“When we informed the European Commission that we do not wish to fulfill Bulgaria’s commitment to a 40 percent reduction in carbon emissions (by 2026 compared to 2019 levels – b.a.) the answer was: If you refuse, our commitment to pay the agreed funds also ceases. According to the recovery plan, according to the REPoewrEU mechanism and from the Just Transition Fund, they are for BGN 17-18 billion, and if we give up this goal, the state gives up this money. It is in the hands of the National Assembly to make this decision, to adjust the budget and to decide that we will not fulfill the commitment and we will not take this money”.
This was stated by the Acting Minister of Energy Rosen Hristov during his three-hour hearing in the plenary hall on Friday, requested by “Vazrazhdane” “because of the lack of public information on how the negotiations with the EC on the renegotiation of the Recovery and Sustainability Plan are progressing.
So far, the overture to the negotiations is underway
Before him, Deputy Prime Minister Atanas Pekanov spoke on the same topic, following a procedure requested by the BSP, in which it became clear that in fact the official negotiations with Brussels have not yet begun, which is why 75 percent of the over 12 billion planned for Bulgaria are currently blocked. BGN. Before July, this will not happen, and after the middle of May, unofficial talks will begin about changing some of the energy projects currently set for grant funding.
The caretaker government was charged by the previous parliament with the task of removing from the plan a 40 percent reduction in carbon emissions of 11 coal-fired power plants by 2026, compared to the harmful gases released in 2019. The MPs tasked Pekanov and Acting Energy Minister Rosen Hristov with removing three energy project – for the fleet of batteries for current storage for BGN 1.6 billion. for 1.4 GW of renewable sources also with batteries for nearly BGN 670 million and for a geothermal power plant for BGN 350 million.
From Hristov’s words, it became clear that the projects for the battery park and for the theothermal plant, for the study of which a contract for consulting services was signed with a unit of the World Bank, will be broken up. Now the EC has agreed in principle that BGN 1.6 billion will be given as a 50% subsidy for the purchase of energy storage systems by individuals and legal entities, and that the money for geothermal energy will be for several projects, including cogeneration.
The request the reduction of greenhouse emissions from coal-fired power plants should not be 40 percent, but less, will be compensated with more renewable energy sources (RES), Hristov repeated his words from the end of March. However, he did not say what cuts in carbon emissions from thermal power plants the caretaker government is proposing.
The EC gave three options, both with a loss of money
“Brussels clearly told us. The first option is not to fulfill the commitment and not receive the money. The second option is not to fulfill it partially and to reduce the financing. Option 3 is – you do not fulfill the goals completely and replace with accelerated RES”he said Rosen Hristov and announced that the government is working on the third option, because a partial loss of euro funds is not acceptable.
According to him, it is being worked on on a project to install 4 gigawatts of solar power on the territory of the state mines, but he met the complete resistance of the workers there, “which is not clear why, given that new jobs are being created”. The megaproject for which BGN 7-8 billion are needed in the first phase alone., however, is also having problems with finding private investors, it became clear from Hristov’s answer to a question from GERB deputy Temenuzka Petkova. Talks have been held with several companies – foreign and Bulgarian, among them the operator of TPP “Maritsa Iztok 3” – “KonturGlobal”. the Turkish “Smart Energy” with business activity in the RES sector and several other companies with Bulgarian and foreign participation.
“If you want, we will not build RES, I have no personal interest in this”Hristov addressed the deputies.
He assured Petkova that no hidden privatization of state mine assets will be allowed, and land to be reclaimed is offered to private investors for the installation of photovoltaic panels to use the existing energy infrastructure of the coal mining enterprise. It is precisely in this way that renewable energy sources can be put into operation at an accelerated rate, in order to secure the preservation of some coal-fired power plants as balancing producers of green energy. That part of the mines’ network, which they do not need for their work, is planned to be transferred to the state “Electricity System Operator” (ESO).
RES and industrial production instead of thermal power plants
Hristov explained that instead of the current coal plants, industrial productions should be attracted to provide jobs to young people who do not want to work in thermal power plants and mines.
“TPPs have two purposes – balancing the energy system and producing electricity, which is determined by the market. If there is a buyer who will pay the price, they produce. But for days now they have not done this, because both from the North and from the South we import cheap RES electricity”, added Rosen Hristov. According to him, at the moment the thermal power plants are loaded with only 20 percent of their capacity as balancing renewable energy sources, because their current cannot be sold on the exchange.
“We can justify the existence of thermal power plants only as balancing capacities and we are working on that”he stated.
In reality, the explanations of the previous cabinet were similar, that the restoration plan envisages that some thermal power plants will work only in winter.
