June 23. 2024. 12:13

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Bulgaria risks €10 billion over coal addiction

Bulgaria risks losing €10 billion as politicians continue to be reluctant to carry out reforms for the Green Transition, a move that would ensure Bulgaria continues to produce polluting and expensive electricity from coal and stays uncompetitive.

Following the energy crisis that followed Russia’s invasion of Ukraine in February 2022, old coal power plants have become very profitable.

Bulgaria earned €3 billion from exporting electricity from the power plants that were previously on the verge of bankruptcy and relied entirely on state subsidies.

It also made the country the second largest exporter of electricity in the EU and helped neighbouring Balkan countries with energy imports.

Profitability has become a strong political argument for keeping coal even as electricity prices fall and plants begin to run unprofitable again. Bulgarian politicians are still unwilling to tell Bulgarian citizens that very soon, coal will mean loss, not profit.

Most major political formations in the country, like the pro-Western GERB, the pro-Russian Bulgarian socialist party and Vazrazhdane, argue that coal is part of Bulgarian independence, and the 10,000 highly educated engineers in the coal regions would lose their jobs.

These arguments are also shared by the caretaker government, which President Rumen Radev appointed because no cabinet has been formed.

Not on zero emissions

The largest and most influential Bulgarian think tank, the Center for the Study of Democracy (CSD), issued a report this week examining several scenarios for developing the Bulgarian energy industry.

If the policy from the caretaker government is continued, Bulgaria will not achieve the European goals for zero harmful gases in 2050, the report states.

Bulgaria needs to have a clear timetable for the decommissioning of coal power and develop the potential of renewable energy sources (RES) on land and offshore wind farms in the Black Sea, the senior analyst of the Energy and Climate programme at the CSD Constantsa Rangelova has said.

This must be done together with investments in the transmission and distribution grid.

At the same time, however, Bulgaria has no strategy for using forests and soils for the natural absorption of greenhouse gases.

Political disputes

The former deputy prime minister for climate policies in Kiril Petkov’s government, Borislav Sandov, commented that no departments in the Bulgarian state administration deal with green policies in different ways.

In the Bulgarian Recovery Plan, 37% of the more than €6 billion planned for 2026 is meant for policies to reduce carbon emissions. At the same time, the caretaker government of President Rumen Radev wants to renegotiate the plan to keep the coal capacities longer.

Borislav Sandov commented that this jeopardises the entire subsidy from the European Commission. At the same time, Bulgaria has not yet submitted to Brussels the territorial plans for the transition of the Stara Zagora, Kyustendil and Pernik coal regions for approval. Thus, the country itself renounces the €1.3 billion under the Just Transition Fund.

The former chairman of the parliamentary energy committee, Delyan Dobrev from GERB, defended the parliament’s decision to renegotiate the Recovery Plan. According to him, the rapid reduction of greenhouse gases by 2026 from coal-fired power plants will lead to a loss of 4% of GDP for Bulgaria. The leading GERB party claims that it is more important to invest in the renovation of buildings.

Since Bulgaria transitioned from a communist dictatorship to a market economy in 1989, it has reduced its greenhouse emissions by nearly 50% and tripled its GDP.

A lot of money already lost

Two days ago, from the words of the Cohesion Commissioner Elisa Ferreira to journalists in Brussels, it became clear that after 2022, Bulgaria had already lost €100 million from the Just Transition Fund and will probably lose more money.

The Commission’s spokesperson for regional policy Stefan de Keersmaecker noted a day later that if Bulgaria does not commit to the territorial plans in question by the end of this year, it will lose funds under the NextGenerationEU instrument, and the tranche for 2023 under the multi-year financial framework.

President Rumen Radev commented that the caretaker government did not give up the European funds for the energy transition. According to him, the statements of European Commissioner Elisa Ferreira from this week are due to a misunderstanding.

“With the inaction and actions of the country, €10 billion in grants under the Recovery and Sustainability Plan from the Fair transition fund and the Modernisation Fund of the European Commission may be lost”, Sandov warns.

(Krassen Nikolov | EURACTIV.bg)