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CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020

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					       CONCEPT

           OF

THE BULGARIAN ENERGY
  STRATEGY TILL 2020

  (CONSULTATION DOCUMENT)
  (CONSULTATION DOCUMENT)




         JULY 2008
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
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CONTENT
                                                                                  Page
         INTRODUCTION                                                               3

       1 PRIORITIES                                                                 4
    1.1. Sustainable development                                                    4
    1.2. Competitiveness                                                            5
    1.3. Energy security                                                            6

      2 TARGETS 2020                                                                7
    2.1. European targets                                                           7
  2.1.1. Reduction of greenhouse gas emissions                                      7
  2.1.2. Increase of renewable energy sources’ share in gross final consumption     8
         of energy
  2.1.3. Energy efficiency improvement                                              8
    2.2. National targets                                                           9
  2.2.1. Reduction of greenhouse gas emissions                                      9
  2.2.2. Increase of renewable energy sources’ share in the gross final            10
         consumption of energy
  2.2.3. Energy efficiency improvement                                             11

      3 ANALYSIS OF STATUS AND POTENTIAL                                           12

      4 STRATEGIC DECISIONS 2020                                                   17

      5 DEVELOPMENT FORECAST AND RESULTS 2020 – 2030                               18

      6 CONCLUSION                                                                 24

         LIST OF ABBREVIATIONS                                                     25
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
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Introduction



       This concept has taken into account the formulations, which are approved at
an European level and are presented in a package of integrated measures for an essentially
new common energy policy of Europe towards economy reorientation to an efficient energy
utilization of low-carbon sources.


       The Concept is an consultancy document which will be a subject to a broad public
discussion and will support the institutions in their efforts to identify the national tasks in
the energy sector with a view to achieving of an optimal balance between the energy targets
and the economic growth as a precondition for complex public benefits.
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
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1. Priorities
The EC proposals, supported by the Spring European Councils of 2007 and 2008, have put
the beginning of a new general European policy of security, sustainability and competitiveness.

The new policy for fulfilling the outlined priorities has been necessitated by the following facts:

    o The price increase of the energy resources and their essential negative impact on
      the European economy competitiveness. At oil prices of 100$/barrel in 2030, the total
      import value for the EU-27 will be increased by 170 billion Euro or by 350 euro annually for
      every European citizen.
    o Still there is no efficient internal market of electricity and natural gas, which is of essential
      importance for provision of long-term investments in electricity generation during the next 25
      years, amounting to 900 billion Euro.
    o Growing energy dependence. If the existing energy policy is continued, the total EU energy
      dependence will increase from 50% to 65%, the dependence on natural gas - from 57% to 84%,
      and the dependence on oil - from 82% to 93% in 2030.
    o Climate changes. The energy sector emits about 80% of the total greenhouse gas emissions
      in the EU; the current energy policy and transport policy will result in 5% annual increase,
      respectively 55-percent increase of the total emissions in 2030.

The European energy policy follows the three priority directions mentioned above:
    o Sustainable development through combating the negative climate changes
    o Security of supplies by limiting the EU external dependence on imported energy sources and
      providing diversification of the energy mix
    o Development of a Common European Energy Market without which the first two priorities
      cannot be achieved.

This will encourage the economic growth and employment and the consumers will be guaranteed
secure and affordable energy.

1.1. Sustainable development
A sustainable development means meeting the needs of nowadays generation without reducing
the possibility of meeting the necessities of the future generations, too. This requires affordable energy
services, which shouldn’t be exhaustible and should contribute to the social and economic
development, while complying with the environmental requirements.

The experience gained, especially for the past few years, has proved that the conventional energy
industry is not a stable one. The world has entered an energy era of continuously growing demand for
energy sources and the resulting environmental pollution, increased greenhouse gas emissions and
exhaustion of the limited natural resources.

A sustainable, environmentally friendly development can be achieved by the following:
    o Less energy to be used, which means energy efficiency improving in energy generation and
      consumption
    o Cleaner energy to be used, which means improving the energy mix by increasing the share of
      low-carbon energy
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
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   o Accelerated technological progress, including the implementation of new energy technologies
     (clean coal).

1.2. Competitiveness
The European energy markets still are not functioning in an appropriate way. Therefore, the European
consumers - and the economy as a whole, haven’t completely benefited so far from the advantages
offered by the free market, such as lower prices and possibilities to choose a supplier of services.
The main characteristics of an efficient competitive market are as follows:
   o Free choice of energy supplier by the consumers
   o Unhindered and equal access for all consumers to the energy transmission networks
   o Corporate structures, guaranteeing the two characteristics mentioned above
   o Conditions of competition for everything outside the network, including power exchange and
     complete market model for all services and products.
The creation of an efficient operating energy market with a potential for competition (production and
supply), will generate incentives for the companies to invest in the new infrastructure and will
encourage diversification. The market extension by including countries which aren’t EU Members
(Pan-European Energy Community), with investing also in the necessary energy infrastructure, will
eliminate the existing limitations and barriers to the energy flows, and will respectively improve
the energy security.

New energy legislation is about to be adopted regarding the rules for internal electricity and natural
gas markets organization and functioning, for which a proposal was made by the European
Commission in September 2007 in the form of Third Energy Liberalization Package. The legislative
changes are meant to solve the identified market weak points in a number of areas such as
independence of the system operators, regulatory supervision and cooperation, transparency and
data storage requirements, access to LNG storages and facilities, relations with third parties.

So far, the discussions on this package have been mainly focused on the possible corporate models,
which can ensure greater independence of the electricity and natural gas transmission system
operators. The main “unbundling” model presented by the EC - based on “ownership unbundling”,
was added by an alternative model developed by eight Member states, which in contrast to the EC
proposal, doesn’t require ownership changes, however foresees stricter rules on assets, staff and
management.

The successful establishment of a competitive market depends on the coordinated efforts of
institutions and companies on a national and Community level. The regulatory institution takes a
central place in the process of a competitive market development. The powers and obligations of the
national energy regulators will be increased and extended with respect to the following:

   o Encouraging of appropriate investments in the network
   o Elimination of any kind of discrimination regarding the access of a third party to the networks
   o Unbundling of the system operators
   o Market development monitoring
   o Provision of transparency and enough information for the market players
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
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These new components add the new standard functions of the regulatory body, related with price
regulation and licensing of energy companies which don’t operate under competitive conditions
(as a rule - the network companies).

