Fact Check: Coal Is NOT A Profitable Business Securing Bulgaria's Energy At Low Prices

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  • от: Lead Stories автор
Fact Check: Coal Is NOT A Profitable Business Securing Bulgaria's Energy At Low Prices Unsustainable

Will the planned transition from coal to renewable energy in Bulgaria jeopardize the country's energy security and affordable electricity prices for Bulgarian citizens in the future? No, that's not true: Coal requires mining, transportation, and processing, the cost of which makes it uncompetitive with free, greener, renewable resources such as the sun and the wind. In addition, coal is responsible for CO2 emissions, resulting in a form of "taxation," through carbon allowances, negatively impacting consumers' electricity prices.

The claim appeared in a TikTok video (archived here) posted on September 30, 2023, under the title: "Let's stop the destruction of Bulgaria," as translated by Lead Stories staff from Bulgarian to English.

It opened:

The expectations of the colonial administration of the American Embassy that the people will sleep forever are failing and the only force that can stop the enslavement and plunder of Bulgaria is the people themselves, because all politicians betrayed us but the people cannot be bought...Maritsa Iztok thermal power plants have fuel reserves for at least until 2080. Fuel is extracted from our own coal, and there is no need to import it...Our energy is 40% from coal plants, we also have certain percentages of hydropower plants and with all these, we are 100% independent from America and Russia... When you point the finger at these power plants and say that you will close them because they were not ecological, you should say where Bulgaria will get its energy from and who will provide the jobs for the people. What is happening with the coal plants is a colossal betrayal.

This is what the post looked like on TikTok at the time of writing:

Screenshot 2023-10-02 224136.png

(Source: TikTok screenshot taken on Mon, Oct 2 19:41:38 2023 UTC)

The TikToker is referring to Bulgaria's commitment to give up coal by the end of 2038, as per The National Recovery and Resilience Plan approved in 2021, and in accordance with the EU objective of carbon neutrality by 2050. As of the end of September 2023, there have been protests by coal miners and energy sector workers in Bulgaria against the government's planned transition to renewable energy, fearing loss of jobs. The coal industry employs tens of thousands of people, and political interference and false claims shared through social media posts fuel dissent.

The Bulgarian government has adopted a plan for transition for coal-mining regions and proposed strategies to attract investments and secure incomes for the affected workers as the country's coal industry gradually shuts down.

Claims circulating on social media that coal mining plants can provide cheap electricity for Bulgarian consumers are false. The Maritsa Iztok 2 state thermal power plant, mentioned in the TikTok video as a source of affordable fuel reserve for Bulgaria, has accumulated losses and must be rescued with public funds. The plant has repeatedly received loans from Bulgarian Energy Holding (BEH), and in 2020, the holding increased its capital by BGN 597 million, thus converting part of its accumulated liabilities. In 2021 and 2022, according to an official letter from the Mini Maritsa Iztok to the chairman of the Commission for Energy and Water Regulation, the cost of the electricity produced at the Maritsa Iztok 2 plant has continued to rise, reflecting the rise in carbon emission allowances. It has also been pointed out that the rescue of the Maritsa Iztok 2 plant has resulted in higher electricity prices at the expense of consumers.

Screenshot 2023-10-02 232413.png

(Source: Financial reports of Maritsa Iztok 2 - Profit/ Loss of "Maritsa Iztok 2" by years - Factcheck.bg screenshot taken on Mon, Oct 2 20:24:15 2023 UTC)

The comparative analysis above shows that the Maritsa Iztok 2 had an unprecedented profit in 2022 due to the high electricity prices caused by the conflict in Ukraine that affected the natural gas supply. However, this situation is not sustainable and does not reflect the true competitiveness of coal power. As the energy market stabilizes, natural gas and electricity prices drop to around 130-140 euros/mWh. This means that coal plants like Maritsa-East 2 will face severe challenges in the future. Almost BGN 70 million loss has been reported for the period April-June 2023. Revenues, profit, and sales concerning the coal plant have decreased by 45-60 percent, and the situation is not expected to improve.

Moreover, worldwide, calls to phase out coal power have become more and more vocal for its impact on global warming. A report by the Center for the Study of Democracy says that coal power will become too expensive and uncompetitive by 2025. The report predicts that coal will have a minor role in Bulgaria's energy mix by 2030-2035.

The Bulgarian government sent the approved plan for a fair transition on September 30, 2023, to the European Commission, reassuring of their intention to look after the workers affected by the transition. The Prime Minister Nikolay Denkov stated the following:

No further postponement can be made, because we risk losing BGN 3.5 billion if we miss this deadline. In the documents we are sending, it is clearly stated that the [coal] plants will operate until 2038. There are no closing dates for specific coal plants. For economic reasons, gradually, step by step, some of them will drop out of the energy system, simply because it will not be economically possible for them to function anymore. That is why it is extremely important to create mechanisms for people who have the necessary qualifications to be able to find employment in the same region. Therefore, we are setting up an enterprise that will work in the same region to transform the territories of the mines into zones where it is appropriate to develop economic activity.

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