site.btaEnergy Minister: Price of Electricity for Households May Go Up from July 1

Most certainly the accumulated deficit in the Electricity System Security Fund will affect the price of household electricity, because in the next regulatory period, if the regulator strictly complies with its regulatory framework, this accumulated deficit must be compensated. There is a serious potential for an increase in the price of electricity from July 1, 2024, said caretaker Energy Minister Vladimir Malinov on Bulgarian National Television on Sunday. 

The state of the Electricity System Security Fund is dire and Malinov  held three meetings with the management of the fund in the course of one month. The accumulated deficit in the fund is currently over BGN 450 million and is expected by the end of June to reach BGN 550 million, said the Minister. 

The caretaker Energy Minister said that next month concrete measures will be proposed to compensate for this deficit and therefore minimize the blow to household. He said that with the latest legislative changes that have been made, NEK will retain the function of a public provider and thus it will be possible to determine which electricity producers will make up the mix of the regulated market. 

On April 25, Parliament adopted changes related to the liberalization of the electricity market. Minister Malinov commented that the liberalization of the market has not been postponed, as in the previous legislative framework the full liberalization of the market for household electricity consumers was set to happen from January 1, 2026 and the deadline will be observed. He explained that the changes are related to the transition period, which was to start from 1 July this year and last 18 months, in which part of the mechanism for regulating this market changed. 

The Minister explained that the regulatory function of the Energy and Water Regulatory Commission (EWRC) in this transitional period should have been transferred to the Energy Minister. In order to maintain electricity prices tolerable for the household consumer, a compensatory mechanism had to be set up, said the Minister. 

He confirmed that an Azerbaijani company is interested in exploring gas fields in the Black Sea. This was one of the topics discussed during President Rumen Radev's recent visit to Azerbaijan, and Malinov was part of the delegation. Bulgarian plans to launch a concession procedure for one of the blocks of Khan Tervel next week. According to him, the Azeri state oil company SOCAR, as well as other companies, are interested. 

Geological surveys and 3D seismic surveys throughout the Black Sea show that there is a fairly high percentage not only for deposits but also for hydrocarbon extraction, the Minister said.  

“It will not be easy to renegotiate the contract with BOTAS because the Turkish side has achieved a certain economic effect from it, but we have a full understanding on their part that this contract was signed in another economic environment when the price of natural gas was different, when Bulgaria was in a situation to receive supplies only from Russia and alternative capacities were sought,” commented Vladimir Malinov. 

On April 19, the National Assembly instructed the Minister of Energy to take the necessary actions to renegotiate the agreement between Bulgargaz EAD and the Turkish energy company BOTAS. 

Turkey, in addition to this natural gas contract, has interests in good neighborly relations with Bulgaria, as well as in other energy sectors, the Minister said. That is why he said he was moderately optimistic about the possibility of a renegotiation. Malinov also explained that any capacity that is reserved on the territory in the EU is paid for, regardless of whether it is used. 

“Within the first days of the caretaker government, we revised Bulgargaz's activities, there was a passive policy on the use of the terms of this contract,” the Energy Minister added. It is confusing why nothing has been done, even for renegotiation, he noted. 

Of the nuclear power plant and the capacities that are expected to be built in Kozloduy NPP in the future, the Minister said that Hyundai is the only company that confirms that it will implement the project within the planned budget and within the envisaged deadline according to which by 2033 Unit 7 of Kozloduy NPP will be commissioned and respectively 2035 - Unit 8 of the nuclear power plant.