1.3. Energy security
Energy security means supply that meets the demand under the conditions of a sustainable,
environmentally friendly environment with price levels that don’t hinder the economic development.

The security risks can be managed by diversification of the energy resources by types, sources, suppliers
and routes, taking into account the regional and world trends of the energy markets. Thus considered,
the energy supplies diversification will contribute to the establishment of competition among the main
energy suppliers and price sustainability of the primary energy sources.

Partnership and cooperation improving in the energy sphere with the main EU suppliers and the SEE
Region, such as Russia, the Middle East, North Africa and the Caspian Region; with the main
countries-consumers, such as the USA, Japan, China, India and especially the dialogue with the
transiting countries such as Ukraine, Belarus, Turkey and the South Caucasian countries is a key
prerequisite for ensuring the balance of demand and consumption under clear and stable transit rules.

Providing of an agreed and coordinated foreign energy policy of the European Union is one of the
important EC proposals. This will contribute to the construction of the new energy infrastructure, as
well as will guarantee the security of supplies and more profitable conditions with respect to prices and
transit of energy resources to the European Union.

The EC also suggests an approach for activities of solidarity, aimed at higher degree of supplies
security, including three milestones:
   o New investments in gas infrastructure, storages and LNG terminals.
   o Improving the mechanism for liquid fuels strategic reserves and increasing the requirements to
     the EU Member states in that respect.
   o Priority plan for interconnection power lines development, as well as introducing of common
     minimal and binding network security standards.

Special measures will be undertaken towards the EU Member states, which depend only on one gas
supplier, as it is the case of Bulgaria, too.

In October 2008 the Second Strategic Energy Review will be presented where the EC will focus on the
security of supplies, differing from the first review, which was mainly related to climate changes,
renewables and energy efficiency.


2. Targets 2020
The outlined priorities are bound to long-term quantitative targets which should be achieved at
a Community level. The Community targets will be reached by efforts at national levels, oriented to
preliminarily allocated national targets on the grounds of fair criteria, taking into account the
economic development of each Member state, as well as the economic growth forecast and the
actual degree of national achievements with a view to their gradual approaching the Community
level.
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
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The mechanism of achieving the long-term Community targets, which the EC will implement,
includes the development of strategic visions and three-year General Action Plans for each Member
state; subsequent monitoring and reviews in regular intervals about the progress of the National
Plans fulfilling, corrections, and respectively development of new plans for the next period.

The so-called plan approach is expected to provide a harmonized relationship between the long-term
targets and the specific obligatory actions for their achieving.

2.1. European targets
In January 2008 the European Commission achieved an agreement on a large-scale package of
proposals for fulfilling the European Council engagements in combating climate changes and
encouraging the use of renewable energy - Energy & Climate Package.

2.1.1. Reduction of greenhouse gas emissions

It is a common European target to reduce the emissions of noxious greenhouse gases by 20% till 2020,
compared to the base year 1990 (or 14% compared to 2005). This reduction of emissions can reach
up to 30% in 2020 under the condition that a new global agreement is achieved about climate changes.

The total emissions reduction till 2020 will be achieved by the following:
   o 10% decrease compared to 2005 regarding the emissions of installations, which are not
     included in the EU Emission Trading Scheme (ETS) (buildings, transport, agriculture and
     waste).
   o 21% decrease compared to 2005 regarding the emissions of installations, which are included in
     the EU Emission Trading Scheme (ETS) (all the other large industrial and energy sources of
     emissions, as well as the aviation sphere).

Pursuant to the reform offered by the EC regarding the EU Emission Trading Scheme, considered
from 2013, the System of National Emission Allocation Plans will be replaced by a Common EU
Emission Cap. At the EU level every year a certain amount of allowances will be issued for the
emissions of the installations included in the EU Emission Trading Scheme and will be reduced
according to a linear schedule. The installations will be obliged to present a sum of allowances, equal
to their annual emissions. It is suggested that the electric power plants shouldn’t be given free
allowances and should start purchasing allowances as early as in 2013. The remaining installations
(including the highly efficient CHPs) will obtain free allowances (80% of the total required amount in
2013), which will be reduced to “zero” in 2020. Certain conclusions will be made about the areas which
are especially vulnerable to the competition of producers from countries where there are no such
limitations.

Auctions for emission allowances are foreseen for the Member states. The auctions will be arranged in
a non-discriminatory way and will be held by the Member states on the grounds of harmonized rules.
The auctions will be open for everyone- each operator of an installation from the EU can participate
and purchase allowances in any Member state. The revenues from the auctions will be collected in the
national budgets of the Member states. At least 20% of these revenues will be used in the fight against
climate changes and for encouraging the use of renewable energy sources, as well as for
implementation of clean coal technologies (Carbon Capture and Storage Technologies) and mitigation
of the social consequences resulting from the increased energy costs.
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
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2.1.2. Increasing the RES share in gross final consumption of energy

The use of renewable energy sources reduces the dependence on import, improves the security of
supplies, provides fulfilment of the environmental obligations and reducing of CO2 emissions, makes
the trading balance easier and supports employment. Due to that reason the second key target of the
EU is to increase the RES share up to 20% of gross final consumption of energy by 2020.

The RES share in gross final energy consumption of the EU is 8,5%, which means that 11,5 % average
increase for the Community is needed in order to achieve the 20% target by 2020. For the purpose, the
Commission proposes individual, legally binding targets for each Member state.

The RES target is defined as a correlation between the energy from RES and the total final energy
consumption, where:

o The energy from renewables is the sum of: electricity generation from RES, final energy
  consumption for heating and cooling by using RES energy and bio-fuels used in the transport
  sector.

o The gross final consumption of energy is defined as the sum of the final energy consumption (of
  the industry, transport, agriculture, services, households), losses of electricity and heat in
  distribution , energy necessary for self-consumption of the energy companies (electricity generation
  and heat generation).

The RES target also includes an obligatory target for at least 10% share of renewables (bio-fuels) in the
EU transport sector, which also should be achieved by 2020. The sustainable development is of
significant importance for achieving that target – criteria are being developed for bio-fuels sustainable
production.

Flexible mechanisms are foreseen, by which the common European target for RES use will be achieved
at least costs. For the purpose, scheme options are being considered, so that the Member states which
can have a relatively cheap development of RES, can have the opportunity of selling their surplus to
the countries in which this generation is more expensive, thus finally the common EU target could be
achieved at least costs.

