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Bulgaria: EIRO CAR on the Changing Business Landscape in the Electricity sector and Industrial Relations in Europe”

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The business landscape in the electricity sector of the country is gradually changing since the beginning of 2000 due to restructuring and privatisation and the commitment to follow the European energy policy, namely as far as the development of new subsectors based on RES, climate change, energy efficiency and energy security are considered. However until now the renewable energy sources (RES) in Bulgaria are not broadly developed (except for hydropower energy generation). While the industrial relations and social dialogue are well developed in the companies in the traditional energy subsectors, the newly emerging RES subsectors are not covered by neither, employers’ organisations nor trade unions.

1. General background information on the energy policy in your country and employment trends

1.1. Please explain briefly the main governmental strategies/action in relation to the electricity production and energy source mix. In your answer, please include information on the following aspects, where possible:

  • Is there an outspoken policy or plan in your country for any kind of change towards an increase or decrease of electricity production with any of the different sources (coal, oil, gas, hydro, eolic, sun, etc.)?

The development of the energy sector is envisaged in the Energy strategy of the Republic of Bulgaria till 2020: For reliable, efficient and cleaner energy, approved in June 2011 and in the National action plan for energy from renewable sources adopted in April 2011.

These documents outline the policy of the country towards increasing the share of electricity produced from renewable energy sources in the gross electricity consumption largely through hydro and wind energy. The expected expansion of wind energy is due to its relatively lower cost per installed capacity and maturity in its technological development compared to other RES. The policy aimed also at increasing the share of non-hydroelectric renewables in the energy mix. It is also planned also to increase the electricity production from gas and nuclear energy.

  • Which is the targeted energy mix for the future (see material provided)? How, in which subsequent steps, such targets are expected to be met?

According to the some estimation the energy mix of the country in 2020 compared with the base 2005 year will be as follows:

  • Energy Production, % 2005 2020
  • Nuclear power 42.3 44.9
  • Hydro power 9.8 11.7
  • Fossil fuel, incl. biomass 47.9 43.4

In line with the Renewable Energy Directive (2009/28/EC) RES share in the gross final energy consumption are projected to be met according to the indicative trajectory as follows:

  • 2011 - 2012 – 10.7%;
  • 2013 - 2014 – 11.4%;
  • 2015 – 2016 – 12.4%;
  • 2017 – 2018 – 13.7%;
  • 2020 - 16%
  • Are investments in networks (new connections, upgrade) envisaged? To what extent? With which specific goals?

The development of new connections and upgrading of the existing network and the necessary investments are envisaged in the Plan for the development of the electricity transmission network 2010-2020. The aim is to consider the increased connection of RES, It is planned to develop the network in North-East Bulgaria and South –East Bulgaria and to develop the 400kV network.

  • What is the Government stance and what are the ongoing/envisaged actions towards generation of electricity from the different broad groups of sources: nuclear /fossil /renewable energy?
  1. rehabilitation of existing and construction of new nuclear power plant -construction of two new nuclear reactors at Belene is intended to replace the lost capacity caused by the Kozloduy closure of two reactors. However the path outlined in the new energy strategy shows the government’s plan to keep nuclear energy at its current levels in relation to other sources
  2. gradual decreasing the fossil power generation
  3. increasing share of wind, biomass, solar and geothermal energy.
  • Are there any other forms of support foreseen for promoting electricity generation of RES?

In order to promote RES, the country has implemented also other mechanisms:

  1. Delivery of machines and equipment for renewable energy sources that are produced abroad are exempt from VAT. Equipment and materials for the use of RES are also not subject to corporate income tax
  2. Various sources of funding and grants: EU Operational Programmes co-funded by the ESF; the EBRD’s Energy Efficiency and Renewable Energy Credit Line (BEERECL) for industrial energy efficiency and small scale renewable energy projects; EU energy funds such as “Intelligent Energy – Europe” and framework programmes for scientific research; Kyoto mechanisms, especially Joint Implementation.
  • Please include any other aspects you consider to be worth mentioning regarding the state of play and the future prospects of RES in your country.

The National Programme on Renewable Energy Sources (NPRES) contains nearly 1,000 concrete real investment projects and project proposals from all administrative regions and sectors in Bulgaria including projects on: solar hot water, heating and PV systems, wind farms, small hydro power stations, biomass, biogas, etc.

