Tackling energy poverty is the biggest challenge for Bulgaria on the path to a full liberalization of its energy market
At the beginning of October 2020, Bulgaria took another step towards the full liberalization of its energy market for industrial companies and small businesses. These two categories of consumers are to participate on the free market and to buy electricity at freely negotiated prices. Meanwhile, the process for households across the country is still ongoing and they are staying on the regulated market for now.
Bulgaria is one of the few countries where both a regulated market and a free electricity market exist — household consumers and small businesses buy electricity from electricity suppliers on fixed prices by the Energy Regulatory Commission, while everyone can do freely on the Independent Bulgarian Energy Exchange. While some have embraced this change, others are also preferring to stay under the regulated prices, mostly because of the economic security that they provide during these uncertain times.
For businesses and households in Bulgaria, a full liberalization could also mean higher energy prices and costs. Being a country that is also facing “energy poverty”, there are lots of issues that plague Bulgaria in its efforts for establishing a well-functioning free market. Most of these issues are due to a combination of three factors: low household incomes, potentially high heating costs and low levels of energy efficiency.
“Although the energy poverty theme is rapidly spreading over the EU, it has distinct specificities in Eastern European countries: low-income households cannot afford to change the old inefficient heating infrastructure or replace the poor-quality heating fuels. As 65% of the total energy used by European households is required for heating, heat supply is the main field of action when tackling the issue of energy poverty.” Petar Kisyov, energy engineer with the Energy Agency of Plovdiv tells EnergyFeed.
One of the solutions is to providing appropriate conditions for consumers to increase their energy efficiency, and to produce and consume their own electricity generated from renewable energy sources. Another is the creation of so-called “energy cooperatives”, Kisyov points out.
“Grouping people into energy cooperatives can be seen as “energy democracy”, because energy cooperatives are enabling group of people to:produce, store and provide own generated RES energy;to invest in such infrastructure and have the opportunity to receive grant funding under programs.” he explains, adding that these initiatives have also been introduced to protect the vulnerable groups and people who are most at risk from the forthcoming full liberalization of the electricity market.
In the capital of Sofia, its municipality is having a campaign for the free replacement of old combustion plants with new fully automated and highly efficient heaters on pellets. Eligible participants may also connect to the gas distribution network, where a high-efficient condensing gas boiler will be installed and also to connect the district heating network. The measure could benefit some 20,000 households in the capital, Kisyov adds.
“Hence, a large number of households are eligible to receive very modern and energy efficient heating device, which will contribute to greater thermal efficiency, increased share of renewable energy, lower energy costs and less air pollutants.” Kisyov said.
The liberalization will also increase the implementation of projects based on renewables, and this can also be of great benefit for consumers.
“Renewables right now make around 20% of the mix if you include hydropower, but it is far less withouth them. In the last years projects have begun to pick up and now businesses are on the verge of making a revolution because they will create their own solar parks and connect them to their factories to produce electricity for own consumption — so that is the big change that is coming.” Ognyan Georgiev, journalist with the business daily Capital.bg, tells EnergyFeed.
Bulgaria is also participating in POWERTY, a European energy project which aims to help vulnerable groups affected by energy poverty. During the next three years, the project envisages an action plan for affect regions in Spain, France, Bulgaria, Poland, Lithuania and the UK, to promote low-cost innovative solutions in the renewable energy sector, a greater knowledge of society of this type of installation and improve the policy instruments of the regional governments in technological, financial, regulatory and social areas.
