site.btaElectricity Prices Expected to Remain Stable after Full Liberalization of Electricity Market - Electrohold Bulgaria CEO

After the electricity market is fully liberalized and household customers go to the free market - provided that the generation mix conditions remain normal - the expectations are for stable prices and new products and solutions, which will give customers a broad choice, the CEO of power distribution operator Electrohold Bulgaria, Georgi Mikov, said in a BTA interview. 

Electrohold is the largest electricity distribution company in the country.

"In a fully open market, the price of energy should be determined by the wholesale market and supply and demand. The market in Bulgaria is part of the market grouping that includes the markets of Romania and Greece. Liquidity has increased a great deal in recent years and, in practice, we are moving closer and closer to a single European energy market. The last year has seen a diversification of supply, a massive introduction of renewables and a stabilization of prices in Europe as a whole [...] Under normal conditions in terms of production mix, we should expect stable prices, new products and solutions and the opportunity for customers to choose," he said. 

He sees two very big challenges for his generation of energy managers: to finally implement the long-delayed liberalization of the market for household customers, which he says is more a matter of political decisions than anything else, and to carry through the energy transition, which depends more on technological solutions and investment. "Both challenges are key for the future. They require first of all professionalism and responsibility, as well as good communication between all stakeholders. The sector needs to develop in the long term, not in a piecemeal fashion," he commented.

The Electrohold Bulgaria CEO said that the grid operated by his company was designed and built in the 1970s and 1980s and is now at the end of its service life. "It was not designed for the higher load in the big cities and the areas around them, or for rapid connection of new renewable energy capacities. This calls for its urgent modernization."

Over the next 10 years, the company's planned investments should be around BGN 150 million per year, with the main focus on the one hand on the rehabilitation of the existing network and its development with new connections, and on the other hand on digitalisation and the introduction of automation and network elements that require minimal maintenance and have a long service life.

Mikov pointed out that the investments will first of all lead to an increase in the quality of services. He explained that there are two ways to secure these funds. One is through an increase in the price of network services, which will raise consumers' bills. The second is through European funding. "[EU] grants will allow us to carry out the necessary upgrades and introduce advanced technologies in the shortest possible time, without affecting the price for end-users. However, we have not yet signed a contract with the Ministry of Energy, which is the administrator of the Modernization Fund for the Republic of Bulgaria."

Georgi Mikov believes that the 3.10% increase in the price of electricity for the consumers of Electrohold from 1 July, which was decided by the Energy and Water Regulatory Commission, is not large, but rather insignificant. According to him, with the adopted minimal increase the final electricity prices for household consumers in Bulgaria remain one of the lowest in Europe.

"There is hardly a specialist in the electricity sector who is not of the opinion that the approved investments in the network are insufficient to cope with all tasks and challenges. Over the last five years, we have been investing around EUR 100 million a year in the network. Nearly half of these funds are for connecting consumers and producers. Another substantial part is for installing automation and remote control elements on the networks. We are also making substantial investments in the implementation of modern metering and management systems for production and consumption. The main objective is to improve the quality of service provided to end customers. These investments must be increased significantly over the next 10 years so that networks are digitized and their cyber-security ensured. Because without automated networks, the green transition is impossible," he said.