Eng. Kremen Georgiev, AHCB: A big tesla is being prepared for heating systems and electricity traders!

The Chairman of the Association of Heating Companies in Bulgaria and an energy expert with many years of experience, Eng. Kremen Georgiev, warned that measures are currently being prepared in the state, which will most likely lead to the collapse of the Bulgarian energy industry and mass bankruptcies of the producers of electricity from natural gas and coal. According to him, the reason for this will be the way in which the regulation adopted by the European Commission to deal with high electricity prices will be transposed into the Bulgarian legislation. According to the expert, if the law is adopted in its current version, the energy security of our country will be threatened.

"If the regulation adopted by the European Commission is also adopted in Bulgaria in its official form, there will not be any problems for the Bulgarian district heating systems and electricity traders. Unfortunately, we have received information that the prepared Bulgarian version of the regulation will be detrimental to the future of natural gas and coal energy producers in Bulgaria and may lead them to bankruptcy. The same thing is feared by colleagues who deal with electricity trading," said Engineer Kremen Georgiev.

The energy expert explained that the European Commission has given instructions to the states in the envisaged measures and restrictions to deal with the high prices not to include the capacities of coal and natural gas in order to preserve the liquidity of the companies, but in Bulgaria it is possible that this will not be fulfilled.

“Let me explain. Let's take gas heating as an example. At the moment, the situation is such that heating X sells thermal energy at a loss, since the sales price of thermal energy is approved at an estimated price of natural gas of about BGN 120/MWh, while the current weighted average price for gas for the quarter is about BGN 260/MWh. This means that the company has to source more than 2 times more funds to purchase its main fuel. The income from thermal energy is fixed and for this reason the only possibility for district heating to compensate for the shortage is to sell electricity at the high market prices, which will at least partially increase its income and provide part of the funds with which to cover the difference from BGN 120 to BGN 260 per unit of natural gas. However, the new law plans to withhold a part of the income above the price set by the regulator to the companies. If this happens, the district heating companies will fall into a liquidity crisis and will not be able to cover their operating costs," explained Engineer Kremen Georgiev.

According to engineer Kremen Georgiev, if restrictions are applied to the gas plants in Bulgaria, which are absent for the same companies in Europe, the local plants will be placed in an unequal position on the European market.

"Achieving such a situation contradicts the principles laid down in the treaty of accession to the European Union, which is an unprecedented violation of the legislation!" said engineer Kremen Georgiev.

The expert pointed out that all the companies are currently implementing investment programs worth hundreds of millions of euros, built on the basis of the EU's demands to create low-carbon energy production, which will be left in question and will lead to non-fulfillment of already made commitments.

"If it is allowed to adopt the law in its form, the operational activity of the Bulgarian district heating companies will be directly threatened, which will prevent them from fulfilling their licensing obligations, which include the production of electricity and the supply of thermal energy," warned Engineer Kremen Georgiev.

According to the chairman of the Association of Heating Companies in Bulgaria, the branch will protect not only the companies, but also the livelihood of the tens of thousands employed in the sector. Engineer Kremen Georgiev stated that they will not allow the Bulgarian energy industry to be liquidated in order to advance someone's personal interests.