Bulgarian Energy Strategy Project: Back to the 20th Century

Analyzing a document with identical nature and content, in which only the "camouflage colors" change every 5-10 years, is a tedious job.

In fact, the main problem of the document is that its anonymous authors, as well as the political and economic mafia that stands behind them and runs the country, are convinced that the European Union is an external environment for Bulgaria. External not only in energy, but in general. They deeply hate the EU, Europe and all the ideas that come from there in the field of both energy and climate policy. The only thing that prevents them from openly opposing these ideas and policies is the expectation of European money flowing into their own pockets. Europe's money is what still makes Bulgarian rulers wear the "lambskin" of Europeanism.

Exactly such a situation is revealed in the text of the draft for the next energy strategy with a pompous name. A small detail is that the project is full of the phrase "sustainable energy development", placed where it should be and where it should not be, but misses important liaisons with European priorities such as solidarity, trust, research have been missed.

The energy strategy project until 2030 is bad! Because:

- seeks to maintain the current situation in the energy sector, such as technologies and production structures, system links and management practices;

- does not eliminate the severe corruption that has gripped the sector;

- does not aim at energy transformation, a fair energy transition and does not lead to the active implementation of the "Green Pact" ("green deal").

- no ambitious climate goals;

- there is no idea how it will support the transition to an innovative economy and a faster recovery from the global crises and challenges of recent years, as offered by new energy technologies.

In times when the EU is trying through its energy policy to achieve not only energy and climate goals, but also to get through crises more easily, the draft strategy is trying to return Bulgaria to the twentieth century!

In the very introduction, this document begins with a giant lie:

"In the Strategy for Sustainable Energy Development of the Republic of Bulgaria until 2030, with a horizon until 2050, (the Strategy) are embedded the common European policies and goals for energy development and climate change mitigation, reflecting the national specifics in the field of energy resources, production, transmission and distribution of energy. The main strategic decisions aimed at achieving national goals and guaranteeing Bulgarian interests have been defined. "

A careful reading of the entire document shows the following:

- "common European policies and objectives for energy development and climate change mitigation" are set in a way that they are not implemented on time or are "partially implemented", i. e. to reach a level of implementation that is insufficient to reduce emissions, but seems acceptable for the reporting documentation;

- "national specifics in the field of energy resources, production, transmission and distribution of energy" are reflected in order to keep energy in the current production and technological framework at least until 2050 - with risky nuclear power plants and polluting coal-fired power plants. In other words, the goal is for Bulgarian energy to remain polluting, dangerous to human health, destroying the environment and expensive (in terms of income and human development) until 2050, because only in such a framework is it profitable for certain energy and political "players" ;

- "achieving the national goals and guaranteeing the Bulgarian interests" in translation means achieving the goals and guaranteeing the interests of the political and energy mafia;

- that is why the project does not envisage such an urgent institutional reform that would change the governance of the energy sector so that it is adequate to the goals and objectives by 2050 (specific examples of necessary steps for reforms see below)

The first major problem with this document is the lack of key elements to make it a good strategy. Missing:

- analysis and evaluation of the implementation of the previous energy strategy (until 2020) SWOT (or similar) analysis to describe the strengths and weaknesses of the Bulgarian energy sector at the moment, the opportunities and risks for the sector;

- analysis of why the proposed preservation of the current structure of management and operation of the sector will have a positive effect for Bulgaria in 10 years;

- proposals accompanied by the relevant analysis of the role of the state and the budget in the development of the sector until 2030 and until 2050.

The strategy claims to be built in sync with the five directions of the Energy Union (ENU), but when considering the specific parameters and set goals, it often contradicts them. The document also lists the current directives and regulations, but lacks specific references to the documents that shape its qualitative and quantitative objectives, management and control. There are also no references to the latest legislation to be taken into account (e.g. Commission Implementing Regulation (EU) 2020/1294 of 15 September 2020 on the Renewable Energy Financing Facility in the Union), as well as other documents - guidelines, communications, etc. In this way the (in) correspondence between the Bulgarian and the common European goals in the energy sector is hidden.

The draft strategy document lacks any request for changes in the management and institutional architecture of the Bulgarian energy sector. This is a worrying sign, as major changes in EU energy and climate policies require major changes in the governance of the sector at national level. Among them we can mention the removal of AUER from the Ministry of Energy, the creation of an independent inter-institutional structure responsible for a fair energy transition and the closure of coal mining, the release of the Minister of Energy from his functions related to concessions (except of those related to coal mining and the terrains that will be freed from it), etc. Are not discussed the issues of:

- the closure of the Bulgarian Energy Holding (BEH);

- the closure of National Energy Company (NEK) and the separation of separate independent units from those of its structures that make sense to continue to operate - electricity supply, electricity trade, electricity generation of dams and hydropower plants;

- the establishment of a public council on climate policy and related sectoral policies with broad stakeholder participation, and representatives in whose choice the state does not interfere, removing these discussions from the current "semi-legal" ones such as publicity and independence. tripartite cooperation, the Economic and Social Council, the newly formed Green Deal Councils, etc.