2.1.3. Energy efficiency improvement

The European target for 20% energy efficiency increase by 2020 is a key precondition for achieving
the targets for greenhouse gas emissions reduction and increasing the RES share in gross final
consumption of energy.

There are considerable opportunities for energy saving in both generation and transmission, as well
as in energy consumption.

The energy efficiency is measured by: :
   o GDP intensity, measured as a correlation between the gross domestic energy consumption
     and the GDP (gram oil equivalent/euro GDP). This indicator gives a global idea about the
     energy efficiency level and is most commonly used for international comparisons; for the
     EU-27 it is equal to 164,5 goe/euro GDP at the price levels for 2005.
   o GDP intensity measured as a correlation between the final energy consumption and the GDP
     (gram oil equivalent/euro GDP). This indicator gives an idea about the energy efficiency
     level at the final consumption; for the EU-27 this indicator is equal to 106,6 goe/euro GDP
     at the price levels for 2005.
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
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   o Correlation between the final energy consumption and gross domestic energy consumption
     (%). This indicator gives an idea about the efficiency of the energy transformation processes;
     for the EU-27 this indicator is 64,4% for 2005.


2.2. National targets
In its proposals for the national targets identification, the EC uses an approach, which takes into
account the GDP level per capita in the respective Member state, the progress achieved, as well as the
economic growth forecasts. The Member states with GDP pre capita lower than the average EU value
get reduced targets on the account of those Member states, which GDP per capita is higher than the
average figure for the EU-27.

2.2.1. Reduction of noxious greenhouse gas emissions

According to the approach mentioned above, for the Bulgarian sectors which are not in the Emission
Trading Scheme, there is a proposal for 20% increase of the emissions by 2020 compared to 2007 ,
which is the highest for the EU-27 (the Member states get targets, which vary in a range from -20% to
+20%).

Having in mind the reform in the EU Emission Trading Scheme, national targets are not defined for
the sectors which are included in that Scheme. 90% of the common European rights for emissions
trading will be proportionally allocated between the Member states, and the remaining 10% of that total
quantity will be reallocated to the Member states with lower income levels per capita and bigger
prospects for economic growth. Thus, Bulgaria will also get additional rights, presenting 53% above the
allocated 90% ( respectively- by 38% more than the base national emissions); only Latvia’s additional
share is bigger- 56%.

The concerns of our country with respect to the changes offered by the EC in the Emission Trading
Scheme are related to the Bulgarian coal-fired power plants, which from 2013 shall purchase/pay
the allowances for all the emissions emitted by them. This will considerably increase their production
costs – at a price of 40 euro/ ton СО2, they will be doubled. Further market risks are also created by
the circumstance that power plants of countries in the Region, which are not EU members, will have
more favourable positions for competition due to the fact that their costs will not include
environmental burdens of that kind.

Therefore, the opinion of our country is that the approach of allowances allocation for the electricity
generators during the period from 2013 to 2020 should be the same as the one for the industrial
installations, i.e. free allowances can be foreseen, which will present 80% of the total allowances for
2013, and will be decreased every year by the same quantities so that they can become 0% by 2020.
This will contribute to the equal treatment of all the operators within the Emission Trading Scheme,
including the electricity producers. Besides, this allocation method corresponds to the principle that
“the polluter pays” and at the same time mitigates the possible negative impacts with respect to security
of supplies for the EU Member states, including Bulgaria, relying to a great extent on the coal-fired
power plants, respectively relying on the local coal output for meeting the domestic demand of
electricity. This will limit the negative impacts on the economy and the households, having in mind the
expected considerable increase of electricity prices.

As for the district heating plants, those of them which generate heat energy in a highly efficient co-
generation mode (as defined in Directive 2004/8/ЕС), will get “free’ allowances so that they can be
equally treated as the generators of heat energy from installations in other sectors. Every year after 2013
the total quantity of allocated “free” allowances for these installations will be decreased according to
the common linear schedule.
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
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2.2.2. RES share increase in gross final consumption of energy

According to the data of the base year 2005 (total energy balance in the country), the energy generated
from RES amounts to 1,18 Мtoe (mainly electric power generated by the large hydro power plants and
from the use of biomass). It is 9,4% of the gross final consumption of energy in 2005 and the electricity
generation from HPP has been brought to normal with a view to neutralizing the weather conditions.

The target for Bulgaria, as proposed by the EC, is that 16% of the gross final consumption of
energy in the country in 2020 should come from RES and the country has got the lowest additional
increase (6,6%), compared to the other Member states.

With increased measures and incentives for energy efficiency improving, the additional RES quantities
for reaching the national target in 2020 (after taking into account projects that have been already
started) is 0,5 mln toe/annually or 5.9 mln MWh/annually). This quantity is 3,5 times less than the
quantity necessary for achieving the same target without any additional efforts/achievements in the
energy efficiency sphere.

A significant contribution to the national target achievement may prove to be the implementation of
large hydro power projects which are in a process of discussions, i.e. hydro power sites along the
Danube river (Nikopol-Turnu Magurele and Silistra-Kalarash). The preliminary estimations for the
annual generation of these power plants amount to 1,8 mln kWh/year, which is 30% of the required
quantities from RES in the energy efficient scenario. It should be taken into consideration that the
hydro power generation is the cheapest way of achieving the national target - approximately four times
lower costs (euro/MWh) in comparison to those for photo-voltaic energy and about two times lower
costs (euro/MWh) compared to those for wind energy generation.

There are also good biomass opportunities, since 60% of the land are agricultural areas and about 30%
are forests areas. There are possibilities for the installation of about 2200 – 3400 MW wind energy
capacities - new 765 MW wind energy farms (1.6 mln MWh annual generation) are in a process of
connection to the grid. In the Eastern and the Western parts of Bulgaria there is a potential for solar
energy use and for energy generation from geothermal sources of about 200 MW.


2.2.3. Energy efficiency improvement

The common European target for energy efficiency improvement is not bound to its allocation at
a national level. At the same time:
   o The national economy is 5,6 times more energy-intensive compared to the EU-27,
     respectively - 927,1 goe/euro GDP compared to 165,4 goe/euro GDP (estimated by the
     gross domestic energy consumption).
   o The national economy is over 4 times more energy-intensive compared to the EU-27,
     respectively – 452,4 goe/euro GDP compared to 106,6 goe/euro GDP (estimated by the
     final energy consumption).
   o Correlation between the final energy consumption and the gross domestic energy
     consumption, which for Bulgaria and the EU-27 is respectively 48.7% and 64.4% (for 2005);
     i.e., while in Bulgaria the energy transformation losses (generation and transmission to the
     end consumers) are more than half of the energy used, in the EU-27 such losses are about
     one third of it.

