The state adopted a Just Transition Plan. Thermal power plants will not be closed, but "will be phased out for economic reasons" in the years to come

Today (on September 29) the Government adopted the Just Transition Plan. This plan will be sent to the European Commission (EC) tomorrow. This was stated by the Minister of Finance Asen Vasilev at a briefing after the extraordinary meeting of the Council of Ministers this afternoon. He also said this is "literally the deadline" so we don't lose the remaining funds under the plan. This was confirmed before him by Prime Minister Academician Nikolay Denkov. His comment is in relation to the draft decision for approving new priorities under the "Regional Development" program 2021 - 2027 and draft territorial plans for a just transition of the Republic of Bulgaria for the regions of NUTS3 level - Stara Zagora (and adjacent municipalities), Kyustendil and Pernik, as part of the program. This was the first item on the agenda of today's meeting, BTA reported. Vassilev recalled that last year our country lost funds due to the failure to meet the set dates.

I want to call on all the protesters to listen to what I have to say now. What we are doing is the best possible for them and for the country as a whole. Much of their claims today are based on false or distorted information. The deadline to send the package of documents to the European Commission (EC) is tomorrow, Saturday, September 30. This was stated by Prime Minister Academician Nikolay Denkov at a briefing in the Council of Ministers after the end of the meeting. His comment is in connection with the discussion of Territorial plans for a just transition on the fate of coal plants. He addressed the protesting miners and energy workers. The government eventually accepted the Just Transition Plan for the Coal Regions, although there were protests against it in many parts of the country. The confidence of the rulers is that there will be social support for everyone, and new jobs in the coal regions economically affected by the transition.

The Prime Minister said that no more postponement can be done because we risk losing billions of BGN. Second, in the documents we are sending, it is clearly stated that the plants will operate until 2038, Denkov announced.

"Third - there are no dates for the closure of specific coal plants. For economic reasons, gradually, step by step, some of them will drop out of the energy system, simply because it will not be economically possible for them to function anymore," Denkov also stated.

That is why it is extremely important to create mechanisms so that people who have the necessary qualifications can find employment in the same region. Therefore, we are creating, we are literally already working on this topic, an enterprise that will work in the same region to transform the territories of the mines into zones where it is appropriate to develop economic activity, for example, industrial zones, he announced.

According to the prime minister, the new enterprise for the conversion of the regions should be created by the end of this year.

Denkov clarified that this future enterprise will not take functions from the mines, but will work in cooperation with the operations of the mines to complement and not compete. He added that the expectation is that with the creation of these investment zones, new and modern companies will appear "that need skilled labor, such as is available in this region."

That is why we had to check what the interest is, and this test showed that the interest in these regions from new investors is extremely high. This is important for the EC to allow these investments to be directed to the respective regions, Denkov also noted.

In this way, we have the mines that will continue to work and the thermal power plants, the new enterprise that will be created by the end of this year, we have investors that have already expressed interest, he explained.

The prime minister explained that the option of what would happen to those workers who did not want to continue "with this type of activity" had to be discussed. For this there were talks with the managements of the two main unions, it was agreed to have "serious social packages". Denkov said that this is also the practice in the leading European economies. "When there is significant upheaval in a sector, if large enterprises have to be closed, such social packages are created," he added.

At the end of his speech, the Prime Minister again called on the protesters to stop the protests. He addressed them saying: “Your representatives should come here for negotiations to why that is the way to look for solutions'. The Prime Minister appeals that if the protests continue, they should take place in a legal manner and not create obstacles for the rest of the citizens.

Denkov specified that negotiations with the EC are coming up in the next two months. According to him, this time is enough to concretize the decisions that have already emerged, in his words, as a general framework.

After November 30, the EC must present to all member states what we have agreed. And by the end of December, every member state must have agreed to what we are proposing. If this does not happen, then the funds will be lost and the consequences for these regions will be extremely severe, warned Denkov.

Asen Vasilev: Carbon dioxide quotas will become more expensive and thermal power plants will become uncompetitive on the market

The initial dates that were set for all Member States were for these plans to be sent by 30 September 2022. The Cabinets did not send the plans. The regular cabinet managed to hold discussions in a very short period of time - both with the trade unions and with businesses in the regions, commented the finance minister.

Vasilev explained that there was a "missing element" in the plan of what people from the plants would do if they wanted to leave them. The standard packages are 24 months, and in Bulgaria it has been discussed with the parliamentary parties that they can be up to 36 months, said the minister. One such package would be between BGN 140,000 and 150,000 per worker, he pointed out.

The problem with the coal industry is not new, Vassilev added. He pointed out that 2038 is the year in which Bulgaria should close its coal production. "This date is being saved. It has not been changed," emphasized the Minister of Finance.

Vasilev drew attention to the fact that this year, it can be seen that mines and thermal power plants are facing financial problems, because, in his words, the cost of the electricity they produce is very high compared to market prices.

These problems will worsen in the future because the price of carbon dioxide allowances will rise and the cost of the electricity they produce will also rise, Vassilev believes. And he added that enterprises will become increasingly uncompetitive.

What is done in the recovery and just transition plans and the co-financing from the national budget is to make this transition in such a way that people can keep their incomes, no one is left in financial trouble, enough investors are attracted in the region and to complete a program that will last at least 10 years, Vassilev also commented. The program is to rehabilitate the entire mine region so that it can become normal for industrial activity, he added.

Transitional fuel does not solve any problem of the mines, Vassilev added. He gave as an example that if natural gas is used in thermal power plants, the mines will not work.

"All calls for transitional fuel are rather lobbying by interests who, in one form or another, want Bulgaria to become more dependent on gas and fuel imports," said Minister Vassilev.

The social packages and how they will operate will be discussed with the trade union organizations, Minister Vasilev explained.

In response to a journalist's question about how energy security will be guaranteed and whether electricity will become more expensive if the coal plants do not work, Vasilev commented that currently the electricity produced from coal is more expensive than that which is on the market.

"Generating electricity from coal would raise the price of electricity, not lower it," he said.

When asked whether potential investors will receive funding under the territorial plans, Vassilev replied that the indicative list is of companies that have expressed interest in investing in the region.

This was done to predict how many jobs could be created and what investment there would be in the region, not whether these firms would receive support. Whether they will be helped financially is subject to additional negotiation with the EC, Vassilev explained.

"If there is such assistance, it will be like all other European programs - with open procedures where investors can apply. There is no way to negotiate directly with companies, because European rules do not allow it," he specified.