The set goals until 2030 are also ungrounded:

- reduction of primary energy consumption compared to the baseline forecast PRIMES 2007 - 27.89%;

- reduction of final energy consumption compared to the base forecast PRIMES 2007 - 31.67%;

- 27.09% share of renewable energy in gross final energy consumption, at least 15% interconnection of electricity.

The most important thing to note about these goals is that they are either unrealistic (the first two) or insufficient (the third and fourth). Personally, I would not uncritically trust the PRIMES 2007 model for two reasons:

The model presents a scenario for the energy development of the EU and the Member States until 2030, based on data, policies, technologies, prices, assumptions, etc., which existed until mid-2007.

The model, although based on "market forces", does not include factors such as external or social costs, e.g. the costs of environmental protection or subsequent threats to the security of energy supply. Among the latter we can list Russia's gas policy, the Fukushima catastrophe, changing energy trends, and more.

On these grounds, we can determine that the PRIMES 2007 scenario is far enough away from today's realities and any goals that are compared today with its forecasts are easily considered ambitious, without actually being such in terms of today's energy goals and objectives. Therefore, the choice of an approach to link the energy consumption targets only to its baseline scenario is misleading and hides the real potential of the sector for truly sustainable development. Thus, the authors easily "justify" the lie that the preservation of the current energy structure will lead to some significant results that meet the European goals in climate, environmental protection and energy itself.

Regarding the third and fourth objectives - 27.09% share of RES in the gross FEC (final energy consumption) and at least 15% interconnection of electricity, we believe that these are extremely unambitious goals.

Bulgaria's renewable energy potential not only as a natural resources, but also as a technological opportunity has been proven to be greater, and technological progress has already reached such levels that by 2030 the targets can be increased by at least 10-15%. It is a matter of political will, proper strategic planning and support for innovative public and private initiatives to realize this potential in the next 10 years.

It is clear, however, that the lobbies of the outgoing coal and nuclear energy companies do not allow such a development to happen and this portends bad times for energy and for Bulgarians as consumers of its production.

In terms of connectivity, greater connectivity in the electricity sector - certainly over 1/3 to 50% - is needed to ensure a smooth transfer of electricity. This transfer will contribute to the faster construction of a regional market, and hence to objective pricing. The elimination of current practices for pre-arranged transactions, which are subsequently fictitiously validated through the stock exchange, is a condition that must be met immediately.

The missing goal of the strategy is to reduce energy poverty to the lowest possible levels. There are no ideas to give energy-poor citizens a chance to get out of energy poverty - for example, by supporting their inclusion in energy cooperatives, etc., i. e. to refer Bulgaria's energy policy to terms such as "solidarity" and "trust".

Ultimately, however, the general solution of the problem of energy poverty remains outside the scope of the draft Strategy. This is a question of the income of the population, which must correspond to modern realities and ensure secure access to energy, water and other basic human needs. This issue needs to be resolved at other levels in the country, but we do not see any hint that they need to commit to the problem. Nor is there a need to develop industries that serve the development of green, innovative and digital energy - for example, the production of individual elements, units, components, appliances needed for "smart grids", which bring added value and increase jobs and income.

Due to all these structural problems of the project for strategy of the Bulgarian energy until 2030, any attempts to analyze the proposed investment ideas, capacity allocations, production forecasts, etc. assumptions, estimates, indicators and forecasts are useless.

This document must be downloaded and rewritten at a completely new baseline, with the missing elements we have mentioned and, above all, with clear European goals and taking into account technological progress, policies and global trends in the sector.

Finally, we will ask three questions to the government, the answers to which we expect, because they are extremely important for the very development of the sector in the next decade:

1. Is it true that in the next few years TPP Maritza East 3 Contour Global and TPP AES Maritsa East 1 will switch from local coal to liquefied natural gas supplied by the United States at the LNG terminal under construction in Alexandroupolis? If the answer is yes, why was a 20% share in the terminal taken over by the state budget of the Republic of Bulgaria and not by the owners of the power plants? Isn't this hidden state aid for them?

2. Is it true that while the authorities in Sofia are trumpeting the continuation of the Belene NPP project through some strange business partnership, including the Great Powers, Washington is convinced that Westinghouse will build Unit 7 at the Kozloduy NPP“?

3. How will Bulgaria react to the forthcoming US sanctions on the construction of the Turkish / Balkan Stream?