1. Assets based industrial transition
8th Regional Energy Conference, BEMF
17 May 2019
Julian Popov
Fellow, ECF
Chairman, BPIE

3. Maritsa East - 5 key questions
What is the future of the European energy sector?
How to guarantee the energy supply security of Bulgaria?
How to preserve the economic output?
How to preserve the employment?
How to increase the economic output?

4. The big €20/t CO2 price surprise
The CO2 price has been brewing for at least 30 years.
European CO2 trading started before Bulgaria joined the EU.
Global CO2 market is emerging.
CO2 is becoming global environment currency.
€30
2050
CO2 neutral
€25
2030
CO2 - 40% €6
2021
ETS Phase 4
2013
ETS Phase 3
2008
ETS Phase 2
2005
ETS Phase 1
2003
European Parliament, ETS Directive
1997
Kyoto Protoco
1992
UNFCCC
1989
Fall of Todor Zhivkov
Fall of Berlin Wall
UNGA
Bulgaria and Romania enter the EU
10 former Communist states in the EU

5. Surprise was the fall, not the increase of the price

6. Carbon pricing is becoming global

7. CO2 is a global currency and is here to stay

8. The gap between cost of RES and conventional fossil is widening
(The 2016 UK government RES cost decline estimates for 2025 were surpassed in 2017) €
Dong Energy
€29 – 2017
Siemens
Turkey
€30/MWh RES is approaching
(Chile, India, Saudi Arabia, Turkey, UK)
UK – 1st unsubsidised solar
€150/MWh conventional is approaching

9. Maritsa East - 5 key questions
What is the future of the European energy sector?
How to guarantee the energy supply security of Bulgaria?
How to preserve the economic output?
How to preserve the employment?
How to increase the economic out?

10. Ten answers to the energy demand security question ME 3
Ten answers to the energy demand security question ME 3.0 can provide full supply security and can further strengthen the national energy security
240 km2 solar PV could provide more power than the national demand (not recommended here)
ME is a good place to develop biomass and biofuel 1st, 2nd and 3rd generation, probably wind
Small and medium gas power plants can further provide supply security and balancing
Integrating short term storage (batteries) will flatten daily peaks
Large power to gas (hydrogen) installations can serve as long-term storage
Upgrade of hydro power plants in BG to storage could balance high intermittent RES in ME
Hydro power could provide dispatchable power for balancing intermittent renewables
The regional market will further flatten demand across different time zones
Demand response management will reduce the pressure on the system
Change will not happen overnight. Let technologies compete.

11. От презентацията на Иван Костов
“От примерите с опитите да се възобнови строителството на АЕЦ „Белене“ и окаяното състояние на ТЕЦ „Марица изток 2“се вижда, че на българската енергетика е необходима стратегия, която минимизира държавната намеса. В стратегията трябва да се предвиди изграждането на заместващи мощности на големите въглищни централи да стане на базата на открит конкурс между инвеститори разполагащи с алтернативни производствени технологии.”
Необходими са законодателни промени, които да могат да направят възможни търгове за равна надпревара между алтернативни технологии.

12. Maritsa East - 5 key questions
What is the future of the European energy sector?
How to guarantee the energy supply security of Bulgaria?
How to preserve the economic output?
How to preserve the employment?
How to increase the economic output?

13. Lignite regions have valuable transition assets
Large areas of land (ME – sq km)
Single owner, simple administration
Strong grid
Transport infrastructure
Qualified workforce

14. The Future of Maritsa East - Summary
Maritsa East region can transform from the largest lignite only power generation complex in South East Europe into an economic zone that would combine new clean energy generation technologies with industrial and R&D enterprises associated with the regional and global energy transition.
The 3 key principles of the proposal are (a) retain the energy profile and capacity of ME (b) preserve and increase the number, quality and pay grade of the employment in the region and (c) retain and increase the economic output of the region.
Maritsa East offers excellent energy and transport infrastructure, human resources and technological development capacity and potential. That creates an opportunity for three scenarios corresponding to three levels of ambition: 1. Employment and energy generation capacity preservation; 2. SEE regional energy technology centre 3. European clean energy technology zone.

15. Conclusions
Lignite regions’ assets have high value for the low carbon industrial revolution.
They could be transformed into dedicated low carbon industry industrial zones.
And serve as industry “transition super-labs”.
Maritsa East region has the perfect low carbon industry assets combination
ME can play national, regional, European or even global role
ME can be the key from restructuring of the Bulgarian industry and economy

16. Assets based industrial transition
8th Regional Energy Conference, BEMF
17 May 2019
Julian Popov
Fellow, ECF
Chairman, BPIE

17. Energy centre and an exceptional national and international infrastructure crossroad on a vast state owned single plot of land
70 years energy industry history: development started in 1948
240 km2 low quality open cast lignite, high content of sulphur
State own land unsuitable for agriculture
The largest energy complex in the SEE
3 main lignite power plants, 3.3GW total generation capacity
The heart of the Bulgarian national electricity grid
Focal point of 3 new electricity Projects of Common Interest
Crossroad of 3 EU transport corridors 4, 8 and 9 
Located near the main national gas ring
By the route of the Bulgaria-Greece gas interconnector
Close proximity to the 5th largest city in Bulgaria
Relatively close distance to Sofia, Burgas (port) and Istanbul

18. ME 3.0 could bring together a wide variety of new energy technologies
Batteries
Hydrogen
Gas
Biogas
EV production
EV components
Smart meters
Inverters
Windows
Ventilation systems
New storage technologies
LED
2G and 3G biofuels
Cables
IT for energy
R&D
Training
Solar
Conference centre
Distance medicine
AQM
3D printing
Waste treatment
Micro hydro turbines
Solar heating
Heat pumps
Wind
Smart building
Public transport
Wind components
Drones
Data centres
…and many others

19. Transforming Maritsa East into the “Low Carbon Valley of SEE”. Or EU
Transforming Maritsa East into the “Low Carbon Valley of SEE”. Or EU. 9 principle of the ME transformation
Preserve the 3.3GW power generation equivalent through competing technologies
Protect and expand the current employment level
Increase quality of employment and payment
Develop an industrial zone in parallel not as substitute of existing capacity
Use existing infrastructure
Follow the transforming energy economics
Build infrastructure for the future
Make ME attractive for global strategic investors
Diversify the energy technologies - storage, 2nd generation biofuels, wind, solar, gas, etc

20. Impact – high quality employment and high economic growth ME 3
Impact – high quality employment and high economic growth ME 3.0 could transform South East Bulgaria into a prosperous EU industrial region
Employment numbers will be preserved
Large share of new employment will need transferable skills from current jobs
Employment will rapidly increase in more ambitious scenarios
Quality and paygrade of employment will increase significantly
Young qualified people will be retained or attracted to the region (reversed brain drain)
Regional and national economic growth will increase
National and regional competitiveness will increase
The region will aquire economic mission and fame
ME will become a leading international new technology centre
ME could become a strategic EU industrial competitiveness centre

21. Financing A sound state backed proposal could raise the required funds
EU coal regions in transition platform
Modernisation Fund
Innovation Fund
EU cohesion funds
European Regional Development Fund (ERDF)
EU budget – next MFF at least 25% climate related
EU budget – next MFF will increase R&D spending by 60%
EFSI 2.0
Carbon trading
National budget
Long term strategy = private investments
Avoided stranded assets