Bulgaria is at a crossroads in energy development
In 2017 Bulgaria needed almost 4 times more energy and generated more than 4 times the average EU carbon emissions per unit of GDP

Achieving carbon neutrality and zero emissions is a challenge that will require significant public and private investments over a time horizon of 30 years and beyond and active contributions from all sectors of the economy in all EU Member States. This is particularly relevant for Bulgaria as an analysis conducted by the European Commission shows that Bulgaria has one of the most energy and carbon intensive economies in the Union.


Bulgaria’s starting position


In 2017, Bulgaria needed almost 4 times more energy and generated more than 4 times the average EU carbon emissions per unit of GDP, with nearly 50% of its electricity generated by power plants fired mainly by lignite coal. According to various statistical data sources, primary annual electricity production stands at approximately 135–140 mln. MWh or 110–115 mln. MWh of energy from sources of CO2 emissions, which should be replaced by green energy by 2050, provided there is no significant change in annual consumption.


The option of keeping the coal capacities has been ruled out because although the final version of the Recovery and Sustainability Plan states that Bulgaria will give up coal mining in 2038–2040, in reality the coal power industry will be forced to start the transformation much earlier – and possibly as early as 2025. 


It should be noted that the Bulgarian energy sector and related industries employ more than 100 thousand workers (most of them highly qualified specialists), with nearly 60 thousand people directly employed in the Maritsa coal basin alone. The fate of these workers is a direct function of the successful transition to green energy, as they represent the main driving force of Bulgaria’s energy sector.


The debate at EU level


In connection with the achievement of the ambitious goals of the Green Deal, the EU countries have been discussing for years the best way to combine available energy production sources in order to ensure long-term stability of energy supply. It is important to note that a one-size-fits-all solution at EU level seems rather unattainable and that each country will undertake a detailed analysis to identify the optimal solution from an economic, financial and social perspective.


Possible options for transition to a green economy in Bulgaria


Taking into account the experience of other EU countries, an attempt has been made to outline the main opportunities for strategic long-term development of Bulgaria’s energy sector. In any case, the established coal mining and power generation infrastructure in the Maritsa coal basin and the other affected regions of Bulgaria should be preserved (even in a ‘canned’ state) for possible future development as and when appropriate technologies become available.


Option 1 – RES as main base capacity


On an annual basis, photovoltaic (PV) plants produce between 6 and 7 times less energy than a baseline power plant with the same capacity. Thus, in order to fully replace the use of energy generating CO2 emissions with energy from PV plants, approximately 85 to 90 GW of PV plants (15 GW of baseline capacity) will need to be installed.


From a financial point of view, the installation of photovoltaic installations with a total capacity of 90 GW will cost between 25 and 30 bln. EUR – the most advantageous option compared to other alternatives on account of the extremely low operating costs of PV plants. However, in terms of an annual average, PV plants only operate during the day, i.e. additional storage systems with a capacity of approximately 250 to 300 000 MWh will be required to meet consumption during the remainder of any 24-hour period, making the implementation of this solution unrealistic under current conditions.


However, this option should not be completely ruled out as the technological development and the massive deployment of RES in industrial production in the mid-term (i.e. over the next 10 to 15 years) may significantly improve the economic feasibility of RES, used as main power supply.


Option 2 – Investment in new NPPs


Unfortunately, the debate about the future of nuclear energy in Bulgaria has been highly politicized in the last decades. As a result, Units 1–4 of the Kozloduy NPP have already been shut down and are irretrievably lost, while an enormous amount of public funds were invested in the Belene NPP without a clear economic model being adopted. In addition, in early 2021, plans were announced for building Units 7 and 8 of the Kozloduy NPP with the equipment supplied for the Belene plant (again without substantial economic justification).


