With projects worth over 327 million leva, the digitalization of the electricity grid in our country is being accelerated

Contracts were signed with the electricity distribution companies and ESO EAD at the Ministry of Energy for financing projects under the Modernization Fund

“Today we are taking a decisive step towards improving the services of ESO EAD and the three electricity distribution companies.” This was said by the Minister of Energy Vladimir Malinov upon signing contracts with “Electric Distribution Networks West” EAD, “Electric Distribution North” AD, “Electric Distribution South” EAD and “Electricity System Operator” EAD for financing projects under the Modernization Fund. According to Minister Malinov, the grant will provide real benefits for customers.

The funds are being allocated under the Modernization Fund, and the grant under the four contracts is for over 327 million leva.

"The projects implemented with the help of the Modernization Fund will contribute to increasing the transmission capacity of the electricity transmission network, installing smart meters, modernizing information systems, as well as modernizing the network by integrating network transformers for automatic voltage regulation. All of these are undeniable benefits for both the more efficient work of the operators themselves and their customers," emphasized Minister Malinov. According to him, the funds provided should make it possible in the long term to suppress the increase in prices for customers of electricity distribution companies.

The Minister of Energy drew attention to the need to refine the financing programs under the Modernization Fund and under the Recovery and Sustainability Plan. “Determining the priority axes for the period 2025-2026 and achieving a balanced solution for both sources was definitely a challenge that we successfully coped with,” emphasized Minister Malinov.

The contract for providing grant aid to “Electric Distribution Networks West” EAD is worth 76.2 million BGN excluding VAT. The grant aid provided will install smart meters, including the necessary infrastructure and integration of a measurement data management system, part of a project for advanced measurement infrastructure.

“Electric Distribution North” AD will modernize its information systems and physical infrastructure with the aim of accelerated electrification and decarbonization of electricity consumption and production. The grant aid provided is worth 58.7 million BGN excluding VAT.

“Electric Distribution South” EAD receives grant aid from the Modernization Fund in the amount of 62.4 million BGN. excluding VAT. The funds will be used to modernize and digitalize the electricity distribution network in Southeast Bulgaria by integrating network transformers for automatic voltage regulation.

The sustainable adaptation of the national electricity transmission network for the full integration of the potential for renewable energy production is fully in line with our decarbonization goals. It will allow the successful connection of the growing number of newly built RES capacities in the country, concluded Minister Malinov.

Minister Vladimir Malinov thanked the representatives of the three ERPs and ESO for their calmness and patience, due to the delay in the process that began in 2023.

"It was a matter of refining the programs under the Modernization Fund. To determine the priority axes for 2025-26 and immediately, after we proposed the priority axes and programs that could be financed in 2025-26, we proceeded to sign the contracts," explained Minister Malinov, explaining the reasons that led to the later development in the process, and added: "You know that we also have exceptional challenges in terms of the financial resources under the National Recovery and Sustainability Plan (NRSP) and this was an in-depth analysis to make these contracts happen and to make a balanced decision between the financial resources under the Modernization Fund and the NRSP, which still, to say the least, has some uncertainty and obscurity regarding its implementation, in terms of financial volume, respectively projects that could be financed," Malinov said, quoted by BTA.

Regarding the contracts signed today and the benefits of their implementation, the Minister highlighted first of all the one on the transmission capacities of ESO as a key moment for improving the operator's services and the possibility of connecting more RES sources.

Secondly, Minister Malinov highlighted the importance of installing "smart" meters, which would contribute not only to improving the services of the ERPs, but also more predictability for their customers and the possibility of more accurate network management.

He also emphasized the importance of network modernization, through the integration of network transformers for voltage regulation and, last but not least, the modernization of the information systems themselves, which would allow for up-to-date online information, in order to improve network management.

He defined the project readiness of the beneficiaries for the implementation of the projects on their part as very high and expressed hope that they would be implemented by the end of 2025.

According to Angelin Tsachev from ESO, the operator's project aims to increase the transmission capacity of the system in connection with the adaptation and reconstruction of the 220 KV network at a voltage level of 400 KV. The project also includes the reconstruction of nearly 800 kilometers of 110 KV power lines, which are directly related to the connection of new RES capacities.

"The goal of the project is to increase the transmission capacity of the entire network and to enable the connection of even more RES capacities, which as of this year are already over 4,500 MW in the network. We expect that in 2025, according to the applications that are being worked on, another 1,000-1,500 MW of new capacities will enter," announced Tsachev, according to whom this project will create indirect assistance to all investors in RES capacities.

He believes that its implementation will lead to additional stabilization of the transmission network and will reduce the risks of power outages.

During the event, Georgi Mikov from "Electricity Distribution Networks West" drew attention to the fact that the change in the paradigm from "concentrated production and consumption, with passive electricity distribution networks" to "many sources of electricity in the distribution networks" requires a high degree of automation of the networks and new information systems.

"If this has to be done at the expense of the investments of the EDPs, it means that the prices of electricity will rise significantly, which is neither unbearable for consumers nor good for the image of the electricity industry," said Mikov. That is why he defined the Modernization Fund's opportunity as exceptional. He expressed the readiness of the company he manages for talks not in the direction of full financing, but in the direction of supporting projects, so that a balance can be found, in his words, between the interest of the end user, of the producers in the networks and the possibility of investing in the networks.