In the top 10 energy companies by revenue, seven have new positions. For the first time in ten years NEK reports less than 3 billion BGN in revenues, Kozloduy NPP and Bulgargaz have record revenues and profits, and the electricity trader Grand Energy Distribution related to Hristo Kovachki, has become the largest electricity trader with a turnover of over BGN 900 million.
Overall, the financial performance of leading energy companies is improving. The profits of the top 25 energy companies, have more than doubled – from about 500 million BGN to over 1.2 billion BGN. And this is with an increase in total revenues by only 4.8% and maintaining the same number of employees – a total of 23 000. In fact, the only losing companies in the leading positions are the state-owned NEK and TPP “Maritsa East 2″ and the municipal “Sofia District Heating”.
The largest growth in revenues is achieved by the electricity trader “Grand Energy Distribution” – from 469 million BGN in 2018 to over 918 million BGN last year, or a spike of over 95 %. For comparison, the next electricity trader in the ranking – CEZ Trade Bulgaria, has revenues of 482 million BGN, which is 7.6% higher than those in 2018. Others, such as Energy Supply, have shrunk in recent years and from nearly 120 million BGN in 2016 and 2017 fell to 90 million BGN in 2018, to reach 60 million BGN last year.
The reported revenues of the other electricity trader related to Kovachki – “European Trade of Energy” are over 313 million BGN, and for 2018 “European Trade of Energy” had revenues of 119 million BGN, and in 2017, they were only 0.07 million BGN.
NEK remained the largest energy company in the country, but the interesting thing is that for the first time in 10 years its revenues fall below 3 billion BGN. For 2019, the company has reduced its loss significantly – to 1.26 million BGN compared to 73.8 million BGN in 2018.
TPP “Maritsa East 2″ has been in technical bankruptcy for two years and the only thing that keeps it operational are the actions of the Ministry of Energy and BEH. After a record loss of over 355 million BGN in 2018 last year, the plant is had also a loss of “only” 202 million BGN. The situation of the municipal “Sofia District Heating” is also critical. It continues to increase its loss, as in 2019 it is 82.5 million BGN.
The situation is exactly the opposite for the three other state-owned companies: Kozloduy NPP, Bulgargaz and the Electricity System Operator. The first two companies even set historic revenue records in 2019.
Interview with the Chairman of ATEB – Martin Georgiev on the development of the electricity market in Bulgaria
Restrictions due to the coronavirus led to a 20% drop in the consumption on the liberalized market and about 50% lower prices in March and April. Fortunately, this did not lead to bankruptcies of companies in the sector. The recovery began in June, and how long it will last depends on the development of the pandemic and the recovery of the economy.
Electricity prices are influenced by a number of factors and it is difficult to predict exactly what their movement will be. But Bulgaria is part of the European electricity market and for this reason prices are already influenced by what is happening in the EU, and to a much lesser extent to what is happening only in the country. For example, the difference between the average electricity price from the beginning of 2020 in Bulgaria and Romania is only 0.1 EUR/MWh, which is 0.3%.
With the liberalization of the electricity market, companies will have more opportunities to negotiate a service that better fits their consumption pattern. For example, if the consumption is higher on weekends, when electricity is cheaper, the company may request a special weekend tariff and pay less.
The EU’s green deal and the associated increase in renewable energy capacity will be a major challenge for everyone, both for network operators and for market participants, as it makes balancing more difficult. But over time we must learn to work in such an environment – with changing parameters in real time.