Type of event:
Round table
Organizer:
Energy Management Institute
Date:
06/11/2019
Place:
Sofia
Time:
9:00 AM
Access:
Upon registration
On November 7, 2019, the Energy Management Institute, with the support of the Ministry of Energy, organized a round table on “COAL REGIONS AND CAPACITY MECHANISMS AS PART OF THE FUTURE BULGARIAN MARKET MODEL”. The event took place at Sofia Hotel Balkan.
The Minister of Energy, Mrs. Temenuzhka Petkova, made the keynote address for the opening of the round table. The main panelists in the event were the Chairman of the Energy Committee at the 44th National Assembly, Mr. Valentin Nikolov, the Executive Director of ESO EAD, Mr. Angelin Tsachev, Mrs. Ivanka Dilovska and Mr. Slavtcho Neikov from the Energy Management Institute.
Among the participants were representatives of state institutions, regional and local authorities, heads of business and trade union organizations, energy companies and NGOs.
The main issues discussed were the following:
The European Coal Regions in Transition initiative – what is it and what can we expect from it in the Bulgarian context?
Are there also risks to security of supply?
When are capacity assurance mechanisms implemented and what kind is appropriate for Bulgaria?
How will the chosen capacity-building mechanism fit into Bulgaria’s future market model and what are the next steps to implement it?
The Moderator’s Conclusions are stated below.
Round Table
Coal Regions and Capacity Mechanism as Part of the Future Bulgarian Market Model
(7 November 2019, Sofia)
MODERATOR’S CONCLUSIONS
- The event was organized by the Energy Management Institute with the support of the Ministry of Energy.
- Attesting to the significance of the topics discussed was the high number of participants registered (over 90) representing state institutions, business associations, trade unions, non-governmental organizations, academia, etc., the presence of more than 15 national and regional media representatives, as well as the active discourses prompted by the introductory speech of Temenuzhka Petkova, Minister of Energy, and the presentations made.
- The topic was explored in the context of challenges faced, considering two key priorities of EU Energy Policy, namely, energy market liberalization and security of supply. In the background of the European framework, it was clearly noted that solutions should be sought for at national level and should reflect national specifics. Market defects and the increasingly stringent European environmental rules imposed on energy producers were contributing to issues of long-term security of supply with a view of effective use of national coal resources. Energy markets alone did not provide the necessary financial incentives to investors and operators to build new power facilities or to maintain availability of capacities thus securing power system reliability and supplies. In Bulgaria, coal-fired power plants were a problem of notable difficulty considering also the substantial costs associated with payments for carbon emission permits.
- For that reason Bulgaria needed to have capacity mechanisms introduced so that coal-fired facilities being crucial for the national power system would continue generate energy in circumstances of growing environmental restrictions evolving from European policies and economic uncertainties in a liberalized energy market setting. Referring to Maritsa Iztok facilities, Minister Petkova reconfirmed government’s position that Bulgaria would continue to rely on local coal resources in the long run, such commitment being already laid down in the Integrated National Energy and Climate Plan.
- Drawing up a long-term forecast on generation capacity adequacy based on economic cost-efficiency analysis was also argued. Such an analysis would be a key premise for the development of a capacity mechanism that could contribute to the security of power supply from local resources, as set out in the draft of the 2030 Integrated National Energy and Climate Plan.
- In the context of capacity mechanism topic, it was pointed out that the role of vast foreign investments already made in the coal-fired power generation sector should be duly accounted for as contributing to upgrading and greening power generation. Particular reference was made to CONTOURGLOBAL MARITSA EAST 3 and АЕS BULGARIA. As regards the notion of preterm termination of power generation agreements with these companies, popping up periodically, it was emphasized that any change required scrutiny within the law. Moreover, these agreements had to be perceived as an integral part of the capacity mechanisms.
- An overarching issue discussed was the sore need of a clear and concrete interpretation – in a simple and accessible language – of actions undertaken and planned regarding sector’s strategic development and future. To date, that was a noticeable deficiency. The main contributor to such a deficiency was considered to be the absence of an updated Energy Strategy, as required by the Energy Law. Debates made it obvious that Strategy drafting term would be extended and the deadline stipulated by law (January 2020) would be missed. As a result, important reforms and documents evolving from the National Strategy (e.g. a reformed/new market model; final 2030 Integrated Energy and Climate Plan; operative capacity mechanism) would precede the Strategy.
- In relation to the abovementioned, it was noted that a wide public consensus and understanding among all stakeholder were required in order to proceed with decisions on the future of the liberalized power market. Such decisions should reflect views of business organizations, branch associations, social partners, consumer organizations, non-governmental bodies, expect councils, etc. They should have their voice heard regarding the upcoming amendments of the Strategy and the legislation, as well as the specific changes envisaged in the Bulgarian power market model. It was stressed that the national and regional perspective of the impact that such changes could exercise on the economic and social environment should also be clarified.
- Noted was also the fact that some of the coal-fired power plants were to be gradually decommissioned. Such an endeavour would require assigning a priority to analysing and planning. In parallel, it would necessitate considerations regarding economic options for future development of coal mining regions on a broader scale. Changes to occur in the regions should be managed in a way allowing for a fair and sustainable transition. Voiced were the prominent expectations for a more active participation in all mechanisms available at European level that would provide options for a motivated search of funding to secure smooth reforms in the regions affected.
- Articulated was the strong concern that Bulgaria still remained without a state representative at the EC Platform for Coal Regions in Transition thus preventing country’s active participation in it (https://ec.europa.eu/energy/en/topics/oil-gas-and-coal/coal-regions-in-transition, etc.). On numerous occasions, support to such participation had been explicitly expressed, including by high level trade union representatives. NGOs and other organizations shared their committal in principle to assist respective government institutions in that respect. Minister Petkova indicated governments’ readiness to involve relevant authorities should a consensus on the topic be reached.
- With a view of the abovementioned circumstances, accentuated was also the need to have government administration improve and become proactive in defending national interests. It would have to interpret actions undertaken based on professionally led consultations with stakeholders.
- Once again, the forum underlined the need to continue debates on the topics, discussing them in substance, in the context of expectations regarding relevant management decisions. The state with its institutions should not only continue to support further dialog but also respond swiftly to anticipations of a timely and objectively substantiated steps on the grounds of a clear strategic framework and respective legislation. In the process, Bulgaria’s commitments to international and European norms should be observed while communicating adequately and objectively the national specifics at both European and International levels as regards economic and social implications arising from reform implementation.
Event Moderator /Slavtcho Neykov, Chair of the Management Board of the Energy Management Institute/
From the the links you can also download the presentations (BG only).
