Bulgaria’s Varna gas plant plans new 550MW capacity

LONDON (ICIS)–Bulgaria’s Varna thermal power plant, one of the few privately-owned producers in the country, announced plans to build two new 275MW gas-fired units to be operational in early 2025.

In a €450m investment plan, the plant owned by Sigda aims to install units with a combined steam-gas cycle with an ISO capacity of 54.3% and the ability to produce 30% from hydrogen, according to a statement released on 2 June.

This would raise the plant’s operational capacity from the current 630MW to 1.2GW, although only one unit out of three was running on the afternoon of 3 June, the company’s website showed.

The Varna plant signed a contract with the Russian energy companies Rakityansky Armature Plant, Pipe Metallurgical Company and Atomenergomash for development of a technical and economic model for reconstruction of the Siemens turbines, added the statement.

Local traders polled by ICIS expected the addition of the Varna units to speed up the coal phase out in the country.

“I guess by 2025 there will be no [coal] plants in the country if carbon emissions [prices] continue to grow,” said one of them.

Varna’s production costs should not be very high, said a second source. Even if the plant works on gas, the costs for emissions will be many times lower, not to mention hydrogen, where a subsidy could be introduced, the source added.

“With these high emission prices, the productions costs of [coal] plants in the Maritsa basin are around Lev210 (€108) per MW,” added the same source.

A third participant noted that Varna did not announce how the €450m funding will be provided.

Others argued the plant can get European Union funding for the two units – either via Bulgaria’s recovery plan or EU’s Just Transition Mechanism where the country is set to receive €1.1bn for transformation of its the energy sector.

COAL-TO-GAS SWITCH OUTLOOK

Local participants told ICIS that Bulgarian gas demand could grow after 2025 if other Bulgarian power producers like the state-owned 1.6GW Maritsa East 2 (ME2) or privately-owned 908MW ConturGlobal Maritsa East 3 and the 670MW AES Maritsa East 1 switch from coal to run on gas and hydrogen.

At 17:45 local time on Thursday, Bulgaria’s consumption stood at 3.9GW, according to grid operator ESO, of which nuclear generation covered 45%, followed by coal plants at 22%.

On 20 May, the Bulgarian energy firm Grand Energy announced plans to convert the Bulgarian 600MW Bobov Dol coal-fired power plant to run on gas and hydrogen from 2025.

In its updated 10-year development plan released on 17 March, gas grid operator Bulgartransgaz proposed to build infrastructure to transport green hydrogen and low-carbon fuels to power stations and other consumers in coal regions of the country.

This included a 175km gas pipeline linking the current network with the four major coal-fired plants in the Maritsa basin, which amount to a combined 3.8GW generation capacity.

“For now we have Bobov Dol (600MW) and Varna (550MW) set for a gas switch. This is already a huge capacity and will lead other producers to reconsider their plans and switch to gas fast,” a Bulgarian gas trader told ICIS on Thursday.