Why is electricity in Bulgaria so expensive again?
(Don't fall for energy populism.)
Electricity prices in Bulgaria are once again extremely high. Today, the average exchange price is around 236 euros/MWh, and during peak hours it exceeds 340 euros/MWh. Why is this happening, since we have nearly 6 GW of solar capacity and as many batteries?
The problem is not only Bulgarian. It is regional. And one of the main reasons is the drought.
Today, the Danube near Oryahovo reached a record low level - minus 133 cm. The Romanian nuclear power plant “Cherna Voda“ is still not operating. There are about 30 GW of hydroelectric power capacity in the entire Danube basin, and another nearly 11 GW of nuclear and thermal power capacity are directly dependent on the Danube waters for cooling.
A total of about 40 GW of electricity generation capacity is to varying degrees dependent on the hydrological conditions in the Danube basin. This does not mean that all of it is limited. Some of them are operating with reduced production, but the exact amount of lost power cannot yet be reliably determined.
In Bulgaria, more than half of the usual production of the “Kozloduy“ NPP is currently missing. A sixth unit is stopped for scheduled maintenance, and a fifth is operating with restrictions related to the low level of the Danube.
Solar production is also decreasing as the days shorten. But here we come to a serious strategic gap.
Bulgaria, like a number of other countries in the region, has been holding back the development of wind energy for years. And wind is usually stronger in the cold months, when the sun produces less. This is what makes it so important for a balanced and cheaper electricity system.
Additional pressure comes from high natural gas prices, related to the crisis around the Strait of Hormuz. Gas-fired power plants often set the marginal exchange price for electricity. Therefore, the increase in gas prices is passed on to the entire regional market, regardless of what share of electricity is produced from gas.
And carbon quotas?
As I explained a few days ago, their impact on the current price spike is much more limited than is suggested. Removing them will not return the water to the Danube, will not restart the stopped reactors, will not increase the wind, and will not lower the international price of gas. (But it will take money to compensate power plants and consumers.)
Moreover, the higher the market price of electricity, the more profitable it becomes for coal-fired power plants to operate, even when they pay for their emissions.
Bulgaria does not suffer from too much renewable energy. It suffers from an insufficiently diverse, flexible and sustainable energy system.
Batteries already help us immensely, but they cannot produce the missing energy. We need more wind, better water management, stronger regional connections and systematic preparation for climate risks.
Drought is not just a water and agricultural problem. It is becoming a serious energy and economic risk for all of Southeast Europe.