Electricity bills are once again among the most discussed topics for Bulgarian households. Although electricity prices in our country are among the lowest in Europe, more and more people are complaining about high heating and electricity costs. Data shows that nearly 30% of the population in Bulgaria is at risk of energy poverty - significantly above the European Union average. A new national energy vulnerability map also shows strong regional differences - districts such as Sofia, Razgrad and Veliko Tarnovo are among the most affected. For the causes, risks and possible solutions… Prof. Dr. Teodora Peneva, researcher at the Institute for Economic Research at the Bulgarian Academy of Sciences and senior climate and energy expert at WWF Bulgaria, spoke to FACTI.
- Ms. Peneva, electricity bills are a very big topic. Even now, because many people complain about the large amounts they have to pay. Are we using more and more electricity…
- Yes, if we look at the data from the energy balance for 2024, it can be seen that electricity consumption per capita has increased by 12.9% compared to 2007, despite the population decreasing by 15.7% over the same period. The electricity used by households has increased from 806 thousand tons of electricity in 2007 to 1109 thousand tons of electricity. in 2024, with electricity increasingly replacing other energy sources in everyday household life. More and more households rely on electricity for heating, cooking and operating electrical appliances, which is one of the reasons why electricity bills are becoming a more significant topic for people.
- You have prepared the national energy vulnerability map and it shows that Sofia, Razgrad and Veliko Tarnovo are among the most vulnerable regions. What are the main factors that put these regions in the first places in terms of energy poverty?
- Razgrad, Sofia region and Veliko Tarnovo are among the most vulnerable regions because they combine several unfavorable factors - high energy needs, low energy efficiency and social risks. For example, Sofia region has an energy needs index of 2.10 - twice as high as that of Varna (1.05), the reasons being twice as high a share of households that are heated with wood, nearly 30% more homes without any energy efficiency measures and over three times as high a share of households that would be affected by carbon taxes on buildings and transport. The climate factor in Sofia district also states some of the highest energy needs in the country, with colder, longer winters and a greater need for heating.
In Razgrad district, this is compounded by the high share of gasification, which makes households more sensitive to sudden changes in energy prices.
Veliko Tarnovo district also stands out with strong social vulnerability – the share of people at risk of poverty is about 30%, and the excessive winter mortality is 28% higher than in other months, which shows how strongly the energy problem affects living conditions in the region, but also systemic problems with the health system of the region and also the age structure of the population and its health status.
At the same time, in some regions, such as Sofia region, there is also a strong dependence on fossil fuels, especially natural gas. With the sharp increase in gas prices in 2022, many households were forced to switch to electric heating and purchase electrical appliances, which increased their energy costs – it is this type of vulnerability that is also reflected in the map.
- The data show that about 30% of the population of Bulgaria is affected by energy poverty, which is significantly above the EU average. Why does our country remain the most affected country in the Union?
- The main factor for energy vulnerability is low income and high inequalities, which continue to be some of the largest in the EU. About 30% of the population in Bulgaria is at risk of energy poverty. Although electricity prices in our country are among the lowest in Europe, the share of energy costs in the household budget is much higher.
In Bulgaria, it reaches about 15% of income, while on average for the EU it is about 9%, which means that many households spend a significantly larger part of their funds on heating and electricity.
The data also show that only about 8% of multi-family buildings in the country have been renovated under national programs, which means that a large part of the housing stock remains energy inefficient and leads to higher energy costs.
In second place is the lack of consistent and well-targeted state policies. So far, there are almost no programs for single-family houses in Bulgaria, although about two-thirds of energy-poor households live in such housing. For comparison, among people in multi-family buildings, the share of energy-poor is lower - about 20-24%, which shows that part of the public resource does not reach the most vulnerable. The lack of targeted policies for energy-poor households makes the system less effective and is one of the reasons why Bulgaria remains among the most affected countries in the EU.
- Until now, there was a lack of consolidated information on energy vulnerability by region. How can the new national map help the state and municipalities plan more effective policies?
- The new national energy vulnerability map provides for the first time a comprehensive picture of the problem by region, combining data on energy needs, social vulnerability and the real perception of energy poverty. This allows us to see much more clearly where different risks overlap – for example, low incomes, lack of energy efficiency or strong dependence on certain energy sources – and, accordingly, where the most vulnerable households are.
Thus, the map can help to direct public resources more specifically, by applying a territorial approach, instead of applying the same measures for the entire country. It enables the state and municipalities to plan policies according to the specific needs of individual regions – for example, energy efficiency programs where the housing stock is most inefficient, or support for households heavily dependent on certain fuels. This is particularly important in order to avoid the current practice of a large part of public resources reaching households with higher incomes instead of the most vulnerable groups.
- According to the analysis, part of the renovation funds are distributed without regard to the social status of the households. Does this mean that public resources are not reaching those most in need?
