May 26, 2022
New natural gas infrastructure is key for increased diversification in the Balkans, according to the Energy Minister of Bulgaria Alexander Nikolov.
Speaking at the Athens Energy Dialogues conference, Nikolov said there are currently two major pillars concerning energy policy: sustainability and affordability. In any case, diversification is the way to tackle dependence on Russian gas. Affordability is critical to Bulgaria, since there is a big gap in wealth between the country and the European average and the impact of high prices is affecting society. At the same time, inflation “eats” wealth and basic consumption in food, medicine etc.
It is why the Bulgarian government pushed to extend compensation packages for vulnerable consumers and is defining the most detailed way to face energy poverty and assess the impact on an industrial and corporate level.
“We are producing more energy than we are consuming, but high prices in neighboring countries push up prices in Bulgaria,” Nikolov noted.
It is critical to find the best solution for natural gas and make sure there are no gaps in consumption. Nikolov said. Russia is a critical parameter, the minister stressed and expressed hope that the war in Ukraine would end soon.
Nikolov: The only way to survive is together, it takes discipline in a tough situation
Secondly, sanctions are another critical factor, Nikolov asserted. “The only way to survive is together. It takes discipline in a tough situation. We are on the right track, but we need to assess the differences between markets. Competition advantages must be monitored to ensure fair implementation. If we want to stop the war we need all possible tools,” he noted.
Looking at the broader picture, the government wants Bulgaria to be a dependable partner and to that end it had talks recently with Serbia and Hungary. “Even though Gazprom did not act as a reliable partner, we acted in good faith. We could have stopped the flow to Serbia and Hungary but we did not because we do not want to cause additional chaos,” he said.
Eastern Mediterranean and North Africa can provide new sources of gas
When it comes to possible gas imports from the Eastern Mediterranean region, Nikolov said that in the long term the region needs to look at every supply location, including East Med and North Africa. “We had interesting talks with the Greek minister, Mr. Skrekas, regarding supplies from Egypt. What is happening is a tectonic shift, alternative routes will be created and they need investment. Also, alternative scenarios like swap deals will become best practices. Green hydrogen and energy efficiency are also important topics for regional coordination. We need to move faster ahead,” in his words.
A new promising infrastructure project for the Balkan region is the LNG terminal of Alexandroupolis. Nikolov mentioned that the government in Sofia has been scanning the market around Europe during the last few weeks and that everything is booked in terms of LNG cargoes.
“We are building the IGB pipeline and Bulgaria’s infrastructure provides gas to our neighbors. Combining these two creates great synergies. IGB was delayed due to many factors, but with everyone’s support the project was accelerated and I hope it will follow the schedule. These two projects will result in diversification for the region. They will have a positive impact for the Western Balkans, not only for EU members,” the minister added.
Mihajlović: New climate and energy plan to set Serbia on a decarbonization path
During the same conference, Zorana Mihajlović, Deputy Prime Minister and Minister of Mining and Energy of Serbia, spoke about her country’s latest energy policy decisions.
Mihajlović pointed out the war in Ukraine has created a different world today, while that Serbia and the region feel the consequences in food and energy prices.
There is a renewed focus on renewables, particularly large wind and solar projects
According to the deputy prime minister, it is evident that rising energy prices require a quick and efficient reaction in terms of energy policy. The Serbian government is in the process of defining two strategic documents. One is the national climate and energy plan for 2030 and the other is the long-term decarbonization roadmap to 2050. There is a renewed focus on renewables, particularly large wind and solar projects, while a minimum renewables penetration of 40% is planned by 2040 and carbon neutrality by 2050.
Furthermore, large hydropower plants and other energy sources can contribute to Serbia’s energy transition, while infrastructure projects will ensure energy security. Diversification of supply is also important and to that end, Serbia will receive gas from the Alexandroupolis LNG terminal in Greece and hopefully from Eastern Mediterranean in the future. Gas interconnections with neighboring countries are critical in natural gas, Mihajlović noted.
Regional cooperation in other areas includes issues such as new power-producing capacity, energy storage and green hydrogen. “We should develop our energy sector together,” the deputy prime minister concluded.
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