Having in mind the significant differences ascertained, it cannot be expected that the Bulgarian
energy sector and our economy as a whole can be successfully positioned on the European market
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
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without considerable efforts in the sphere of energy efficiency - both during transformation
(generation and transportation) and during energy consumption. Taking into account
the European target for 20% energy efficiency improvement, our national targets in this aspect will
be more ambitious with a view to bringing these levels closer.

The sustainable economic growth observed in the recent years has been accompanied by a trend
towards energy intensity reducing as a result of the energy policy that is being conducted and the
national economy restructuring. In the period 1999 – 2007 the GDP had an average annual growth
of 5,3%, while the gross domestic energy consumption increased by 2,4% and the electricity
consumption - by 0,9 %.

This stabilizing and strengthening of this trend will contribute to the national targets achieving in
the context of the new energy policy and will bring for reducing the considerable differences
between Bulgaria and the other EU Member states.

The specific goals and measures for energy efficiency improving are about to be assessed in details and
defined in a general National Action Plan, part of which will also present the action plans for energy
efficiency.

The main directions with energy saving potential are as follows:

   o Energy saving at the final consumption, including households, transport, industry and
     services.

   o Energy saving in the processes of energy generation and transformation, including development
     of the gas distribution network, improving the efficiency of the thermal power plants,
     increasing the share of energy generated from highly efficient co-generation.
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
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   3. Analysis of condition and potential
                                               Condition Analysis
      Efforts by areas                                                                               Potential (strategic potential and projects)
                                   Advantages                   Disadvantages
       (1) Security of    Strategic geographic position Lack     of      well-developed Key role of Bulgaria in the EU policy making and partnership
           supply         among the main producers material         infrastructure and with the countries of the Black Sea and Caspian Sea Regions, as
                          and consumers of energy functioning                  solidarity well as a key role in the SEE market development process.
                          resources in Eurasia          mechanisms for joint activities,
                                                        as well as lack of coordinated
                                                        foreign energy policy of the
                                                        EU with third countries.


                          Geographical proximity to The Russian Federation is the Diversification of sources and routes and increasing                       the
                          the source of liquid fuels and only source of liquid fuels and transit possibilities:
                          natural gas supplies.          natural gas.
                                                                                          - NABUCCO Project
                                                                                         - SOUTH STREAM Project
                                                         Bulgaria has only one storage
                                                                                         - Construction of a regional re-gasification LNG terminal
                                                         for natural gas with limited - Construction of a branch line, connecting Bulgaria with Turkey-Greece gas
                                                         capacity.                       pipeline
                                                                                             - Construction Rousse-Gurgevo interconnection line
                                                                                             Extension of the natural gas storage capacity.
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
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                                               Condition Analysis
      Efforts by areas                                                                            Potential (strategic potential and projects)
                                   Advantages                    Disadvantages
                          Electricity from local coal - The coal is of low-calorific Guaranteed future of the coal industry and increase of the
                          source        of       energy value, high content of sulphur country’s export possibilities by:
                          independence and long-term and powder, and            a main
                          employment.                   source of greenhouse gas - Rehabilitation completion and environmental projects completion in
                                                        emissions.                      Maritsa East - 2 TPP and Maritsa East - 3 TPP
                                                                                         - Commissioning of a new capacity, which will use coal – Maritsa East -1
                                                        The      strict   environmental TPP
                                                        limitations     require   large - Commissioning of another new capacity, which will use coal - Maritsa
                                                        investments and increase the East - 4 TPP
                                                        production costs.
                                                                                        Support in the implementation of Carbon Capture and Storage
                                                                                        technologies in the existing and in the new coal-fired power
                                                                                        plants.

                          The     nuclear energy is Decrease of export possibilities         Achieving of low-carbon energy mix, stable prices and
                          a reliable and emission-free and      breach    of    the          possibilities for increasing export by:
                          source      for   electricity environmental balance after
                          generation.                   the closure of unit 1-4 in           - Construction of a new nuclear power plant - Belene NPP
                                                        Kozloduy NPP.                        - Extension of the capacities in Kozloduy NPP.
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
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                                                Condition Analysis
      Efforts by areas                                                                                 Potential (strategic potential and projects)
                                   Advantages                   Disadvantages
                          Potential of renewable energy Comparatively           higher      Maximum utilization of the cheap hydro resource potential by:
                          sources is not used yet.       investment costs for some of
                                                         the     renewable      energy      - Commissioning of Tsankov Kamak Hydro Power Project
                                                         technologies.                      - Construction of hydro–power sites on the Danube river
                          An Act on renewables and                                          - Construction of Gorna Arda Hydro Power Cascade.
                          alternative energy sources There aren’t any available
                          and bio-fuels has been mechanisms for encouraging                 Efficient utilization of the potential, including biomass, solar,
                          adopted.                       heat energy generation from        wind and geo-thermal energy by commissioning of appropriate
                                                         renewables.                        regulatory mechanisms.

                                                         The     existing encouraging
                                                         mechanisms for renewable
                                                         energy use need further
                                                         development to a market
                                                         direction.

                          Well-developed national and The economic growth of the Provision of an unhindered access of new customers to the
                          cross-border         electricity country goes ahead of the distribution networks by investments and modernization.
                          transmission infrastructure.     distribution   infrastructure
                                                           development .                 Timely development of the cross-border infrastructure by:

                                                         The        electricity    market   - Completion of the project for construction of an interconnection power line
                                                         liberalization requires adequate   between Bulgaria and Macedonia
                                                         development of the cross-          - Construction of interconnection power line 2 between Bulgaria and Serbia.
                                                         border connections.                - Construction of interconnection power line 2 between Bulgaria and Greece.
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
                                                                                                                                                  15

                                              Condition Analysis
      Efforts by areas                                                                              Potential (strategic potential and projects)
                                   Advantages                    Disadvantages
                          Well-developed       national Initial stage of gas distribution Provision of cheap and environmentally friendly alternative for
                          transit and transmission gas network construction.              meeting the energy needs of the business and the households by
                          infrastructure.                                                 accelerated gasification of the country.
                                                        Small share in households
                                                        gasification.