In the EU, the cost of constructing and commissioning a nuclear plant with an installed capacity of 1 GW is 9 to 10 bln. EUR and could be executed in approximately 10 years. The main advantage of nuclear power is the possibility of electricity generation in a non-stop operating mode and the service life of the plant of approximately 50 to 60 years, as well as long-term stability, the great possibilities of hydrogen utilisation in base mode operation, regardless of changes in the energy system.


At the same time, nuclear capacity is associated with significant disadvantages:


·         they are operated as base power generating capacity without the benefit of fast maneuverability which, in principle, precludes nuclear power plants from being sustainably combined with photovoltaic plants and wind farms;


·         extremely high operational and upgrade costs (particularly in the wake of the Fukushima accident), which can exceed the initial investment by a factor of 2 to 3 (i.e. 20 to 30 bln. EUR per 1 GW). Separately, the stability of the supply of fresh nuclear fuel and the disposal of high-level radioactive waste carries a significant risk;


·         such a project must be backed by the State (via direct shareholding or State guarantees), which requires the commitment of many billions in public funds. Furthermore, the State remains liable in the event of a nuclear accident, even if the nuclear power plant is operated by a private entity.


In view of the above, the construction of new nuclear plants in Bulgaria does not appear to be financially feasible as the final cost of 1 GW of new installed capacity (construction and operating costs) is likely to reach 30 to 40 bln. EUR.


In addition, over the coming decades Bulgaria will not be able to avoid the risks and dependencies stemming from the need for regular supplies of fresh nuclear fuel and mandatory disposal of high-grade radioactive waste and spent nuclear fuel (which entails further costs). Certain poor business practices in nuclear power, coupled with negative public attitudes following the Chernobyl and Fukushima incidents, should not be underestimated as well.


In any case, the Bulgarian government should make every effort to extend the operation of Units 5 and 6 of the Kozloduy NPP as long as possible (including by obtaining further extensions of the lifetime of both units) due to the competitive prices of the electricity they generate.


Option 3 – Combining RES and combined cycle (co-generation) plants


A third option is the construction of photovoltaic plants and wind farms with a total installed capacity of approx. 15 GW (an investment with a likely cost of 5 to 6 bln. EUR) and 15 GW of rapidly adjustable co-generation power plants (an investment that will require approximately 25 to 30 bln. EUR), including by replacing the combustion plants of coal-fired TPPs. In this respect, the continued operation of the so-called American power plants should be encouraged by the State due to their high technical adjustability and world-class environmental technology and performance.


The steam and gas power-powered plants have a higher efficiency (approx. 60%), with the advantages of high relative power, rapid readiness for deployment, relatively small size, and relatively low construction and operating costs. The construction period for a steam plant is approximately 4 to 5 years, with another purely technological advantage being the possibility to add up to 20% hydrogen to natural gas.


The main disadvantages are the high natural gas consumption and the cost of the electricity produced, 80% of which is formed by the price of natural gas. Currently, natural gas is regarded as a “transitional” fuel with a utilisation time horizon until 2030–2035, after which it must be replaced by the so-called “green” hydrogen.


In view of the current level of technological development, the option with a combination of RES and co-generation plants seems to be the most realistic to implement.


To ensure long-term sustainability of the model, the Bulgarian government needs to invest sustainably in industrial technologies for the production of green hydrogen, including from RES. If an initial condition is set that co-generation plants can be upgraded for the purpose of a gradual switch to hydrogen-only mode of operation, over time and as the technology to produce it becomes cheaper, this would ensure a smooth and cheaper transition to hydrogen power, ideally using renewables as the main capacity.


In conclusion, for Bulgaria’s efforts to be successful, the main goal that should be set for the green transition is the transformation of the Bulgarian energy sector into a modern digital industry based on renewable energy, allowing the development of new, sustainable industrial production with high added value. A prerequisite is the adoption of the necessary legislative changes (a new Energy Act and significant amendments to the Renewable Energy Act) to promote the development of low-carbon renewable energy and ensure the development and long-term stability of the energy sector.


Vladimir Penkov     Nikolay Voynov

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