sexta-feira, 8 de novembro de 2013

The energy sector in Bulgaria

The energy sector is basic component in each economy. Oil, natural gas and electricity are crucial for economic growing. Economic and social well-being depends on safe, affordable and reliable energy supplies. Therefore, energy security is not only a matter of economic but also of national security.
Bulgaria has a strategic geographic location and because of that is faced with complex dilemmas. On the one hand, it is involved in the controversial energy geopolitics of Eurasia, on the other hand, as a member-state of the European Union, is obliged to pursue ambitious regulations, energy efficiency and climate changes within the fragmented and complex energy policy. Such a position is a complex challenge, but also revealed many opportunities for the government. Bulgaria is a member of the "Energy Community ", which aims to promote regional cooperation in the Balkans and the Black Sea, but is marked by geopolitical issues, such as negotiations Turkey's membership in the EU and the aggressive energy strategy of Russia towards the EU.

The energy market 
Bulgaria imports about 75% of its primary energy sources (oil, gas, nuclear, coal) from Russia. Bulgaria's energy markets remain highly monopolized in all levels. Prices are adjusted on the basis of reference values ​​or formulas, which indicates a very low level of competition in the energy sector. The Russian gas is imported by an  layout through Ukraine.  Moreover, the country relies entirely on import of nuclear fuel from Russia, although nuclear power, according to a method of Eurostat, should be considered a local energy source. 
Final user prices of energy Bulgaria remain among the lowest in Europe. If are compared based on market exchange rates, the price of electricity was 4.7 EUR kWh in 2011, however, based on PPS (Purchasing Power Standard), gas in Bulgaria is among the most expensive in the EU and the price of electricity is near the top. The price of gas for domestic use in Bulgaria was the highest in terms of purchasing power (10.1 PPS 100 kW / h) during the second half of 2011, according to EU statistics office Eurostat. Consumer prices for gas and electricity energy are determined by the national regulator. The regulated electricity market companies often have to sell at prices below costs. The loss is partially offset by higher prices on the open market, but  most part of the electrical energy is sold on the regulated market.

Strategy 20-20-20
The national energy strategy to 2020 reflects the political vision of the government for European development of Bulgaria, consistent with current European framework for energy policy and global developments in energy technology. The  priority directions of European energy policy are:
1 ) Neutralizing the negative impacts on climate;
2 ) Reduce the energy intensity of the economy and increasing energy efficiency, including energy independent buildings;
3 ) Limiting the dependence of the European Union (EU) on imported energy resources;
4 ) Promote economic growth and employment thereby to secure safe and affordable energy to consumers.
These priorities are unattainable without a developed internal energy market. Sustainable energy development is pivotal to energy policy and achievement is linked to long-term quantitative targets for 2020 :
-  20 percent reduction in greenhouse gas emissions compared to 1990;
-  20 percent share of renewable energy in the total energy mix to 10 percent share of renewable energy in transport;
-  Improving energy efficiency by 20%.
Energy Strategy will address the key challenges the Bulgarian energy sector faces at present, namely:
1 ) High energy intensity on GDP: despite the positive trend to improve, the energy intensity of the national GDP is 89% more higher than the EU average ( taking into account the purchasing power parity ability);
2 ) The high dependence on imported energy resources: Bulgaria provides 75% of total consumption from imports. Dependence on natural gas crude oil and nuclear fuel is virtually complete and is traditionally sided orientated to the Russian Federation;
3 ) The need for environmentally sound development: the world is facing challenges of climate change, influenced by the increase in volume of greenhouse gases.

Energy efficiency
Bulgaria has consistently ranked as the most energy-intensive economy in the EU - as measured by "gross inland energy consumption / GDP ratio". Some analysts want to reduce the figures provided by Eurostat presumption that official GDP is not responsible for the large share of the shadow economy (estimates suggest that informal economy could amount to 30%). However, even if this adjustment is applied Bulgarian energy consumption would still be quite higher than the average in the EU-27. Energy consumption Bulgaria is influenced mainly by the industrial sector, especially energy-intensive sectors such as metallurgy and energy sector itself.
Bulgaria improves energy efficiency on a higher rate than that of the EU-27, and if sustained it will enable the country to reaches the defined EU target of 20% reduction by 2020. Historically, GDP growth is ahead of growth in demand for energy and hence decreased energy intensity. Energy intensity of industry-manufacturing sector rises after drop during the period 1997 - 2002. Inefficient use of energy, especially in the energy sector, where transmission losses are significant, indicate the reason for that - industrial energy intensity in Bulgaria remains 40% higher than the EU average.

Despite of the good strategies outlined by the government for the future development of the energy sector, they are far from realization. There is lack of political willingness for positive change. The existence of large corruption schemes at all levels undermine public confidence. Society has lost trust and faith in the management of energy companies and the oversight exercised by the government on the energy sector.

Teodora Machkanova


[artigo de opinião produzido no âmbito da unidade curricular “Economia Portuguesa e Europeia” do 3º ano do curso de Economia (1º ciclo) da EEG/UMinho] 

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