Alexander Nikolov: The energy system has the resources to withstand a problem with gas supplies

The Minister of Energy expressed hope that such a scenario would not be reached, and also denied that there was any information that Gazprom did not want to work with Bulgargaz

Energy / Bulgaria
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For gas supplies from Russia

Of course, there is a risk of gas supplies from Russia and we cannot bury our heads in the sand, but what will happen is not under our control. This was stated by the Minister of Energy Alexander Nikolov on BNT within the program "Speak Now".

"What will happen is not in our control, but the resources we have, respectively, and the way of managing the reserves in Chiren must be very careful," Nikolov said. He added that "fortunately, even in more negative situations, especially the heating sector in winter can be to some extent offset by electricity. I hope it doesn't get there, "the minister said. According to him, "the system has the resources to endure." "Fortunately, the peak weeks and months of electricity can be covered by the current capacity in the system." He expressed hope that "such a scenario will not be reached".

Aid for electricity in support of municipalities

The Minister of Energy also commented on the frequent interruption of the lighting by the municipalities due to the high electricity bills.

Regarding the suspension of lighting by the municipalities, Nikolov said that what could have been done has already been done, and in the medium and long term the municipalities should think about a better way of governing. He clarified that it is not a question of the operational management of the companies, but of finding mechanisms such as concluding long-term contracts in order to avoid such deficits. In order for funds to come, they are taken from somewhere, Nikolov said. In this sense, the Minister of Energy clarified that currently the decision is to compensate for high electricity bills "to occur on the basis of the state budget, the Security System of the electricity system and the so-called “excessive profits”, although this is not an exact definition. "

"That is, yes, to some extent, the possible reduction in the indebtedness of the energy system cannot happen at the moment. This is quite normal. "I think that the efforts we have made to compensate on time and to be as wide as possible will help, firstly, to remain competitive and, secondly, to avoid additional stress from rising consumer prices," he said.

In this regard, the Minister clarified that, for example, in 2021 for Europe the average change in electricity prices for households was over 30%, while in our country - by 5.5%.

EWRC

The Minister of Energy commented in response to a question from the host and the relationship with the energy regulator regarding price levels.

"I have not had and I do not think I will have a problem with which I am a regulator, because we as the executive must comply with what the regulator says. I would not have a problem with the EWRC, or with any regulator, "said Nikolov on the statement of the presenter that given that the jump in prices in our country was only 5.5% should like the EWRC, and it is not so.

"I say this against the background of the fact that when prices in Bulgaria increase by 5.5% for end users and this seems close to the tolerance limit, it is not an answer to whether we are managing an energy crisis or a purchasing power crisis. That is, the problem in Bulgaria is not so much with the available capacity, or with the dependence on one specific resource, to our joy. The problem is that we are poor. And why we are poor is a function of many things, "said Alexander Nikolov.

Electricity compensation for business

Regarding the price of electricity for business, the Minister clarified that the situation is quite different and therefore the compensation is aimed at companies. "As far as the corporate sector is concerned, all the mechanisms in question, which have been developed by the EC, are mostly related to additional duties, fees, taxes, transmission and so on. The compensations that are currently structured for the corporate sector in our country are much wider, "he said. The Minister specified that as compensations for the prices of electricity during the caretaker government the compensations were 110 BGN (per MWh) for October and November, and then for "approximately 130" (BGN 130 per MWh).

"From now on, after talks with businesses, employers' organizations, the compensation ceiling will be a maximum of BGN 250, 75% of the increase in the price of basic cargo from July 1 from BGN 185.59 (BGN per MWh) to the real price in end of the month. That is, compensations are progressively increased so that in the most energy-intensive month, January, when business bills come in, they will first see most of them in their invoices as compensation for both December and January. Thus, operating costs will drop really and will allow for a more correct distribution, so that jobs are retained, possibly investing in new employees and capital costs, depends on the specifics of the business, "said Nikolov.

According to him, the energy system is loaded so that such bills as at the end of December are no longer visible.

On the moratorium on electricity prices

"I cannot take a stand on behalf of the National Assembly." This was said by the Minister of Energy in response to a question whether it is appropriate to lift the moratorium on electricity prices in late January or early December.

"At any time when the moratorium is active or not, expired or not, what we can do is reduce the pressure on the next leadership (of the EWRC) and if there is one, and when there is one, to make a decision, which: a) meets the needs of the EWRC; b) - is in line with the policy of the National Assembly," said Nikolov.

