Renewable Energy

Economic News

22 Jul 2010
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Several electricity companies have announced investments in Bulgaria this year, with renewable sources increasingly attracting interest.

Bulgaria's electricity generation sector is reaching a crucial stage. The only nuclear power plant, which produces almost half the country's power, is the subject of much EU debate as two of its reactors are listed for closure this year. Opponents of the move say that the region's energy supply and Bulgaria's economy will be badly hit by closure, while others cite a recent accident as a reason why the closure cannot come soon enough.

At present 44% of Bulgaria's electricity needs are supplied by Kozloduy Nuclear Power Plant, and the country is able to export 14% of its power due to the capacity of the plant. However, of the six reactors at the plant, two were shut down in 2002 and two more are scheduled for closure at the end of this year. The EU has allocated $64m to help close the reactors, and closure was a precondition of Bulgaria's EU accession. The Union's Energy Commissioner, Andris Piebalgs, has pledged support and reassured Bulgaria that he does not believe that there will be an energy shortfall after the reactors are closed.

This week, two Members of the European Parliament (MEPs) tabled a written question to the European Commission calling for two reactors of Kozloduy to be kept working until the end of August 2007, instead of the tabled date of December 31 this year. The MEPs, from Hungary and Slovenia, called for the power plant to be kept running as a vital supplier to the whole region, stating that if the reactors are shut down "power cuts are certain".

The MEPs drew attention to the fact that the Atomic Questions Group has "commented favourably" on the safety of the plant, and that time would be bought in which to reassess the viability of the plant, taking into account issues of external energy dependency and environmental factors. Many fear that an energy shortfall would have to be covered by heavily polluting lignite power plants. MEPs claim that the closure of the reactors before the end of their life will cost Bulgaria up to 2.5bn euros ($3.16bn) if environmental costs are taken into account.

Last week, a 20-year-old heat exchange facility became contaminated and there was a serious scare at Kozloduy. However, after cleaning, no radiation escaped and workers at the plant were unaffected.

In the long term, Bulgaria's electricity future may well lie in renewable power. The country already has a strong hydroelectric sector and there have been several big renewable energy projects announced recently.

The Italian energy company Petrolvilla recently announced that it plans to construct nine new hydroelectric stations on the Iskar River in conjunction with the municipal government. The project will be implemented in three stages with a total investment of 60m euros ($75.8m). The output of the complex is expected to be 142GWh annually.

The American firm AES Corporation, the largest single investor in
Bulgaria, has announced that it is investing $220m in a new wind power plant on Bulgaria's Black Sea coast. The 120MW Kavarna development, in which AES has a minority stake, will be one of the largest of its kind in South-eastern Europe. It is expected to begin operating in mid-2008 and is being developed with Geo Power, a German-Bulgarian renewable energy firm.

AES has also invested in conventional power in Bulgaria, with a greenfield development of a lignite power plant worth $1.4bn underway. However, the company seems increasingly interested in wind power and its Bulgarian investment is leading the way.

It is not the only company involved in wind power generation in the country. The Japanese firm Mitsubishi Heavy Industries recently unveiled plans to build a wind plant on the Black Sea coast. The plant would have 33 turbines, each of 1MW capacity, and the investment would total $59.9m.

Other plants are being upgraded to meet EU safety and environmental standards, one such being Maritza thermal plant, where more than 150m euros ($189m) has been spent since March 2003.

Companies involved in electricity generation in Bulgaria are looking at the opportunities presented by the single European electricity market and neighbouring countries with a power shortfall.

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