International Association for Energy Economics | 1 Energy Poverty: The Bulgarian Case By Teodora Peneva* Introduction "As winter approaches, millions of people who don't have the money to heat their houses are left to fend for themselves", said Brenda Boardman this October, the primary “researcher, strategic thinker and campaigner” in the world of fuel poverty, as the Environmental Change Institute of Oxford University celebrated her 21 years of research in the ield in 2012. As winter approaches, two thirds of the Bulgarian people are left to fend for themselves, and there haven't been many years of research behind these numbers in the past. Yet, energy poverty is quite severe in Bulgaria. Documents of Eurostats and statistics from the Statistics of Income and Living Conditions survey since 2008 show over 67% of the people limiting their heat comfort in the winter due to lack of money. Compared to an average of 8% for the EU and 16% for the post-social regime member countries in Central-East Europe, this number is distressing. In fact, this is just the subjective perception of the respondents in the survey. But this number can not be far from true. All the three factors determining the level of energy poverty - e.g., low income, high energy prices and poor quality buildings - are present. Speciic measures and social policies for each factor are inef- fective, targeting a very limited part of the population and providing very low heat allowances, for the poorest groups, in particular. Since there is no speciic research being done so far, or published by the National Statistical Institute, only guesses can be made that the energy poverty level likely worsens each year, or luctuates depending on climate conditions. A mild winter at the end of 2012, however, couldn't stop social protests against high electricity bills in the beginning of 2013. The government managed to keep electricity prices at the same level for the irst time this year, leveraging costs by changes in vari- ous taxes for business, producers, and exporters, and sharing the cost burden between different market participants. In each of the preceding years price increases of between 5% and 10% were registered for households, twice a year. Increases in energy prices were much greater than increases in income, result- ing in social protests, political pressure, speculation, and other negative consequences. High Energy Prices In fact, electricity prices in Bulgaria are the lowest amongst countries in the EU. Statistics on electric- ity prices in the EU from 2011 show (Figure 1) Bulgaria with the lowest retail price per kWh. One would ask why do we call this high energy prices then? The main problem is the low income level, but there are also problems with the energy consumption structure in the country. Electricity accounted for over 55% of Bulgarian household energy consumption in 2011, according to data estimates from the World Bank. Around 20% is from wood consumption, 9% from coal, some 11% from district heating, and just 1-2% from gas. Few countries in the climate conditions of Bulgaria use so much electric- ity for household heating. This is ineffective and results in higher costs for primary energy, compared with other ecologic and lower cost energy sources. This share has increased in past years, with many users of district heating switching gradually to electricity in order to be able to control energy costs. The gas supply network for households is underdeveloped, and meets severe barriers for development, thus leaving people with no access to a gas heating alternative during the winter. One of these barriers is the price of gas. Gas prices in Bulgaria, unlike electricity prices, are among the highest in the EU. In the few cities where gas networks were established and de- veloped for households, the gas price became too high for affordability, so many people who connected to the gas grid in the beginning, quickly stopped using it for heating during the winter. Central heating is used by around 11% of households, in speciic regions, in 18 cities in the country. This type of heating, usually the most eficient and clean Figure 1: EU Electricity Prices (kWh). * Teodora Peneva is a PhD student in the Busi- ness Department of Soia University, Soia, Bulgaria. She may be reached at teodorap- eneva@hotmail.com