June 9 (BTA) - Bulgarian President Rumen Radev has talked
 to caretaker Energy Minister Andrey Zhivkov, who will propose a
 short-term solution so that the Maritsa East 2 Thermal Power
Plant could continue to operate after July 1. Radev said this at
 a meeting with the leaderships of the Confederation of
Independent Trade Unions in Bulgaria and the Podkrepa
Confederation of Labour on Wednesday.

The Energy and Water Regulatory Commission has warned that as
from July 1, 2021 Maritsa East 2 will not be allocated a quota
to transact on the regulated market (for household customers)
because the electricity it produces is too expensive (over 210
leva/MWh). The TPP cannot sell electricity on the free-market
energy exchange, either, considering that prices there have
averaged 100-110 leva/MWh and have peaked at some 170 leva.

With its eight units, the state-owned Maritsa East 2 is
Bulgaria's largest coal-fired power plant. A baseline generating
 capacity, it has been in operation since 1969. The enterprise
is a major employer in the area of Stara Zagora (Southeastern
Bulgaria).

According to the company's annual financial statements, it was
in the red every single year between 2014 and 2019, and its
losses now add up to 925 million leva. For 2020, Maritsa East 2
reported a record-large loss of 341 million leva, it emerged in
June. Zhivkov then formally admitted that the company's
financial standing was critical. The trade unions at Maritsa
East 2 threatened to take industrial action shortly if the plant
 suspends operations.

The losses are due to a steep rise in the prices of greenhouse
emission allowances, from under 8 euro/tonne of CO2 in early
2018 to over 25 euro in August 2020. To operate at full
capacity, the facility needs over 10 million allowances, which
translates into an annual expenditure of almost 400 million
leva, given the price does not exceed 20 euro/tonne.

Meeting with the trade unions on Wednesday, Radev said that the
socially affordable cost of this decision is known and said that
 the Energy Ministry is working hard to find a long-term
solution.

"We can't block the energy transition process and shun the need
for this transition and for decarbonization," the head of State
said, adding that "social problems do exist and people above all
 have to be protected, but the transition cannot be blocked,
either."

Radev was surprised that Bulgaria has not yet introduced a
capacity mechanism and that it has not taken full advantage of
the Initiative for Coal Regions in Transition in the EU.

In the EU, a capacity mechanism offers additional rewards to
electricity capacity providers on top of income obtained by
selling electricity on the market, in return for maintaining
existing capacity or investing in new capacity needed to
guarantee the security of electricity supplies. The Initiative
is intended to help European countries, regions, communities and
 workers to achieve the economic diversification required for a
clean energy transition.

"What people want more than anything else is certainty. The
transformation should be smooth and jobs should be created," the
 President said. "Our role as a State, trade unions and society
is to find a solution as quickly as possible," the President
added. "Bulgaria cannot evade a EU-wide trend, and everybody
stand to gain from up-to-date effective solutions based on
consensus and a regular government which will urgently address
them." NV/PP/LG

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