The Association of the Organizations of Bulgarian Employers (AOBE) has urgently called for government action to address the soaring electricity prices affecting businesses in Bulgaria. In an open letter to the authorities, the AOBE is demanding compensation measures to support the economy and maintain the industrial sector.
To mitigate the impact of these high electricity costs, the AOBE urges the Council of Ministers to implement a Program for compensating electricity prices specifically for non-domestic consumers. The letter highlights the alarming prices in the “day-ahead” market, noting that on July 15, the price reached BGN 373.82 per megawatt-hour (MWh), marking the highest rate for the month. Furthermore, July is projected to be the most expensive month of the year, with an average price of BGN 249.15/MWh for the first half, surpassing June’s average of BGN 191.52/MWh.
Bulgaria currently holds the fourth highest electricity price in the European Union, trailing only Hungary, Romania and Greece. The letter points out that Bulgaria’s prices are significantly higher than those in several EU countries, being two times more expensive than in the Czech Republic, 2.1 times higher than in Germany, and even more compared to Austria and France. The AOBE also noted that evening rates are exceptionally high, ranging from BGN 600 to over BGN 1100/MWh on July 15.
The AOBE attributes these steep prices to a combination of factors, including electricity shortages in regional markets like Hungary and Romania, reduced transmission capacities in Southeastern Europe, significant electricity exports to Ukraine, high temperatures, and low water resources. Additionally, unplanned outages at the Kozloduy Nuclear Power Plant have compounded the issue, despite the recent inclusion of the sixth power unit not yielding a positive pricing effect.
The organization warns that these conditions, which are outside the control of market participants, are detrimental to the competitiveness of Bulgaria’s economy. The current high electricity prices are challenging for businesses, especially amidst a decline in orders and a prolonged downturn in industrial production, which has persisted for 17 months. This situation, coupled with budget deficit concerns, could exacerbate inflationary pressures.
The AOBE emphasizes that maintaining competitiveness is crucial for Bulgarian industry, particularly given its position as an external EU border. In previous years, the industry has managed to cope with high electricity and natural gas prices thanks to compensatory measures covering the gap between market rates and a set price of BGN 200/MWh. (Novinite)