The Energy Policy of Bulgaria

The Energy Policy of Bulgaria

Hamit Can (Technical University of Sofia, Bulgaria) and Daniela Minkovska (Technical University of Sofia, Bulgaria)
DOI: 10.4018/978-1-7998-2193-9.ch007
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Energy is considered the main input for economic and industrial development. In this context, it is important that countries develop sustainable energy policies in order to meet economic growth and energy demand. Government policies play a critical role in economic growth and incentives for innovation. This chapter summarizes Bulgaria's energy policies as an increasingly important energy transit country due to its strategic location. These policies were presented in line with the European Union energy policies and the solutions of the characteristics of the country. Some of the targets to be implemented are as follows: ensuring energy supply security, achieving RES share targets, energy efficiency improvements, development of a competitive energy market, safe energy needs and protection of consumers, establishment of the necessary infrastructure and diversification of energy resources, strengthening the external relations and solidarity coordinated in the field of energy.
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Renewable energy for foreign dependent countries in energy is important in terms of encouraging the use of local resources of countries, improving balance of payments deficits by reducing energy imports, and reducing energy input costs in the production process. In addition, the promotion of environmentally friendly production techniques is among the issues to be addressed. In addition to the necessity of renewable energy production by environmental pollution, the increasing energy demand due to the rapid increase in the world population made it necessary to both maintain the balance of environment and natural life and increase the energy supply to meet the current demand.

Bulgaria has an important strategic position between the Eastern and Western countries. While it had a centrally planned economy in the period between 1945 and 1989, it can be said that after that, it witnessed to market-based economy. In 2004, the country joined the North Atlantic Treaty Organization (NATO) and has been a member of the European Union since 1 January 2007. All these developments have a great impact on the economic and political development of Bulgaria and energy policy. The main priority of the strategy, which forms the basis of Bulgarian energy reform, is to develop a competitive energy market. In addition to this strategy in the long term, it is aimed to secure energy resources, to position Bulgaria as a regional center for the transition of oil, natural gas, and electricity, to provide more conditions for energy production from renewable energy sources (RES) and to ensure environmentally friendly energy production.

In this study, the connection between Corporate Social Responsibility (CSR) and Socially Responsible Investments (SRI) is presented by the sustainable corporate finance concept. Responsible investment is a phenomenon that is growing rapidly. And according to recent research, it now affects all generations. The mentality is changing in work, consumption, and even investment. Increasingly, consumers, citizens, and workers are seeking to integrate and take into account the dimensions of sustainable development to promote a healthier, greener and more positive society.

It is known, this is especially among young people. For years, many studies have shown that young people are changing paradigms. More and more young people are turning to the professions for sustainable development, they are putting sustainability at the heart of their career concerns, and would even be willing to pay less to work for a greener company. Responsible consumption is developing and with it the desire to invest in more responsible projects.

The different and strengths of our study from other studies examining a similar subject, and the objectives to be achieved can be listed as follows:

  • Determining the effects of renewable energy consumption and nuclear power generation on economic growth;

  • Environmental impacts of renewable energy and nuclear power generation;

  • Discussion of the impact of renewable energy and green business on the national economy and employment;

  • The effects of nuclear power generation and renewable energy consumption for the country on sustainable energy supply.


Literature Review

Empirically, the direction of the causality between energy consumption and economic activities has been tried to be put forward to a great extent by using the granger technique in both developed and developing countries. Since Granger (1969)’s new horizons, the literature on granger causality has developed considerably. A significant amount of work in practical studies is dedicated to addressing the aforementioned causality problem between energy consumption and economic development.

Some studies have found unidirectional granger causality from energy consumption to economic growth or from economic growth to energy consumption, while others have identified the ‘neutrality hypothesis (no causality in any direction) and others have found a two-way causality. Some results vary depending on the estimation methods applied (univariate or multivariate models using different causal techniques), although similar data sets are used for the same countries and sample periods.

Key Terms in this Chapter

Gross Fixed Capital Formation: The gross fixed capital formation consists of resident producers’ investments, deducting disposals, in fixed assets during a given period. It also includes certain additions to the value of non-produced assets realized by producers or institutional units. Fixed assets are tangible or intangible assets produced as outputs from production processes that are used repeatedly, or continuously, for more than one year.

Fully Modified Ordinary Least Square (FMOLS): The FMOLS method produces reliable estimates for small sample size and provides a check for robustness of the results.

Labor Force (L): The labor force, or currently active population, comprises all persons who fulfill the requirements for inclusion among the employed (civilian employment plus the armed forces) or the unemployed. The employed are defined as those who work for pay or profit for at least one hour a week, or who have a job but are temporarily not at work due to illness, leave or industrial action.

Gross Domestic Products (GDP): The GDP is a monetary measure of the market value of all the final goods and services produced in a specific period, often annually.

Autoregressive Distributed Lag (ARDL): The ARDL model is an ordinary least square (OLS) based model, which is applicable for both non-stationary time series as well as for times series with mixed order of integration.

Foreign Trade: It provides opportunity for import and export firms to get the product demands and the information that they may need currently or when they penetrate new markets.

Johansen Test: The Johansen test, named after Søren Johansen, is a procedure for testing cointegration of several, say k , I(1) time series.

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