High power prices may result in 100,000 job cuts

Deputy chairman of the Bulgarian Industrial Association Kamen Kolev told Bloombergtv.bg that with the current power prices, 100,000 jobs may be lost next year, citing an analysis by Ernst and Young, Standart News reported. The impact on exports will be also very serious, since the goods consume a lot of energy, said Kolev.

The surge in electricity prices for businesses from August 1 already contracted exports, Cyril Domuschiev, chairman of the Confederation of Employers and Industrialists in Bulgaria, said in an earlier interview for Standart. Electricity prices fell by 2.6% to 2.8% on November 1, but this has not changed much, according to Kamen Kolev. The justification for the symbolic decrease was dictated only by the decrease in the price of natural gas, he added. The supplement continues to be the most expensive for the Bulgarian business – BGN 37 (EUR 18.92) per MWh, and constitutes about 50% of the price of electricity, which is up to EUR 40.91 for the same amount.

From November 1 the price of electricity for businesses fell slightly, while for the domestic users it  remained unchanged, according the Commission for Energy and Water Regulation. The change in the electricity price for households was smaller than 0.5%. On the other hand, electricity for small businesses that buy from the regulated market dropped by 2%.

The reason for the reduction is a more than 14% decrease in the price of natural gas in the last three months. The price reduction for the businesses, however, is much less than in the demands of employers. Gas is the main feedstock for heating and power cogeneration facilities, but the 14% price cut in October caused a less than 0.1% drop in electricity generation costs, Sofia Globe reported. EWRC said that it decided to leave household prices unchanged as a possible safeguard against future gas price increases, although the cost savings could also factor in future price cuts down the line.