Ministry of Energy: Compensation for high energy prices will continue in 2022

The support provided by the government is for BGN 1.5 billion

Energy / Bulgaria
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The government will continue to support business in 2022 due to high energy prices. At its last meeting of the year, the Council of Ministers decided to compensate the network operators in full for the accumulated in the period July - December 2021 critical deficit of their electricity costs for technological needs. Thus, the compensation for the network operators for the months of October and November, approved by a previous decision of the government, in the amount of BGN 110 / mWh, will be upgraded. Under this scheme, BGN 235 million have been allocated, which will be paid upon confirmation of the notification for the aid from the EU, the press center of the Ministry of Energy announced. The department also explains exactly how the funds are distributed.

The financial support for the network companies, including ESO EAD, will reduce the financial deficit, which should be compensated in the next price decision of the EWRC. In turn, this limits the need to significantly increase the prices of network services for all end-users. In this sense, the program "saves" about 4.50 BGN / MWh on average for those connected to the transmission network and about 20 BGN / MWh on average for those connected to the distribution networks, which amounts would otherwise have to increase network charges due to the accumulated deficit. This has a direct positive impact on all consumers in the country - domestic and non-domestic.

It is planned that the support for the network operators will continue in the first quarter of 2022. The planned additional financial resource is worth BGN 120 million.

According to the program launched by the caretaker government, the support of non-household end customers of electricity will continue in December 2021 and in the first quarter of 2022, the government decided.

The amount of this support, as well as the December business aid, is calculated as 75% of the difference between the base price of BGN 185.59 / mWh and the real average monthly stock price of the IBEX day-ahead segment for the respective month, but not more than 30% of the real stock exchange price for July 2021. This scheme is worth BGN 250 million only for December 2021, plus another BGN 670 million for the first quarter of 2022.

In December alone, the support for the Bulgarian business is expected to be around BGN 130 / mWh, which, in combination with the direct support for the network operators, will lead to a significantly increased effect compared to October and November.

From the beginning of 2022, the government plans for the first time to include natural gas consumers on the regulated market among the recipients of financial support. They, as well as non-household electricity consumers, will be supported for December 2021, as well as for the entire first quarter of 2022. The financial resource for this is about BGN 200 million.

The total value of the envisaged compensations may exceed BGN 1.5 billion, depending on the market dynamics. The financial source for them is the state budget, the dividend from the state energy companies, as well as the revenues from the sale of carbon emission allowances.

The teams of the Ministry of Energy and the Ministry of Finance will continue their communication with all representatives of social and employers' organizations for effective adaptation of the compensation mechanism in view of the dynamically changing market environment, the ministry said.

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