Carbon emission permit ETS prices have shot above 30 euro/ton. Projections for their average price in 2023 stand at 46 euro/ton, inviting a fresh look at CCS’s projects’ economy. Unfortunately, the topic is taboo in Bulgaria, even for the National Climate and Energy Plan (NCEP). Chances for solving the issue with the growing bill for emission permits, which in 2020 again hit 500 million euro, are fading away. Reference to CCS technologies’ investments lacks in the NCEP, while projects for greenhouse transmission infrastructure are discussed superficially, without estimates and timescale.
Most Bulgarians sense the Maritza-East TPPs are doomed, and taxpayers and consumers have no alternative but to observe helplessly the inevitable decomissioning of Bulgaria’s coal power generation.
The NCEP does not consider scenarios for emission-free coal or hybrid/coal and gas/ power generation.
The future of Bulgaria’s energy sector, for now, seems pessimistic, torn apart between different lobbying groups, lacking a consolidated and forward-looking approach. The proposed amendments to the Energy Act, instructing BEH to cancel the PPA with AES and Contour Global, seem more like a lobbyists’ agenda, than a comprehensive reform plan.
On the one hand, the zealots of nuclear energy and the Belene NPP, are desperate to close the baseload power generations at the Maritza-East power plants. They hope that opening a gap in the national energy balance would justify new nuclear projects. These lobbyists successfully spent 3.5 billion leva, which could have helped prepare the Maritza-East TPPs for the carbon-free future.
On the other hand, the Greens are quick to dismiss as anathema any fossil fuel.
In the field of energy, as in mathematics, the logic of numbers is inexorable.
If it weren’t for the Maritza East TPPS, as happened recently, Bulgaria would have gone dark and cold during the fifth unit of Kozloduy NPP’s recent emergency stoppage . Whatever energy pundits tell you, lignite coal is the only credible indigenous energy source, a backbone of Bulgaria’s energy system and a guarantor of its energy security. It is affordable and independent of circumstances and events beyond our control and beyond our borders.
The more Renewables capacities come online, the greater the cost and the need for balancing power, where the TPPs of Maritza-East are simply indispensable.
Carbon capture and storage (CCS) technologies have evolved and have attested their economic viability, with time only adding arguments to their case. The current state-of-art technologies for carbon capture prove their financial credentials at 25 and 30 euro/ton, while infrastructure to storage facilities adds another 10 and 15 euro/ton. Investment becomes feasible when emission permit prices rise above 35-40 euro/ton, which fits projections for 2022 and 2023. As an immediate reality, decision-makers in the energy sector should henceforth roll up our sleeves and immediately consider projects with CCS technologies in power generation units of TPP “Maritsa-East” -1, 2, and 3.
Bulgaria pays between 0.5 and 1 billion euros for emission permits each year, with virtually no cap. Over a horizon of 10 years, this makes 8-10 billion euros, an impressive capital pool, capable of decarbonizing the coal-based power generation on its own merits.
The EC has also adopted a regulatory framework through Directive EU / 2009/31, which regulates CCS site selection and project implementation and has approved tens of billions of euros in carbon capture and storage projects, greenlighting EU funding for CCS energy transition projects.
Depending on the capacity load factor at the Maritza-East TPPs – typically between 55 and 85 per cent, and the price of carbon emission permits (even if they remain at the current level of 25 euro/ton), according to a study, conducted by the American Leonardo Technologies, the payback is 7 and 10 years!
Unfortunately, successive GERB governments have wasted precious time, given that 2025 is the last year to allow support for coal-based energy.
Numerous studies on appropriate geological formations for carbon emission storage exist, both closer or farther from the Maritza-East basin. Storage capacities are well over 2800 million metric tons that at current emission rates and technology levels will suffice for over 60 years.
Better technological solutions and declining emissions mean that the issue has a permanent and sustainable solution. Zero-emission coal energy is possible.
The construction of CO2 transport infrastructure should not be an issue, even for the remotest storage sites in Northern Bulgaria. Capturing and storing emissions should convert this coal industry into a fully recyclable and in a sense, a renewable source.
Against the background of the tens of billions of euro for the transition to carbon-neutral economy, investments= in CCS seems most competitive as the preferred choice when judged on cost-benefit-security-sustainability terms.
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The GERB government instead opted for the ‘kicking-the-can-down-the- road’ tactic. Forecasts in 2023 emission permit price above 46 euro/ton mean that the coal-based power generation in Bulgaria will have to shut down.
Any decision to address this governance gap will take a minimum of 9-10 years from the conceptual phase to implementation. Therefore one can safely deduce that Bulgarian taxpayers and consumers will have to foot the inevitable bill of 5 billion euro in price premiums, asset depreciation and expensive emission permits.
Suffice is to look at the National Climate and Energy Plan, which harbours wishful thinking, general wording and no specific action line.
Additional nuclear power capacity is a non-starter, given the cost and the limited scope to balance the system.
Renewables will be unable to overcome by 2030 their main handicaps as alternative baseload capacity – their intermittency, the impact to the system and related costs – balancing, energy storage, utilization.
CCS projects, as all fossil fuels, are considered the archenemy by ecoactivists. Most of them have long traversed the road from the romantic period in their activity to the current pro-active, lobbyist phase. When climate change and decarbonization drive started to gain the upper hand, polluters were supposed to identify on their own the optimal cost-effective solution. These days ecoactivists have turned proactive, even aggressive, preaching as lobbyists the only school of good faith – solar and wind farms.
In conclusion, the coal power generation in the Maritza East basin has the right to find its carbon-free solution within the market paradigm, allowing TPPs to exist and contribute to a greener economy.
For those sceptical of carbon capture and storage projects, trusting they belong to the past, here is a surprise – one of the human symbols of innovation and advanced technologies – Elon Musk, recently donated $ 100 million to a capture technology development project and CO2 storage. There are at least 100 CCS projects in the world at various stages of implementation. Experience and know-how are accumulated in the process. Most importantly, projects are implemented and operated on a commercial basis, generating revenue and profits, offering asset holders in coal-based power a hedge against sky-high carbon emission permit prices.
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