Yordan Kostadinov, former director of Kozloduy NPP: Without Belene NPP Bulgaria will be the EU country with the most expensive electricity in 2025

- Mr. Kostadinov, the State Energy and Water Regulatory Commission (SEWRC) had initially projected to raise the price of electricity by 10%, but eventually, the final decision was for a 13% increase. What caused this?
- Ten years ago, Bulgaria undertook a commitment to the European Union that by 2020, some 16% of the electricity would be generated by renewable energy sources (RES). In my opinion, back then, we had to think about the share of different types of energy in this percentage. It was known that solar energy is the most expensive, energy from the wind costs less, and that from water is the cheapest. I advocated the idea that we should decide on the share of solar energy and that from wind and water in these 16%. It was normal for electricity from water to account for about 12%, that from wind – for about 2-3% and solar energy – for 1-2%. Moreover, the generation of electricity from various RES had to be distributed in different regions. We know the price of electricity from photovoltaics in the last 6-7 years. A number of big companies were given the opportunity to invest in this type of energy in Bulgaria and made large solar parks. Now, we are suffering from the results of all this.

- How long will prices be rising steeply? Does your forecast mean that in the next few years we should expect constantly increasing prices of electricity?
- Production of electricity is not something you can plan from today for tomorrow. The State should draft plans for the development of this sector for at least 10-15 years ahead. Power engineering is neither a sector about which a new government can say that its predecessors have done nothing and the incumbent people in power will do everything necessary. There must be understanding and people who will ensure continuity of the plans for the development of the sector when governments change. In our case, both the previous government and the incumbent one believe that everything in power engineering starts with them. The increase in electricity prices is inevitable.

- Does this mean that we should add the price of carbon emissions to the price of green energy?
- Yes, it is our commitment to the European Union – to begin paying for the carbon emissions as of 2013.

- But this will make an overall price increase of about 25%...
- I cannot specify the percentage, but there will be yet another significant price increase. I have no idea how the estimates of the increase in electricity have been made, but I am sure the next government will have to set new, higher prices, no matter if it wants this or not. I cannot predict the exact price increase of electricity, but it will be a significant one for sure. I would not like to scare anyone, but I feel we need to say these things because they are inevitable. With the current state of development of the economy, of labour and of natural gas prices, electricity prices in Bulgaria are the highest and if we do not build the Belene NPP, we might be the EU country with the highest electricity prices by 2020-2025.

- Yes, but the Government’s decision to suspend the Belene NPP project is already a fact. Can things be compensated with the construction of unit 7 of the Kozloduy NPP?
- I understand some aspects of the Government’s decision but I don’t understand others. It is understandable to give up the Belene NPP project for political and economic reasons. But I cannot understand the decision for building a new unit at Kozloduy, which is estimated to cost as much as two generators at Belene. Moreover, this will take about 12-13 years. Nobody asked and nobody explained where the money for unit 7 of Kozloduy NPP would come from. Until now, it was said there was no money for implementation of the Belene NPP project and now, suddenly, they say there is money for Kozloduy’s new unit 7. Regretfully, there are no answers, but it is us who will be paying for all that. I am afraid that if we talk again in 10 years, our topic will again be such a drastic price hike of electricity.

- Would you venture to make a forecast about the increase in electricity prices over the next 5-10 years?
- Without a new nuclear power plant, in 2020-2025, we will be among the top five European countries with the highest electricity prices. I cannot specify the price, but I know for sure that electricity will be very expensive. By 2020, we will have to make the price of electricity in our country equal to that in Western Europe. Currently, the electricity market in Bulgaria is worth BGN 5 bn. In 2020, the same market will cost €5 bn, which is double that amount.

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