                          The   district heating has      Only 53% of the generated Complete and timely measures for keeping the district heating.
                          proved to be an efficient and   heat energy comes from co-
                          environmentally friendly way    generation installations.      Long-term          solutions  which   can         guarantee
                          of providing heating in                                        district heating development.
                          the densely populated urban     The technological losses along
                          areas    (20%      of     the   the heat transmission networks
                          households’            energy   are 20%.
                          consumption) and electricity
                          from cogeneration.              The      unstable      regulatory
                                                          practices    create      financial
                                                          tension and hinder            the
                                                          investment activities.

                                                          The uncollected receivables
                                                          from customers are increasing,
                                                          respectively- the debts to the
                                                          suppliers.
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
                                                                                                                                                       16

                                                 Condition Analysis
      Efforts by areas                                                                          Potential (strategic potential and projects)
                                   Advantages                     Disadvantages
         (2) Energy       Institutional       framework, Inefficient use of energy and Additional incentives and investments in measures for energy
          efficiency      created and functioning for energy resources in the efficiency improving in all the demand spheres - energy sector,
                          improving       the     energy economic sectors and by the transport, industry, services, households.
                          efficiency in the country       households       (the    energy
                                                          intensity in the country is 5,6
                                                          times higher than the average
                                                          value in the EU) - lack of
                                                          competitiveness and high costs
                                                          for the households.

                                                         The market of energy services
                                                         is in its initial stage of
                                                         development.

                          There is a potential for High            losses    in    energy   Constructing of new high-efficient capacities and improving the
                          energy technologies and generation and transformation.            efficiency of the existing ones.
                          energy           infrastructure
                          modernization.                  The regulatory framework and      Commissioning of new capacities for high efficient co-generation
                                                          the lack of the competition
                                                          don’t create enough efficiency    Investments for reducing the losses in the energy infrastructure.
                                                          incentives in energy generation
                                                          and transformation.
                          Regional and municipal The use of electricity for                 Front-running construction of gas transmission branch lines by
                          licences have been issued for heating instead of direct           Bulgargas EAD and accelerated construction of the gas
                          gas distribution, which cover combustion of natural gas in        distribution networks.
                          the     greater     part     of the households results in three
                          the country territory.          times more primary energy use.    Efficient use of funds under European Programs and funds for
                                                                                            gasification accelerated development, including:
                                                         Only 1% of the households are
                                                         gasified.                     -“Kozloduy” International Fund
                                                                                       - “Regional Development” Programme
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
                                                                                                                                                          17

                                                  Condition Analysis
      Efforts by areas                                                                                   Potential (strategic potential and projects)
                                     Advantages                    Disadvantages
      (3) Markets and       A     market      model      of Market relations, still not well-
      competitiveness       the electricity and gas sectors developed.
                            has been introduced.
                                                            Lack of power exchange - lack
                                                            of competition.
                                                                                             Creation of a power exchange and cooperation with the power
                                                                                             exchanges, functioning in the Region - a prerequisite for
                                                             Lack of efficient management
                                                                                             competition increasing and market development.
                                                             practices    and      optimized
                                                             corporate structures.
                                                                                                Introducing of modern management and organization models.
                            Investments are provided for The long-term contracts which
                            rehabilitation of the existing   have been signed limit the
                            electric power generation        energy quantities and the
                            capacities and construction of   number of players on the
                            new ones.                        liberalized domestic electricity
                                                             market.

      (4) Price stability   The     regulated electricity    These price levels don’t           The necessary increases of regulated prices can be controlled (by
                            prices for the industry and      provide enough revenues for        schedule) and limited to a growth lower than the GDP growth.
                            for the households are among     financing the investments          Thus the goals for secure and good quality power supply will be
                            the lowest in Europe.            necessary for improving the        achieved without hindering the economic growth and the welfare
                                                             quality and security of supply     of the citizens and providing of affordable energy goods and
                                                             and meeting the environmental      services.
                                                             standards.
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020
ОНЦЕПЦИЯ ЗА ЕРГИЙНА СТРАТЕГИЯ НА БЪЛГАРИЯ ДО 2020Г.
                                                                                                                                                18

                                              Condition Analysis
      Efforts by areas                                                                      Potential (strategic potential and projects)
                                   Advantages                  Disadvantages
                          Tariff prices and standard The tariff structures and not The good practices of the EU Member states in tariff structures
                          regulatory   methods    are cost-oriented, the regulatory and regulatory methods can be successfully introduced in
                          adopted.                     methods don’t encourage Bulgaria, too.
                                                       efficiency. This results in
                                                       wasteful use of energy,
                                                       expressed    in    groundless,
                                                       increasing costs in both
                                                       generation and transportation,
                                                       as well as in energy
                                                       consumption.

                          A    system,      supporting The system should be more Integrated state policy regarding the population revenues,
                          the low-income households, flexible to the changing including protection against energy poverty.
                          has been adopted.            conditions and prices.

                          Legislative possibilities are These consumers’ protection Redirecting the regulator’s efforts towards the creation of
                          introduced for continuing         is performed in a way, which conditions for competition and limiting the regulation only to
                          the electricity sales at prices   leads to much more regulation regulation of the network companies.
                          regulated by the SEWRC for        on the energy companies and
                          households and middle and         market defects.
                          small businesses.
 CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020                                                         19


 4. Strategic decisions 2020
                                             ADVANTAGES                          DISADVANTAGES

                                     Strategic      geopolitical     and     High energy intensity
                                     geographical location of the            Scattered      and     not   well
                                     country                                 managed energy sector
                                     Developed cross-border energy           Limited      competition     and
                                     transmission and transit network        overregulation of the domestic
                                     Balanced electricity mix                electricity market
                                     Energy independence by using            Slight gasification, resulting in
                                     local coal and nuclear energy           huge energy losses during
                                     Not utilised potential for energy       the      energy    transformation
                                     generation from renewables              processes
                                     Potential for development of large-     Lack of competitive external
                                     scale energy projects                   suppliers of energy and routes
                                     The energy prices are among the         for its transmission
                                     lowest in the EU
                                     Freedom in choosing the national
                                     energy mix
      POSSIBILITIES                      “MAX/MAX” STRATEGY                  “MINI/MAX” STRATEGY

