Bulgaria: CEZ stops TPP Varna due to the lack of agreement with Bulgarian energy holding

, SEE Energy News

The Czech energy company ČEZ has announced that, as from 2015, they will temporarily suspend the production in the coal-fired thermal power plant in Bulgaria which does not meet the environmental protection standards of the European Union.

The ČEZ has failed to reach an agreement with the Bulgarian state energy company on joint financing of the environmental protection improvement in the power plant in Varna because the analyses showed that this would be economically unjustified.

However, this thermal power plant, owned by the Czech company, will be able to continue generating electricity in case of cessation of gas supply from Russia because it has the EU permission for this.

The negotiations between the ČEZ and the Bulgarian Energy Holding (BEH) on establishing a joint venture for financing the modernization of the thermal power plant in Varna have failed after the analyses showed that such investment would be unjustified regarding the electricity prices and the gases emissions that cause greenhouse effects, the ČEZ announced on 2nd November, it was confirmed from BEH to Serbia Energy.

The joint venture was supposed to fund the improvement of three out of six blocks in the power plant amounting to a total of 1.260 megawatts in this Black Sea city with the aim of extending the life of the power plant and then leasing it.

“The financial model has shown that the power plant would generate electricity at a price that is uncompetitive on the regional liberalized energy market”, the Czech company said in its statement, as reported by the EurActiv.com.

According to their announcement, the ČEZ will continue working on the sale or lease of the thermal power plant which has been used as a support for the Bulgarian electricity network.

“We are prepared to consider all options. In any case, as from 1st January 2015, the power plant will be temporarily closed because it cannot operate without environmental improvements”, the Director of the thermal power plant Minčo Minčev pointed out.
However, in October, the head of the Czech company said that the withdrawal of certain power plant blocks from operation could be delayed until the end of year, because there was a possibility of exemption from the European Union rules as a part of the measures for providing energy stability in the tense situation with Russia.

In the document of the European Commission, it is stated that the thermal power plant in Varna has been given the possibility of exemption from the EU rules and that it will continue operating in case of cessation of the Russian gas delivery.

The ČEZ has abandoned the original plan to invest 100 million euros in three power plant blocks due to unfavourable market conditions and following the Bulgarian failure to extend the contract on providing security in the power supply system.

The Thermal Power Plant Varna EAD is the second largest thermal power plant in Bulgaria and in the Balkans.