- To some extent, yes. Some of the renovation programs are implemented as 100% grant funding, without taking into account the social status of the households, which means that public resources often reach people who have the opportunity to invest in such measures themselves. Thus, significant funds are directed to more profitable households, while some of the most vulnerable remain outside the scope of these programs.
This is also evident from the structure of the housing stock - about two-thirds of energy-poor households live in single-family houses, for which there are almost no national energy efficiency programs.
At the same time, only about 8% of multi-family buildings have been renovated, which shows that progress is limited in these areas as well. Therefore, there is an increasing need for a more targeted approach, in which support is directed primarily to low-income households and to regions with the highest energy vulnerability.
- What specific measures should local authorities take to help households with high heating and cooling costs?
- First of all, local authorities can start working more actively with households that already receive heating benefits, since municipalities have information about them - addresses, contacts and social status. This makes it possible to organize information meetings, consultations and technical assistance for applying for each new energy efficiency program - for example, for photovoltaics, wall, roof and floor insulation, replacement of joinery, entrance doors or heating appliances. Municipalities can also implement small but targeted local programs themselves, for example with a budget for 10-15 households per year, in which basic measures are financed - more efficient air conditioners for heating and cooling, boilers, refrigerators or window frames. By purchasing services and equipment collectively, the municipality can negotiate lower prices and better quality, and even limited support - for example, around 500 euros per household - can significantly reduce energy consumption and family costs.
It is also important that the programs include co-financing by households, even in a small amount - for example, 20-40%.
Practice shows that even the most vulnerable households are willing to participate financially if they have a guarantee of a lower price and quality performance. This way, more families can be helped with the same public resource, and once the most vulnerable groups improve the energy efficiency of their homes, the programs can gradually be expanded to a wider range of households.
- From 2028, the new European emissions trading scheme will also cover the building sector. How will this affect households that are already in energy poverty?
- From 2028, the new European emissions trading scheme will lead to an increase in the price of fossil fuels used in the building sector, which means that households that are heated with gas, coal and other carbon-intensive fuels will be directly affected. For countries like Bulgaria, this is a particularly sensitive issue, because a significant part of households are already in energy poverty. The effect will not be limited to gas and coal alone. The price of wood is also strongly linked to that of natural gas, with studies showing that around 40% of the increase in the price of wood can be explained precisely by the increase in the price of gas. Data for the last 30 years or so show that the prices of these fuels move almost synchronously – when gas prices rise, a similar trend is observed for wood. This is a serious risk for Bulgaria, since a large part of low-income households are heated with wood. Therefore, the effect of the new scheme should not be underestimated – without timely energy efficiency measures and more affordable heating alternatives, it could further increase energy costs for the most vulnerable households.
- The analysis indicates that support through direct financial aid has a limited effect. How much more effective would investments in energy efficiency of housing be?
- Direct financial aid alleviates costs in the short term, but does not solve the main problem - the low energy efficiency of housing. Investments in improvements such as insulation, replacement of windows or heating appliances can reduce energy consumption by around 20-30% with partial measures, and with complete renovation the effect can be approximately twice as large. In addition to lower bills, these measures also improve thermal comfort, quality of life and people's health, which makes them a much more sustainable solution in the long term.
- What is the role of the upcoming European financial mechanisms, such as the Social Climate Fund and the Decarbonization Fund, in the real reduction of energy poverty in Bulgaria?
- The role of the upcoming European financial mechanisms will be very large, since Bulgaria practically lacks sufficient national instruments for the systematic fight against energy poverty and the country relies mainly on European funding, as happened in recent years with the Recovery and Resilience Plan. At the same time, the Social Climate Fund in its current design has a number of limitations - the resource for the building sector is relatively small, some of the measures are aimed at 100% grant renovation for all households, regardless of their income, and others, such as energy communities, would have difficulty reaching the most vulnerable. The reason is that around 50% co-financing is required, which makes the initial investment practically inaccessible to energy-poor households. They could only benefit from lower energy prices, but their real participation and ownership as full members of such communities remains limited.
This creates a risk that the funds will be insufficient and poorly targeted, with still unclear access conditions.
As for the Decarbonization Fund, the positive thing is that for the first time a component aimed at households is also envisaged. However, it is not yet clear what its size will be and whether it will have a sufficiently strong social focus. The broader problem is that there is a significant funding shortage in the country, limited investment, and the instruments applied so far often prove to be ineffective. Therefore, it is necessary to build a more balanced set of financial mechanisms aimed at different income groups – from a higher grant component for energy poor households to combined schemes with co-financing for the middle class, so that a greater effect can be achieved with the same public resource.
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Assoc. Prof. Dr. Teodora Peneva is a researcher at the Institute for Economic Research at the Bulgarian Academy of Sciences and a senior climate and energy expert at WWF Bulgaria. One of the most prominent specialists on energy poverty, she actively participates in the consultations for the National Plan for the Social Climate Fund.