October 2 (SeeNews) - The Bulgarian government said it has decided to extend the life of the country's coal-fired power plants until 2038, with no dates adopted for closing down any of these facilities.
Bulgaria is seeking approval from the European Commission of revisions made to its territorial plans under the Just Transition mechanism for the regions of Stara Zagora, Pernik and Kyustendil, with negotiations with the EU executive due to continue until the end of November, the government said in a press release on Friday.
"In parallel, talks with the social partners will continue, so that there is a clear national plan for the transition, with an allocated budget and distinct sources of funding. The EU member states must deliver their decision in December. If any of them does not agree with our proposals, Bulgaria stands to lose 1.4 billion levs ($757.9 million/715.8 million euro) earmarked for these three regions, with particularly severe consequences as a result," prime minister Nikolay Denkov said.
At the start of 2023, Bulgarian lawmakers mandated the government to renegotiate with the European Commission parts of the country's National Recovery and Resilience Plan, seeking a delay in the coal-fired plants' phase-out by twelve years, including by changing a commitment under the European Green Deal for Bulgaria to strive for a 40% reduction in carbon emissions from power generation by 2026, based on 2019 levels.
The Commission has allocated 5.69 billion euro ($6.02 billion) in grants to Bulgaria under the Recovery and Resilience Facility (RRF). So far, Bulgaria has received only one instalment, of 1.37 billion euro, paid in December 2022.
The government is also pledging individual financial support of between 140,000 levs and 150,000 levs for each worker affected by the potential loss of jobs in the three mining and thermal power generation regions. A new state-owned enterprise will be created, which will be charged with transitioning the former thermal coal mining regions to industrial zones focused on alternative sources of employment.
Over the past week, Bulgaria has been rocked by national protests by miners and workers in the traditional energy sector, leading to blockades of major roads across the country. Trade union representatives insist on no additional restrictions for coal-based power generation facilities, in particular until 2026.
Coal-fired power plans accounted for some 33% of Bulgaria's total installed capacity in 2022, or 4,475 MW, while the capacity of gas-fired thermal power plants was 1,307 MW, according to data published by the Electricity System Operator. Lignite-fired power plants, such as state-owned Maritsa East 2, represented by far the biggest share of capacity. Together, these three types of power plants produced 26.5 million MWh of electricity last year, or 15% more than a year earlier.
With energy prices coming off a record spike caused by the war in Ukraine last year, the costs of coal and carbon pricing are starting to dent the profits of traditional thermal coal power plants. Last month, Maritsa East 2 posted a 53% annual drop in first-half net profit, to 128.4 million levs. The company cautioned that lower wholesale power prices and higher costs to offset emissions are threatening its ability to ensure a normal rate of return.
(1 euro = 1.95583 levs)