Overview of the Draft of Energy Strategy of Bulgaria to 2020
Introduction
The Draft Energy Strategy for Bulgaria to 2020 (the Draft) is a consultative document
prepared by the Bulgarian Ministry of Economy and Energy and published in November
2008. It considers the settings approved on European Union level representing a
package of integrated measures for the material establishment of a new common energy
policy of Europe, aiming at redirecting the economy to an effective use of energy
generated from sources with low carbon emissions.
After the successful fulfillment of the Energy Strategy of Bulgaria of 2002, aimed
at resolving the middle-term problems of the transitional period towards financially
stable and market oriented power production, Bulgaria has prepared a new Energy
Strategy project until 2020. The Draft aims at reflecting the dynamic changes in
the European energy policy at the national level due to the new Bulgaria’s status
as a member state of the European Union. The structure of the Draft covers the following
main points:
- Priorities and aims 2020, with an analysis of the current state and the potentials
of the country
- Strategic decisions 2020
- Predictions of the development and expected results in 2020 – 2030 and vision
for 2050.
Priorities and aims
European aims and priorities
The European energy policy is based on three main principles:
- domination of the negative changes in the climate
- limitation of the external
dependence of the EU on energy sources
- encouragement of the economical growth
and employment with a purpose to securing reliable and accessible energy supply.
The stable clean energy development may be achieved through:
- improvement of the energy efficiency during production and consumption
-
increase of the renewable energy sources up to 20 % until 2020
- fast technological
progress.
New energy legislation will be implemented at European level in the sphere of the
rules for organization and functioning of the internal electrical energy market
and natural gas market. The changes in the legislation will aim on resolving such
problems as: (i) independence of the network operators, (ii) regulatory supervision
and cooperation; (iii) transparency etc.
Bulgaria's aims
Current status
The production of electricity in the state completely satisfies and exceeds the
internal demand. As a result of that, Bulgaria is a leading exporter of electrical
energy for Southeastern Europe. However, the electricity production capacities in
Bulgaria have considerably outdated. After the shut-down of Kozloduy Nuclear Power
Plant’s Units No. 1 - 4 the export opportunities were decreased. There is some potential
for constructing new electricity generation units. The electricity production units
that have already been started and those that are planned, as well as the construction
of the infrastructure for their connection to the national energy system, will serve
as a guarantee for the coverage of the internal demand and will strengthen the state’s
positions as a net exporter of electrical energy. The overall task is to develop
the competitive renewable sources.
Currently the renewable energy sources are evaluated at 9.4 % of the energy consumption.
With the approval of the Energy Act in 2003 and its amendments in 2008 Bulgaria
has made its national legislation compatible with the European legislation to a
large extent. The Bulgarian Renewable and Alternative Energy Sources and Biofuels
Act, published on 19 June 2007, set out a frame for development of the renewable
energy sources and established specific measures for some technologies with a view
of reaching the national purposes in 2010 regarding the share of electrical energy
and liquid biofuels in the transport sector.
As of 1 July 2007 the Bulgarian electrical energy and gas market was fully liberalised.
The restructuring of the energy companies was completed within the necessary term
and foreign energy companies, already operating successfully, have been attracted
to the country. The Bulgarian Energy Holding, established in September 2008, is
now one of the largest energy companies in the region.
As to the coal fired power plants, mostly locally mined, as of 2013 they will have
to purchase emission quota under the EU Emission Trading Scheme. However, the thermal
companies that produce energy in combined highly efficient manner will receive “free”
emission permits; quantity of “free” permissions allocated will be progressively
decreasing as of 2013.
In respect of the securing the sustainable energy development, the Bulgarian Fund
for Energy Efficiency has been established and already operates. Bulgarian companies
successfully participate in projects financed by the EU programme “Intelligent Energy
Europe” and others.
Future aims
Bulgaria's aim, as proposed by the European Commission, is 16 % of the total
end energy consumption in the country in 2020 to be generated from renewable energy
sources. The country receives the lowest additional increase (6.6 %) as compared
to the rest of the EU Member States.
The state potential regarding the renewable energy sources will be used for attaining
the national purpose:
- Creation of suitable systems for encouragement of the use of biomass, small hydro
power plants and wind.
- The present system for encouragement will allow the
utilization of 40 % of the total renewable energy potential. The additional encouragement
of the development of micro and small hydro power plants and biomass as well as
the preservation of the effective conditions for encouragement of the wind energy
will create a opportunity for use of 80 % of the total potential of such resources.
-
In addition, the biomass is a source that may have substantial impact on realizing
the sector purpose for heating and ventilation by energy from renewable energy sources.
-
The three renewable energy sources that will be utilized to a higher extend are
wind, biomass and hydro power plants.
- The biggest technical potential (4.1
million tons of oil equivalents) at present is in the photovoltaic solar installations.
The effective preferential prices do not allow for the utilization of more than
10 % of it.
- Within an average term, the water source (small and big hydro
power plants) will continue to play a dominant role in the production of electrical
energy of renewable energy sources.
The national transmission and trans-border energy grid is well developed. In the
recent years the distribution grids in the territory of Bulgaria have been in a
process of serious development and configuration change.