1.3. Are there any studies and documents assessing the employment impact of energy policies and of prospective changes in the energy mix within the electricity sector? This could include, for instance,

  • Employment effects resulting from the unbundling of activities (production from distribution)
  • Employment effects (on quantity and quality of work) resulting from the possible shifts within the electricity production sector from traditional sources to RES
  • Employment effects from investments in infrastructure (renewal of grids, introduction of smart meter technology, district heating)
  • The need for retraining of workers or provision of new qualifications linked to the sector transformations
  • Possible spatial mobility of workers as a result of more decentralised production (linked both to new activities and to restructuring of existing ones)
  • Please include any other aspects you consider to be worth mentioning regarding prospective impacts on employment and industrial relations

There are no specific studies on employment impact of the energy sector reform (restructuring, privtisation, development of RES, etc.). The focus of the existing surveys is on social impact of energy liberalisation on living standards. The energy strategies and other policy documents even did not mention the impact on the labour market. The official statistical data in this respect are also scarce.

The Bulgarian contribution to the project ‘WiRES - Women in Renewable Energy Sector provides some information about the social dialogue and employment of women in the field of biomass utilization.

1.4 To what extent are the social partners involved or consulted concerning the governmental energy policy, notably in relation to employment impacts? Has this happened on an ad-hoc basis or on a structural, permanent basis? Is there a special tripartite social dialogue body for such consultations? Did consultation take place at national level, at sector level, or at the initiative of individual companies? Please briefly provide details.

There is no special tripartite social dialogue body in the energy sector for discussing the governmental energy policy, notably in relation to employment impacts. However the issues related to energy policy are discussed in the tripartite Branch council for social partnership with the Ministry of Economy, Energy and Tourism and in the bipartite Branch council for social partnership as shown in 4.3. The social partners are also consulted and participate at regular basis in discussions related to the legislation, including in discussions of the Energy strategy 2020 in the Economy and Energy Parliamentary Commission. They also participate in discussions at the meetings of the State Energy and Water Regulatory Commission (SEWRC) when the new electricity prices are setting.

2. Composition, structure and employment trends for the different resources used for electricity production

2.1 Please give an overview of the current sectoral composition of electricity production in your country, by giving for each of these seven groups of energy sources, the NAME of the three largest producing, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

For all companies listed, as a summary, please indicate:

  1. Total production and its distribution across different energy sources
  2. Total employment and its distribution across different energy sources
  3. Production plants and their respective energy source(s)
Electricity production

Electricity production with

TOP 3

PRODUCING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

FOSSIL FUELS

Thermal power plant Maritsa East 2

2100

2010

public

Thermal power plant ENEL Maritsa East 3 -

480

2010

Private

Thermal power plant Varna

530

2010

Private

NUCLEAR

Nuclear power plant - Kozlodui

4168

2010

public

       
       
HYDRO

National electricity company – Enterprise Hydro-Power Plant

Includes 29 hydro power plants

800

2010

public

       
       
WIND

Wind power plant ‘St Nicola’ - AES-Geo Energy (USA), in Kavarna town

20

2010

private

Wind power park of Kaliakra wind power, Balgarevo, Varna district пауър"

n.a

 

private

Enel green power – 14 wind generators

n.a

 

private

BIOMASS        
       
       
PHOTO-VOLTAIC        
       
       

2.2 Please provide an overview of the current oganisation of electricity distribution in your country. Is there a single distributing company/body? Are there multiple companies? At national or territorial level?

There are three main distributing companies in the country operating at territorial level: CEZ Distribution Bulgaria AD, EVN Bulgaria and E.ON Bulgaria. All three distribution companies are subsidiaries of MNCs. The Government privatised the existing seven power distribution companies, selling them to the Czech Republic’s CEZ, Germany’s E.ON, and Austria’s EVN in 2005. National Electric Company (NEK), the former national electric utility, still owns the transmission network and some generation plants.

2.3 Please indicate the NAME of the three largest distributing companies, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

Distribution companies
 

TOP 3

DISTRIBUTING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

Distribution GRID

CEZ Bulgaria

2920

2010

private

EVN Bulgaria

2680

2010

private

E.ON Bulgaria

1490

2010

private

2.4. Where there any significant developments/changes since 2008 for a specific company or source of electricity production in numbers of employees or in their public/private status? Was this due to the current economic crisis? Were there any instances of unbundling or mergers? With what consequences in terms of employment and industrial relations?

There are no official statistics on employment in different sub sectors of the energy. The data for the ‘Production and distribution of electricity and heating energy and gaseous fuels (NACE 35) show that employment decreased from 34109 in 2009 to 32717 in 2010 (or by 4.1%). Since 2008 employment in distribution companies increased in CEZ by 8% and in E.ON by 0.7%, while in EVN it decreased by 13,9%. In electricity production companies (in fossil and nuclear sector) employment decreased at a different pace. In the Nuclear power plant – Kozloduy the number of employees decreased by 8.9%.

