The Association of Industrial Capital in Bulgaria (BICA) and the MEP and President of the European Energy Forum Tsvetelina Penkova discussed the possibilities for sustainable solutions to the challenges facing the Bulgarian industry related to high electricity prices.
“According to European business, the costs of electricity production in the EU will be at least 50% higher than those in the US and China by 2050. This makes European companies uncompetitive compared to American and Chinese companies and should be an extremely strong signal for the entire EU. We need urgent measures at the European level – a pan-European compensation mechanism, additional compensation for the countries of South-Eastern Europe, as well as the postponement of the industry-crushing regulations from the Green Deal package for unnecessary non-financial reporting, as requested by the European People’s Party,” said Vasil Velev at the beginning of the conversation.
During the discussion, the current problems caused by the uncompetitive prices of electricity for non-household consumers in our country were discussed, as well as the need for a permanent mechanism for compensating consumers.
For BICA, it is of critical importance that the national mechanism for compensating for excessively high electricity prices be included in a permanent law, which will be activated and deactivated automatically when price crises begin or stop. Only in this way will companies have certainty to invest in Bulgaria. The association believes that such a mechanism could have a lower threshold of 60 BGN per megawatt hour (below which contributions to the FSES are made by consumers, and compensation is received by electricity producers) and an upper threshold of 180 BGN per megawatt hour (above which contributions to the FSES are made by producers at relevant thresholds by type of generation, and compensation is received by electricity consumers).
“I believe that the immediate continuation of compensation for non-household consumers is crucial. This is the first step to ensure stability for businesses and maintain the competitiveness of our economy. We must also create a permanent compensation mechanism that will automatically be activated in future crises, so that we can adequately respond to dynamic changes in energy markets.
It is also necessary to consider both national solutions, including investments in modernizing energy infrastructure and increased support for nuclear energy, which is an important source of energy security, as well as European instruments that can contribute to sustainable solutions. From now on, all approaches must be both proactive and synchronized with our European partners in order to create energy stability and security.
I am committed to actively continuing to raise these issues with national and European institutions, insisting on concrete and urgent actions in support of Bulgarian business and economy. I am convinced that only through solidarity, strategic planning and implementation of sustainable policies can we overcome the current challenges and ensure long-term stability and development,” said Tsvetelina Penkova.
According to Vasil Velev, the countries of Southeastern Europe should be compensated by the EC for the extremely high electricity prices in the region, as they bear all the negative consequences of the imperfections in the pricing of the European electricity market, the lack of sufficient connectivity with Western and Northern Europe, and ensure energy security and electricity deficit for Ukraine and Moldova on their own. He added that the BICA will address the problem to the Bulgarian European Commissioner Ekaterina Zaharieva, the European Parliament, the European Economic and Social Committee, the European Committee of the Regions, the European Energy Forum, SGI Europe, the International Trade Union Confederation, as well as the Ministry of Energy of the Republic of Bulgaria.
During the meeting, the commitments undertaken by Bulgaria within the framework of the European Green Deal and their negative impact on the competitiveness of Bulgarian companies were also discussed. enterprises. The participants united around the opinion that urgent measures are needed to recalibrate the Green Deal and to compensate for the damage caused to Bulgarian enterprises by the ban on access to traditional energy carriers and markets. The poorest country in the EU - Bulgaria is paying a heavy price for upholding the positions of the United Europe and support for the real sector in it is of key importance for its economy. BICA will also request the convening of the National Economic Council to discuss the priority sectors for Bulgaria in the European strategy for clean industry, as well as the Bulgarian proposals for the plan for deregulation of business in the EU.
BICA will continue to work actively to protect the interests of business and to find sustainable solutions in the context of the overlapping crises.
Chart 1 – Electricity prices in Europe for 2024 on the Day-Ahead market
Chart 2
