Electricity

Coal power plants in Bulgaria cutting production amid losses, pollution breaches

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Published

March 29, 2024

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Published:

March 29, 2024

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Coal power plants in Bulgaria almost halved their output last year as their operators struggle to compete with cheaper kinds of electricity in the market, high CO2 emission costs and strict pollution standards.

Chief Executive Officer of ContourGlobal Maritsa East 3 Vassil Shtonov urged Bulgaria two months ago to help coal-fired thermal power plants until large gas power plants are built. At the time, he claimed the facility that he runs, called Maritsa iztok 3 in Bulgarian, is the most competitive in the sector. Now it is preparing to lay off a third of its employees – 160 people.

Throughout Europe, coal plants are closing ahead of schedule. In the Balkans, most units are obsolete and unreliable. Their operators, pressured by the market, increasingly pause production as renewables and other kinds of electricity are becoming cheaper for consumers and available abroad.

Without government aid, coal power won’t last long and it may jeopardize the security of energy supply. But the European Union doesn’t allow subsidies in the sector.

Maritsa East 3 on pause since February

Production at Maritsa East 3 was halted on February 21 as the contract with National Electricity Co. (NEK) expired and switched the facility to the open market. The state-owned utility is a minority owner. When the layoffs were announced, Shtonov denied there would be any kind of a shutdown.

“We believe it is our duty to keep the plant operational until we successfully execute our strategy to transition to lower carbon electricity production,” the CEO stressed. He argued that electricity prices are low mainly because of cheap gas in the region, so importing from Romanian and Greek gas power plants is more cost-effective.

The management expects production to be resumed in the second half of the year. ContourGlobal Maritsa East 3, controlled by KKR, is planning to build an 80 MW solar power system 3.5 kilometers from the thermal power plant. It is scheduled to be completed in 2025.

Almost 15 GW of solar power capacity expected by 2033

Other operators, state-owned utilities and the government are preparing decarbonization projects as well. The other factors taking coal plants in Bulgaria below water include the costs of carbon dioxide certificates within the European Union’s Emissions Trading System and strict pollution protection rules. Investors are losing confidence and hesitate even to finance smaller overhauls and upgrades.

Energy and Water Regulatory Commission (KEVR) has found that electricity production dropped 22% last year. The biggest plunge was in the coal power sector, which almost halved output. Hydropower production fell 21% while solar power surged 141%. Notably, the latter came in at just 1.56 TWh out of 35.9 TWh, but photovoltaics are in rapid expansion.

The Electricity System Operator (ESO) expects almost 15 GW of solar power capacity to come online by 2033. According to its report for the period through March 24, electricity production tumbled 17.5% since the beginning of the year on an annual basis, but the renewables segment grew by 13.4%.

State-owned coal plant, mining company in Bulgaria nearing insolvency

Stara Zagora Mayor Zhivko Todorov said there isn’t even a short-term solution for state-owned thermal power plant Maritsa East 2 and Maritsa East Mines (Mini Maritsa iztok), warning that they don’t have any more money. Trade unions are organizing protests.

Moreover, the local administrative court revoked the 2019 derogation for Maritsa East 2. The Executive Environment Agency issued it to circumvent sulfur dioxide and mercury emission rules. Without obtaining another permit, the company faces closure.

The facility is already using just 30% of its 1.6 GW capacity. According to law, it will enter the open market on July 1 and so will all the household consumers.

Bobov Dol ceased production once again last weekend. In addition to not being able to compete in the market, the system requires major repairs. The private coal plant is investing EUR 250 million in solar power, gas, biogas and biomass projects.

Neighboring Serbia is about to complete its Kostolac B3 coal plant and it may be the last one in Europe.

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