Electricity prices for Bulgarian households could increase by an average of 9% from January 1, 2024, according to a report by the Energy and Water Regulatory Commission (EWRC).
Acting Energy Minister Vladimir Malinov, responding to growing concerns, emphasized that the good news must come first – there will be no power outages.
Malinov reiterated this assurance during an interview with Bulgarian National Television (BNT), dismissing any warnings of potential blackouts akin to those experienced during the 1980s. However, he noted that no specific agency or institution has formally raised such alarms.
Factors Behind the Price Increase
Minister Malinov attributed the expected price surge to higher electricity consumption starting in January rather than July, as traditionally observed.
He also pointed to discrepancies in the EWRC’s pricing forecasts, suggesting that the Commission’s estimates were either incorrect or unmet.
The minister highlighted the broader geopolitical context, particularly the ongoing war in Ukraine, as a significant factor driving energy price volatility.
“The critical situation in neighboring Romania and Moldova serves as an example,” Malinov said, adding that Bulgaria is prepared to supply energy to Moldova via the Vertical Gas Corridor if needed.
Despite the challenges, Malinov assured Bulgarian consumers that they remain in a relatively favorable position, paying lower electricity prices compared to markets like the Dutch natural gas exchange.
Market Liberalization and Consumer Concerns
The liberalization of Bulgaria’s energy market for household consumers remains inevitable, but Malinov reassured the public that this transition would not result in a sudden price shock. A six-month transitional period has been planned to ease the change.
However, the ministry has not yet launched an information campaign due to the repeated postponement of the liberalization process. “A campaign would make sense if timed closer to the actual implementation,” Malinov explained.
Renegotiating Energy Contracts and International Cooperation
When questioned about the possibility of renegotiating the agreement with Turkey’s Botas, Malinov acknowledged the complexities involved.
He revealed that the Turkish company has refrained from seeking contractually stipulated monthly payments from Bulgaria for the past six months, suggesting an unspoken understanding between the parties.
However, the minister did not clarify whether an annex to the agreement has been signed or what consequences might arise if Botas ceases its leniency.
Regarding Russian gas transiting through Bulgaria, Malinov stated that payments to Gazprombank have been halted due to sanctions.
He noted that discussions with Hungarian officials, including Foreign Minister Péter Szijjártó, are ongoing to address how payments should proceed without violating sanctions. “If there are no payments, the service will not be provided,” Malinov warned.
Sofia’s Heating Challenges and Future Plans
The minister also reassured Sofia residents relying on heating and hot water that Bulgargaz will continue supplying Toplofikatsiya-Sofia, despite the company’s bankruptcy.
While the Energy Ministry remains committed to assisting the Sofia Municipality, Malinov called for short- and medium-term solutions before exploring long-term strategies.
He suggested the need for a “future strategic investor” to develop the company but refrained from specifying whether this would involve privatization or a concession.
With the electricity market facing mounting challenges, Malinov underscored the government’s commitment to safeguarding Bulgaria’s energy stability and consumer interests.