BFIEC: Bulgarian industry cannot withstand this price pressure for a long time

BFIEC is very concerned about the rapid and significant rise in electricity and natural gas prices both in Bulgaria and in European markets. Rising energy prices are putting the industry at a disadvantage and making it difficult to recover from the COVID-19 pandemic. Bulgarian industry cannot withstand this price pressure for a long time! This is stated in their position by the Bulgarian Federation of Industrial Energy Consumers. The document was sent to the media and is about the continuing unfavorable environment for the Bulgarian industry, caused by the high prices on the energy markets.

We note with concern that electricity prices in both Europe and Bulgaria are reaching record highs since the existence of the free energy market. It should also be noted that the average price for basic cargo in the day-ahead segment for August is BGN 218.17 / MWh. Compared to the same period last year, the price of electricity in this market segment has increased 3 times, explained by BFIEC.

Moreover, natural gas prices have increased almost 5 times in the last year, due to increased demand after COVID-19, as well as the low level of filling of storage facilities on a European scale. This has an impact on electricity prices in Europe, as natural gas is increasingly used as a fuel for electricity generation during the Green Transition.

Another important factor influencing the formation of the energy price is the increase in the prices of carbon emissions, which in the last month exceeded 60 EUR / t CO2. Bulgaria has not yet introduced a mechanism to offset the indirect costs of emissions in support of industry, which is widely accepted in many EU member states.

Only a month ago on the electricity market at such high price levels a number of structurally determining energy-intensive enterprises temporarily ceased their activity!

There is still a lack of long-term market stability. On the contrary - now we are witnessing again at record high prices! For today the achieved average price on the market "day-ahead" amounts to BGN 335.51 / MWh. The situation continues to deteriorate, and the industry needs market-functioning and predictable energy so that it does not collapse!

The Bulgarian energy intensive industry is of key importance for the economic growth of the country. The enterprises in BFIEC are structural determinants of the national economy with a high contribution to exports and gross value added.

Moreover, these energy-intensive enterprises are at the heart of achieving the transition to a circular and low-carbon economy - initiatives set out in the EU's Green Deal!

Given the above, as well as the similar position of the International Federation of Industrial Energy Consumers in terms of price levels in Europe, BFIEC strongly insists on ensuring the stability of energy markets and limiting the negative impact of energy prices on the competitiveness and viability of Bulgarian industry. The measures we insist on are:

- Immediate organization of separate tenders for the sale of electricity to the energy-intensive industry through the formation of a wholesale market;

- Introduce a mechanism to offset the indirect costs of carbon dioxide emissions. This is permitted assistance from the European Commission, and the eligibility criteria are set out in specific guidelines;

- Inclusion of demand-side response of users, meeting the technological requirements, to the distribution of available range for secondary regulation;

- Reduction of any other burdens in the final energy value in accordance with the guidelines of the European Commission.