Without a definition of energy poverty, building renovation and RES schemes are schemes for the rich

Raya Lecheva

Without a definition of energy poverty, building renovation and RES schemes are schemes for the rich. This was commented to 3eNews by the economist Dr. Teodora Peneva, chief assistant at the Institute for Economic Research at the Bulgarian Academy of Sciences. She is also a member of the Commission for Energy Efficiency and Overcoming Energy Poverty at the Advisory Council for the European Green Deal.

On December 20, the long-awaited measure to increase energy efficiency in multi-family residential buildings, or as we call it, the remediation measure under the Recovery Plan of the Ministry of Regional Development, started. In fact, the feedback from many blocks is that given the lack of clarity as to whether they will be approved or not, owners are not willing to finance the energy survey of their homes. It turns out that households are worried about giving an average of 400 BGN in advance without having clarity on whether their block will be renovated or not.

Although the application deadline has been extended to May 31, 2023, there are still a number of risks, one of which is whether the condominium will be able to organize and apply. However, it should be borne in mind that at the moment the financing is free, while after May it is planned that households will cover 20% of their costs.

If people now find it difficult to finance the energy survey, it is expected that it will be even more difficult for them to decide to invest in remediation when they have to give their own funds. Given the need for serious investments in energy efficiency, it is clear that the state will need nearly 6 billion to renovate the housing stock. If this happens at the current rate, we will need about 60 years, experts say.

It is mandatory to introduce the possibilities of financing the renovation by the citizens, commented Dragomir Tsanev from the Center for Energy Efficiency "EnEfect". It is mandatory to have sufficiently attractive support schemes through various financial mechanisms and instruments, including through the Decarbonization Fund, which is expected to start working. But there is still a lack of sufficient information exactly in what way and how it would support households. In fact, it is unlikely to start until May, and concerns about the application of much of the condominium remain.

Moreover, in the Strategic Vision for the development of the Bulgarian electricity industry until 2050, there is only one line for energy efficiency, and that is that all the best available practices and technologies will be used, which is, to say the least, frivolous, according to experts.

In fact, a similar deterrent is likely to be in place with the measure to build solar water heaters and solar panels with batteries for households under the Department of Energy's Recovery Plan. According to the measure, whose public discussion ended on January 23, up to BGN 2,000 will be financed free of charge for solar water heaters and up to BGN 15,000 for photovoltaic installations with batteries, but the investment must have been made.

This is also a scheme for the rich, commented Dr. Peneva. According to Peneva, the programs were rushed simply to get started in order to absorb funds that were known in advance to be unable to reach energy-poor families and the more needy vulnerable groups of the population.

The purpose of the definition is to link with energy efficiency schemes

The aim of the definition of energy poverty is primarily to be linked to energy efficiency schemes to support the energy poor with 100% funding. This is at least 40-50% of the Bulgarian population. The rest could be supported with a certain percentage of funding, the economist said. Because the EC says what is the share of energy-poor families, the same percentage of the funds should be directed only to them, commented Peneva in addition.

We fully support the idea of co-financing these projects, but the fact that funds have to be given in bulk without being sure that the funds will be reimbursed creates concerns for most of the people and would deter them, commented Balin Balinov from "Greenpeace-Bulgaria". .

In addition, there are not a few administrative obstacles and procedures that would take about half a year. Therefore, it is mandatory to reflect in the new conditions the changes that the deputies accepted for passing a notification regime in the municipality for up to 20 KW RES installation for own needs. However, it is not yet known how exactly the procedure will be changed and how the municipality will be notified, and the changes have not yet been officially released. These are extremely important details, commented the expert.

All these obstacles show that these measures are made for the rich and for people who can afford to renovate or build photovoltaics on the roof, for which they must withdraw at least 15,000 BGN in advance.

No one wants to take over the administration of the process yet

However, Peneva also announced the good news that very soon, within two weeks, the Energy Transition Commission is expected to consider the proposal for a final definition of energy poverty and then it will be released for public discussion. The definition should go into the Energy Act, but the changes will be made without specifying who will administer the process. Here is the puzzle, because neither the Social Assistance Agency nor the Ministry of Energy wants to take over the management of the process. Most likely, it will not be included in the changes to the law and the importance of the definition of energy poverty in the liberalization of the market, commented Teodora Peneva. Most likely, we will delay the process as much as possible and try to extend the period for the liberalization of the market, which according to the current legislation should happen from 2026. This should have already happened, but our country took the opportunity to postpone it and he will do it while he can, the economist thinks. The very idea of liberalization is not to burden people, but on the contrary to create competition. However, the expectations are that if the price for the household is currently BGN 25 per MWh, it will rise to BGN 200. It is then important for the country to know which families and population groups it should support. But probably this role of the definition will be avoided at the moment and delayed in time, the economist emphasized.

The changes that create energy communities are already in parliament

Perhaps another good news is expected in the sector, which has an important role in the implementation of investments in photovoltaic installations. It is tied to changes introduced in the National Assembly to the Law on Energy from Renewable Sources to introduce the concept of energy communities. This will provide opportunities for people and small businesses to unite and jointly finance such systems, Balin Balinov from Greenpeace-Bulgaria reported. The changes were introduced by deputies from the "Green Movement" and at the moment the opinion of the Ministry of Energy is neutral and rather positive towards the changes. They are expected to be voted on soon in the Commission, but given the recent dissolution of Parliament, it is still unclear whether they will be voted on.