On the frontline of the potential militarization of Russian energy, the poorest and arguably most corrupt EU member state is heavily dependent, but not without options for diversification
EU and NATO member Bulgaria faces a challenge as Europe attempts to wean itself off Russian gas while facing the potential risk that Putin’s regime will cut off supplies to those who oppose his Ukrainian adventurism. The country imports about 90% of its gas and most of its other energy resources from Russia, but it can, in fact, diversify relatively easily.
Bulgaria’s energy problems are to some extent self-inflicted, as the recently elected pro-Western government is quick to point out. Solutions will involve not only connecting to nearby pipelines and securing the right contracts, but also eradicating institutional dysfunction and healing political divisions.
In response to harsh financial sanctions and asset freezes, Russia has demanded that European countries, including Bulgaria, pay for its gas in rubles – although it now appears to be flexible on a previous end-March deadline – which the government of Prime Minister Kiril Petkov and his counterparts in Western Europe have so far refused to do so. In the longer term, however, it’s not just about gas.
The country’s low gasification rate is a blessing in the context of the current crisis, as is its strategic location
Burgas, Bulgaria’s only refinery – the largest in the Balkans and the source of around 60% of the fuel used in the country – is owned by Russia’s Lukoil, while its only functioning nuclear power plant, which supplies around 35% of electricity, runs on Russian uranium. According to some estimates, up to 75% of the country’s primary energy resources come from Russia.
Many analysts lament the situation in Bulgaria, but there are positives. The country’s low gasification rate is a blessing in the context of the current crisis, as is its strategic location, being effectively connected to the Tanap gas pipeline from Azerbaijan and Russian gas passing through Turkstream and other gas pipelines to countries like North Macedonia, Serbia, Hungary, Greece and Turkey, some of which are decidedly less hostile to Putin’s regime than governments further west.
Only around 120,000 households of around 7 million are connected to gas, according to recent data, while gas-fired power generation is limited.
Domestically mined coal and nuclear power combined provide 85% of electricity generation. And about 80% of the 3.3 billion m³ of gas used last year went to just 10% of industries, mainly chemicals, fertilizers, construction and combined heat and power plants.
A single centralized heating company serving the capital, Sofia, consumes about 40% of the country’s gas, while almost 70% of Bulgaria’s annual consumption is used during the winter, giving the government a window of opportunity. about six months to diversify its supply.
On paper, at least, some degree of energy independence is surprisingly easy to achieve. Long-term contracts with Russia’s Gazprom, which oblige Bulgaria to buy the equivalent of 80% of its gas consumption from Russia, expire this year.
And an interconnecting gas pipeline with Greece – which can supply gas from its existing and expanding LNG import capacity and Azerbaijan – is expected to be completed within months, while long-term contracts for the supply of 1.5 billion m³/year of gas should also be triggered.
The oil may come from elsewhere, while the Kozloduy nuclear power plant will not deplete its existing uranium until 2025, according to reports. In this window, it can be retrofitted to use US-produced nuclear fuel.
Petkov’s own coalition is fragile, its fate depends on the traditionally pro-Russian Bulgarian Socialist Party
The main obstacle is political and institutional dysfunction. There is a long-running national debate about the extent to which endemic corruption can be blamed on Russia, but corruption was a big part of why Bulgaria was once seen as Russia’s Trojan horse in the world. within NATO and Europe. And despite recent major reform efforts, some of that persists.
The country went through three rounds of parliamentary elections last year, before a flimsy coalition of self-proclaimed reformists led by US-educated Petkov came to power. In mid-March, former Prime Minister Boiko Borisov was arrested on corruption charges, although a judge released him the following day. Petkov accuses Borisov – who served as prime minister for more than a decade and is now opposition leader – of signing contracts that, among other things, made the country excessively dependent on Russian energy.
The government has sided with Ukraine and is actively participating in efforts to form a common European energy strategy, but Petkov’s own coalition is fragile, its fate depending on the traditionally pro-Russian Bulgarian Socialist Party. And no less than 32% of the population support Putin, according to recent polls. That’s down from 55% before the war, but still leaves Petkov’s government vulnerable to a blowout over the Russian question.