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Green Energy Governance in Bulgaria

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Green Energy Governance in Bulgaria GREEN ENERGY GOVERNANCE IN BULGARIA AT А CROSSROADS The current report reviews existing policies for energy sustainability in Bulgaria and the EU, the main achieve- ments and challenges in their implementation, and discusses the central issues to Bulgaria’s sustainable de- velopment agenda. The report presents a summary of the transition to sustainable development in Bulgaria, and offers policy recommendations for improving the governance of the Bulgarian green energy sector. Authors: Ruslan Stefanov, Director, Economic Program, Center for the Study of Democracy Denitza Mantcheva, Policy Analyst, Center for the Study of Democracy Nikolay Tagarov, Senior Analyst and Project Director, Center for the Study of Democracy Dr. Dobromir Hristov, Research Fellow, Center for the Study of Democracy Valentina Nikolova, Policy Analyst, Center for the Study of Democracy The Center for the Study of Democracy would like to thank the following individuals for their contribution to this report: Ivanka Dilovska, Chair, Energy Management Institute Todor Galev, Senior Analyst, Center for the Study of Democracy Kiril Gegov, Chief Executive Officer, Bulgargaz EAD, 1998 – 2006 Velizar Kiriakov, Chairman, Association of Producers of Ecological Energy Petko Kovachev, Executive Director, Green Policy Institute – Bulgaria Georgi Stefanov, Climate Change Officer, WWF Bulgaria Plamen Tzvetanov, Head of Energy Systems Analysis Laboratory, Institute for Nuclear Research and Nuclear Energy, Bulgarian Academy of Sciences Editorial Board Dr. Ognian Shentov Alexander Stoyanov Dr. Maria Yordanova The publication is supported by a grant from Norway through the Norwegian Co-operation Programme for Economic Growth and Sustainable Development in Bulgaria ISBN: 987-954-477-174-4 © 2011, Center for the Study of Democracy Sofia 1113, 5 Alexander Zhendov Str. tel.: (+359 2) 971 3000, fax: (+359 2) 971 2233 www.csd.bg, [email protected] TABLE OF CONTENTS EXECUTIVE SUMMARY ................................................................................................... 9 1. INTRODUCTION .....................................................................................................17 2. EUROPE’S COMMON ENERGY FUTURE .......................................................................23 2.1. A STRATEGY FOR SUSTAINABILITY .......................................................................23 2.2. A VIABLE ENERGY POLICY FOR EUROPE ..............................................................26 2.3. INSTRUMENTS OF THE EU ENERGY POLICIES ........................................................34 3. BULGARIA’S ROAD TO SUSTAINABILITY ......................................................................39 3.1. CLIMATE CHANGE ...........................................................................................39 3.2. RENEWABLE ENERGY ........................................................................................45 3.3. ENERGY EFFICIENCY .........................................................................................59 4. THE BULGARIAN SOCIETY AND SUSTAINABILITY ...........................................................67 4.1. ARE BULGARIANS ABLE AND WILLING TO PAY FOR SUSTAINABILITY .........................67 4.2. NECESSARY CHANGES IN CONSUMER BEHAVIOR .................................................. 68 4.3. A SUSTAINABLE DEVELOPMENT STRATEGY FOR BULGARIA? ......................................71 5. CONCLUSIONS AND POLICY RECOMMENDATIONS .........................................................75 ANNEX I. TOTAL CARBON DIOXIDE EMISSIONS FROM THE CONSUMPTION OF ENERGY ...................................................................................83 ANNEX II. FEED-IN TARIFF RATES BY RES TYPE IN BULGARIA FOR 2010 – 2011 ............91 ANNEX III. FINANCIAL SUPPORT SCHEMES AND CREDIT LINES FOR RES ............................93 4 LIST OF FIGURES Figure 1. The Sustainable Development Idea ....................................................23 Figure 2. EU Energy-related Legislation – Timeline ...........................................25 Figure 3. EU Policies on Energy .........................................................................26 Figure 4. EU Member States’ Attainment of National RES Targets ...................33 Figure 5. EU Energy Policy Instruments .............................................................34 Figure 6. Illustrative GHG Trading Scheme ........................................................35 Figure 7. Carbon Performance of Main Stakeholders in Copenhagen, 2009 ......................................................................... 