Published on November 13, 2018

Just Transition: Mission Possible for the Maritsa Iztok complex in Bulgaria?

Reflecting the European trend for phasing out highly polluting fuels like coal, this preliminary analysis outlines options for a just energy transition in the broad region surrounding the heart of Bulgarian coal energy – the Maritsa Iztok energy complex in Stara Zagora region, which generates 30% of the electricity used in Bulgaria.

The Maritza Iztok energy complex (MIEC) includes three lignite pit mines (Maritza Iztok Mines), four coal-fired power plants (CFPPs) that generate electricity, a briquette production factory, as well as the production, warehouse, logistics, etc. facilities of dozens of businesses related to the mining and power plant operations.

Over 400,000 people live in the broader Stara Zagora region; about 12,000 people are directly employed by the mines and the coal-fired power plants in MIEC. The region boasts economic growth and low unemployment, however, outside MIEC, military and processing industry, salaries are generally low (ca. 300 euro per month).

The necessary steps for just transition of the region into the post-coal era include:

1. Develop of a national strategy for reducing dependency on polluting energy carriers such as coal

The swift implementation of a Coal Mining Strategy is a mandatory initial stage of the just transition process and would guarantee predictability, clarity and smoothness of a gradual transition processes. The strategy must reflect the fact that the most polluting facilities will have to be shut down in the short term, while maintaining about 1500 MB of electricity generating capacity in a stand-by regime a long-term reserve in case of force majeure only. Delaying closure would only lead to waste of time and resources, as witnessed by the case of Kozloduy nuclear power plant.

2. Assess the opportunities for business development and for redeployment of dismissed workers, both in the immediate vicinity of the MIEC and its neighbouring regions.

The report outlines general investment possibilities and characteristics of the region in terms of land, services and connectivity, however, lack of reliable data precludes a more detailed analysis. Priority existing and future business sectors with high potential include: green energy, transport and logistics, IT, production of machines, services, etc.

The ‘post-coal’ development of the region is envisioned in several major directions:

a. Development of new high-tech sectors

b. Development of already existing high-potential sectors and businesses

c. Specific focus on green energy and energy conservation

d. Development of existing non-energy activities owned by Maritsa Iztok Mines and the energy companies

e. Maintenance of the reserve for force majeure situations

3. Include these assessed opportunities for a just transition in the strategic documents for development of South-East and South-Central development regions (NUTS II), as well as the affected areas (NUTS III) and municipalities (NUTS IV).

4. Begin immediate implementation of these strategic documents as soon as they are adopted.

Funding just transition in the region is possible by using a mixture of funds and financing instruments for post-closure remediation, investments, early retirement, retraining, entrepreneurship. Currently there are no especially targeted funds towards remediation and post-closure activities after coal mining is discontinued.

Recommended steps before 2022 (for Brikel EAD, by the end of 2019):

1. Plans for decommissioning the mines and power plants in the Maritsa Iztok energy complex.

2. Establish funds for the remediation of the impacts of the activities of the Maritsa Iztok Mines and the 3 coal-fired power plants in the MIEC

3. Establish sources of funding for remediation of the impacts of the activities of Brikel.

Conclusions and recommendations

Based on research of the available information and interviews with representatives of the institutions, businesses, trade unions, municipalities and active citizens the following conclusions can be drawn:

1. A successful just transition in the MIEC region is entirely feasible, but its success depends on proper planning.

2. While the region expects leadership by “the state”, history suggests that the best decisions are not always taken by “the center”. Unfortunately, the lack of regional self-government in Bulgaria is an obstacle to just transition.

3. Pitting just transition against the option of “keeping forever” MIEC, domestic and European coal mining is a losing strategy for Bulgaria.

4. The region has good economic and social development baseline indicators, suggesting minimal expected disturbances and long-term success in taking up the employees dismissed during the transition period.

5. The available financial sources offer a good starting point for the implementation of just transition.

6. There is an expectation in the region that just transition should result in the creation and development of high-tech manufactures and services that bring higher incomes, and not a return to traditional sectors.

7. It is desirable for just transition to avoid the process of over-centralization and not to focus on creating jobs only in Stara Zagora. Diversification of investments would also ease the management of municipalities, some of which need a ‘kick-start’ for better development, so as to keep people within their territories.

Photo by Alexander Ivanov, Za Zemiata.