Development oriented to the          Bulgaria – energy center of the         Establishment of Bulgarian
creation      of      Regional,      SEE Region                              Energy Holding for improving
                                                                             the management and the
respectively          Common         -    5 times increase of the electric   investment potential of the
European Energy Market                    power export                       national energy sector
Market        extension       -
                                     -    Regional transit center for        Creation of an        electricity
creation of a Pan-European
                                          natural gas - 4 times increase     power exchange
Energy Community
                                          of the transit through the
Increasing the demand of                  territory of Bulgaria              Introducing of tariff systems
energy and natural gas in the                                                and     efficient    regulatory
SEE Region and Europe                -    Natural    gas     distribution    methods, encouraging the
Good corporate organizational             center- the first one on the       energy companies’ efficiency
practices of the large energy             Balkans
companies in the EU                                                          Logistic center – energy
                                                                             observatory for the Pan-
                                                                             European Energy Community
         THREATS                         “MAX/MINI” STRATEGY                 “MINI/MINI” STRATEGY
                                     Electric  power      mix, which         Fighting against the energy
Price increase of liquid fuels in    guarantees independence and is          poverty
a global aspect, respectively        environmentally friendly
                                                                             GDP doubling by two times
increase of the energy prices,       -    Independence by development        less energy through:
too                                       of nuclear and coal burning
Raising the cost of electricity as                                           -   Energy saving of the end
                                          power   plants   plus  CCS
a result of new environmental                                                    users by improved energy
                                          implementation
obligations (emissions and                                                       efficiency
renewables), requiring large         -    Clean energy (nuclear and
                                                                             -   Costs decrease for energy
                                          renewable) with a dominating
investments                                                                      generation             and
                                          share in the electric power
Lack of competitive external                                                     transportation          by
                                          mix – over 50%.
suppliers of energy and routes                                                   improved energy efficiency
for its transmission                 Utilization of the water potential,
                                     which is the cheapest renewable         -   Accelerated gasification in
Lack of competitiveness in the
                                     energy source, by construction of           the country
economic branches of the
Member states that are less          hydro power sites on the Danube         Diversification  of      energy
rich.                                and Gorna Arda River.                   sources and routes
                                     Price security by conducting
                                     a policy of keeping energy prices
                                     lower than the European ones for
                                     the Bulgarian population and
                                     the industry.
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020                                                                                         20


5. Development forecasts and expected results 2020- 2030

       The energy intensity of the gross domestic product (GDP) of Bulgaria will decrease two times
       till 2020 and three times till 2030 compared to 2005, at 4,4 % mean annual decrease.
       The higher decrease rate of the national energy intensity compared to the other Member states
       and EU-27 will bring these levels closer.

                                                Gross Inland Energy Consumption / GDP
                                                              (toe/МEuro)
        1200.0
                                    Status                                         Forecast

        1000.0


         800.0


         600.0

         400.0


         200.0


                         0.0
                                    2000        2005         2010         2015            2020           2025          2030



                                      Romania           Czech Republic          Ireland          EU-27           Bulgaria

       Source: MEE, Eurostat


       The national GDP will increase 2,3 times till 2020 and four times till 2030 compared to 2005,
       at 5,5 % mean annual growth. As a result of the decreased energy intensity, the gross domestic
       energy consumption will increase only by 15,5% till 2020, and by 28,7% till 2030, at 1% mean
       annual growth, and the final energy consumption will increase by 32% till 2020 and by 56% till
       2030, at 1,8 % mean annual growth.

                         30000                                                                                          90.0
                                     Status                                 Forecast
                                                                                                                        80.0
                         25000
                                                                                                                        70.0
                         20000
         thousands toe




                                                                                                                        60.0
                                                                                                                               000 МEuro




                         15000                                                                                          50.0
                                                                                                                                   05




                                                                                                                        40.0
                         10000
                                                                                                                        30.0
                           5000
                                                                                                                        20.0

                               0                                                                                        10.0
                                       2000      2005        2010        2015        2020        2025           2030


                                   Gross Inland Energy Consum ption             Final Energy Consum ption

                                   GDP (000 MEuro'05)

       Source: MEE
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020                                                                                                                                                                                                  21

                     The improved energy efficiency results in 50% saving of primary energy, equal to
                     22 mln toe/annum or 6 bln Euro annual savings from saved import of energy sources.


   240                                                                                                                                                                                                     50% energy efficiency
                                                                                                                                                       GDP                                                 improvement equal to:
   220                                                                                                                                                                                                     -energy savings - 22
                                                                                                                                                                                                           Мtoe/annually
                                                                                                                                                                                                           - energy import costs'
   200
                                                                                                                                                                                                           savings - 6 bln.
                                                                                                                                                                                                           euro/annually
   180


   160


   140                                                                                                                                  Energy
                                                                                                                                     Consum ption
   120


   100

       2005                                                                                                                                                            2020

Source: MEE

                     The ambitious goals for strengthening Bulgaria’s positions as a powerful energy center on
                     the Balkans are being achieved by accelerated construction of new electricity generation power
                     plants. Within the period till 2020, 7000 MW new capacities will be commissioned.


                                                                                                                                     години
                              2007
                              2007          2008
                                            2008                2009
                                                                 2009   2010
                                                                         2010              2011
                                                                                            2011              2012
                                                                                                               2012          2013
                                                                                                                              2013            2014
                                                                                                                                               2014             2015
                                                                                                                                                                 2015          2016
                                                                                                                                                                                2016              2017
                                                                                                                                                                                                   2017          2018
                                                                                                                                                                                                                  2018               2019
                                                                                                                                                                                                                                      2019      2020
                                                                                                                                                                                                                                                 2020
                    14000
                     14000

                                                                                                                                                                 RES
                    12000
                     12000


                    10000
                     10000


                     8000
                      8000                                                                                                                    RES
                                                                                                                                              ???
                                                                                                                                                                      2
                                                                                                                                                      NPP BELENE ???? 2
                                                                                                                                                      ??? ?????? UNIT
   bм л.k .К В тч




                     6000
                      6000
    ln н W h




                                                                                                                                                                                                              HEC “????????
                                                                                                                                                                                                              ??? “SILISTRA      –
                                                                                                                                                                                                                  ???????
                                                                                                                                                                                                                KALARASH" ”
                                                                         RES                                                                                                                                                ???
                     4000
                      4000
                                                                         ???                                                                                                                                                   RES

