Recovery and Sustainability Plan, I believe that in 2035 the Bulgarian energy sector will be much more secure and competitive. Renewable energy sources, energy efficiency and new technologies are an integral part of the future of the industry.
The successful completion of the reforms of the electricity market related to its full liberalization, the active participation of consumers, the decentralization of energy production, as well as the successful completion of the unification of the Bulgarian and the common European electricity market will be key to the realization of these prospects.