Findings and Recommendations of the Energy Charter Energy

Findings and Recommendations of the Energy Charter Energy Efficiency Review of Bulgaria In-depth Review of Bulgarian Energy Efficiency Policy David Taylor, Ireland, Chair of the Review Team Sofia, October 2008 David Taylor

Structure of Report Situation • Background • Policy • Activity Assessment Recommendations

Sources of Information • In – Depth and Regular Reviews • Bulgarian Government Publications • IEA and ODSSEE-MURE statistics • Presentations from Bulgarian Institutions

Review Team David Taylor Sustainable Energy Ireland Inguna Ozolina Latvian Energy Agency Herbert Lechner Austrian Energy Agency Mr. Peter Nielson Danish Energy Authority. Valya Peeva Energy Charter Secretariat Wolfgang Eichhammer Consultant to the Secretariat

Final Energy Consumption FEC Sector % Share of FEC Industry 36 Transport 30 Residential 22 Services 9 Agriculture 3

Industry Sector Sub Sector % Share of FEC Chemicals & Petrochemicals 28 Iron and Steel 17 Non Metallic Minerals 18 Subtotal % GVA 63 23 Balance 37 77 Total 100

Transport Sector Car Statistics • • • Stock Increase +60% or 1. 0 million Ownership 330 cars per 1, 000 population Average Age 40% are over 20 years old 24% are 16 -20 years old

Residential Sector Housing Statistics • Permanently occupied 2. 82 m • Private Ownership 92% • Central Heating 42% • Appts in “Panel” buildings 40% • Average Area 63. 5 m 2 • New build rate 13, 000 pa

Residential Sector Heat Source % Final Energy in Heat Provision Wood 35 District Heating 30 Coal 23 Electricity 12

Energy Policy • Energy Strategy • Adopted by Parliament July 2006 • Energy Law 2003 – legal, operational, accounting, unbundling • • • Chapter 10 D/ Heating billing Chapter 11 RES-E and CHP Amended 2006, March 2008 • Energy Market Liberalisation • • • SERC established 1999 Unbundling in Electricity and Gas Privatisation of operational units

Energy Pricing Policy • Market liberalised • Privatisation well advanced • Pricing Policy • Liquid fuels and coal set by market • Electricity, heat, natural gas subject to regulation • Prices • Electricity prices are 35% to 50%(In) EU average • Gas prices are 50% (Res) to 60% of EU average

Institutions of Energy Policy • Ministry of Economy and Energy • State Energy and Water Regulatory Commission (SEWRC) • Electricity System Operator (ESO EAD)

Energy Efficiency Policies and Programmes • Energy Efficiency Act – February 2004 • Amended 2006 and 2007 • Energy Efficiency Agency • Responsibilities, Targets, Powers • First National Energy Efficiency Action Plan • National Programmes • • EE short and long term programmes under the EE Act Sectoral EE programmes for Building, transport and SMEs

Energy Efficiency Programmes by Sector Residential Sector • Measures linked to EU Accession • Measures in Support of Thermal Performances of Homes • Subsidies and fiscal measures District Heating • Modernisation of the Network

Energy Efficiency Programmes by Sector Industry and Tertiary Sector • Energy management with efficiency and audit focus • Grants to support energy management • Energy management in Municipalities Transport Sector • Mandatory measures • Taxation measures

Organisation of Energy Efficiency Activities • Ministry of Economy and Energy • Form EE and Environment Protection Division • Legislative initiative, implementation control • Energy Efficiency Agency • Executive Agency, Established 2002 • Mandate flows from Energy Efficiency Act • Enlarged mandate and responsibilities • Ministry of Regional Development and Public Works • Regional and Local Authorities - Others

Financing Energy Efficiency • Sources of Funds • Ten principal sources • Commercial banks, state, EU and international aid • Funding Schemes • Five principal schemes • Sectoral, revolving project and credit lines • Grant funding • Four EU Operational Programmes (OP) • Economic, development, transport, environment

Renewable Energy Policy RES-E • Targets • 2010 11% of RE in electricity consumption • 2020 16% in draft EU Directive • Potential • Biomass and Wind • Geothermal and Solar • Incentives • Feed in tariffs

Market response Capacity MW Hydro Wind PV Requests for licenses 7 800 51 Licenses issued 7 620 26 Requested grid connection capacity 90 2257 76

Recommendations General • Ample evidence of a structured approach • Not clear that the resources required are available • Significant progress in implementing EU Directives • Continued efforts necessary • Low income groups are vulnerable • Sensitive and sustainable EE measures required • Energy market reform well advanced • Look to ESD for enabling EE market opportunities

Recommendations Energy Efficiency Policy • Deliver Energy Efficiency Action Plan (NEEAP) • Focus on pace and co-ordination • Monitor Implementation of NEEAP • Adjust in the light of progress • Engage market actors • Review interaction of measures • Balance objectives and pathways

Recommendations Legal Framework and Energy Markets • Legal Framework • Enact “Condominium” Law • Monitor success • Energy markets • Stimulate PPPs and ESCOs • Structure for sustainable energy services to appts

Recommendations Institutional framework • Ministry of Economy and Energy • Build implementation capacity • Secure resources in line with EE Act • Energy Efficiency Agency • Enhance capacity to analyse and act on audits • Add value through promotional activities • Local Actors • Strengthen LEA and Energy Officers in Municipalities

Recommendations Energy Efficiency Funding • Raise awareness of existing funds • Position for additional OP funding at review • Build on success of revolving funds (Bg. EEF) • Test a variety of approaches to “Panel “ buildings • Maximise Kyoto JI up to 2012

Recommendations Sectoral Built Environment • Facilitate improvements to energy performance of building stock • Promote legal structures for energy service provision to “panel” and other multi-family buildings • Monitor and assess true costs of electricity use for heating • Ensure appropriate standards for heating appliances e. g. heat pumps, are in place • Promote building energy rating

Recommendations - Sectoral Industry • Evaluate audit results to date • Promote replication of lessons learned • Build networks for Energy Managers

Recommendations- Sectoral Transport • Fiscal measures targeting purchase and use • Sustainable planning and infrastructure provision • Public transport infrastructure investment

Recommendations Energy Supply District Heating CHP Gasification Renewable Electricity Biomass Secure in the short term Expand in the medium term Increase share in heat generation Introduce biomass as a fuel Balanced approach to competition with others networks e. g. District Heating Monitor price impacts Weigh costs against other options Ensure strategy in place

Recommendations Data Collection and Monitoring • • Monitor and Evaluate Energy Efficiency Actions Develop the capacity to make forecasts Publish results Develop Energy Efficiency Agency’s Capacity • People • Software • Hardware

Conclusion • The Team would like to express its thanks to • The Bulgarian Authorities and the EEA in Particular • The Energy Charter Secretariat, and our • Rapporteur Wolfgang Eichhammer