It is more than evident that the Bulgarian energy sector is losing its market share in the region. And this is not just signaled by the record import of electricity in January. The lack of true reforms in the sector, and opting for political comfort over long-term planning, have led to reduced competitiveness and an even more complex outlook for the future of Bulgarian energy.
A few significant reasons point to Bulgaria continuing to lose ground in the region in coming years, and due to the integrated European market - for other countries to even take a significant share in its domestic electricity market.
Crazy or ambitious goals?
Perhaps the best contrasting example to Bulgaria lies to our south - Greece, which for many years depended on Bulgaria for electricity supplies, but has managed to reverse the trend. Today, Greece is in the process of meeting its targets for an 82% renewables share in its electricity production in 2030, combined with numerous gas, grid and geostrategic projects with foreign to EU markets, some of which are already operational.
At the same time, Bulgarian planning is mired in obscurity and the system still relies on old and unprofitable coal-fired power plants, which are almost non-operational. The problem is that even if new capacities and investments are currently being considered, the market has already started to rearrange itself and it is not clear whether Bulgaria can catch up.
"The past year 2023 ended in a good way for us. The national battery tenders were successful. Talks are underway about the HVDC submarine cables with Slovenia and Egypt. The plan is for Greece to become a net exporter of green energy," Agis Digkas, Vice President of DAPEEP, stated for Kapital.
If we can speak about trends, the one now is practically the opposite of what happened in 2022, when Greece was powered by Bulgarian coal electricity due to the gas price crisis in Europe. At the moment, Bulgaria often imports electricity during the day from Greece, and the gas plants in the southern neighbor are the market makers on the energy exchange for the entire region. The gas power plants' production is simply much cheaper than coal plants. Unfortunately, there are no gas plants in Bulgaria and there probably won't be any soon.
A project for a steam-gas plant was included in one of the drafts of the Recovery Plan in 2021, but it was removed during the Kiril Petkov government due to the uncertainty of gas supplies at the time.
Proof of the well-structured direction that Athens is following is that by 2028 it will completely stop coal plants, which are currently already severely curtailed and rarely exceed 300 megawatts in the daily production output. The difference with Bulgaria is that Sofia's commitment is not clear and the date 2038 was adopted with the sole purpose of delaying the decision and suppressing miners' protests. At the same time, the coal miners' future depends on the Bulgarian state and eurofunds - both of which can be a wild card with an unclear outcome.
Geography, gas and lots of money
The only area in which it can be said that Bulgaria is making progress is solar investments. The country added about 1.3 gigawatts of new solar in 2023, while Greece installed about 1.6 gigawatts. However, the difference arises from the fact that Athens is progressing very quickly with household installations, which is not yet happening in our country.
However, last year's figures only hint at what will happen in the near future. According to Greece's national plan, the country plans to build 23.5 gigawatts of solar installations and wind farms by 2030. This is supported by recently released data from the European electricity network ENTSO-e that Greece is one of the few countries where offshore wind is profitable.
Perhaps the biggest difference comes from the gas investments made in Athens a few years ago, the fruits of which are now being harvested. Although they initially had problems with high gas prices, now the fuel is competitive and they are running on steam. It is also important that several key international gas pipelines pass through Greece, which are the main alternative to Russian supplies, bringing money to the country and allowing local consumers to be supplied.
The Trans-Adriatic gas pipeline and the gas interconnector with Bulgaria are the main route for Azeri gas, but they are also the main mechanism for transferring the LNG delivered to the Greek gas terminals to Europe. The country is the only one in this area of the EU with regasification terminals. In addition to the terminal in Revitousa, the one in Alexandroupolis is opening in a few weeks and there are plans for another one in Volos.
There is also a project for a floating gas storage in Kavala, as well as a gas connection with North Macedonia, which, in principle, imports Russian gas through Bulgaria.
Greece has also come far in the East Med project, which according to Kapital sources is also being promoted as a hydrogen project. The pipeline connects Israel's gas fields with Cyprus, Greece and Italy and could potentially completely change Europe's gas map in terms of supply opportunities.
In the coming years, Bulgaria will be extremely dependent on Greece for its gas supplies for all these reasons, and the country will compete with Turkey for the title of being "gas hub".
Some big cables and batteries
Months ago, Greece also opened the discussion for undersea HVDC cables delivering power over long distances, directly submitting a proposal to extend its power grid to Africa to tap the vast solar potential there. Thus, in the future, Bulgaria can also start importing cheap solar electricity from countries like Libya and Egypt.
According to Efstatios Sideris, a Greek energy expert, there is a good chance that the project with Egypt can be operational, with Cairo showing a great interest. Regarding the other HVDC cable, which is planned to reach Slovenia and Germany, there is a strong desire among countries to make it happen, but the water and land costs are still being calculated. If the two large-scale infrastructure projects are implemented, Greece will not only be a transit, but will be able to find a huge market for its own green plants.
According to Sideris, last year's battery auctions showed the economy's huge interest in energy storage systems. The country has held auctions for 700 megawatts of batteries, and now a new auction is coming up in the former Kozani coal area for 300 megawatts (with a capacity of 4 hours). Greece's storage capacity will allow not only low local prices, but also the possibility to export during peak hours in the morning and evening to other countries such as Bulgaria.
Bulgaria also has a project for batteries and energy storage systems under the Recovery Plan, but these are not yet underway and there is a high risk of failure.
Even if only part of the Greek plans come to fruition, the future seems set. Greece has made a clear commitment to its own resources to dominate the gas and energy market through new technologies. Although Bulgaria has geographical advantages and potential for the development of new capacities, the lack of planning may make it dependent on foreign decisions and governments in the coming decades.
It is more than evident that the Bulgarian energy sector is losing its market share in the region. And this is not just signaled by the record import of electricity in January. The lack of true reforms in the sector, and opting for political comfort over long-term planning, have led to reduced competitiveness and an even more complex outlook for the future of Bulgarian energy.
A few significant reasons point to Bulgaria continuing to lose ground in the region in coming years, and due to the integrated European market - for other countries to even take a significant share in its domestic electricity market.