3. Industrial relations in the electricity sector: Actors

3.1 Please provide details on the membership in the electricity sector and membership of the top 3 producing and distributing companies in employer’s organisation (see questions 2.1-2.3 above). Please provide information on the name of the trade unions organising in this subsector and the level of their membership, or otherwise provide overall data but please include indications on differences in membership densities across subsectors.

Trade union representation and Membership to employers’ organisation
FOSSIL FUELS

Thermal power plant Maritsa East 2

Bulgarian Branch Chamber of Energy

1. Federation "Energetics" at Podkrepa CL –12 %

2. National Federation of Energy Workers at CITUB – 82 %

1. Federation "Energetics" at Podkrepa CL - 31 %

2. National Federation of Energy Workers at CITUB – 56 %

3. Independent Trade Union Federation of the Workers in the Energy Industry at CITUB – 6..5%

1. Federation "Energetics" at Podkrepa CL – 38 %

2. National Federation of Energy Workers at CITUB – 57 %

Thermal power plant ENEL Maritsa East 3 -

Bulgarian Branch Chamber of Energy

Thermal power plant Varna

Bulgarian Branch Chamber of Energy

NUCLEAR

Nuclear power plant – Kozloduy

Bulgarian Branch Chamber of Energy

1.Federation "Nuclear Energetics" at Podkrepa CL – 31 %

2. National Federation of Energy Workers at CITUB – 26 %

3. Independent Trade Union Federation of the Workers in the Energy Industry at CITUB- 4.2%

   
   
HYDRO

NEC- HPP company

Bulgarian Branch Chamber of Energy

1. Federation "Energetics" at Podkrepa CL – 31 %

2. National Federation of Energy Workers at CITUB – 62 %

   
   
WIND

Wind power plant ‘St Nicola’

 

There are no trade unions

   
   
BIOMASS      
   
   
PHOTO-VOLTAIC      
   
   
And in the distributing companies

Distribution GRID

companies

CEZ Bulgaria

Bulgarian Branch Chamber of Energy

1.Federation "Energetics" at Podkrepa CL – 17 %

2.National Federation of Energy Workers at CITUB

Independent Trade Union- 20.5 %

3. Federation of the Workers in the Energy Industry at CITUB – 48 %

______________________

1.Federation "Energetics" at Podkrepa CL- 11 %

2.National Federation of Energy Workers at CITUB

- 38 %

3.Independent Trade Union Federation of the Workers in the Energy Industry at CITUB- 47 %

______________________

1.Federation "Energetics" at Podkrepa CL- 15 %

2.National Federation of Energy Workers at CITUB- 40 %

Independent Trade Union 3. Federation of the Workers in the Energy Industry at CITUB – 23 %

4. Union of Energetic Workers – 12 %

EVN - Bulgaria

Bulgarian Branch Chamber of Energy

E.ON Bulgaria

Bulgarian Branch Chamber of Energy

3.2 To what extent are employees in the different subsectors (fossil/nuclear/RES) covered by trade union representation? Has there been any impact of the crisis on trade union representation?

With trade union density at 62% the energy sector is one of the most organised sectors comparing with the average trade union membership for the country at 18%. The larger part of the trade union members are members of the trade unions affiliated to the Confederation of Independent Trade Unions in Bulgaria (CITUB).

The highest is the trade union density in fossil fuel subsector – at about 72%, followed by the nuclear power subsector – at 62%. In the subsector of RES (represented only through the hydro power subsector) – at about 30%. In the new RES subsectors there are no trade union organisations.

Also very high - at 88% - is the membership in the three electricity distribution companies which are subsidiaries of MNCs.

The crisis does not impact significantly the trade union membership. Since 2008 the registered decrease is about 4%. The loss of membership is mainly due to the outsourcing of some activities, decreasing of administrative staff in the hydro power plants due to structural merger of the companies and the closing dawn the units 3 and 4 of the nuclear plant Kozloduy.

3.3 Have there been major reorganisations/splits/mergers of trade unions or employers organisations in the sector during the last five years?

During the last five years there have been no major reorganisations/splits/mergers of trade unions or employers organisations in the sector.

3.4. Have new actors (trade unions or employers organisations) been founded in recent years, especially in the newly evolving RES industries? Or is the industry covered by established actors?

There are no new employers and trade unions organisations in the newly evolving RES industries. The only RES subsector which is well established and developed is the hydropower sector which is covered by the existing trade union and employer organisations. The remaining RES industries are not covered.

3.5. Have the established sectoral actors (both trade unions and employer organisations) started any initiative to extend their representation to the new emerging parts of the sector? Please describe such initiatives and their results so far.

The nationally representative trade union and employer organisations did not initiate any actions to extend their representation to the new emerging parts of the sectors. The main reason according to the trade unions is that the companies in the RES subsector are as yet only few and most of them are micro and small enterprises which are difficult to organise.

