Energy connectivity, cooperation and infrastructure are the basis for the decarbonization of the region and the reduction of fluctuations in supply and prices

Energy connectivity, cooperation and infrastructure are the basis for the decarbonization of the region and the reduction of fluctuations in supply and prices. These are the main conclusions of the experts and managers of the Bulgarian and Greek energy companies who took part in the Economic Forum, which was held in Sofia. The role of Bulgaria and Greece in ensuring the transmission of natural gas and electricity was emphasized, but the challenges in the coming years from the point of view of decarbonization remain. Energy storage and the production of electricity from emission-free sources, including nuclear energy and hydrogen, will be of particular importance here. Better connection between energy markets will also play a role in smoothing out fluctuations in supply and prices, it became clear during the forum.

Energy connectivity and infrastructure

Bulgaria plays a very important role in the energy sector of the entire region. Energy connections are becoming increasingly close, and this has been demonstrated especially in the last few months. This was commented by the Chairman of the South East Europe Energy Institute, Costas Stambolis, within the framework of the next edition of the Economic Forum, taking place in Sofia. As an example, he pointed to the assertion of a joint position of Bulgaria and Greece regarding high electricity prices. Second, but not in importance, Stambolis drew attention to the construction of the Vertical Gas Corridor, the intention for which has been since 2014. "I see that work is already underway on its implementation," he said, emphasizing energy connectivity and infrastructure.

Stambolis drew particular attention to the importance of Bulgaria, as well as Romania, for decarbonization from the point of view of nuclear energy. "Another example of the importance of Bulgaria together with Romania is the presence of nuclear power plants. We see that baseload capacities, excluding coal, are becoming increasingly important," said the Greek expert.

"Not only Bulgaria, but the entire region needs to improve critical infrastructure. commented in his speech the former Minister of Energy Vladimir Malinov, who also did not pass by the initiative to implement the Vertical Gas Corridor. "The region needs more LNG," he was also categorical. According to him, the countries in the region should work on unifying tariffs. "If we want to be competitive, we must cooperate with other operators, provide one-stop services, because we do not have time," he said. Regarding gas infrastructure, Malinov said that all projects should have a common goal. According to him, the big challenge is the strong competition in the energy sector as a whole. In this regard, Malinov shared the expectation for investments in energy storage in the region next year in the order of 5 billion leva. “But perhaps we need a common approach to shared energy storage,” he said, emphasizing the projects for the two new Dospat and Batak nuclear power plants, which, as he put it, “are very promising and will contribute to avoiding seasonal fluctuations.”

He also shared the expectation for the construction of the two new units of the Kozloduy NPP. “Bulgaria must decide on two new units this year and provide financing, and the countries in the region must be involved in this project,” the former energy minister said, emphasizing the importance of providing emission-free energy.

 

“When we talk about cooperation, we must also look at the potential of the Caspian Sea, but also of North Africa,” Malinov said.

Nuclear energy

New technologies in nuclear energy, and in particular small modular reactors, according to Georgi Christidis, acting president of the Canadian Nuclear Association, have significant advantages. He specified that Canada has ample opportunities for diversification in the nuclear energy and renewable energy sectors. According to him, the country has focused its efforts on building small modular reactors, which are the future of nuclear energy. According to him, the decision will be economically sustainable.

Energy exchanges

Connectivity with countries, especially outside the European Union, is extremely important, emphasized Konstantin Konstantinov, CEO of IBEX (IBEX). He emphasized the opportunities that the region would have if an agreement were reached between the Bulgarian Electricity System Operator and the Turkish TEASH to increase the current transmission capabilities from 100 to at least 500 MW. Konstantinov added that initiatives for market integration with the Western Balkans are also being discussed, although this requires time. “It is a question of merging (the energy exchanges),” he said, adding that there are several of them in the region. At the same time, he was categorical that it is “much more important to guarantee that every exchange follows the same rules”.

“It is up to the exchanges to ensure market connectivity so that electricity continues to flow between countries,” said Konstantinov. Explaining the work and importance of IBEX and the products, he announced that 15-minute products are being prepared on the “day-ahead” market from June. The CEO of IBEX was categorical that the exchanges must comply with the regulatory requirements and REMIT policy.

Hydropower

The boom in renewable energy sources (RES) in recent years requires more and more options for energy storage and we are taking this into account, said Martin Georgiev, CEO of the National Electricity Company. He did not ignore the serious efforts to maintain the operation of hydroelectric power plants (HPPs), which are over 50 years old, but thanks to them, the company managed to provide up to 80% of balancing services last year. The rehabilitation of the Belmeken-Sestrimo-Chaira cascade has been completed, and the repair of the Chaira HPP continues.

In the hydropower sector, the main trend is the construction of HPPs, Martin Georgiev explained. "The future is bright for HPPs," he said, supporting his words by pointing out that Austria, for example, has several HPP projects. Brand-new hydro projects for the region are rare, but there are still opportunities for such, Georgiev believes, not ignoring the very strict environmental standards.

NEC is also developing projects for energy storage with batteries at some of the operated HPPs.

Natural gas and hydrogen

Natural gas and in particular LNG projects, especially after the suspension of transit through Ukraine, were also among the highlights within the Economic Forum. "The role of the Greece-Bulgaria interconnector. “The IGB interconnector is key for Europe,” noted ICGB Executive Director Teodora Georgieva, who recalled the trend of abandoning dependence on Russian gas. “After Russia’s attack on Ukraine, Europe learned its lesson the hard way,” she said, explaining how important the quantities flowing through the interconnector are for Bulgaria’s energy security. The ICGB Executive Director also emphasized the importance of the Vertical Gas Corridor as a whole for supplying European countries, especially if the necessary financing from Europe of around EUR 500 million is secured. This project is exposed to negative influence from some countries, including Turkey’s dumping policy in transmission. In this sense, Teodora Georgieva believes that “Europe still does not have a good enough policy for removing bottlenecks.”

Speaking about cooperation on the gas interconnector, the ICGB Executive Director explained the success in working with the company’s own structure. “Maybe I should describe my experience with the interconnector in a book? I am talking about cooperation,” she said. The very structure of the company, which is equally divided between the Bulgarian and Greek sides, was, in her words, important “to prevent sudden movements”. Teodora Georgieva made it clear that at the moment there can be no question of an IGB capacity of over 10 billion cubic meters, “as it is a question of the sustainability of the project”.

Within the framework of the forum, deserved attention was also paid to the LNG assets managed by the Greek side and in particular the enormous importance of the Revitusa terminal, at which almost all slots for 2025 have been reserved. This in turn means that in the coming years this terminal will play a huge role in the supply of gas to Europe. The DESFA company also intends to expand the North Macedonia-Komotini interconnector, as well as a new one, and to improve the monitoring systems.

Hydrogen is also in the plans of the Greek side, which together with the Bulgarian company Bulgartransgaz is also working on establishing a hydrogen transport system in line with European ambitions.

The work of the new LNG terminal in Alexandroupolis and the future of its supplies to the countries of the region and to Europe was also a topic among the participants in the Economic Forum. However, it has only been operating for three months, so the expectation is that the results of at least one year of its work will become clear.