                                                                                MARITZA ?????
                                                                                ??????  EAST       3                                   ??? ?????? UNIT 1
                                                                                                                                       NPP BELENE ????      1           ?????? EAST 4
                                                                                                                                                                        MARITZA ?????   4
                                                                                                                                                                                               HEC “???????
                                                                                                                                                                                               ??? “NIKOPOL  –
                                                                                MARITZA ?????
                                                                                ??????  EAST       2                                                                                          TURNU ????????
                                                                                                                                                                                              ????? MAGURELE ”
                                           MARITZA EAST 2 2
                                           ??????  ?????
                                                                                ??????  ?????      1                                                                                                      ???
                                                                                                                                                                                                           RES
                     2000
                      2000                 ??????   ?????   1
                                                                                MARITZA EAST       1

                                           MARITZA EAST 1
                                                                                                                                                                                 RES
                                                                                                                                                                                 ???
                                                                                            RES
                                                                                           ???                    ???
                                                                                                                   RES        ???
                                                                                                                               RES                                                        GORNA   ???
                                                                                                                                                                                        ?????      RES
                         00
                                                                                ??????
                                                                                 TZANKOV
                                                                                 ?????
                                                                                KAMAK
                                                                                                                                                                                          ARDA
                                                                                                                                                                                         ????

                                                                                                                                                                                                              ??????
                                                                                                                                                                                                              GAS               ??????
                                                                                                                                                                                                                                     GAS         ??????
                                                                                                                                                                                                                                                    GAS
                               BOBOV DOL
                               ????? ???                                                            BOBOV ???
                                                                                                   ????? DOL                                               BOBOV DOL
                                                                                                                                                           ????? ???
                                                                                                                                                                                                          ????????   ??
                                                                                                                                                                                                          POWER PLANT . 1        POWER PLANT ???????? PLANT3
                                                                                                                                                                                                                            ????????    ?? . 2  POWER ?? .
                                                                                                                                                                              ??????    3
                                                                                                                                                                                                            UNIT 1                    UNIT 2      UNIT 3
                                                                                                                                                                              MARITZA
                                                                                                                                                                           ???????????? 3
                                                                                                         ??????
                                                                                                       BRIKEL                                                              DIMITROVGRAD
                    -2000
                     -2000


                    -4000
                     -4000
                                     ВЕЦ "Цънков камък"
                                      ВЕЦ "Цънков камък"                                                          ТЕЦ "Марица Изток 1"
                                                                                                                   ТЕЦ "Марица Изток 1"                                                     ТЕЦ "Марица Изток 2"
                                                                                                                                                                                             ТЕЦ "Марица Изток 2"
                                     ТЕЦ "Марица Изток 3"
                                      ТЕЦ "Марица Изток 3"                                                        ТЕЦ "Марица Изток 4"
                                                                                                                   ТЕЦ "Марица Изток 4"                                                     АЕЦ "Белене"
                                                                                                                                                                                             АЕЦ "Белене"
                                     Нова газова централа
                                     Нова газова централа                                                         ВЕЦ "Горна Арда"
                                                                                                                   ВЕЦ "Горна Арда"                                                         Други нови ВЕИ
                                                                                                                                                                                             Други нови ВЕИ
                                     Хидроенергиен комплекси Турну --Магуреле
                                     Хидроенергиен комплекси Турну Магуреле                                       Хидроенергиен комплек Силистра --Калараш
                                                                                                                   Хидроенергиен комплек Силистра Калараш                                   Бобов дол
                                                                                                                                                                                             Бобов дол
                                     Брикел
                                     Брикел                                                                       ТЕЦ "Марица 3"
                                                                                                                   ТЕЦ "Марица 3"


Source: MEE, NEK EAD
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020                                                                22


        The electricity intensity of the Bulgarian GDP is 6,9 times above the average value for
        the ЕС-27, as in 2020 it will become 4,5 times above the average value for the ЕС-27, and in
        2030- 3,3 times above the average value for the ЕС-27.

                               Electricity Consumption per Unit of GDP, MWh/МEuro'05

          2500.0
                         Status                                                                      Forecast

          2000.0



          1500.0



          1000.0



           500.0



                0.0
                           2000        2005        2010         2015          2020            2025         2030


                           Romania              Czech Republic                 EU-27                  Bulgaria
        Source: MEE, NEK EAD, Eurostat

        In the period 2005 - 2020 the energy transformation processes in the thermal power plants will
        become more efficient by 44,1% and the power plant efficiency will reach 39,9%. The share of
        the electricity produced by co-generation plants will be increased by 28,1%. The losses resulting
        from electricity distribution will decrease by 28,5%. The self-consumption of the power plants
        will decrease by 31,6%.


         45.0
                      Status                                                       Forecast
         40.0

         35.0

         30.0

         25.0
    %
         20.0

         15.0

         10.0

          5.0

          0.0
                               2005                2010                     2015                        2020

                                         Efficiency of TPPs
                                         Electricity from CHPs
                                         Electricity Distribution Losses
                                         Pow er Plants - ow n consum ption of electricity

        Source: MEE
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020                                                                                                                            23

       The gross domestic consumption of electricity will increase by 38% - from 38,7 bln kWh in
       2007 to 53,3 bln kWh in 2020. The electricity generation in the country will increase by 70% -
       from 43,1 bln kWh in 2007 to 73,4 bln kWh in 2020. The export possibilities will increase 4,5
       times compared to 2007 and will reach 20 bln kWh in 2020.


                                            Electricity Generation & Consumption, MkWh


      80000
                                      Sta tus                                                                        Forecast
      70000

      60000

      50000

      40000

      30000

      20000

      10000

              0
                   2000

                              2001

                                     2002

                                             2003

                                                    2004

                                                           2005

                                                                  2006

                                                                           2007

                                                                                  2008

                                                                                         2009

                                                                                                2010

                                                                                                       2011

                                                                                                              2012

                                                                                                                     2013

                                                                                                                             2014

                                                                                                                                    2015

                                                                                                                                           2016

                                                                                                                                                  2017

                                                                                                                                                         2018

                                                                                                                                                                2019

                                                                                                                                                                       2020
                                             BG - Gross Inland Electricity Consumption (av erage annual growth - 2,5%)
                                             Gross Electricity Generation

         Source: MEE, NEK EAD



       The share of the generated clean electric power (RES and nuclear) in the country will increase
       from 41% in 2008 to 55% respectively in 2020 and up to 60% in 2030. As a result of that,
       the CO2 emissions emitted for the generation of 1 MWh electricity will decrease by 40%.



