Martin Vladimirov: The "best" of the energy crisis is coming

"We have not yet experienced all the pain of the energy crisis. The 'best' is when the EWRC has to make the difficult decision whether to increase electricity prices for households from January 1." This was commented to BNR by Martin Vladimirov, director of Energy and Climate Program at the Center for the Study of Democracy.

"If the market logic is followed, the increase would be significant ...

There are quite interesting solutions that the government and the regulator have not yet discussed, but should. For example - how to use the huge resource accumulated in the Security System of the electricity system from the sale of carbon allowances. Revenues there this year will reach record levels, so we can expect revenues of over BGN 2 billion in the fund. And the fund compensates the difference between the market price for electricity production and the one that EWRC sets for the final suppliers - the three ERPs. A mechanism can be found to limit the price increase through the fund or to introduce something like a negative "social responsibility" fee, which is now BGN 7 per megawatt-hour, but it can also become negative and this is a compensatory mechanism with which the final consumers to be compensated so that the total burden of the final price of electricity is less ".

He explained that this is also a mechanism recommended by the EC as the most gentle on market rules, ie. the state should not interfere in the functioning of the market, but use this available resource for direct compensation for businesses and households.

According to the expert, the energy crisis is severe enough for the president to convene an extraordinary session of parliament to update the country's budget.

Vladimirov described as reckless the decision of the caretaker government to seize the profits of "the only well-functioning energy company - Kozloduy NPP - and redistribute them to big business."

"I expect energy prices to stabilize by the spring of 2022, which is part of a natural cycle of natural gas demand in Europe, which is the main culprit for the rise in electricity prices. We are already seeing a collapse in European gas exchanges. at the price of gas, it is already clear that the market is calming down, "he commented.

According to him, this is a Russian sabotage of the gas markets in order to facilitate the start of operation of the Nord Stream 2 gas pipeline.

According to Vladimirov, at this stage Belene NPP is not needed and would not be profitable:

"After some time, when coal-fired power plants are shut down after 2035, there can be talk of a new baseline capacity, but it is not needed at this stage.