Rumen Galabnov: An instrument against energy poverty should be introduced for small and medium-sized businesses

Mr. Galabanov, can and should the state intervene in the electricity market in any way?

Before the market somehow smoothes out, becomes more predictable, more bearable, if I may say so, there will be a period of quite extreme price changes. From this point of view, I think it is reasonable what the employers' organizations offer - the state to find a form to support companies in general. Because, as we have used the term "energy poverty of households" so far, we no longer have to talk about energy poverty of companies. The big ones will manage somehow with their electricity bill. Will they calculate it in final prices, will they use external financing ... But this is about small and medium business, family business. And it seems that they will be hit hardest, and at the same time they do not have any opportunities to finance themselves to pay their higher bills.

Therefore, the state should intervene in some form of program to prevent energy poverty in companies with some tools. They can be grants, they can be credit, guarantee ... There could even be combined support as part of the anti-crisis measures, including the payment of electricity, heat or natural gas. Very soon, perhaps, criteria for energy poverty of companies will be introduced, according to the size. Because even a small company, which has the opportunity to produce and sell its products well, is competitive, but its production and other operating costs are so thin that the electricity bill, increased by 30 or 50% per month, is fatal in general for the existence of this company and its survival. And just being left bankrupt just for that is not worth it.

Do you see any deformations on the Bulgarian energy market?

For me, they are inevitable. Because we still have a natural monopoly position of some of the electricity producers. I think we all know about one that is state-owned, which, in addition to being in focus because of prices at the moment, will be in focus again after that in the Green Deal, the green transition in energy and what will be its fate in future. From now on, these state-owned energy producers will have other issues to address. And at the moment, the speculative electricity market is hardly helping them much. On the contrary, it may not be to their advantage because they have other problems - restructuring, switching to another type of energy source, for example instead of coal - gas, hydrogen or something else. If anyone thinks that they know how much they earn from the current short-term peaks, they are wrong.

Will these peaks, together with the rise in fuel prices, not raise inflation further?

Yes for sure. That is why the expectations for the pro-inflationary development are high. We will probably continue to monitor such processes until the end of the year. The moment is also very important with these points of conflict that we see around the world related to regional geopolitical problems. Also with the sharp increase in energy consumption and energy from large economies, such as China, which is recovering, the US, Europe as well. This abrupt restart actually leads to peaks. Because there are still no technologies for large energy "tanks" in which to store huge amounts of electricity, which at some point can be quickly placed on the market and quickly stabilize it. This may be a question of the future. If there is an increase in electric transport and other things that require that there is always enough electricity somewhere "in stock". But this is not the case at the moment, electricity is still slowly overcoming such deficits and such sharp fluctuations. And while the market stabilizes, weeks pass, and this can not but affect prices.