As Bulgaria wrapped up its Presidency of the Council of the European Union, it positioned itself as a flagbearer in Europe’s push for a unified clean energy market. Thanks to the timing of political shifts in Italy and Spain, the Balkan country can stake claim to have secured heightened sustainable energy targets under its watch – EU legislators have now agreed on an energy efficiency target of 32% by 2030, up from 27%.
Under the Bulgarian Presidency, EU policymakers signed four out of eight energy laws in the bloc’s Clean Energy Package of 2016 as well as a landmark agreement on the governance of the Energy Union. That agreement spells out rules to enable member states to meet common clean energy goals and setting the stage for a single energy market that allows the free flow of oil, power, and gas across member countries.
And yet Sofia’s own efforts towards a clean energy future at home stand at odds with those of the bloc. With energy policies that favor less efficient state-owned companies, a market still heavily reliant on coal, and lawmakers courting problematic energy partnerships in the East, Sofia is far from the ideal poster child in Europe’s transition to a clean energy future.
In reality, while Bulgaria says all the right things about clean energy, it is also contravening EU regulations by offering unfair advantages to state-owned energy assets and stemming the ability of Western companies to compete effectively in its domestic market. All the while, Bulgaria’s top elected officials are seeking stronger ties with Russia and China in pursuit of highly controversial energy projects. All these actions go against the very foundation of the EU’s efforts to create a single energy market to help members reduce their dependence on Russia.
Bulgarian leaders – most notably the pro-Western Prime Minister Boyko Borisov – have been engaging in energy diplomacy with Moscow to get backing for their efforts to become a center for Russian gas exports. In March, Bulgaria’s state-owned gas company Bulgartransgaz launched a feasibility study to create a natural gas hub at Varna’s Black Sea port to ensure Russian gas continues to flow through it to other European markets. Bulgarian President Rumen Radev met his Russian counterpart Vladimir Putin in May, with Borisov visiting Moscow later that same month. And in June, the country decided to seek Russia’s help to restart the shuttered Belene nuclear power plant project.
Perhaps equally alarming: as the Financial Times reported, the Bulgarian government’s push for greater alliances in the East comes close on the heels of its decision to review two long-term power purchase agreements (PPAs) with American thermal power plants run by ContourGlobal and AES Corporation. While Bulgaria claims the move was prompted by its efforts to liberalize its energy market – and has the European Commission for assistance – the government’s approach seems to portray an undue preference for confrontational partners in the East and antagonism towards the Western firms that employ modern technology to run Bulgaria’s most energy-efficient plants. The two plants account for about 20% of Bulgaria’s electricity needs.
Ironically, even as it targets those facilities, Bulgaria is continuing to subsidize its state-owned outdated and air-polluting coal plants in what amounts to a contravention of European standards and EU clean energy goals. That discrepancy has not escaped environmentalist notice; last year, the legal advocacy group ClientEarth challenged Bulgaria’s support for highly-polluting coal plants in a complaint filed with the European Commission.
In truth, the imperfections of Bulgaria’s energy sector go well beyond targets on paper. Bulgaria does indeed have the potential to become one of Europe’s most dynamic and fastest-growing economies, but it needs a stable, reliable, and affordable supply of clean energy combined with better governance to realize the promise of that future. To be sure, Sofia has seen significant economic growth ever since the financial crisis of the 1990s. And since its inclusion into the EU, the country has seen a surge in foreign investments. Preliminary data from the Bulgarian National Bank show that foreign direct investments rose to 158.8 million euros in January this year alone, an impressive 65 percent jump from the same period a year earlier.
And yet, between the government’s inconsistent behavior towards energy projects and its reliance on tricky partnerships outside the bloc, Sofia may be creating unnecessary obstacles to its own progress as well as the European clean energy transition it wants to lead. To avoid undermining its own efforts, Bulgaria will need to adopt more sound energy market policies, ensure fair and ethical business practices, and forge partnerships that are more closely aligned with the EU’s goals for energy supply security.
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