Bulgaria’s plans to replace coal-fired with gas-fired power plants to meet the EU requirement to shut down the coal industry are not feasible from an economic point of view, the CEE Bankwatch NGO said in an analysis emailed to bne IntelliNews on March 14.

Bankwatch noted that Bulgaria currently has no strategy or financial plan but is considering the full replacement of coal plants with gas-fired ones, which would secure it a full capacity substitution.

In Bulgaria, the existing coal-fired power plants have committed to transition to gas by utilising CCGT units and a medium-scale project based on gas engines is underway.

The NGO focused its analysis on two existing projects – a 1000 MW CCGT at the Maritsa East 2 power plant and a 39 MW gas-engine installation at the Bobov Dol plant.

“Our analysis shows that, from an economic point of view, both projects are unfeasible based on current market conditions. All financial indicators remain strictly negative when their sensitivity is tested against reasonable variations in the main input parameters: capital expenditure (CapEx), electricity sale price, gas price, CO2 emissions price, availability capacity price, utilisation factor electrical efficiency,” CEE Bankwatch noted.

It added that the 1000 MW project at the Maritsa East 2 power plant would require €1.3bn in financial support until 2040 and, taking into account the capex, the financial burden reaches €2.1bn.

The scenario which is being looked at is not based on existing investment proposals, but is based on the most likely scenario for the TPP should it transition to gas in order to understand whether it makes economic sense, the NGO said.

The 39 MW project at Bobov Dol would require around €68mn in capacity or other form of support, which exceeds by 200% the estimated project capex.

By contract, the NGO suggests that several renewable energy options can replace the coal industry, including photovoltaic and wind farms, pumped storage hydro power plants and biomass plants. Renewable hydrogen and geothermal are also viable options for the country.

Nearly 40% of the energy in Bulgaria is produced by coal-fired power plants with more than 95% of the fuel being lignite. The biggest coal-fired power plant is the state-owned Maritsa East 2 with capacity of 1.61 GW of the total 3.85 GW capacity of all coal-fired power plants.

These units have become increasingly important for the country’s energy stability since the end of April last year when Gazprom stopped deliveries of natural gas.