TPP Maritsa Iztok 2 to supply households with energy again, NPP Kozloduy replaces TPP Maritsa Iztok 3

As expected, the Bulgarian Acting Minister of Energy, Vladimir Malinov included the electricity production of the Maritsa Iztok 2 TPP in the household energy mix during the new regulatory period - starting July 1. His decision actually continues that of the former caretaker energy minister Rosen Hristov, who a year ago also included the high-priced electricity produced by the state-owned thermal power plant in the mix used by households.

Actually, both orders are based on the decision of the National Assembly (Bulgarian parliament) from January 31, 2020, by which the MPs obliged the governments to take all necessary measures to guarantee the operation of coal-fired thermal power plants.

Despite the inclusion of expensive coal-produced electricty in the mix, the Energy and Water Regulatory Commission (DKER) expects that the price increase for end-use consumers to be the smallest in a decade - below 2%. The new electricity prices have already been announced by the electricity distribution companies and their final approval is pending on July 1.

More expensive electricity from TPP Maritsa Iztok 2

Malinov's order was issued on May 31 and is for 2.628 million MWh from TPP Maritsa Iztok 2 for the entire 12-month period. For last year its quota was 2.2 million MWh. Thus, the state-owned plant will continue to operate with two units with a total capacity of 300 MW, and the expensive electricity from them must be purchased by the public utility – the National Electric Company (NEK).

There is also a difference in the price of electricity from Maritsa Iztok 2 TPP compared to last year - now the plant has asked to sell it for BGN 280.74/MWh (about 140 euros). However, after a correction by DKER, it was reduced to BGN 275.98. For comparison, the price last year was BGN 318/MWh. The reason for the decrease is the lower projected price of carbon emission allowances, which this year is 70 euros per ton, whereas last year it was 85 euros per ton.

It is, indeed, the emissions that form the biggest expense for the coal plant. During the new regulatory period, the company will emit 10,519,491 tons of greenhouse gases, and the entire amount will be purchased at market prices. Thus, the TPP will have to pay over BGN 1.4 billion (700 million euros) for them.

For comparison, for the next regulatory period, the Commission has determined the annual market price of electricity in the amount of 88.50 euros/MWh, or 173.09 BGN/MWh, which is nearly 50 euros below the price from the state thermal power plant.

Kozloduy NPP replaces Maritsa Iztok 3

It is known that, of all the power plants that provide base energy to Bulgaria's electric grid, the Kozloduy Nuclear Power Plant produces it at the lowest cost. The price at which the NPP will produce electricity this year will be BGN 65.47/MWh (about 32.5 euros).

The total expected amount of electricity from the nuclear power plant destined for the regulated market is 5,943,500 MWh, an increase of 2,001,500 MWh compared to last year. The aim is for these quantities to compensate for the loss of ContourGlobal Maritsa Iztok 3, which stopped working at the end of February, after its contract with NEK for supplying electricity expired.

However, in mid-May, the US-owned TPP asked the Bulgarian Minister of Energy to be included in the general annual quota for mandatory purchase of electricity from producers using local primary energy sources. The DKER report explains that if the company is included in the specified quota, its corresponding costs will be compensated by the Power Grid Security Fund.

Translated by Tzvetozar Vincent Iolov