Delian Dobrev, Bulgarian Minister of Economy, Energy and Tourism, in an interview for Focus Radio’s broadcast This is Bulgaria
Focus: Bulgarian President Rosen Plevneliev pointed energy efficiency as the new main priority for our country. Energy was also one of the main topics during the first sitting of the Consultative Council for National Security, chaired by President Plevneliev. After the sitting it was announced that all political parties, except the Bulgarian Socialist Party (BSP), had united around the statement that Bulgaria’s energy security was connected with the implementation of a pack of measures for energy diversification and energy efficiency. Bulgarian Minister of Economy, Energy and Tourism Delian Dobrev was the rapporteur on the Energy topic, during the sitting. Mr Dobrev, could you please present us with the main points of your report, which you presented to the participants of the Consultative Council for National Security?
Delian Dobrev: The report covers a lot of topics, including diversification, energy efficiency, interconnectors, and infrastructure. The report is very widespread – it includes the opportunities for extraction of conventional natural gas in Bulgaria; development of a free energy market; development of renewable energy sources; and our preferences for construction of small installations, up to 30 KW, on the roofs of houses; expansion of the gas depot in the village of Chiren and what specific measures have been taken in this regard; extension of the exploitation terms of units 5 and 6 of Kozloduy NPP; procedure for construction of a 7th unit of Kozloduy NPP; as well as the big international projects like South Stream and Nabucco, among other topics. I doubt that I will be able to speak about each and every one of them. The thing around which all members of the Consultative Council, apart from BSP, united was energy efficiency and diversification. Because energy efficiency and diversification guarantees the energy security of the country, which is a component of the national security. The report received a very high appreciation from all members, with the exception of BSP. The main arguments of BSP were, again, connected to Belene NPP and their disagreement with the stopping of the Belene NPP project.
Focus: Was the stopping of the Belene NPP project the most discussed topic, or was there another topic?
Delian Dobrev: This was the only topic, which was commented, and the comments came only from BSP. Naturally, they wanted the report to present an energy balance, but this was not the purpose of this report. The purpose of the report was to show development in all spheres, which I already mentioned.
Focus: Did you discuss shale gas?
Delian Dobrev: No, this topic was not commented, and it was not a part of the report. As you know, there is a moratorium on the exploration and extraction of shale gas. With regards to extraction of conventional natural gas in Bulgaria, however, detailed information was presented on the number of granted permissions, signed contracts for natural gas exploration, Bulgaria’s resource of conventional natural gas, as well as the procedure, which is probably most interesting to all your listeners, for the exploration of natural gas in the Black Sea. A very vast territory of 14,200 sq km, for which a tender procedure, for exploration works, is currently in process. There is a very serious interest towards this natural gas field from at least five of the most famous companies in the world, in this sphere, as the deadlines are June 17 and July 15. I suppose that we will be ready with the evaluation and have a winner of the tender for natural gas exploration by the middle of this summer. This is an extremely perspective territory, from where many positive results are expected, as only around 15 km from the northern border of the Bulgarian Black Sea block – huge fields were discovered in the Romanian block, which hold between 40 and 80 billion cubic metres of natural gas. Bulgaria’s natural gas consumption for one year is 3 billion cubic metres, so such quantities on our territory would satisfy our consumption for around 20-30 years to come. We have very high hopes and expectations, not only because of the interest by major companies, but also because the geological structure of our Black Sea block is very similar to the Romanian one. That is why we are very optimistic about this project.
Focus: The exploration of the Black Sea shelf is probably one of the measures for energy diversification. What other measures for diversification did you discuss during the sitting of the Consultative Council?
Delian Dobrev: This is the best measure for energy diversification, as there is nothing better than having a local extraction. This will give us not only security of supplies, because it is on our territory, but it will also bring down the price of natural gas that is being imported.
Focus: And will also give us energy independence.
Delian Dobrev: Yes, it will give us independence. But let me give you an example. The quantities, which Bulgargaz buys from Melrose Resources are 40% cheaper than the imported natural gas, so this would have a very positive influence on the price of natural gas in Bulgaria.
Focus: Did you discuss any guarantees for energy security, or was it a question raised only by BSP?
Delian Dobrev: I do not think that I understand your question correctly, but this is energy security – energy diversification, independence, and efficiency. With regards to the balance of energy capacities – this is not a complicated question, and does not even need a special analysis, as we know that we have more than 10,000 MW of total energy capacity generated. The average consumption load is around 5,000 MW. In 2010 we exported a record-high quantity of electricity, despite the fact that there was an analysis made in 2005-2006, which read that Bulgaria would have to start importing electricity in 2010. You can all see that these fears for lack of electricity in Bulgaria are absolutely groundless. Moreover, we are literally wasting electricity, as we consume 5 times more than the EU average consumption.
Focus: This is a part of our mentality – we are penny-wise and pound-foolish. This is where we should discuss energy efficiency. Apart from the fact that it was discussed during the sitting of the Consultative Council, before the sitting your ministry presented a new scheme for financing from OP Competitiveness.
Delian Dobrev: We will start this year, and expect to sign contracts for BGN 1 billion, which will finance energy efficiency projects for both the business and blocks of flats. Today we started a programme for EUR 150 million in gratuitous aid for micro, small, and medium enterprises. Apart from the abovementioned EUR 150 million, we have also been granted EUR 150 million more from the European Bank for Reconstruction and Development in the form of loans. This makes EUR 300 million, or BGN 600 million. We also have BGN 240 million from the Kozloduy International Decommissioning Support Fund (KIDSF), from which we have already signed projects worth BGN 0.5 billion, which are currently being evaluated. When we add the funds provided by the energy efficiency fund, the total amount surpassed BGN 1 billion. These are a lot of funds that will be invested in energy efficiency, and these funds are worth it, because the projects, which were financed from the previous programme period of KIDSF, have led to saving of electricity of 633 MW installed capacity. 633 MW are close to what half a unit from a NPP produces, which means that we have spent just a little bit of money – around EUR 200-250 million, and against this money we have reduced the consumption by 633 MW, which is now instead being exported.
Focus: That is why energy efficiency has to be a leading priority in Bulgaria.
Delian Dobrev: Yes, indeed. Energy efficiency reduces people’s electricity bills, which also helps the economy, as these saved funds are invested in other things. When they buy other things, people increase the consumption, which as you know is one of our main problems at the moment – the low level of consumption.
Focus: The engine of the economy.
Delian Dobrev: Energy efficiency in companies will also guarantee their long-term competitiveness, as companies in Bulgaria currently are competitive because of the low price of electricity and the low labour expenses. We all know, however, that this will not last forever. The wages will surge, and there are objective reasons, which will increase the price of electricity – connected with the higher number of renewable energy sources included in the network, and the CO2 quotas. That is why the price of electricity will not remain as low as it is now. In order to guarantee their competitiveness, companies must invest in energy efficiency projects. The funds we have earmarked, and the ones provided by the EU, are an excellent chance for each company to achieve a higher energy efficiency.
Focus: Thank you very much for your time.