site.btaUPDATED Aid Offsetting High Electricity Prices for Businesses to Remain Available after March

The aid being provided to businesses to offset high electricity prices will remain available after March, Economy and Industry Minister Kornelia Ninova said on Monday, emerging from a meeting between Prime Minister Kiril Petkov and employer organizations. The meeting discussed the domestic electricity market in connection with the war in Ukraine.

"A new mechanism for support to businesses will be worked out by the end of April," Ninova said. She added that the participants in the meeting hosted by the Prime Minister reached agreement that the aid intended to offset rising prices of energy resources will be increased as well. "It is up to the experts to determine the whats and the hows," she said.

Energy Minister Alexander Nikolov, who also attended the meeting, said the idea is to use the current business support mechanism in a way that allows predictability and alleviates worry. "The concrete parameters of the size of compensation and how it will be provided will be discussed by the end of this week, and the way the mechanism will continue to work will become clear early next week," Nikolov said. He noted that not just short-term mechanisms but also long-term solutions will be sought in order to give the corporate sector clarity at least a year into the future.

Bulgarian Industrial Association Managing Board Chair Dobri Mitrev expressed his satisfaction with the meeting, saying it paved the way for dialogue in the coming days to find the best way for all non-household users of electricity to be compensated next month for the high electricity price paid by their enterprises. "More importantly, today we talked about long-term security, sustainable solutions for setting the price of electricity on the domestic market and for having a working and growing economy and a prosperous society," Mitrev said. He expressed hope that the fairest possible mechanism will be devised in the coming days and months to provide compensation and find lasting and sustainable solutions for the future.

Employers want the compensation cap for high electricity prices for non-household users to be abandoned. They said such compensation should be available until electricity prices normalize definitively. The compensation scheme until the end of March is far from sufficient, employers said. The scheme sets the compensation at 75 per cent of the difference between the real market price for the respective month on the Day Ahead market of the Independent Bulgarian Energy Exchange and the real market price for July 2021 (185.59 leva/MWh), but not more than 250 leva/MWh.

Prime Minister Kiril Petkov stressed that, unlike the current situation in which non-household consumers buy electricity on the day-ahead market, the new mechanism will stimulate long-term electricity contracts. Thus, market fluctuations will be overcome and there will be an increase in the share of long-term contracts.

“Regretfully, this has not been done in the last 10 years. Had we had such a mechanism, the business would not be facing the risks it faces now. I am glad that we will implement it quickly now,” Petkov added.