Bulgaria’s coal industry starting to accumulate large losses

After a year of huge profits due to the EU electricity market crisis, Bulgaria’s coal industry has started to lose taxpayers’ money, data from the state-owned company Mini Maritsa-Iztok according to EURACTIV Bulgaria’s partner Capital.bg.

The state-owned mining company, which operates the country’s largest deposit of lignite coal, has a huge loss of €26 million for the first half of 2023 against a profit of €20 million for the same period a year earlier, Capital.bg reported.

The losses of Mini Maritsa-Iztok can be explained by the fact that the company sells coal on the domestic market and works with a limited number of customers, mainly the state-owned coal-fired power plant Maritsa-Iztok 2.

In 2022, the Bulgarian energy industry managed to export electricity for nearly €3 billion, and in a short time, Bulgaria became the second largest net exporter of electricity in the EU, surpassing even France. The country also started exporting coal to Serbia.

Until the start of the pandemic, the Bulgarian government constantly subsidised state-owned coal-fired power companies to compensate them for the heavy losses incurred due to the increasing costs of greenhouse gas emissions. The crisis in the EU energy market brought short-term relief and quick profits, but from the start of 2023, the situation worsened.

The profits and sales of the state-owned coal-fired power plant collapsed by up to 60%, directly affecting Mini Maritsa-Iztok.

However, it seems that the mining company is staying above water because of its contract with the Serbian company Virom, to which it is exporting coal under a contract from 2022, and already at a higher price than initially agreed, according to data from the company’s reports.

Despite the plans to limit coal energy and the apparent impossibility of the sector competing on a market basis, no sign of reforms on the part of the Bulgarian state is noticeable.

Bulgaria has not yet adopted the necessary reforms and plans to use EU money to transition to a low-carbon economy in the coal regions, despite risks of losing more than €1 billion in funding from Brussels.

(Krassen Nikolov | EURACTIV.bg)