Energy in Bulgaria, between past and future

The energy sector in Bulgaria is going through a phase of profound transformation, between the need to proceed with decarbonisation and that of freeing itself from traditional ties with Russia. We talked about it in Sofia with expert Kostantsa Rangelova

In Bulgaria, we see two important developments in the energy sector: on the one side the decarbonisation process, on the other one attempts to disconnect from Russian dependency. Where are we today in these two processes? And are they intertwined in any way?

Over the past year, Bulgaria has made significant progress in its decarbonisation efforts, despite a weak institutional policy. One of the key developments over the past year has been a true revolution in solar energy: since 2019, when solar capacity in Bulgaria was one gigawatt, it's now more than three gigawatts. And the share of solar in the electricity mix this June was 25%, while it was just 12% a year ago in June. The solar industry in Bulgaria is growing extremely fast, thus contributing to creating green electricity, produced locally and partially replacing fossil fuel imported from Russia.

What about other renewables?

In 2023, 66% of the electricity produced in Bulgaria was from non-fossil sources. This includes all renewables such as solar, wind and hydro, but also nuclear and bioenergy. This year we'll see an even bigger share of clean sources, primarily due to the mentioned strong growth of solar energy. The key problem in supporting industrial decarbonization is that this needs to go hand in hand with electrification in the industry. Industries currently using gas need to switch to electricity, with the adoption of industrial heat pumps, especially for low-temperature processes that can easily replace natural gas with electricity.

In these last years, we have witnessed complicated negotiations between Brussels and Sofia about "just transition" in the coal-mining regions, like Stara Zagora, Kystendil and Pernik. Today Bulgaria is the only EU member still negotiating its 2021-2030 National Energy and Climate Plan (NECP). How would describe the current situation?

Sofia had a cautious and status quo focused approach regarding the just transition process. Bulgaria is one of the countries that was supposed to get one of the biggest shares of the Just Transition Fund and use that to accelerate a fair decarbonisation process. It was a big opportunity for the country that, unfortunately, has been delayed to a great extent. Even without the policies for just transition, though, the transition itself continued to happen. Coal power plants have been reducing their share in the national electricity mix, irrespective of policy, because of economic processes. And this will continue: within the next 5 to 10 years, coal power generation will probably drop significantly in Bulgaria. The Just Transition Fund is important because it can make that process easier on both the workforce and enterprises, supporting employment and green investments in parallel with this development.

Has Sofia eventually sent its plan to Brussels?

It is an ongoing negotiation, and for Bulgaria the risk of losing EU funds remains. What is key is the political will from both sides to agree. The other key aspect is talking more with local communities and informing them on what just transition means.

But why was the process delayed so much?

The key problem was that Bulgaria wanted to do a just transition without any actual transition and to access funds without a real plan to phase out coal. This failure to accept that this transition needs to happen and that coal will be gradually pushed out prevented the issue from being discussed at the political level and engaging with local communities. Not by chance we had huge protests when the just transition plans were supposed to be submitted initially. These protests were a reflection of the fact that there was no political dialogue between the government and local communities.

How do you think the transition looks like from the point of view of regular people, workers in the most affected areas?

We should have explained to these workers that they have already a skill set that is transferable to other sectors, and then created the new jobs that these workers can embrace. There are many opportunities, from green energy to the actual work of the decommissioning of the coal plants, of cleaning up polluted sites. Getting them on board with this process was key, but this didn't happen, which is why workers became hostages of the process.

According to some, for Bulgaria it's risk to totally drop coal mining and thermo power-plants especially now that, with the Russian invasion of Ukraine, the energy sector has become much more volatile in the region...

Coal is here, but solar and wind are also here, they're also local sources. And they are cheaper. In Bulgaria, we have an overcapacity in coal, especially if wind and solar continue to grow. Till now the country has been a big electricity exporter, but electricity exports have actually been falling because neighboring countries such as Greece are importing less and less, precisely because they're also building wind and solar. The markets to which Bulgaria exports electricity, mainly based on coal, are then reducing, which means that our coal power plants do not have a market to operate in. To a certain degree, some coal-based power plants may need to continue functioning until 2030, but beyond that, they will no longer be able to compete.

There are plans to add two new reactors to the Kozloduy nuclear power plant. What role nuclear energy is going to play in Bulgaria in the future?

Nuclear energy still plays a big role in Bulgaria's electricity mix: in 2023, nuclear was 40% of the electricity generated in the country. It will continue to be an important factor in Bulgaria's electricity mix for the years to come. However, it's going to take 15 to 20 years till the new nuclear reactors are operational, so they're not going to solve our problems in the short-term. In the meantime, we need to be acting much, much faster on decarbonisation.

How do you see the energy sector is changing for ordinary people in Bulgaria? Which are the main challenges there?

There's two key problems that we need to deal with in Bulgaria on the consumer level. Energy efficiency is definitely one of them: we have a lot of very old, inefficient buildings that need to be refurbished, while the standards for new buildings need to be much stricter to ensure that they're more energy efficient. On the other hand, we have energy poverty: depending on the measure, energy poverty in Bulgaria could reach up to 30% of the population or even higher. These two problems are strongly interconnected: because even people that have better revenues can still be energy poor because they live in a poorly insulated building that makes their energy bills much higher. The European Climate Fund is going to be crucial: these funds need to be directed for tackling energy poverty in both supporting energy efficiency measures, but also building solar or wind energy.

Since the start of the full-scale Russian invasion, Bulgaria is currently supporting Ukraine in the energy sector. How?

Short-term Bulgaria is helping by exporting electricity, but also fuel, to Ukraine. In the longer term, if we think beyond the war, there are lots of opportunities for cooperation between the two countries. One of them is nuclear power: Sofia and Kyiv are negotiating the purchase by Ukraine of two Russian-made reactors, bought by Bulgaria for the aborted Belene power-plant and no longer needed here, which Ukraine would use to expand the capacity of the Khmelnytskyi power plant. There are also lots of opportunities to collaborate with Ukraine after the war in renewables, since Ukraine has huge potential in terms of offshore wind, solar, etc.