Only the planned economy guarantees operation of all thermal power plants
“You want us to guarantee the operation of all thermal power plants until 2038!? Only one is state-owned, the rest are private, and if you want to make them work, we are going to a planned economy. Unless “Vazrazhdane” plans to introduce a planned economy, I don’t see how I will oblige private plants to work under certain conditions”the minister said.
“We are negotiating for the EC to accept that in an alternative way we can meet the decarbonisation targets and get our money. And if you care about the work of these people, we should focus on developing alternative industries and attracting investment to open new jobs. It is very easy for you to blame a government behind which no party stands, and for ten months you cannot produce a regular cabinet. If only we had organized elections, there would be no interconnector and a number of other projects.”he addressed the deputies.
“It is easy to say that we will tell the EC what we are going to do. I want to see this person who will tell the EC what to do“, he exclaimed. He reminded them that most of them were also in the previous cabinet, when Kiril Petkov’s government developed and adopted the recovery and development plan, and they supported it, and now they want the official cabinet to renegotiate it.
Struggle for ESO and Bulgartransgaz to remain in BEH
His words provoked the sharp reaction of the BSP, whose MP Atanas Svilenski asked Hristov how he allowed himself to behave like this with the people’s representatives.
The Minister of Energy also explained that the other important issue being negotiated with the EC to drop as a commitment in the recovery plan is the withdrawal of ESO and the operator of the gas network Bulgartransgaz (BTG) from the assets of their current owner – the Bulgarian Energy holding” (BEH).
According to Hristov, this is the most complicated and dangerous issue from the point of view of the security of energy and BEH. “We strongly want the renegotiation of this commitment and the two operators to remain in BEH by proposing measures to guarantee their transparent functioning. Their removal from BEH leads to demand for the bonds and it will be difficult for these operators to be managed and financed”the acting minister said, after Zhecho Stankov from GERB explained before that the removal of the two operators means that BEH will have to pay BGN 2.4 billion in loans ahead of schedule.
Before Hristov’s hearing, Deputy Prime Minister Pekanov explained to the people’s representatives that the aim of the caretaker government is to send all changes to the recovery and sustainability plan unofficially to the EC by mid-May – After that, the schedule foresees negotiations with the European Commission by mid-June , and by the end of the same month, the request for amendment will be officially presented.
Everything is going according to the plan
And the Deputy Prime Minister, like the Energy Minister some time ago, now explained that the renegotiation schedule is part of the general renegotiation of the recovery plans for the member countries due to the activation of the REPowerEU funding program, which can also be applied for with projects and those foreseen for Bulgaria funds of nearly BGN 1 billion
Hristov announced some time ago that the goal of the office is to achieve synergy between the energy projects that will remain finally in the Recovery and Resilience Plan after its renegotiation, the future ones to be financed by the Just Transition Fund and the ones currently planned under the Modernization Fund for Rehabilitation for Electricity Distribution networks, replacement of electricity meters and to build a system of charging stations for electric cars. Now he repeated the same thesis and expressed confidence that the goal will be achieved.
According to Pekanov, Bulgaria managed to convince the European Commission that in 2022 there was no way to comply with the agreed commitments to reduce carbon emissions from coal-fired power plants. “If not, it means that it will take away part of the resource already provided to us”said the Deputy Prime Minister and added that he does not expect such actions.
So far, under the Recovery Plan, Bulgaria has received only the first payment of BGN 2.7 billion, in order to request the second, 13 draft laws must be passed, which have been submitted to the National Assembly, but the parliament has yet to form its committees, which must approve them before to enter the plenary hall for voting.
According to Pekanov, the transformation of the 40 percent reduction in greenhouse gases depends on new projects and choices, such as those for introducing an energy poverty system, for buildings with zero emissions and for expanding the capacity of the gas transmission infrastructure.
Everything is in the hands of Brussels, but Bulgaria is in the golden middle
He still pointed out that the final word on the changes will be with Brussels, but assured that the interim government is trying not to allow delays in the implementation of the projects under the Recovery Plan while its parameters are being renegotiated, as well as not to lose European funds on the plan.
“Bulgaria is in the ‘golden middle’. We have received about 25% of the funds under the Recovery and Resilience Plan. There are many countries that have received much less. There are six or seven countries that have not requested the first payment at all . I am glad that within the framework of the office we managed to make up for some of the delay that had occurred”Atanas Pekanov also said.
He predicts that as soon as possible, after we pass the necessary legislation, we will be able to receive the second payment.
It is for over BGN 1.4 billion and was scheduled to be requested by the end of 2022, but this did not happen because of the unadopted laws. Meanwhile, at the end of June 2023, the third could be requested – for nearly BGN 1.5 billion, but for now this seems mission impossible. In principle, the planned funds can be requested with a delay and it depends entirely on the parliament how much it will be caught up.
