Bulgaria's Employers Push for Continued Electricity Price Compensation in 2025

Employers' organizations in Bulgaria are urging the government to extend the compensation program for high electricity prices into 2025. In a recent letter, they highlighted the sharp increase in electricity prices, with November's price on the energy exchange reaching 328.09 leva/MWh, making it the second highest in the EU, just 28 cents below Romania's rate.

The government's electricity cost compensation program for non-household end customers has been crucial in preventing widespread shutdowns of businesses during periods of extreme price fluctuations. This mechanism, which began in late 2021, has proven effective in safeguarding industries from soaring electricity costs. The compensations were initially activated when prices exceeded 250 leva per megawatt-hour, covering 80% of the price difference, and later adjusted to cover 100% at a lower threshold. In 2024, the program became even more extensive, covering price differences when average monthly prices exceed 180 leva per megawatt-hour.

However, the business community is sounding the alarm about the worsening situation. Several medium-sized enterprises have already closed, and nearly 5,000 people have lost their jobs, according to the Employment Agency. The Association of Employers' Organizations warns that the economic situation is becoming dire and could lead to significant consequences for Bulgaria's economy, including lower government revenues from taxes and social security contributions.

The employers' letter stresses that the challenges in the electricity market, such as insufficient market connectivity in Europe, low water levels, reduced production from renewable energy sources, and rising natural gas prices, are expected to persist in the coming months. This, combined with...