Following the General elections held on 26 March 2017, a coalition government between the winner GERB and the three parties of the Patriotic Front (the coalition between three parties) is in final stages of negotiations. The coalition partners have agreed on the fact that the new government will be headed by the leader of GERB, Mr. Boyko Borisov; Mr Borisov will start his third term as Prime Minister of Bulgaria. There is also an expectation that the new government must survive its full term of four years, a task the previous government was unable to meet.
The coalition partners have put together a paper called “Priorities for Governance 2017-2021” (http://gerb.bg/bg/pages/prioriteti-125.html), which details the program of the new Bulgarian government. Chapter XVI of the paper contains the six priorities of the new government in the energy sector.
1. Energy security and continuation of the deep offshore Black Sea exploration and undertaking of new tender for the ‘Teres’ block
Fueled by the recent oil discovery in the Han Asparuh block by Total, OMV and Repsol and the completion of the seismic work of Silistar block by Shell, the new government not only commits to support these unprecedented exploration campaigns, but is also considering re-tendering the third big deep-water block – Teres. With limited geological data to date, the Teres block was unattractive during the previous bidding rounds.
2. Implementation of the EU decision regarding TPP Maritsa East 1 and TPP Maritsa East 3
The new government is also committed to working with the EU to address the competition/state aid concerns raised by the long-term PPAs signed for the purpose of the project financing of the TPP Maritsa East 1 green-field project (owned by AES) and the TPP Maritsa East 3 rehabilitation project (co-owned by Contour Global and the state-owned NEC).
3. Revision of the expenses for TPP Maritsa East 2, Maritsa East Mines, NPP Kozloduy and others
The paper also emphasizes optimizing the costs and feasibility of the operations of the largest state-owned companies, which are part of the Bulgarian Energy Holding (TPP Maritsa East 2, Maritsa East Mines, NPP Kozloduy). This is somewhat open-ended and is likely to include other state/municipality owned entities like Sofia District Heating.
4. Construction of interconnectors between Bulgaria and its neighboring countries
Like the previous government, which managed to complete the gas interconnector with Romania and to advance the ones with Greece and Serbia, interconnectivity will continue to be a focus for the new government. These plans also include the increased capacity for electricity interconnectivity, primarily with Greece.
5. Full liberalisation of the electricity and gas markets
Based on the recently published Extract of the World Bank study of 2016 and the recommendations made towards full electricity market liberalization, the new government is planning to proceed with the reforms needed for full electricity and gas liberalization in the country.
6. Continuation of the activities related to the extension of the life of Units 5 and 6 of NPP Kozloduy
This priority shows a de minimis approach to the nuclear energy given the recent failures and terminations of NPP Kozloduy Unit 7 and NPP Belene projects.
Once the new government is elected in May 2017, its Governmental Policy Paper will likely clarify these priorities further.