Европейска схема

1.5 Taking into account the national energy policy

1.5 How has national energy policy been taken into account when establishing the total quantity of allowances to be allocated? How is it ensured that the total quantity of allowances intended to be allocated is consistent with the Member State’s target under Decision 2002/358/EC or under the Kyoto Protocol?

The objectives for climate change are harmonized with the main strategic objective “rational use of energy sources” laid down in the National Energy Strategy adopted in 2002, and with the objectives of the National Long-term Programme on Promotion of Renewable Energy Sources (in process of development). In addition to the direct effect on reduction in emissions, the policies and measures presented in p.1.4 to promote energy efficiency and the use of renewable energy sources, contribute to the reduction of the import energy dependence of the country and represent structural measures of the national energy policy. Considerable potential to reduce energy consumption and therefore to limit the production of energy and the quantity of allowances for the energy production exists in sectors which are not directly covered by Directive 2003/87/ЕС (e.g. households, transport).

The National Energy Strategy and the National Long-term Programme on Promotion of Renewable Energy Sources contain the following measures:

Production of heat and electricity:

• 
  Maintain the share of nuclear power in the total energy balance of the country through the construction of new nuclear capacities;
  
• 
  Increase the share in the national energy balance of power generation plants using natural gas;
  
• 
  Priority construction of plants for combined production of thermal and electric power;
  
• 
  Increase the share of the production of energy from renewable sources in the national energy balance by applying preferential policies for their development;
  
• 
  Performing the rehabilitation of production capacities in large thermal power plants whose generating capacity will exceed 20,000 hours after 2008.
  

Distribution of electricity and heating:

• 
  Reduce losses in the electricity distribution lines, heating and gas systems;
  
• 
  Gasification of households to replace consumption of electrical energy and heavy fuel oil
  

Use of renewable energy sources

• 
  Use of biomass for heating and production of electrical and heat energy
  
• 
  Construction of hydroelectric power plants
  
• 
  Use of geothermal resources
  
• 
  Increase of energy produced by wind generators
  
• 
  Solar thermal and photovoltaic panels
  

For most of those measures the mechanisms of the Kyoto Protocol may be used for attraction of investments and they could be performed through “joint implementation” projects.

1.6 Application of the criteria of Annex ІІІ to the Directive

1.6 How is it ensured that the total quantity of allowances to be allocated is not more than is likely to be needed for the strict application of the criteria of Annex III to the Directive? How is consistency with the assessment of actual and projected emissions pursuant to Decision 93/389/EEC ensured?

Bulgaria’s NAP has been developed completely in compliance with the criteria of Annex ІІІ to the Directive. Historical data on emissions and projections is official for the country and are performed independently of the development of the NAP. Incorrect data is not expected.

The total quantity of allowances to be allocated for the year 2007 is determined in the range of projected emissions with the application of existing measures. All assessments of emissions, both actual and projected, are consistent with Decision 93/398/ЕЕС.

Figure 2

Projected top-down emissions and allocation during the period 2007-2012

1.7. – 1.9 Taking into account the potential to reduce emissions and the Community legislation. No provision to auction allowances.

1.7 Please explain in Section 4.1 below how the potential, including the technological potential, of activities to reduce emissions was taken into account in determining the total quantity of allowances.

See Section 4.1 below.

1.8 Please list in Section 5.3 below the Community legislative and policy instruments that were considered in determining the total quantity of allowances.

See Section 5.3 below.

1.9 If the Member State intends to auction allowances, please state the percentage of the total quantity of allowances that will be auctioned, and how the auction will be implemented.

Bulgaria does not intend to auction allowances at the first allocation. During initial allocation to installations, all allowances within the National Allocation Plan for 2007 and the National Allocation Plan for 2008-2012 will be allocated free of charge.

2. Determination of the quantity of allowances at sector level

2.1 By what methodology has the allocation been determined at sector level? Has the same methodology been used for all activities? If not, explain why a differentiation depending on activity was considered necessary, how the differentiation was done, in detail, and why this is considered not to unduly favour certain sectors within the Member State.

The allocation is made first at sector level, and then – at installation level within the sectors.

