Georgi Dobrev, CEO of NEC: We have successfully implemented an algorithmic trading mechanism (bot)

Marinela Arabadjieva

The National Electricity Company (NEC) is fully prepared to perform its main functions even in a changing market environment with a fully liberalized wholesale market in the country. The main challenges facing the company, which operates 31 HPPs and 39 dams, are related to maintenance and rehabilitation activities, as they were built more than 30 years ago, and some are centenarians. This was commented on in his interview with 3eNews by NEC CEO Georgi Dobrev. The electricity company continues to work on the projects for HPP batteries and the construction of new HPPs.

Mr. Dobrev, we are only days away from the start of the liberalization of the electricity market. Is the National Electricity Company (NEC) ready for this process and what is the effect you expect? I start with this question, although there is still some hypothetical possibility of revising the procedure.

The National Electricity Company EAD (NEC) holds four licenses – Public Supply (PS), Electricity Generation from HPPs and PSHPPs, Trade and Supplier of Last Resort (SLR). The PS and SLR licenses are imposed by the Energy Law and are mandatory, while the other two are due to the nature of the managed fixed tangible assets (HPPs and PSHPPs) and the adequacy to the electricity market (Trade).

Until the liberalization of the wholesale electricity market, the main function of public supply is to provide the necessary energy for household consumers in the country. This task, related to ensuring the significantly changing profile of household consumption by months and hours, is successfully performed by NEC with the engagement of a large production resource and expert capacity in the company.

According to the current Energy Law of 01.07.2025, the public supply activity should be eliminated and the wholesale market should be completely liberalized. Despite the elimination of one of NEC's functions, with the remaining 3 licenses, the company has developed a business plan for the next 5 years for the development of its activities. The plan provides for the electricity produced by the hydroelectric power plant and the hydroelectric power plant to be sold on the free and balancing market to achieve optimal financial results and to guarantee the security of the electricity system. With the trading license, the company will affirm its main role in the free market in the country, while additionally adapting the activities within the company to the liberalized market.

We have excellently prepared experts and very good technical support, which give me confidence in achieving good results.

Another important progress that I would like to note is that we have successfully implemented an algorithmic trading mechanism (bot) and have taken steps to register on the European Energy Exchange EEX.

It can be said that NEC is fully prepared to perform its main functions even in a changing market environment with a fully liberalized wholesale market in the country. The company will adequately fulfill its commitments for the benefit of society, while ensuring a stable technical and financial condition.

What is the condition of the Hydroelectric Power Plants (HPPs) and what are the problems you are facing?

There are no unplanned emergency repairs in the hydroelectric power plants managed by the National Electricity Company. The company's engineers maintain the hydro generators and all hydrotechnical facilities in a working technical condition with a high degree of reliability and availability. Our employees work daily for their maintenance, reliable and safe operation. NEC's hydroelectric power plants play a key role in providing balancing energy to ensure the security of the power system, and their excellent maintenance is a top priority for the company's management.

The challenges we face as a company operating 31 hydroelectric power plants and 39 dams, 21 of which are complex and significant, are primarily related to the long operational period of the facilities. A significant part of these facilities were built more than 30 years ago, and among them there are centenarians. This creates the need for timely rehabilitation of the company's infrastructure facilities. In order to extend their operational life and increase their efficiency, we prioritize the investment and repair programs, with all necessary activities planned in a timely manner. Significant funds are needed for their successful implementation, and therefore we focus on achieving the best possible financial results.

Another important challenge that we continue to face is the hydrometeorological justification and insufficient amounts of precipitation. Limited water resources require serious planning to cover the needs of all users.

It is very important to note that through their work, NEC's hydroelectric power plants do not consume water at the expense of other water users, but on the contrary - they ensure its regulated supply in accordance with the priorities of use. That is, the more NEC's hydroelectric power plants produce, the more water is supplied to other users.

The majority of NEC's hydroelectric power plants are organized in cascades, i.e. the same water resources are used for electricity production several times and the production from these cascades is highly efficient.

How far has the process of building energy storage facilities in batteries and in particular the Vucha 1 hydroelectric power plant project reached? Will you continue this initiative, as there was a development for the construction of such facilities at 4 more HPPs?

The project for the construction of batteries at HPP Vacha 1 is being implemented according to plan. The detailed design was recently approved and we are currently in the process of coordinating with stakeholders and obtaining a construction permit. We expect to complete this pioneering project within the calendar year.

We plan to operate the new battery system entirely on a market basis, charging during hours with low electricity prices on the Bulgarian Independent Energy Exchange and discharging during hours with high prices. The battery will also provide an opportunity for important system services for the Electricity System Operator, such as primary regulation and automatic secondary frequency regulation. In the context of increasing the share of energy from renewable sources, the battery will contribute to increasing the stability and security of the country's electricity system by ensuring compensation for short-term fluctuations in the network.

The implementation of this innovative system will allow us to expand our portfolio and experience in the management of flexible production capacities and green energy storage systems.

You have found the Chaira PSHPP in operation, the third tender for the repairs has been completed. What are your expectations?

We are continuing the intensive work on the repair and rehabilitation of two hydro units simultaneously and the activities are being implemented according to the set schedule.

The procedure for replacing hydro units 1 and 4 has not been completed and the initial proposals received are currently being evaluated.

By the end of March, the analyses for the two new Batak and Dospat PSHPPs should also be ready, and Minister Stankov also spoke about the Teshel PSHPP. Have you familiarized yourself with them and what are NEC's phased plans?

We are also actively working on the analyses for the construction of two new HPPs on the already existing Batak and Dospat dams. A technical assistance contract is currently being implemented to carry out preliminary and pre-project studies for the technical and economic feasibility of the projectswith the expert and financial support of the European Investment Bank. The assessment activities include technical, geological, hydrological, financial and environmental studies and will allow NEC to make informed decisions for the further development of both projects. The technical assistance will also ensure compliance of the projects with national and European environmental legislation.

We are also studying the possibilities for the implementation of two more pumped-storage hydroelectric power plants in the Rhodope Mountains, which are still in the conceptual phase. The goal is to maximize the utilization of the resources from the Batak, Dospat and Vacha dams.

The benefits and social significance of the implementation of these projects in Bulgaria are undeniable - on the one hand, the new capacities will guarantee the security of electricity supplies for the entire country through their two operating modes - generator and pumping; on the other hand, they will contribute to the integration of renewable energy capacities in the country, the successful balancing of the national and European electricity systems, as well as the implementation of the decarbonization goals of Bulgaria and the EU.

With the implementation of these projects, Bulgaria will become a regional leader in the storage of electricity from renewable sources.

Mr. Dobrev, according to information in the public domain, our country intends to cancel the sale of the equipment for the Belene NPP. Of course, a procedure is also pending in the National Assembly, but if it is positive, what are NEC's intentions for its implementation and in what period of time?

NEC implements the decisions adopted by the National Assembly.

How do you see the future of the National Electricity Company and is there a problem that needs to be solved urgently?

We continue to work to establish NEC as a modern company with a vision to expand the portfolio and implement innovative projects. In the short term, our priorities are related to the successful implementation of the renovation and the rehabilitation of hydro units 1 and 3 of the Chaira Hydroelectric Power Plant, as well as the completion of the tender for the complete replacement of hydro units 1 and 4 of this key power plant.

Another important aspect is related to the successful management of limited water resources during the upcoming summer season and meeting the needs of all users.

Depending on the decisions of the parliament on the future development of market liberalization in the country, NEC will organize its short-term and long-term market behavior policy.