Another bomb for the price of electricity is ticking! State mines plan to increase the price of the finished product by 30%

Big ax prepares Mini Maritsa East for its customers who rely on mined lignite coal. A few days ago, it became clear that the state-owned company intends to demand a 30% increase in the price of its final product, which, according to energy experts, will cause huge upheavals in the electricity market.

"6-7 Bulgarian plants rely on the energy fuel from Mini Maritsa East for their production activity, and certainly the increase in the selling price of lignite coal by 30% will be a big shock for them. Such a sharp increase at any time of the year is insane! Potential bankruptcies in the industry are a real threat if this happens!”. This was stated by Eng. Kremen Georgiev, chairman of the Association of Heating Companies in Bulgaria.

The expert said there is no dispute that inflation in the country is widespread and affects all economic sectors, but described the desire for this drastic increase in the state producer as "devoid of any economic logic".

Eng. Kremen Georgiev specified that the decision on the price of coal is mainly in the hands of the Ministry of Energy as the main principal of the state company and explained that it is very likely to be taken after the appointment of an acting minister of the department.

The Chairman of the Association of Heating Companies in Bulgaria expressed his deep hope for a balanced decision that will not cause a collapse for the industry and an additional increase in the cost of electricity and heat production in Bulgaria.

"Inflation in the last year has affected everyone, the energy crisis and the disruptions in the strategic decisions for the future of the Bulgarian energy industry can be detrimental to the industry. All plants are in dire straits and are forced to invest magically in the green transformation, but such a step to save one market participant risks creating a huge problem for everyone else, not excluding bankruptcies of some of the most the heavily affected, which are actually the largest power plants in Bulgaria," explained Engineer Kremen Georgiev.

The expert specified that significant amounts of the mining go to the state headquarters, the American headquarters and Brickell. By pointing out that Brickell processes the lignite coal in a special way, enriching it and reselling it to other Bulgarian plants that also rely on it, but do not buy it directly from the producer, as it is more useful to them after it is enriched.

"Can you imagine that some of these big clients of Mini Maritsa East will cease their activities because of the 30% increase in the price of lignite coal? Well, maybe we will witness at least 1 bankruptcy of a large power plant, if this increase is allowed!" said engineer Kremen Georgiev.

The expert also drew attention to the fact that companies will begin to terminate already concluded contracts due to the inability to pay for them. Not only the contracts with various counterparties and customers of the headquarters will be affected, but also those with Mini Maritsa East. According to Eng. Kremen Georgiev, the potential increase in the selling price of lignite coal will lead to a significant contraction of its demand, and hence to a decrease in financial income for the state mines, which will cause additional mine closures and workers' layoffs.

"And we don't want a similar scenario with an additional number of people in the industry entering the labor market!" said Engineer Kremen Georgiev.