Bulgarian district heating provider Toplofikatsiya Sofia should record a loss in the amount of 64 million euros in 2021, due to soaring prices of natural gas and CO2 emissions.
The company operates on the regulated market, which means that the price of thermal energy is determined by the Commission for Energy and Water Regulation (KEVR). On 1 July, the regulator calculated the price of thermal energy based on the price of natural gas, which was set at 24.1 euros/MWh, while the projected CO2 emission costs are at 51 euros/ton. However, as of 1 October, the price of natural gas supplied by Bulgargaz has already reached more than 48 euros/MWh, while the price of CO2 emission exceeded 60 euros/ton.
The company’s debt to Bulgargaz will increase by almost 130 million euros by the end of the year and by 180 million euros by the end of the current regulatory period in June 2022. Toplofikatsiya Sofia is Bulgaria’s largest gas consumer – about 25 % of total consumption – and Bulgargaz’ largest customer.
However, the district heating company continuously accumulates debts to state-owned gas supplier, which have been reprogrammed several times. The current debt reached 367 million euros at the end of September. The company is now seeking state aid to compensate for high gas and CO2 emissions prices and has already launched negotiations with the Ministry of Energy and Bulgargaz’ parent company Bulgarian Energy Holding (BEH).