site.btaEnergy Minister Nikolov: Compensation for Expensive Electricity, Natural Gas Expected to Be in Place from December until March 2022

December 21 (BTA) - Compensation for the expensive electricity is expected to be paid from December until March 2022. In addition, compensation for natural gas consumers on the regulated market is being considered, said Energy Minister Alexander Nikolov at a news briefing on Tuesday.

Electricity compensation will be calculated based on the actual day ahead market price for July, or 185.59 lv/MWh. All consumers who have signed long-term contracts below this price won't be eligible for compensation.

The compensation will be equal to 75 per cent of the difference between the base price and the real average monthly market price for the respective month but it cannot exceed 30 per cent of the actual price.

The Minister said that all proposals will be discussed by the Council of Ministers and the schemes will be developed.

The Energy Minister said that in 12 months alone the price of carbon emissions have increased nearly four times from 20 euro to 81 euro per tonne, which directly impacts coal-powered facilities. On an annual basis the price of natural gas went from 20 euro to over 160 euro. The last market component, which drives the electricity production, is oil. In the past year it appreciated significantly from 50 dollars to 71 dollars per barrel of crude oil. This is important to know in view of some specific sof long-term agreements which Bulgaria has for natural gas deliveries.

Alexander Nikolov said the compensation for the high electricity prices will exceed 900 million leva for the four months.

Within the next four months the resources which will be set aside under various items will exceed 1.5 billion leva, said the Energy Minister. The money will be provided from the Energy System Security Fund, the companies in the Bulgarian Energy Holding and the state budget, which will disburse between 700 million and 1,000 million leva depending on the market dynamics.

All proposals under the scheme are subject to notification by the European Commission, a decision of the Council of Ministers which will be discussed on Wednesday and a working group between the Energy Ministry and the Finance Ministry to finalize and prepare the necessary decisions. "The aim is to meet all requirements and make a decision before December 30 which will give household consumers and businesses clarity and predictability about the upcoming expenses during the winter months," said the Minister.