The new requirements for separation of the system operators of transmission networks,
which are to be introduced at the general European level, will serve as additional
guarantees for their independence and, respectively, for sustainable development
of the transmission networks and equal access to them. This will ensure more effective
functioning of the market and lower prices for the benefit of the consumers.
Strategic decisions
The strategic decisions are grouped in two packages:
"Overcoming the Differences" package.
The decisions included in this package are mandatory:
- Improvement of the energy efficiency at a pace faster than the European average
– to achieve twice as low energy intensity of the total internal energy consumption
until 2020.
- Guaranteed attainment of the national goal for 16% share of the
renewable energy sources in the gross end energy consumption – achieving over 16
% share.
- Implementation of efficient tariff systems and methods for regulation
of the network companies.
- Effective separation of the delivery and production
activities from the management and networks operation activities.
- Organizing
a national electric power exchange with a view of fulfillment of the priorities
for compatibility, security and sustainable development of the whole energy market.
-
Guarantee of the necessary natural gas deliveries for satisfaction of the internal
consumption.
- Modernization of the management of the companies integrated in
the Bulgarian Energy Holding.
- Price stability for the Bulgarian industry and
population through manageable increase of the prices.
- Accessible energy for
socially disadvantaged Bulgarian citizens.
"Use of the Potential" package
The considerable potential of the country is expressed in:
(i) the strategic, geopolitical and geographic location; (ii) strong position of
South-Eastern Europe in the region with regard to export and transit of energy;
and (iii) capacity for strengthening these positions through development of energy
projects on a large scale.
The decisions included in this package are:
- Priority development of big projects for production of non-emitting electrical
energy – as at 2020; pure energy (nuclear and renewable energy sources) will have
a share of over 50% in the electrical energy mix; thus the emission of carbon dioxide
for production of 1 MW/h electrical energy will decrease with almost 50%.
-
The diversification of the sources and the routes of natural gas through the successful
execution of the already started “Nabucco” and “South Stream”, as well as other
new projects.
- Establishing the Bulgarian Energy Holding as a leading energy
player in the South-Eastern Europe region;
- Active stand of the country on
formation and conduction of common regional policy and a key role in the future
expansion of the European Energy Community.
- Strengthening the position of
Bulgaria as an energy centre on the Balkans.
Strategic projects
Coal
The future of coal industry is certain in accordance with the Draft. The rehabilitation
projects for Maritsa East 2 and Maritsa East 3 TPPs, as well as the coming start
of commercial operation of Maritsa East 1 TPP are a guarantee for such future. Bulgaria's
ambitions are focussed to the development of Maritsa East 4 TPP with a CO2 capturing
technology. The potential for such project will very much depend on the availability
of financing.
Replacement capacity development based on local coal is a potential alternative
and a matter of free investment decision. Given the importance of the local energy
resources, the exploration activities will be further encouraged. TPP Varna needs
rehabilitation.
Nuclear
NPP Belene is envisaged to enter commercial operation within 2014 and to increase
with 35% the production capacity of the electricity system, compared with 2007.
Big hydro projects
Bulgaria will continue the development of big hydro projects. Tzankov Kamyk project
will be finalized and the development of big hydro project will continue with the
"Gorna Arda", "Nikopol – Turno Magurele" and "Nikopol –
Kalarash" projects.
Extension of the electricity networks
Among the priority projects are: completion of Energy 2 project; finalization of
the 400 kV network with Macedonia; construction of second 400 kV line with Greece;
considering the feasibility of construction of networks between Vidin - Serbia and
Belene NPP – Romania.
New Combined Heat and Power (CHP) facilities
Combined Heat and Power facilities in Bulgaria are very outdated (20-36 years old).
Very limited recent investment in CHP technologies has been undertaken. Increase
of the CHP production is outlined as a strategic goal.
Oil pipelines
The oil pipelines "Burgas – Alexandropolis" and "Burgas – Vlora"
are the strategic projects that will transmit mostly Russian oil. Bulgaria will
be positioned as an important hub for oil transportation towards Western Europe.
Natural gas projects
Nabucco and South Stream will be the key priorities regarding the development of
gas pipelines. Bulgaria will have the aim to increase the number of natural gas
storage facilities. Bulgaria will aim on construction of a regional LNG storage
facility. Bulgaria is also aiming on creation of the first natural gas hum on the
Balkans and increasing the transit capacities four times.
Predictions of development
and the exptected results in 2020-2030 and visions for 2050.
The energy strategy until 2020 is the basic and first substantial step in the transitional
period towards lowcarbon energy systems of high efficiency. Initially, at European
and then national level, a political programme until 2030 and a plan until 2050
will be developed. The practical implementation of the revolutionary technological
changes in the electric power engineering in order to achieve its decarbonisation,
the cease of the transport dependency on oil and oil products, the wide spread of
low-energy homes and intelligent electricity networks can be achieved only through
a coordinated plan for research and technological development, regulation, investments
and infrastructural development. This requires an intensive dialog both between
the member states and on a national level - between the institutions, the academic
community and the industrial experts.
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