Bulgaria's Energy Sector.

The Bulgarian energy sector faces challenges and opportunities as a part of reform. Bulgaria is a potential link for energy routes from Russia and the Middle East to Europe. The future of nuclear energy and improved energy efficiency are critical. The main objectives of the strategy are the security of energy supply, nuclear safety, energy efficiency, environmental protection, and gradual liberalization and integration of the energy sector into European energy markets. The parliament adopted the Law on Energy and Energy Efficiency, which outlined conditions for the gradual liberalization of the sector and created the State Energy Regulatory Commission as an independent regulator for the future energy market. Because the operation of Bulgaria's only nuclear power station, Kozloduy, had been an issue of contention with the European Union because of concerns about the safety of Soviet-designed reactors, the Kostov government requested a World Bank-funded study to evaluate the environmental and economic impacts of alternative energy scenarios. By 2002, the new government of the National Movement Simeon II had transformed the Agency for Energy and Energy Resources into a ministry of energy that was vested with considerable political power. The new strategy involves energy security, energy efficiency, environmental protection, and nuclear safety. It criticizes previous policies for maintaining strong control over energy sector investments, continuing to subsidize energy companies and prices, and lacking transparency in decision-making and the regulatory framework. The Bulgarian Ministry of Energy's recent communication, on the potential role of energy service companies, the investment priorities identified in the energy strategy, and a plan announced to provide energy subsidies to the poorest households against the introduction of efficiency-enhancing metering systems, are important steps.