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Bulgaria officially joins the AIB as an observer

Wednesday, 15 September 2021

Earlier today (15 September 2021), the AIB announced that the Bulgarian Sustainable Energy Development Agency has now formally joined the AIB pending the preparation of its membership application. 

In total, the AIB has 31 members within its European Energy Certificate System (EECS) and in its press release mentioned that "within the EU only Poland, Romania and Malta are not participating in the EECS system of Guarantees of Origin for electricity."

Greenfact contacted Liesbeth Switten, Secretary-General at the AIB for additional comments who noted that

 "the Bulgarian Sustainable Energy Development Agency SEDA had introduced a membership application in July 2020, only to withdraw it after a few months due to the political situation (elections and subsequent inability of government formation). However, SEDA wants to be involved in AIB in preparation of picking up the membership application again once the political situation is settled."

Switten further added that "The AIB is pleased to see yet another EU country well on their way in developing their GO system in line with the EECS standard. Bulgaria is thereby preparing to join the other 31 AIB members of AIB who jointly operate the pan-European GO system that has proven its efficiency and reliability over the past 20 years and is interconnected through the AIB hub for transfers of GOs. AIB’s target is to get the 40 countries of the EU, EEA and contracting parties to the Energy Community on board."

The energy sector in Bulgaria

Bulgaria has a well-developed energy sector. The country relies on coal and nuclear energy for most of its electricity production; non-renewable generation accounts for almost 80% of the country's production while the remaining renewable energy is mostly dominated by hydropower followed by solar and wind generation. 

The highly regulated Bulgarian electricity market is dominated by a few major state-owned power producers that have built a supply monopoly within the country. The country's emission intensity (carbon emissions/GDP unit) is among the highest in the EU and its geographical location makes it a major hub for transit and distribution of oil and gas from Russia to Western Europe and other Balkan states. 

Rising carbon prices (currently above 60 Euro/tonne CO2) in the EU have forced many coal-fired power plants in Bulgaria to shut down due to unprofitability. This year, the country has reduced the production from its largest coal-fired power plant (Maritsa Iztok 2) in response, with the plant suffering losses of hundreds of millions of euros over the past five years due to the purchase of carbon allowances.

What could this AIB membership mean for the GO market?

According to the AIBs residual mix for 2020, Bulgaria's total supply mix volume was 32.61 TWh which is almost on par with Demark (33.44 TWh) while its production volume was at 36.75 TWh, the country is also a net electricity exporter. 

In 2020, Bulgaria had a renewable share of over 19% renewable energy for both production and supply mix while nuclear energy was the highest contributor in both mixes at 43%. 

Within the AIB, Ex-Domain Cancellations (EDCs) are cancellations that happen in one country, for use in another country that is not part of the AIB hub. The most recent AIB data shows that in 2020, 0.02 TWh GOs were cancelled on behalf of Bulgaria, of which 47% originated from Norway.

Should Bulgaria continue to retire coal-fired power plants due to mounting pressure from rising carbon prices, it could be expected that the country would increase its imports of electricity in order to meet its high energy demands. It could be expected that in the short to medium term the country could be a net importer within the AIB while it works on expanding and accelerating its energy transition from coal. 

Greenfact covers the green certificate markets in Europe, including the Guarantees of Origin market, offering pricing data as well as industry/legislative updates. Get in contact with us to find out more!

Source:

AIB (LinkedIn press release)

Euractiv