by Emiliya Milcheva and Krassen Nikolov
Leading Bulgarian energy experts have dashed the government’s hopes of receiving compensation from Brussels for high electricity prices as recently requested by Bulgaria, Romania and Greece, Euractiv Bulgaria has found.
Earlier this month, Bulgaria, Romania, and Greece called on the European Commission to take targeted measures, including compensation payments, to tackle high electricity prices in south-eastern Europe.
The three countries called on the Commission to introduce a special tax on the excess profits of electricity producers and traders and prioritise the development of energy interconnections in Southeast Europe. The aim is to mitigate the effects of the region’s energy isolation from the wider EU market and ensure greater energy market stability.
But as Kaloyan Staykov, chief economist at the Institute of Energy Management, told Euractiv, there is no such EU support mechanism, and the issue does not seem to be on the agenda in Brussels.
"This does not mean that something cannot be invented for purely political reasons. We have a new European Parliament, a new composition of the European Commission," he said.
Martin Vladimirov, director of the energy and climate programme at the influential Bulgarian think-tank Centre for the Study of Democracy, was also sceptical about the possibility of Brussels setting up compensation mechanisms. He recalled that Bulgaria has had an internal compensation system for expensive electricity since October 2021.
From October 2021 to the end of 2024, state aid due to high electricity prices granted after notification by the Commission is to exceed €2.4 billion. This money has been distributed to nearly 633,000 businesses, schools, temples, theatres, medical facilities and other institutions.
The support mechanism provides for full compensation if the price of electricity on the energy exchange exceeds €90 per MWh.
Asked by Euractiv whether Bulgaria would ask the European Commission for compensation for high electricity prices, the Energy Ministry said that it would continue to push for EU funding.
"Bulgaria adheres to the position it has repeatedly stated - there is a need to mobilise a community resource to compensate for the high prices,” the ministry said.
It also recalled the letter sent by the energy ministers of Bulgaria, Romania and Greece to European Energy Commissioner Kadri Simson. The three countries insist on adequate measures and analysing the reasons for the high prices.
The reasons for the high cost of electricity in the Balkans are complex. The limitations of the electricity transmission links between Central and South-Eastern Europe, including the low capacity of the interconnectors and the incompatibility of the energy networks, have been in place since mid-2024. The market situation with high electricity prices has also affected Southeast Europe and, to some extent, Central Europe.
The rest of the countries in the region are keen to support Bulgaria, Greece and Romania in their request for a common approach to the issue, the Energy Ministry said.
Commenting to Euractiv, the chairman of the Bulgarian Energy and Mining Forum, Ivan Hinovski, said that Brussels was setting tough conditions to help with Bulgaria’s expensive electricity - the liberalisation of the electricity market and the restructuring of the Bulgarian Energy Holding (BEH).
"It is very likely that failure to fulfil these two conditions will prevent Of course, we can beg for mercy from Brussels, pull our hair out, but will it help... Liberalisation will be a huge shock, as there is no preparation whatsoever, and the Ministry of Energy is showing criminal irresponsibility towards its preparation,” said Hinovski.
In Bulgaria, households continue to buy electricity from a tightly regulated market, and household electricity prices have remained almost unchanged in recent years. Electricity distribution companies strongly protest against the maintenance of a "political price" for electricity, as it does not allow for investment in the energy network.
With Bulgaria amid a severe political crisis for the past three years, it is no surprise that the last thing the parliament would do would be raise household electricity prices.
*first published in: Euractiv.com
By: N. Peter Kramer
