(DF) Energy Minister to Propose Short-term Solution to Keep Maritsa East 2 TPP Running after July 1

June 9 (BTA) – Bulgarian President Rumen Radev has talked to caretaker Energy Minister Andrey Zhivkov, who will propose a short-term solution so that the Maritsa East 2 Thermal Power Plant could continue to operate after July 1. Radev said this at a meeting with the leaderships of the Confederation of Independent Trade Unions in Bulgaria and the Podkrepa Confederation of Labour on Wednesday. The Energy and Water Regulatory Commission has warned that as from July 1, 2021 Maritsa East 2 will not be allocated a quota to transact on the regulated market (for household customers) because the electricity it produces is too expensive (over 210 leva/MWh). The TPP cannot sell electricity on the free-market energy exchange, either, considering that prices there have averaged 100-110 leva/MWh and have peaked at some 170 leva. With its eight units, the state-owned Maritsa East 2 is Bulgaria’s largest coal-fired power plant. A baseline generating capacity, it has been in operation since 1969. The enterprise is a major employer in the area of Stara Zagora (Southeastern Bulgaria). According to the company’s annual financial statements, it was in the red every single year between 2014 and 2019, and its losses now add up to 925 million leva. For 2020, Maritsa East 2 reported a record-large loss of 341 million leva, it emerged in June. Zhivkov then formally admitted that the company’s financial standing was critical. The trade unions at Maritsa East 2 threatened to take industrial action shortly if the plant suspends operations. The losses are due to a steep rise in the prices of greenhouse emission allowances, from under 8 euro/tonne of CO2 in early 2018 to over 25 euro in August 2020. To operate at full capacity, the facility needs over 10 million allowances, which translates into an annual expenditure of almost 400 million leva, given the price does not exceed 20 euro/tonne. Meeting with the trade unions on Wednesday, Radev said that the socially affordable cost of this decision is known and said that the Energy Ministry is working hard to find a long-term solution. “We can’t block the energy transition process and shun the need for this transition and for decarbonization,” the head of State said, adding that “social problems do exist and people above all have to be protected, but the transition cannot be blocked, either.” Radev was surprised that Bulgaria has not yet introduced a capacity mechanism and that it has not taken full advantage of the Initiative for Coal Regions in Transition in the EU. In the EU, a capacity mechanism offers additional rewards to electricity capacity providers on top of income obtained by selling electricity on the market, in return for maintaining existing capacity or investing in new capacity needed to guarantee the security of electricity supplies. The Initiative is intended to help European countries, regions, communities and workers to achieve the economic diversification required for a clean energy transition. “What people want more than anything else is certainty. The transformation should be smooth and jobs should be created,” the President said. “Our role as a State, trade unions and society is to find a solution as quickly as possible,” the President added. “Bulgaria cannot evade a EU-wide trend, and everybody stand to gain from up-to-date effective solutions based on consensus and a regular government which will urgently address them.” NV/PP/LG //