The expense of low energy prices in Bulgaria and Hungary

What’s wrong with low energy prices? In this book chapter Atanas Georgiev and myself look at the mounting debts and political maneuvering in Bulgaria and Hungary. Countries where energy regulators were both sidestepped and politically maneuvered to ensure household consumers would pay low energy prices. The results? Unnecessary debts throughout the energy systems.

The chapter is written for the book, ‘Energy Law and Energy Infrastructure Development for a Low-Carbon World,’ edited by Raphael Heffron, Darren McCauley, Angus Johnston, and Stephen Tromans QC to be published by Cambridge University Press – early 2017

Full text of the chapter

 


Authors:

Michael Carnegie LaBelle

Assistant Professor, Central European University, CEU Business School and Department of Environmental Sciences and Policy

Corresponding author, Contact: labellem@ceu.edu

Atanas Georgiev

Assistant Professor, Sofia University, Faculty of Economics and Business Administration

Abstract
Energy regulation underpins the European Union’s efforts to establish competitive energy markets in each Member State. Since the 1990s a system of regulatory governance was established, shifting the oversight of the energy sector from a government and politically centric system to one based on independent national regulatory authorities (NRAs). In some Member States the movement towards market pricing and regulatory governance is prompting political action to reassert and challenge the EU’s institutional architecture. This chapter will look at the underlining concept of energy regulation and how it is implemented in two Eastern European countries, Bulgaria and Hungary. Intense efforts are made in both countries to keep energy prices low in an attempt to address energy poverty. These actions call into question the ability of these countries to modernize and decarbonize their energy systems. Political efforts to maintain low prices create a system of contested governance, marked by political efforts to undermine regulatory tools balancing long-term investments with short-term pricing pressures.

Key words: Neoliberal, electricity, regulation, governance, risks, energy poverty, Hungary, Bulgaria

Prepared for ‘Energy Law and Energy Infrastructure Development for a Low-Carbon World,’ edited by Raphael Heffron, Darren McCauley, Angus Johnston, and Stephen Tromans QC to be published by Cambridge University Press