Is There Any Carbon Capture and Storage Future for Bulgaria: Will government willingness lead to practical actions?

Publish date: July 13, 2009

Over a year ago the Bulgarian energy minister welcomed the building of CO2 capture and storage (CCS) project in Bulgaria. The country’s desire to undertake such a project has not evolved into real action yet, except for a few specialized studies assessing CO2 geological storage options in northern Bulgaria.

 In addition, Bulgaria has stated its willingness to make a demonstration project in the “Maritsa East” complex part of the EU programme of building 10-12 pilot plants with CCS by 2015.  

Due to historical and economic reasons Bulgaria is one of the countries in Europe that is neither a ‘green champion’ nor has it been pushing for higher environmental standards and policies. Entering the European Union in 2007 the country has started developing environmental legislation by implementation of EU law, making significant progress ever since. Still a challenge remains: How to integrate environmental concerns with the country’s wider political and economic priorities?

Bulgaria’s energy vision

Bulgaria’s energy mix is dominated by fossil fuels (mainly lignite coal) and nuclear energy. It imports more than 70% of its primary energy sources. At present, thermal power plants using coal make up 43.6% of the electric power generation, nearly 35% from the electricity production in Bulgaria comes from nuclear energy, 4% and 6.4% from natural gas and renewables respectively (See Energy Bulletin Bulgaria).Thus, coal is an indispensable part of the electricity generation in Bulgaria with 74% CO2 emissions in the energy sector coming from coal-fired power plants.

Today, the government places the continuing role of fossil fuels and nuclear power at the forefront of its energy platform in its Bulgarian Energy Strategy by 2020. Notwithstanding the uncertainties surrounding the government’s biggest nuclear mirage – “Belene” nuclear power plant (NPP) – it seems that Bulgaria is pressing on energy policy that is believed to increase its energy independence in a carbon constrained world by a mix of coal, nuclear and renewable energy.

Where does CCS really stand?

There are no CCS projects in existence in Bulgaria so far. The country has started to discover CCS as a technology for curbing CO2 emissions in the atmosphere relatively late due to economic and political reasons. However, there are government intentions for building future power plants equipped with CCS. In May 2008, Bulgarian energy minister Petar Dimitrov announced that Bulgaria wants a “clean coal” power plant and that the government had talked with potential US and British investors about building a CCS project in Bulgaria, but he did not say if the government would contribute to cover the costs. They discussed “Maritsa East 4”, a new 600 megawatt (MW) coal-fired power plant fitted with CCS. Bulgaria has expressed interest in making a CCS project part of the EU CCS demonstration programme, which could cover up to half of the CCS costs of the project.

But, at the moment there is no adequate political support of CCS technologies in the country as the official political standpoint is rather vague and fuzzy. The official position on geological storage of CO2 says that Bulgaria supports technological developments introducing CCS, and would follow in line with the EU requirements and the country’s economic capabilities. However, it still needs to develop a regulatory framework for CCS deployment – in particular implementing the recently adopted EU directive on geological storage of CO2 – and impact assessment analysis. The Ministry of Environment and Waters (MEW) intends to engage in a large scale research project in order to identify geological formations that could be used as CO2 storage sites. Reportedly, the European Bank for Reconstruction and Development will assist the Ministry of Economy and Energy to assess the technical and economic feasibility for the transport and storage of CO2 in Bulgaria by contracting a consultant on behalf of the Ministry. The assignment will start in July 2009 with the maximum budget of €500 000.

Moreover, the government is ready to start a demonstration project “Lom Lignite Energy Project” (installed capacity of 400-600 MW) with Integrated Gasification Combined Cycle (IGCC) and CCS with 14% local coal resources. The project is estimated at €750-850 million. In 2007 Enemona, private energy company, and the Ministry of Economy and Energy signed an agreement licensing Enemona for the exploration of lignite in Momin Dol area near Danube river. Enemona plans to create energy centre and develop future mine together with a thermo power plant. The necessary studies and research, including an impact assessment report on the mining part of the project, are already done. Further, Enemona intends to conduct research on the potential geological storage sites which, as preliminary studies show, will reduce CO2 transportation costs due to the close location of the storage settings. Enemona is currently considering its options for gaining additional funding for its activities.

The EU Emission Trading Scheme as a driver for CCS

Under the EU Emission Trading Scheme (ETS), the national allocation plan for 2008–2012 provides for allowances of 42.3 million tonnes of greenhouse gas (GHG) emissions. It is planned that after 2013 the coal-fired plants will have to purchase emission allowances (EUAs) for all emitted emissions. This would double the production costs of coal-fired power plants if the EUA price reaches €39 per tonne СО2. It would make them uncompetitive in comparison with gas-fired plants, thus leading to higher gas import dependency for the country. Although there is not much clarity on the issue, the Bulgarian government considers the options of requesting transition period of free allocation of EUA in 2013-2020 and embracing CCS technologies.

Moreover, the government should analyze in detail the question of cost-effectiveness of nuclear power and fossil fuel power with CCS in order to prioritize among them. Clearly, if there is to be a future role of the local coal in the Bulgarian energy mix, the country must consider CCS.

CCS: an appetizer for the corruption?

It is not a secret though that Bulgaria has been deprived of millions of euros from the structural funds over charges of corruption. The flourishing of the corruption and the functioning of the judicial system have been the subject of concerns to the European Commission (EC) that has led to freezing European money in several cases. When it comes to accessing subsidies for CCS project building, it might become complicated because of the large amounts of money and interests involved. It is already rumored that certain interested groups would use CCS as an instrument for decreasing CO2 emissions by increasing subsidy frauds. The EC has to make sure that Bulgaria provides clear mechanisms for financial monitoring and corruption prevention, if EU CCS subsidies were ever to be considered for Bulgaria.

Common language and actions are needed

Local environmental groups think that CCS technology is still unproven and not compatible with the country’s economic state and CO2 geological storage capacity. They insist on the Bulgaria’s energy efficiency potentials and worry that CCS will distract the attention from renewables and make room for Bulgaria to continue on fossil fuels. According to the ‘Bulgarian vision for sustainable energy’ (See the document on the right), Bulgaria can become carbon neutral by 2050 through energy efficiency, phase out of nuclear and fossil fuel power, and increased use of renewables. A position that will lead to decreased energy dependency and expected phase out of net electricity export (in comparison, today Bulgaria covers almost 50% of the electricity deficit in the region.)

To ensure deployment of CCS though, a common action is needed, establishing a dialogue between all interested parties is vital. The country has at its disposal a large number of scientists of all fields, within the network of institutes, universities, and other research bodies. The cooperation of these with the interested stakeholders and government departments, however, is very low. All groups have to embrace the much needed communication on CCS.

Still the main question for Bulgaria is, would it be economically viable to embrace CCS technology and who would provide the funding to secure its deployment? The capability of closing the economic gap by a private- public subsidies scheme might be the turning point, which for now is highly uncertain task.

This article was contributed by Olga Bakardzhieva (Bellona CCS Advisor in Bulgaria)

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