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28/07/2016

Borissov warns of Bulgarian energy ‘catastrophe’

Energy

Borissov warns of Bulgarian energy ‘catastrophe’

Boyko Borissov [L] and Maros Šef?ovi? [Georgi Gotev]

Bulgarian Prime Minister Boyko Borissov paid a visit to the European Commission today (12 January) to sound the alarm over his country’s energy resources, following the freezing of the South Stream project. In particular, he warned that if Russia drags its feet over the rehabilitation of Bulgaria’s two nuclear reactors, this would be a “catastrophe” for the country.

Borissov spoke to the press after he met with the Vice-President responsible for Energy Union, Maros Šef?ovi?, and the Commissioner for Climate Action and Energy, Miguel Arias Cañete.

He said he had exposed to Šef?ovi? all of his country’s complicated energy problems with Russia. In his words, these included the rehabilitation of units 5 and 6 of the Russian-built Kozlodui power plant. Units 1 to 4 have been decommissioned as part of Bulgaria’s EU accession deal, but units 5 and 6, of a more modern design, could continue to function for many years, provided that they are rehabilitated by the company that built them.

Bulgaria depends on Russia for 89% of its petrol, 100% of its natural gas, and all of the nuclear fuel needed for its Kozloduy nuclear power station, which has two functioning reactors.

“I’m confident in the security of Units 5 and 6, but the issue is that their rehabilitation could cost too much, and last too long. We hope this will not become a pawn of EU-Russia relations in this difficult state of their relations […] Stopping one of the reactors is a catastrophe for Bulgaria, its economy and its citizens won’t be able to pay the bills, as the remaining electricity that it produced is way too expensive,” Borissov said.

In fact, the previous government Borissov led had to resign precisely because of boisterous protests following hiked electricity prices.

>> Read: Bulgarian prime minister quits following mass protests over electricity bills

Borissov also said his country was unfairly blamed for having been the main obstacle which prevented building the Gazprom-favoured South Stream project. He said Bulgaria wanted South Stream to be built, and this is why his country advocated either resuming the project, or building a gas hub near Varna, under the condition that the offshore pipeline from Russia reaches the Bulgarian sea port of Varna.

As on previous occasions, Borissov said that the gas hub could become one of the infrastructure projects under Commission President Jean-Claude Juncker investment plan. One of the ideas advocated by Borissov is that Nabucco-West, a shorter version of the shelved Nabucco project, could be built by Western companies from the Varna hub to Austria.

Long list of losses

Borissov also listed all the losses his country had incurred from stopped projects with Russia. He mentioned the Burgas-Alexandroupoli oil pipeline, a Russian-inspired project intended to bring Russian oil from the Bulgarian port of Burgas to the Greek port of Alexandroupoli, bypassing the Bosporus. The project was shelved by the Bulgarian government in 2011 over environmental concerns, but in fact Western pressure played a role in the decision-making.  Borissov said his country had lost many millions because the project had been shelved.

Another project that was put off is the Belene nuclear power plan, Borissov said, without specifying that it was his own government that shelved the plan to build a second nuclear central with Russian technology. By cancelling the project, Bulgaria has so far lost 1.8 billion leva (€900 million), he said. In addition, Bulgaria risks paying compensation, due to a court case with its Russian counterpart, to the tune of €1 billion, he added. It is also widely assumed that Bulgaria canceled the Belene projects following Western pressure.

>> Read: Bulgaria drops nuclear power plant plans

“Bulgaria is extremely harmed by the stopping of these projects, and now we risk going to the court over South Stream,” he added.

Borissov said he trusted that Šef?ovi?, who leaves tomorrow for a visit to Russia, would take on board Bulgaria’s concerns and make sure that instead of court cases, there would be new gas connections.

For his part, Šef?ovi? thanked Borissov for the timely information before his Moscow visit. He gave no assurances regarding the Bulgarian idea of a gas hub. A joint communiqué says the sides had agreed that a “high level group” tasked with advancing important energy projects in South Eastern Europe would first meet in Sofia and “analyse the energy situation in the region and, amongst others, whether and how these conditions can be met by the creation of a gas hub in Bulgaria”.

EurActiv asked Šef?ovi? if he was aware of any investor interest in building Nabucco West as a project carrying Russian gas, but received no clear answer.

Background

South Stream is a Russian sponsored natural gas pipeline project. As initially planned, the pipeline would run under the Black Sea to Bulgaria, and continue through Serbia with two branches to Bosnia and Herzegovina and to Croatia. From Serbia the pipelines crosses Hungary and Slovenia before reaching Italy. Its planned capacity is 63 billion cubic metres per year (bcm/y).

The Commission has put pressure on Bulgaria to freeze South Stream, citing breaches to EU law in the intergovernmental agreement for the construction of the pipeline.

>> Read: Barroso warns Bulgaria on South Stream

Further Reading