"Regarding the trust, whatever the structure of the EWRC, I say again, I think we will be able to work normally with them. I don't think about whether the prices will increase. "As for whether the markets will be calmer - they are a function of many factors. Yes, prices are unpredictable, but they are much calmer and significantly different from what we saw at the end of December," he said in regard to the free market prices.

At the same time, he reiterated that he would not give recommendations to the National Assembly regarding the moratorium, because in his words, in the ruling coalition, and in particular in the Energy Committee, "there are quite reasonable people who know what decisions to make with a certain long-term strategy ".

Answering the urgent question whether it would be a convenient option to lift the moratorium at the end of January or the beginning of February, Alexander Nikolov said that "A convenient option will always be when the EWRC accepts the function of a body that simply validates proposed decisions, and begin to be a body that validates the details of these decisions as well as the inputs. Since the decisions made by the particular regulator depend on what data is submitted to the regulator, their validity and value. That is, at any time when the EWRC has the relevant expert potential to inspect and conduct its activities in such a way that it is a public benefit body, as any regulator should be, then, yes, I would advise the moratorium to fall. " said Nikolov.

For gas supplies, the price and Bulgargaz

The Minister clarified that during the meeting of energy ministers the day before in Amiens, no concrete steps were discussed regarding a general agreement on the purchase of natural gas by the European Union from Russia. According to him, the discussions were about what happened and why, including price levels and lower storage volumes in European gas storage facilities. In this regard, he said that this situation was reached as a result of various factors - on the one hand geopolitically, and on the other lower gas flows. As well as increased demand for natural gas as a result of the closure of base coal facilities.

Regarding the high price of gas - 6 times higher than last year, the Energy Minister said that such a situation is not sustainable and pointed to January, for example, when prices fell from a maximum reached in December from 180 to 75 euros per MWh per month. -Late. "That is, it is clear that the market is becoming too volatile, prices are changing too fast. This is a basic resource that is connected to lighting, heating and, in general, the circulatory system of any economy and such things are unacceptable, especially in terms of the competitiveness of Europe's economy, including Bulgaria.

The Minister said clearly that Bulgaria has no problem with natural gas supplies, but this does not mean that we should not stop working to diversify suppliers and routes.

With regard to LNG supplies, he clarified that the trend will continue until the price of direct delivery from Gazprom is lower.

Alexander Nikolov denied any information that Gazprom did not want to work with Bulgargaz.

"There is no such thing," the minister was adamant. "Naturally, the terms of the contract (with Gazprom) are to be renegotiated, but at the moment I do not see any indications in such a direction," he said.

Commenting on gas supplies from Azerbaijan, the visit and meetings with representatives of the supplier company, the minister said that the commitments undertaken by the Azerbaijani side are being fulfilled, given the changes in the contract.

"We have established what we were for." There was no representative of Bulgargaz with us at the meeting," Nikolov said, confirming that he "takes less (Bulgargaz) than he can receive," he said. In response to the question "Why is the maximum not taken?" The Minister refused to comment, including the statements of Bulgargaz, as "taken out of context and are interpreted in a convenient way, which is strange to say the least."

"Yes, we have done the relevant checks and found out what the reasons are and why, from then on Bulgargaz has a principal, you know that checks are underway with them as well, so they will find out what happened back in time, I guess." .

Given the allegations of redistribution of profits from the company to the business, the Minister commented on the financial situation, saying that "some things must be taken into account - first, what are the assignments of" Bulgargaz "to BEH, second, what interest and penalties are imposed on other state-owned companies and how these interests are accounted for as a financial result, third, on the basis of the possibilities that exist under long-term contracts to what extent they are used or not used, fourth, to what extent the main function is met (Bulgargaz “) To be a public supplier, ie to deliver as much as possible for the public benefit ", said the Minister. He said that everyone must respect the public interest and is not greater than the state and Bulgarian citizens, adding that from what the financial data show for him is extremely clear the situation, and another question of interpretation. Asked if there was a suspicion of money laundering, he said it was not a suspicion.

"What I can say is that the function of Bulgargaz's public supplier as a public supplier could have been performed on a much more rational and much more socially acceptable scale," he said, adding that he had no facts that funds have been diverted. "I think that against the background of the existing instruments that Bulgargaz has, the management of resources within the company, the decisions submitted to the EWRC could be more socially useful."

"It must be clear how the sequence of actions is going. It is not acceptable not to take this into account when the supplier's price is raised 6 times. The decision for Bulgargaz is not in the Ministry of Energy. A certain hierarchical structure is to be followed, "said Minister Nikolov.

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