In order for coal-fired thermal power plant Maritsa East 2 Thermal Power could continue to operate after 1 July, Bulgarian caretaker Minister of Energy Andrey Zhivkov will propose a short-term solution for it.
The Energy and Water Regulatory Commission (KEVR) has warned that as of 1 July 1, TPP Maritsa East 2 will not be allocated a quota to transact on the regulated market (for household customers) because the electricity it produces is too expensive (over 107 euros/MWh). The plant cannot sell electricity on the energy exchange IBEX either, considering that prices there have averaged around 57 euros/MWh. With its eight units, the state-owned TPP Maritsa East 2 is Bulgaria’s largest coal-fired power plant. A baseload generating capacity, it has been in operation since 1969. According to the company’s annual financial statements, it recorded losses every single year between 2014 and 2019, and its accumulated losses now add up to 470 million euros. For 2020, TPP Maritsa East 2 reported a record-large loss of 174 million euros. Minister Zhivkov then formally admitted that the company’s financial standing was critical. The trade unions threatened to take industrial action shortly if the plant suspends operations.
The losses are due to a steep rise in the prices of CO2 emission allowances, from under 8 euros/ton in early 2018 to over 25 euros in August 2020. To operate at full capacity, the plant needs over 10 million allowances, which translates into an annual expenditure of more than 200 million euros, given the price does not exceed 20 euros/ton. Meeting with the trade unions, President Radev said that the socially affordable cost of this decision is known and said that the Ministry of Energy is working hard to find a long-term solution. He said that he is surprised that Bulgaria has not yet introduced a capacity mechanism and that it has not taken full advantage of the Initiative for Coal Regions in Transition in the EU. In the EU, a capacity mechanism offers additional rewards to electricity capacity providers on top of income obtained by selling electricity on the market, in return for maintaining existing capacity or investing in new capacity needed to guarantee the security of electricity supplies. The Initiative is intended to help European countries, regions, communities and workers to achieve the economic diversification required for a clean energy transition.
