Ignoring potential problems could prove to be the weak link in securing supplies

Commentary by Kaloyan Staykov for Capital, October 24, 2025

• New renewable energy capacity, old thermal power plants, and prices are among Bulgaria’s main “energy” risks.
• Along with the growth of the RES system, energy is regularly “lost,” which is a sign of management problems.
• Some of these are related to the lack of functioning market mechanisms and insufficient network capacity.

The energy transition in the European Union, and indeed in the rest of the world, is not proceeding in a linear fashion, at a steady pace, and even less so according to the forecasts made 20 or 10 years ago. It follows its own administrative and market logic, which does not always coincide with the technical capabilities of individual systems or the available market mechanisms for dealing with new challenges. For example, the price for base load on the energy exchange in Bulgaria in 2021, as well as in the period 2023-2025, is almost unchanged – around BGN 200/MWh. However, its maximum values in January and February range from BGN 920 to BGN 1180, and its minimum values in May and April are around BGN 197.

Price is the market mechanism that gives us information about how affordable a given good or service is. When the price is low, it means that goods are abundant and supply exceeds demand, and when it is high, it means that goods are scarce and supply is too low. This is the first and most immediate challenge facing the electricity system not only in Bulgaria but also in other EU member states. Electricity consumption has always been variable, depending on the time of day, outdoor temperatures, and seasons. Added to this is the growing share of variable generation, which also depends to a large extent on meteorological phenomena, including annual ones such as drought, windlessness, etc.

Semi-closed thermal power plants and new RES

Although Bulgaria has had almost no closed generating capacity in the last eight years (since the cold winter of 2017), the same cannot be said for other countries in the region. The most striking example in this regard is Romania, which has decommissioned 6,533 MWh of coal and natural gas TPPs over the same period, thereby increasing the regional electricity deficit. What is more, the worsening balance does not only apply to the quantities consumed, but also to the reduction in maneuvering capacity, which can ease the pressure on both maximum and minimum prices. Added to this is the risk of technical failure of the electricity systems, as we have seen in less than six months in Spain, parts of France, and North Macedonia.

The second challenge is related to the still high investor interest in connecting new solar capacity, which not only exhausts the grid’s connection capacity but also outpaces consumption growth, including from storage systems. The outpacing growth of production during sunny hours leads to one of two problems: the transformation and transmission of electricity over long distances, which increases system costs, or limiting production. In April alone, 130 GWh of generation from photovoltaic power plants was “lost.” The introduction of storage systems will alleviate this problem, but additional steps are needed.

Thirdly, there is the declining load on coal-fired power plants, including the closure of such plants in neighboring countries. Despite the rapid development of the RES sector in recent years and its growing share in total production, it is not yet ready to sustain the system on its own. Even though in the summer, production from PV plants covers about 90% of the country’s load, at the time of writing this article, this share is 14.5%. In other words, the energy transition is continuing, but its pace is outstripping the pace of decommissioning old and depreciated power plants, while the remaining power plants, which are vital to the system, are experiencing financial difficulties.

Trial and error

Fourthly, there are insufficient operational reserves and an underdeveloped demand side response. Perhaps the best illustration of the first problem is the shutdown of the Maritsa East 3 thermal power plant at the beginning of last year, the dismissal of all employees, and the government’s subsequent “realization” in the fall that it was very important. This was followed by the forced start-up of two units at the beginning of this year and the re-hiring of some of the employees.

The plant operated sporadically until the beginning of March and then for a few more days in July; its future, its systemic importance, and possible mechanisms for securing it are still unclear. We can only hope that the government will be wise enough not to repeat this mistake with the Maritsa East 1 Thermal Power Plant. Therefore, a clear assessment of the minimum necessary strategic reserve of coal-fired capacity and the period of its operation is needed to ensure its functioning and, consequently, the security of the electricity system.

Finally, we can note the lack of market mechanisms that are adapted to the new energy mix and market realities. For years, the Bulgarian market has suffered from a lack of long-term products, including flexible ones, when it comes to RES production, for which it is difficult to make forecasts for a longer period. However, “dumping” almost all quantities on the day-ahead market is not only not a solution, but also exacerbates the problem of lack of predictability on the part of consumers.

The working solution

The easy solution – regulated prices for households and vulnerable non-domestic consumers, a price cap for non-domestic consumers for the period July 1, 2025 – June 30, 2026, and discussion of a law for an even lower price cap for energy-intensive industries. Such mechanisms literally kill the market and take us back to regulated prices – we supposedly have a market price, but the government sets price caps for different groups of producers and consumers. Under these conditions, there is no way we will see new investments in base or maneuvering capacity; all interest is focused on RES and batteries.

In the long term, the lack of solutions to these challenges could turn into problems of system adequacy, or in short, supply disruptions. What is more, while at European level more and more attention is being paid to transmission networks and interconnections, the problem of the development of electricity transmission networks is still not being addressed. These networks connect not only new RES, but also consumers, and at the same time, the process of electrification of social and economic life is expected to intensify, with the introduction of electric vehicles and the need for charging stations in populated areas, the construction of smart grids for millions of consumers, etc.

Ignoring this challenge may sooner or later become a weak link in ensuring security of supply. This is because current electricity systems are designed for centralized generation, geographically balanced consumption, unidirectional flow of electricity, and relatively low connectivity with neighboring markets.

New electricity systems, however, rely on decentralized generation, concentration of consumption in a few economic and social centers, two-way flow of electricity due to active consumers (prosumers), storage systems, electric vehicles, and others, and a high degree of connectivity across Europe. Ignoring these changes is like driving your car forward while navigating by looking in the rearview mirror—it’s not impossible, but there’s a high probability of an accident.