ContourGlobal fires almost all workers from its coal plant in Bulgaria

The headcount at the ContourGlobal Maritsa East 3 coal-fired power plant in Bulgaria is dropping to just 35 people as electricity prices in the market are too low to operate profitably. On the other hand, state-owned Maritsa East 2 got a one-year lifeline from the government.

Market forces in Europe are merciless to coal power. Just a few years ago, some countries were hesitating to determine coal phaseout dates or pushing them back. Now even newer or reconstructed facilities are reducing capacity utilization or abruptly shutting down. One of the most notable examples is Bulgaria, where ContourGlobal said it would leave only 35 employees at its Maritsa East 3 power plant.

Expenses are high because of the allowances that producers must buy via the European Union’s Emissions Trading System (EU ETS). It makes coal power uncompetitive. An uncontrolled collapse of the sector could jeopardize the security of energy supply.

ContourGlobal Maritsa East 3 couldn’t survive in open market

National Electricity Co. (NEK), a subsidiary of Bulgarian Energy Holding (BEH), holds a 27% stake in facility’s operator ContourGlobal Maritsa East 3. London-based company ContourGlobal is owned by private equity firm KKR.

The electricity market is currently oversupplied and the demand for futures contracts is too low

The coal plant couldn’t break even when the 15-year contract with NEK expired in February, taking it to the open market. Chief Executive Officer of ContourGlobal Maritsa East 3 Vassil Shtonov revealed to Radio Zagora that another 160 people are getting pink slips.

The electricity market is currently oversupplied and the demand for futures is too low, he explained. The price for January delivery is EUR 90 per MWh while the cost of generating power from lignite is above EUR 140 per MWh, Shtonov stressed.

Coal plant can resume production in case of crisis

The severance pay at the facility, known as Maritsa iztok 3 in Bulgarian, will amount to nine salaries on average, the CEO added. Employees that remain will be tasked with solar power and battery storage projects, according to Shtonov. He claimed that in case of an energy crisis, the firm can hire people and restore coal power production.

The company earlier said it is planning to build an 80 MW photovoltaic system. It has also submitted proposals for waste incineration and gas power projects.

Of note, ContourGlobal has just joined SolarPower Europe and WindEurope. It operates 1.7 GW of renewables across seven countries including Romania.

Government contract keeps state-owned Maritsa East 2 above water

Unlike Maritsa East 3, the only state-owned coal-fired power plant, Maritsa East 2, got another one-year contract from the government. NEK is obligated to buy a total of 2.63 TWh in the period that started on July 1. In comparison, the previous deal was for 2.2 TWh.

Under the European Union’s new electricity and gas market rules, member countries can submit requests to introduce so-called capacity mechanisms to maintain essential production facilities.

The plant came down to two units of 300 MW in total.

Neighboring Serbia is about to commission the Kostolac B3 coal plant, possibly the last one in Europe.