                  90000                                                                                                                                  110

                  80000
                                                                                                                                                         90
                  70000

                  60000                                                                                                                                  70
        GWh




                  50000                                                                                                                                            %
                                                                                                                                                         50
                  40000

                  30000                                                                                                                                  30

                  20000
                                                                                                                                                         10
                  10000

                          0                                                                                                                              -10
                                     2005            2008                2010            2015            2020               2025           2030
                                                                  Electricity from Fossil Fuels
                                                                  Clean Electricity
                                                                  CO2 Em issions (t CO2/MWh) 2005=100%
       Source: MEE, NEK EAD
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020                                                                                   24

       If accepting an escalation schedule (in real expression) of the electricity regulated prices by
       a mean annual growth rate lower than the GDP growth, Bulgaria will achieve the following:
       prices stability; provision of the required revenues to guarantee secure and good quality power
       supply; market integration by gradual bringing of the price levels close to those outside
       the country.

                                     Alteration of households' electricity price in Bulgaria (4.5% annual growth)


                                0.2500



                                0.2000



                                0.1500
             (excl. VAT)
              Euro/kWh




                                0.1000



                                0.0500


                                0.0000
                                         2007       2008        2009          2010     2011         2012   2013    2014     2015



                                  Rom ania             Czech Republic                  Germ any            EU-27          Bulgaria



       Source: MEE, Eurostat

       The construction of a new gas infrastructure and a liquidated natural gas (LNG) terminal will
       guarantee the supplies, needed by the growing domestic demand.

                            9

                            8

                            7
       bln. cubic m eters




                            6

                            5

                            4

                            3

                            2

                            1

                            0
                                          2007                         2010                         2020             2030

                                          Supplies through connection to pipeline Turkey - Greece
                                          Supplies through interconnection Russe - Giurgu
                                          Supplies - LNG
                                          Supplies - South stream
                                          Supplies - NABUCCO
                                          Supplies - contracts in operation
                                          Inland consumption

  Source: MEE, Bulgargas Holding EAD
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020                                                                  25

       The implementation of natural gas projects on the territory of the country will help for
       diversification of the sources and routes for natural gas supply for domestic consumption.

                                                 GAS SUPPLIES STRUCTURE 2030
                                                 Структура на газовите доставки 2030г.
                                                            (8.1 млрд.куб.м.)
                                                           (8.1 bln.cubic meters)
                                                                                           Contracts in operation
                                                                                           Действащи договори
                                                                                           (Russia)
                                                                                           (Русия)
     GAS SUPPLIES STRUCTURE 2008
                (3.5 млрд.куб.м.)
         (3.5 bln. cubic meters)                                                           "NABUCCO"
                                                                                           "НАБУКО"
                                                                   12%
                                                                         12%
                                                                                           "SOUTH STREAM"
                                                                                           "Южен поток"

                                                                                           LNG terminal
                                                                                               терминал
                                                      43%                    25%
                                                                                            Interconnection
                                                                                           Връзка Русе - Гюргево
                                                                                             Russe - Giurgu

                                                                     4% 4%                 Connection to pipeline
                                                                                           Връзка с газопровода
                                                                                             Turkey - Greece
                                                                                           Турция-Гърция

 Source: MEE, Bulgargas Holding EAD

       Thanks to the development of nuclear power plants and power plants, using local coal,
       the country’s dependence on imported energy sources remains stable and below the average
       level for the EU-27.


                                      Energy Import Dependency, %


            54.0
                       Status
            52.0

            50.0

                                                                                               49.5
            48.0

        % 46.0

            44.0

            42.0

            40.0
                      2000          2005       2010         2015          2020          2025       2030


                                       EU-27                                 Bulgaria

        Source: MEE, Eurostat
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020                                                   26

       The successful execution of the planned significant energy projects is strengthening the
       country’s export positions and is turning it into a powerful, transit center of electricity and
       natural gas in the Region.

        2007                                                                              2030

     ELECTRICITY:
     ELECTRICITY:                                                                    ELECTRICITY:
                                                                                     ELECTRICITY:

  4,5 bln. kWh EXPORT                                                                  20 bln. kWh
             +                                                                         POSSIBLE
  2,8 bln. kWh TRANSIT                                                                  EXPORT

      AT NETWORK                                                                   IN CONDITIONS OF
       CAPACITY                                                                        NETWORK
      OF 9 bln. kWh                                                               CAPACITY EXPANSION
                                                                                    OVER 20 bln. kWh




    NATURAL GAS:
            GAS:                                                                            GAS:
                                                                                    NATURAL GAS:

  17 bln. cubic meters                                                         OVER 70 bln. cubic meters
        TRANSIT                                                                       TRANSIT




 Source: MEE




6. Conclusion

       This Concept will help for the development of Bulgaria’s Energy strategy for the
period till 2020. According to the updated Government Program, till 30th November 2008
the Energy Strategy Draft will be submitted 2008 to the Council of Ministers for its
approval.
CONCEPT OF THE BULGARIAN ENERGY STRATEGY TILL 2020                                                27

                                    List of abbreviations
              NPP      Nuclear Power Plant
              GDP      Gross Domestic Product
            GDEC       Gross domestic energy consumption
              RES      Renewable Energy Sources
              HPP      Hydro Power Plant(s)
               GW      Gigawatt(s)
              GWh      Gigawatthour(s)
               goe     Gram(s) oil equivalent
  Goe/Euro/GDP         Gram(s) oil equivalent per unit of GDP
Goe/Euro ‘ 05 GDP      Gram(s) oil equivalent per unit of GDP acc. to comparable prices of 2005
          SEWRC        State Energy and Water Regulatory Commission
                EC     European Commission
               EU      European Union
              kWh      Kilowatthour(s)
               MW      MWatt(s)
             MWh       Megawatthour(s)
            МEuro      Million euro
             MEE       Ministry of Economy and Energy
              Mtoe     Million tons of oil equivalent
         Bln Euro      Billion euro
         Mln Euro      Million euro
         Bln KWh       Billion kilowatthour(s)
            Bln m3     Billion cubic meters
              SMB      Small and medium businesses
                Mt     Million tons
               СО2     Carbon Dioxide
              TPP      Thermal Power Plant(s)
                toe    Tons of oil equivalent
      t СО2/MWh        Tons of CO2 emissions pet megawattthour
              HPS      Hydro Power Site
     thousand toe      Thousand tons of oil equivalent
              SEE      South East Europe
              CCS      Carbon Capture & Storage technologies

				
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posted:10/12/2011
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