Bulgaria's electricity system is being overwhelmed by the boom in renewable energy

Bulgaria's electricity system has been held back by the boom in renewable energy in recent years, mainly due to a lack of investment in the grid. This was the conclusion of a roundtable on "Electricity Networks and Network Services - Challenges for Energy Transition and Market Liberalisation" organised by the Institute for Energy Management.

In Bulgaria, we increasingly find ourselves in a situation where we produce green energy and then wonder what to do with it. This was the case in April this year, when the load in the system was about 3500 MW. However, during the Easter holidays, only one unit of the Kozloduy NPP (1000 MW), 300 - 350 MW of district heating plants, 4 units of thermal power plants - about 500 MW - were in operation. The production from renewable energy sources in this period was 3000 MW.

Tell me, where will the remaining 2000 - 2500 MW go?" asks the CEO of the Electricity System Operator (ESO), Angelin Tsachev.

He told Economic.bg that it is normal for the system to stagnate, as final contracts for more than 15 thousand MW of renewable energy have been signed and opinions issued in the last 2.5 years.

Penalty for ESO

In April 2023, the electricity system in Bulgaria registered a surplus of 1176 MW, thus "swinging" the synchronous zone of the whole of continental Europe, for which the operator suffers a penalty of 900 thousand euros.

ESO was sanctioned because we did not balance our system and we have this surplus, which came about as a result of higher production and unfair practices by traders who bought electricity at negative prices and imported it into the country without having a need or someone to sell it to," Tsachev continued.

In his words, this is the reason why the system is going into a systemic surplus, causing an imbalance in the operation of the entire European grid.

A frequency increase starts in the whole synchronous area and for this reason an emergency procedure is triggered by all ENTSO-E member countries," Tsachev continued.

Certain capacities in Germany, Austria and Italy were then redispatched to compensate for this excess electricity.

Limiting production

If we've all done our job, I don't expect there to be such high fines, and there are enough legislative and regulatory changes to give us a tool to manage the system properly. But if the status quo is maintained, we should expect that there will be imbalances in the system that will lead to curtailment of production".

Our country produces a lot of electricity at certain times of the year - when we have low consumption in the system - the months of April, May and September, and to some extent October.

During these periods, the ESO warns that it may be necessary to reduce energy production because there is a lack of transfer capacity in the system to allow this energy to be stored or to compensate for its production.

If we can't regulate the system and certain generators are operating without having sold their energy, that is, there is a mismatch between their generation schedule and their sales schedule and it is positive relative to the generation schedule, then the system goes into positive imbalance, that is, it goes into surplus."

Therefore, if there is no way to compensate for this surplus, ESO will be forced to curtail all generators and they will have to reduce their commercial schedules in order not to cause further problems in the system.

The remedy

The system is choking, but there are always solutions to problems, and ESO is awaiting action from the Energy and Water Regulatory Commission (EWRC) in the form of regulations and by-laws.

The system operator has proposed a measure for consideration by the EWRC that would anticipate the entry into force of changes already made to the Energy Act.

As an interim measure, it is proposed that the regulator should allow renewable capacities to register as suppliers of the down regulation service, which could reduce their generation and compensate for this possible surplus.

Another solution, which the industry has long been pushing for, is the rapid development of energy storage projects as well as energy corridors so that surplus energy can be exported out of the country.

PV plants are the general solution because pumped storage plants, firstly, have a large resource to store a lot of electricity and, secondly, they bring into the system the so-called 'momentum' that is missing in other battery-type storage systems," Tsachev explained.

He said that with batteries there are inverters that do not provide the necessary momentum in the system, they provide a synthetic momentum that "we are not yet convinced would work in terms of dynamic stability of power systems".

However, the CEO of the National Electricity Company (NEC) explained that storage has its price, which is not low. That is why it is lagging behind the development of renewables.

With the new technologies, the cost of energy storage reaches BGN 500 per MWh, which does not allow its implementation on a purely market basis," he said.

According to him, until these weaknesses are addressed and we stop taking this service for granted, it will lead to a slowdown in investment.

Overall, the solution to the problem could come from gas-fired power plants, which also shunt capacity.

There needs to be price signals to support and encourage investors to invest in this type of generation capacity so that we can manage the electricity system properly."

And more investment...

Network development is at the heart of the energy transition. Research shows that energy consumption will grow, so the capacity of the grids needs to be increased," said Karel Krall, CEO of Electrohold Bulgaria.

It is clear that it has to be financed, but the question is from where. It can be financed in two ways - by the consumers through the final prices or by using EU funds.

For his part, the chairman of the Energy and Water Regulatory Commission, Ivan Ivanov, added that there was no doubt that prices for transmission and distribution would be increased.

The CEWRC chairman added that the problem of network development is present everywhere, not just in Bulgaria. According to him, studies have shown that by 2040 the length of electricity transmission and distribution networks in the world should double, which means that 8 million km of new networks should be built in Europe.

In Bulgaria, network services are the cheapest in the entire European Union, Krall said, adding that networks cannot develop in this way.

According to Angela Toneva, Managing Director and Member of the Board of Energo-Pro, it is therefore important for electricity distribution companies to be financially stable in order to have sufficient funds for network development.

Kalina Trifonova, deputy CEO of EVN Bulgaria, said that investment in grids is a key issue because they are the backbone and the foundation on which the whole green energy transition will take place. In her words, there is a huge imbalance in terms of support for green energy production and incentives for grid development.

According to Ivan Ivanov, the principle that should be respected is that for every euro invested in generation, another euro should be invested in the grid, and at the moment this is not being respected at all.

We are used to electricity being cheap and consumed like water, and that has to change," the regulator's chairman concluded.

This article was translated with the support of DeepL.