On January 9, when, after weeks of relatively warm weather, a real cold snap descended and hit Bulgaria, triggering sub-zero temperatures almost everywhere, electricity consumption surged. However, Bulgarian power plants (the country has the largest power capacity in the region) remained almost unused. The Maritsa-Iztok 2 state-owned coal-fired power plant, for example, was operating at less than 30%, and its coal-fired boilers are probably as frosty as the excavators of the state-owned mines, which are scattered across the fields of Stara Zagora and barely work.
Even more puzzling is when we look at the data on export and import of electricity for the same day, indicating that Bulgaria is a net importer of electricity not only from Romania, but also from Greece, Serbia, Turkey and North Macedonia. This means that despite Bulgaria's sufficient capacities, it does not produce electricity that is competitive on the market and can be sold. And instead, it is more profitable for everybody to just buy from neighbors.
The situation was radically different in 2022, when the war broke out in Ukraine and there were critically high prices on the energy exchange. At that point Bulgaria exported record amounts of electricity - over 12 tWh, mainly from Bulgarian coal plants, which served for balancing the entire region. Back then, politicians, experts, heads of utilities, trade unions, etc. made the huge mistake of believing and forecasting that the energy price crisis was not a huge fluke, but a trend that would continue. The unspoken assumption was that everything in the sector is rosy and our energy facilities would continue to prosper.
The consequences of this thinking have yet to be analyzed, but even then it should have been clear that the huge profits masked the big deficits of one of the strongest historical sectors in the Bulgarian economy - energy, which is currently lagging significantly behind other countries.
Minus a few billion
What led to Bulgaria losing the foreign electricity markets? Data from the already completed year 2023 show that the situation of the last few days is not a precedent, and that Bulgarian energy plants have been selling less and less electricity abroad. The consequences, which should have been foreseen in recent years, will be many and lead to the incontrovertible truth that Bulgarian electricity production will soon not be in demand.
In 2023, Bulgaria exported the least amount of electricity compared to previous years, the only one with a smaller net balance - was 2020, when lockdowns literally stopped demand and industry in Europe was idle.
One of the red lights for the competitiveness of Bulgarian energy capacities is that in May and November last year the country was a net importer of electricity - an unthinkable scenario in the recent and distant past, in which Bulgaria always was the provider. In both months, the reason was the planned repair of the nuclear plant in Kozloduy, which brought to the fore all the shortcomings of the other facilities in the country. In short - the missing nuclear power in those periods was not replaced by available TPPs, but by imports.
Why will Bulgaria soon be an importer?
In recent years, Bulgaria's energy industry has been dominated by a specific agenda - how to preserve Bulgarian coal plants. All sorts of energy and policy planning is only for the purpose of populism in the coal regions or to settle geopolitical comfort by finding a new builder of large and ultra-expensive nuclear power plants. Overall, there is a lack of analysis on the competitiveness of coal, who can provide the balance for new renewables, the need for quick start-up plants like hydro, the investment in offshore wind and new pumped storage facilities. The only bright spot regarding the modernization of the Bulgarian energy sector is the country's solar boom which despite its expansion, is absolutely insufficient to build a working energy mix to compete with huge investments in Romania and Greece.
It is now clear that over the next few years Bulgaria should invest in a real alternative to coal-fired power plants, whose electricity is uncompetitive, and start their gradual decommissioning. And those who work in Bulgarian coal must not be the recipients of well- directed false informational campaigns, preventing them from being retrained and their expertise used elsewhere in the field of energy.
It would be a monumental economic blunder for the country's energy sector to fail to meet the demand for new, flexible and low-carbon capacities, and continue to believe that the economy can rely on coal plants.
Who will replace us and at what price?
Romania is now often a net importer of electricity to Bulgaria with Greece recently joining the equation. Bucharest has a diversified energy mix, which includes wind and solar plants, a large number of hydroelectric plants (about 6 GW), nuclear power plants and gas plants. Both Greece and Romania have made significant investments in gas-fired power plants in recent years. Although these might be subject to regulations because of methane emissions, they are now a more profitable and competitive source of electricity than coal. In 2022, the opposite was the case because of the high price of natural gas, and that is precisely why the Bulgarian thermal power plants managed to sell their energy throughout the region - it was simply more profitable.
The rough monthly accounts show that Bulgaria's net trade balance from electricity exports for 2023 tops 800 million levs. But there are enough reasons for this amount to decrease significantly in the coming years, and this will not be related to the lower electricity prices on the exchange, but to what happened in the last quarter of last year - prices dropped to normal and Bulgaria's trade balance shows exports of only 29 million levs.
Of course, Bulgaria will continue to export electricity at certain times, but in no case will this bring the same income.
On January 9, when, after weeks of relatively warm weather, a real cold snap descended and hit Bulgaria, triggering sub-zero temperatures almost everywhere, electricity consumption surged. However, Bulgarian power plants (the country has the largest power capacity in the region) remained almost unused. The Maritsa-Iztok 2 state-owned coal-fired power plant, for example, was operating at less than 30%, and its coal-fired boilers are probably as frosty as the excavators of the state-owned mines, which are scattered across the fields of Stara Zagora and barely work.
Even more puzzling is when we look at the data on export and import of electricity for the same day, indicating that Bulgaria is a net importer of electricity not only from Romania, but also from Greece, Serbia, Turkey and North Macedonia. This means that despite Bulgaria's sufficient capacities, it does not produce electricity that is competitive on the market and can be sold. And instead, it is more profitable for everybody to just buy from neighbors.
