05.09.2019

In view of the procedure initiated by the Ministry of Energy for the preparation of an ordinance for the organization and control of the implementation of the National Investment Framework for the period 2021-2030 under Art. 10c regarding the possibility of free allocation of allowances for the modernization of the energy sector by Directive (EU) 2018/410 amending Directive 2003/87 / EC (the Directive), Bulgaria has the opportunity to consider the option given to beneficiary countries to redirect part of their free allowances under Art. 10c paragraph 4 to the Modernization Fund under Art. 10d. Beneficiary countries should notify the European Commission (EC) of their decision by 30 September 2019 and at the same time provide a list of specific priorities for their country in the context of projects funded under Art. 10c and 10d. In this regard, we support the draft ordinance presented for public consultation in its general plan, namely to organize the allocation of free quotas through a tender procedure for both small and large projects. We consider it necessary to provide in the Ordinance the case in which the unallocated allowances under Art. 10c, as a result of insufficient participation in the tenders announced, will be transferred to the Modernization Fund at the end of the period in order to support the preparation and implementation of projects qualifying for Modernization Fund financing, but with funding below 100%.

In parallel with the preparation of the ordinance for the implementation of Art. 10d of the same Directive and in connection with the establishment of the Modernization Fund, it is imperative in the ordinance that the priorities of our country are described in detail, based on the common topics described in the Directive. According to the information note of the European Commission on the implementation of the Directive, the beneficiary country under the Modernization Fund should hold public discussions on the operational rules, be involved in the development and adoption of the act for implementation of the Modernization Fund by the EC, including outline its national priorities and topics, to be financed by the funds earmarked for Bulgaria in the amount of 5.84% of the Fund by the end of 2019. While the permissible priorities are generally formulated in the text of the Directive (Art. 10d, paragraph 2), Bulgaria has the opportunity to bring in the specificity needed for our energy sector, which will actually lead to an increase in investments and the realization of modernization projects in the energy sector.

Members of the National Energy Chamber recognize the following priorities as sufficiently specific and motivating for the representatives of the (private) Bulgarian energy sector to be active participants in the realization of the goals and opportunities provided by the Fund.

• Energy efficiency – setting up a national fund to finance energy efficiency improvement measures
• Development and integration of renewable energy sources in the electricity system and market.
• Energy storage systems
• Development of district heating networks – financing the deployment of district heating networks and increasing their efficiency by focusing on cities with low air quality indicators; financing the modernization of fossil fuel combustion systems with those powered by alternative fuels such as hydrogen.
• Digitalization of the electricity distribution networks – a national program for the planned digitization of the electricity distribution networks and their modernization in order to adapt to the changing electricity system and to meet the needs of customers of electricity services.
• E-mobility

NEC is ready to actively participate in public discussions on the formulation of national priorities. Official Position NEC_Modernization Fund