In the latest educational video from the “Informed Consumer Choice” series by Net-Zero Lab at the Faculty of Economics and Business Administration, Sofia University, energy expert Assoc. Prof. Teodora Peneva, PhD, from BAS discusses the challenges of energy poverty in Bulgaria and presents solutions inspired by European practice.
Low incomes, high energy costs, limited creditworthiness of homeowners, and poor energy efficiency of buildings are among the main causes of energy poverty in the country.
Today, almost 30% of Bulgarian households, or about 1.8 million people, fall into this category. Despite the scale of the problem, Bulgaria still lacks effective protection mechanisms, which hinders the successful implementation of electricity market liberalization for households – a reform expected to bring significant benefits and new opportunities.
Energy poverty is not the same as monetary poverty. It reflects not only income, but also housing conditions, energy prices, and the ability to manage energy consumption. For this reason, the group of energy-poor households is much broader and includes people who struggle both to cover their electricity bills and to invest in long-term energy efficiency measures.
A smaller group of “vulnerable customers” (around 5% of the population) includes people with over 50% disability, recipients of heating allowances, and families receiving child benefits.
Instead of targeted protection, Bulgaria has long applied a universal approach – maintaining low regulated prices for all. This, however, is ineffective, as resources also reach higher-income households, while the most vulnerable remain most affected.
“If we, as a country, want to deal with this huge problem, it is important to work with a common strategy or long-term program to reduce energy poverty, in which different financial support mechanisms are coordinated, and not to rely only on compensations under a liberalized market, but also on other long-term instruments.” – emphasizes Assoc. Prof. Teodora Peneva, PhD.
Among the concrete measures proposed, inspired by European practice, are:
- Establishing an institution to manage an information system with data on income, household members, and the energy characteristics of buildings;
- Providing financial compensations based on income and energy consumption;
- Administrative measures for the most vulnerable, such as a ban on disconnections during winter and the option for installment payments without penalties;
- Information campaigns to ensure proper household registration and access to compensations.
The conclusion is clear: the successful liberalization of the electricity market is only possible if it is combined with effective protection for vulnerable consumers and long-term strategies to tackle energy poverty.
Watch the full video here: https://youtu.be/PsClg3sgUmA
All materials from the campaign are available on the information portal of the laboratory: netzerolab-feba.bg/bg/knowledge-box/consumer-choice/