The liberalisation of the electricity market confronts domestic consumers with the risks of rising and volatile electricity prices, loss of wealth and even fuel poverty. Measures are needed to address the potential risks expected from market liberalisation, energy efficiency measures and a mechanism to tackle energy poverty in Bulgaria.
This is stated by the Economic and Social Council of the Republic of Bulgaria (ESC) in an analysis on “The Free Electricity Market: Problems and Challenges, Measures to Increase Energy Efficiency in Support of Households”. The analysis, which was adopted in plenary by ESC, was developed on the council’s own initiative, proposes concrete solutions and policies, and focuses on domestic consumers in fuel poverty. The rapporteurs are Andon Rokov from Group II and Bogomil Nikolov from Group III.
Among the recommendations is the development of a package of measures targeting households that do not fall into the energy poor category. It should contain mandatory safeguard clauses in commercial contracts, for example on the right to change and terminate the contract, the right to information on the energy mix of the trader concerned and protection from passing on balancing costs, as well as model fixed and hourly price contracts developed by the Ministry of Energy. In addition, electricity suppliers should offer not only floating but also fixed tariffs, following the European Commission’s proposal for a “right to fixed-price contracts” and introducing a ban on unilateral changes to the contract during its validity period.
ESC also recommends that, in the case of liberalisation of the electricity market, the base prices be set by the EWRC, instead of the Council of Ministers, according to a methodology that takes into account the costs of electricity production in order to preserve the regulator’s control functions. The Council also recommends that efforts should be directed towards initiatives that incentivise energy efficient investments and energy efficient behaviour, with a focus on households in fuel poverty. Such as a differentiated approach to them and 100% grant funding from the state for the renovation of their homes. According to the analysis, the centralised energy renovation of residential buildings is insufficiently effective – only about 4.5% of the renovated homes have 100% public funding. ESC proposes another approach – the creation of funding schemes for the transition to a higher energy class of housing or building, whereby if a specific result is achieved, the household would benefit from a subsidy, and if it is an energy poor family, the grant would be 100%.
At its plenary session ESC also adopted an Opinion “Accelerating the development of the social economy in Bulgaria in response to contemporary challenges” with rapporteurs Assiya Goneva from Group II and Elitsa Barakova from Group III. The opinion points out that the country has significant untapped potential for the development of the social and solidarity economy. Against the backdrop of 6.3% paid employment in the social and solidarity economy on average in the EU, Bulgaria reaches only between 1% and 2.8% of employees according to different sources. Similarly, the share of the social and solidarity economy in GDP is on average 8% in the European Union, while in Bulgaria it is 0.3 – 0.4%. In order to bridge these gaps, ESC recommends a number of measures that Bulgarian institutions can take to enable disabled and disadvantaged people to find fulfilment in the country.
The members of ESC voted and adopted the two acts in the presence of the Deputy Minister of Labour and Social Policy Natalia Efremova and the Deputy Minister of Economy and Industry Nikolay Pavlov, who were official guests of the plenary session.
