Interconnector Greece-Bulgaria could support Bulgarian coal-to-gas switch

The launch of the 3 billion cubic metres (bcm) per year gas Interconnector Greece-Bulgaria (IGB) could support Bulgarian coal-to-gas fuel switching, project operator ICGB’s executive officer Teodora Georgieva told ICIS.

“IGB passes close to the power plants of the “Maritsa East” energy complex. If plants are interested in gasification, we are ready to work to build gas transmission diversions next to them,” said Georgieva, adding: “It should be borne in mind that after the start of the war in Ukraine, the price of natural gas has increased several times, and there is also a lack of sufficient volumes on the market.”

IGB started commercial operation on 1 October and could transport 300 million cubic metres of gas by the end of 2022, Georgieva told ICIS.

IGB’s capacity of 3bcm/year in the direction from Greece to Bulgaria could be increased to 5bcm/year if there is sufficient market interest.

Maritsa Basin Gas Switch

The coal plants in the Maritsa East coal complex include the state-owned 1.6GW Maritsa East 2 (ME2) as well as at the privately-owned 908MW ConturGlobal Maritsa East 3 and the 670MW AES Galabovo Maritsa East 1.

Georgieva said the current circumstances did not incentivise the gasification of the complex. “If the prices on the gas market stabilise, the LNG terminal in Alexandroupolis comes into operation in 2024, and Azerbaijan accordingly increases the export of natural gas to Europe, as is actively discussed at the political level, then the chances of building a gas power generation capacity in the complex will increase significantly. This remains a conversation ICGB will always be open to as a grid operator,” said Georgieva.

In 2021, privately-owned 600MW Bobov Dol plant revealed plans to run on gas and hydrogen from 2025.

The privately owned 630MW Varna thermal power plant is already running existing units on gas and announced plans in June 2021 to build two new 275MW gas-fired units by early 2025.

“For the gasification of existing thermal power plants or for the construction of new gas power generation capacity, it is extremely important the European Commission recognises gas as a transition fuel in a significantly longer term plan,” said Georgieva.

In February, Bulgaria cancelled its plans to build 1GW of combined-cycle gas-turbine capacity to replace the ME2 plant by 2025.

Coal Importance

“The coal plants in the Maritsa East complex, which operate entirely with local resources, make a significant contribution to the energy independence of the country and cover a significant part of the energy deficit in south-eastern Europe,” added a market participant.

However, the need for new gas capacity for Bulgaria’s low-carbon transition is debatable, argued sources.

According to a study commissioned by the American Chamber of Commerce in Bulgaria, the continued operation of Bulgaria’s coal plants until at least 2030 would be the cheapest way to meet European targets of at least a 55% reduction in carbon emissions by 2030 compared to 1990 and achieve net carbon neutrality by 2050.

“In the event the administrative closure of coal plants is implemented before 2030 and the reduction of carbon emissions by 40% by the end of 2025 compared with 2019 is implemented in accordance with commitments under the Recovery and Resilience Plan, the cost to society would be €1.6bn more per year. Under this scenario, 735MW of new gas-fired power generation would be needed by 2030 to replace coal-fired power,” stressed the market participant.

Bulgaria plans to keep its entire 4.9GW coal-fired fleet online until 2040, the prime minister said in October 2021.

The country is the third largest net electricity exporter in Europe, the energy ministry said on 23 October.

Bulgaria exports around 1GW daily and is a key exporter to Greece, North Macedonia and Serbia.


Source: ICIS – Independent Commodity Intelligent Service, Luka Dimitrov