40 Figure 8. Carbon Emissions in Bulgaria ..............................................................41 Figure 9. Total Greenhouse Gas Emissions in CO2-eq. per IPCC Sector, 1988 – 2009 .......................................................... 44 Figure 10. Bulgarian Energy-related Legislation – Timeline ..................................47 Figure 11. Installed Generation Capacity, Bulgaria, 2008 ....................................51 Figure 12. Bulgaria: RES Share in 2020, as per NREAP ......................................52 Figure 13. Share of RES: Contribution of Electricity from Renewables to Total Electricity Consumption, 2008 ..............................................54 Figure 14. Share of Renewable Energy in Fuel Consumption of Transport, 2008 ..............................................................................54 Figure 15. Energy Intensity of the Economy ........................................................59 Figure 16. GDP Energy Intensity ......................................................................... 60 Figure 17. Final Energy Consumption by Sector ................................................ 60 Figure 18. Energy Losses in the Processes of Transformation, Distribution, and Consumption ...........................................................61 Figure 19. Price of Electricity for Industrial Consumers, 2010 .............................62 Figure 20. Prices of Electricity for Household Consumers, 2010 .........................63 Figure 21. Would You Pay a Higher Price for Electricity? ................................. 68 Figure 22. Measures Adopted by Households to Increase Energy Savings and Efficiency .........................................................................69 Figure 23. Have You Used a State Subsidy or Special Bank Credit Line for the Insulation of Your House? ...................................70 Figure 24. Did Your Household Use Wood for Heating during the Last Year? ..........................................................................71 Figure 25. The ‘Triple Helix’ of Energy Sector Development – Efficiency, Sustainability and Independency .......................................76 Figure 26. Structure of the Bulgarian Energy Efficiency & Renewable Energy Credit Line ..............................................................................95 Figure 27. Share of Indicative Funding for RES from OP Competitiveness .................................................................. 96 Figure 28. Share of Contracted Funding for the Scheme “Support for Implementation of Energy Efficiency Measures in Municipal Educational Infrastructure in Urban Agglomerations” from OP Regional Development ............................. 96 GREEN ENERGY GOVERNANCE IN BULGARIA: AT А CROSSROADS 5 Figure 29. Share of Indicative Budget for Operation “Access to Sustainable and Efficient Energy Resources” from OP Regional Development .........................................................97 Figure 30. Share of Indicative Funding for the Scheme “Support for Implementation of Energy Efficiency Measures in Municipal Educational Infrastructure of 178 Small Municipalities” from OP Regional Development ................................97 6 LIST OF TABLES Table 1. Renewable Energy Targets as per the Directive on the Promotion of the Use of Energy from Renewable Sources .......................................................................32 Table 2. Bulgarian Instruments for Meeting Obligations on Climate Change ................................................................................43 Table 3. Projected Total Electricity Generation for the Period 2005 – 2020 ..................................................................52 Table 4. Projected Total Biofuel in Renewable Transport for the Period 2005 – 2020 ..................................................................52 Table 5. Renewable Energy in Final Energy Consumption (2020 targets) .........................................................................................53 Table 6. Date of Adoption of National SDS in Relation to the Adoption of EU SDS in 2001 ....................................................72 Table 7. Focus and Scope of National SDS .......................................................72 Table 8. Best Practices in Effective Climate Change Policies .............................81 GREEN ENERGY GOVERNANCE IN BULGARIA: AT А CROSSROADS 7 LIST OF ABBREVIATIONS ACER Agency for the Cooperation of Energy Regulators BEEF Bulgarian Energy Efficiency Fund BEERECL Bulgarian Energy Efficiency and Renewable Energy Credit Line BGN Bulgarian National Currency (leva) CCS Carbon Capture and Storage CHP Combined Heat and Power Directive CSD Center for the Study of Democracy CSP Concentrated Solar Power DFID Department for International Development (UK) EBRD European Bank for Reconstruction and Development EC European Commission EEAP Energy Efficiency Action Plan EEF
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