At sector level, the quantity of allowances to be allocated to the installations in the sector is calculated as a ratio of the sum of verified projected emissions of the installations covered by the Scheme to the projection for the sector calculated according to the approaches described in section 1.2. The data received from the application of the two approaches – “top-down” and “bottom-up” is compared to clarify any inconsistency. Received data is compared also with the data of the National greenhouse gas inventory for 2003, ensuring the compatibility of calculated quantity of allowances with the obligation of the country under the Kyoto Protocol. This process is described in more details in the current section:

The following sectors, listed in Annex І to the Directive, are included in Bulgaria’s NAP:

• 
  Energy activities (except hazardous or municipal waste incinerators)
  
• 
  Production and processing of ferrous metals
  
• 
  Mineral industry
  
• 
  Cellulose and paper production.
  

A uniform allocation methodology is used for all sectors.

The allocation at sector level is based on historical emissions for the period 2002-2004, as a base year is selected. The base year is the average of the emissions in the two years with highest emissions from the years 2002, 2003 и 2004. For installations which have not functioned in two of those years, the base year is the last year of operations.

Based on submitted and verified data on the production activity of each installation, historical emissions of installations were calculated and data is determined for the “base year” for each installation. The application of the concept “base year” is necessary in order to avoid the effect of accidental reduction of emissions of installations due to incidental crises or long repairs and modernization. The base year is the average of the emissions in the two years with highest emissions from the years 2002, 2003 и 2004.

The calculated volume of the emissions from the installations for the “base year” is expressed as (i – serial number of the installation, g – number of the sector)

Emissions in the base year for each sector “g” are calculated as a sum of the emissions of all installations in the respective sector in the base year for each installation :

.

The determination of the quantity of allowances to be allocated in each sector and their proportion to the emissions from sources outside the scheme is based on two sources of information:

• 
  National GHG Inventory for the year 2003;
  
• 
  Company data based on a questionnaire, filled in by the operators of the installations.
  

The total quantity of emissions from registered installations is determined as a sum of the emissions of the individual registered installations (submitted in the questionnaires and corrected during the verification with official data from the NSI, the integrated permits and other sources). This quantity is compared to the data from the inventory.

In addition to calculating the total quantity of emission volumes from participating installations, the data for registered installations is used for calculating emissions by sectors according to the IPCC classification in a way that the quantity of emissions is comparable to those from the inventory of the GHG emissions for 2003.

Emissions from the following groups of sources have been determined:

1. 
   Condensing TPP;
   
2. 
   District Heating Cogeneration Plants;
   
3. 
   District Heating Boilers
   
4. 
   Auto-generation;
   
5. 
   Refineries;
   
6. 
   Ferrous metallurgy (fuels);
   
7. 
   Production of cellulose and paper (fuels);
   
8. 
   Other productions (fuels);
   
9. 
   Production of ferrous metals (process emissions);
   
10. 
    Cement production (process emissions);
    
11. 
    Lime production (process emissions);
    
12. 
    Glass production (process emissions);
    
13. 
    Ceramics production (process emissions);
    
14. 
    Cellulose and paper production (process emissions).
    

The quantity of allowance allocated to a given sector is corrected with calculative reserves and is distributed between installations. The quantity of allowances allocated to each installation each year is proportional to the product of emissions from the installations during the base year corrected with the projected increase in emissions in the sector compared to the base year.

The calculated quantity of allowances for each installation is limited by the installation capacity. The surplus of allowances over the production capacity of the installation shall be re-allocated to the other installations in the sector proportionally to the volume of their emissions during the base year. Installation capacity means the maximum annual production output defined in the integrated permit, and when no permit is issued, 90 % of the annual projected capacity or of the reached maximum production in the period 1988–2004.

This method ensures equality between installations in the respective sector, and installations are provided equal opportunities (percentage equal to the average percentage of increase in emissions in their sector) to increase their production volume compared to the “base year” until reaching full production capacity.

At the second stage of allocation, the quantity of allowances of installations is corrected with the quantity of the reserves of emission allowances necessary for the implementation of compulsory measures, for standardisation of the degrees/day, for new entrants and delayed installations and for new cogeneration.