4. Role of collective bargaining and social dialogue

4.1 Please provide information on the structure of collective bargaining in the electricity sector. Please, briefly mention the main characteristics of collective bargaining:

  • At what level are collective agreements within the subsectors of the electricity sector (traditional providers, newly emerging providers) concluded (company, sectoral level and/or inter-sectoral level)? Is there a difference between the producers and the distributors?

Collective bargaining in the electricity sector is organised at two levels – national branch and company level. The branch collective agreement (re-negotiated each two years) covers all sub-sectors, including: energy production, distribution and sales, nuclear power, heating, electricity network construction. Parties to branch collective agreement are four trade union federations and one employer association, as follows:

  • Federation "Energetics" with Podkrepa CL (FE);
  • Federation "Nuclear Energy" with Podkrepa CL (FNE);
  • National Federation of Energy Workers with CITUB (NFEEW);
  • Independent Trade Union Federation of the Workers in the Energy Industry with CITUB (ITUFWE).
  • Bulgarian Branch Chamber of Energy (BBCE) – affiliated to Bulgarian Industrial Association (BIA).

There are no differences between producers and distributors as they are covered by the branch collective agreement and by the company agreement. The newly emerging RES sub-sectors are not covered by branch or company collective agreements as there are no trade union organisations, which is the only employee representative being entitled to negotiate.

  • Estimate the coverage rate of collective bargaining in terms of companies and employees: are there any differences in coverage across different subsectors of electricity production?

According to the Bulgarian labour legislation the collective agreements covers only trade union members. However it provides for procedure agreed in the collective agreement under which the remaining employees can join the collective agreement. Due to this fact there is no reliable data about the exact coverage rate in the different subsectors. The coverage rate is at least equal to the membership rates as already shown in the answer to the question 3.2, i.e., about 62% for the whole energy branch, 72% - in fossil fuel subsector, 62% - in the nuclear power subsector and about 30% - in the hydro power subsector.

4.2 Please comment on the most recent collective agreements reached at sector level and at company level. Please address the following topics:

  • Pay and working time: level and trends relative to the national average and significant differences across subsectors of the electricity industry.

The latest branch collective agreement in the energy branch was concluded in October 2009 and expired in October 2011. Due to the crisis the 2009 branch collective agreement preserved the provisions of the previous 2007 collective agreement. The negotiations for new collective agreement, which started in September 2011 proved to be difficult and the negotiations continue. However the employer and trade union organisations manage to conclude an Agreement on the increase of the minimum social security thresholds for 2012 at 5.6%.

In relation to pay the 2009 branch collective agreement contained provisions for increasing the minimum wages in the energy sector companies with a coefficient of 1.2 for low qualified employees and 1.5 for all other categories of personnel compared to the statutory minimum wage for the country.

The wages by categories of personnel and economic activities must consider also the agreed minimum social security thresholds.

In the first quarter of 2011 the wage agreed in the Energy, heating and gas fuels production and distribution sector (BGN 1407) was about twice as high as the average wage for the country at BGN 671. There is difference in wages agreed in production and distribution companies with producing companies (TPP, NPP and HPP) providing for higher wages.

The branch collective agreement provides also a higher rate of compensation for each year of length of service – for each year the compensation represents 1% of the wage. For the personnel working under the ground or under the water the compensation rate is 1.6% (compared with the statutory rate at 0.6% provided in the Labour code).

The provisions concerning working time follow closely the Labour code statutory provisions. The information and consultation with trade unions at company level in case of need of changing the working time schedule is specially stressed in the branch collective agreement. It contains also more favourable provisions for additional paid leave depending on the years of service in the company or the character of working conditions. Additional leave is also provided for working mothers.

4.3. Cooperation between the social partners and government

  • Have the government started any social dialogue or social concentration in the electricity sector since 2008? Please illustrate the features and results of any such initiatives.

The tripartite social dialogue in the energy sectors dated back to 1992 when the first ever institutions for social dialogue in the sector have been established. There are no new initiatives since 2008 except the new representatives of the government in the partnership bodies as the new government is in power since mid-2009.

  • Have bipartite and/or tripartite bodies dealing with specific issues of the electricity industry been created since 2008?

The bipartite and tripartite social partnership bodies were established in early 1990s and since than there are no other bodies created in the electricity sector. The Branch council for social partnership is a body for negotiating the Branch collective agreement and annual Agreement for minimum social security thresholds. Upon request of the trade unions it can also discuss the violation of the company collective agreements namely concerning the wages.

The tripartite Branch council for social partnership with the Ministry of Economy, Energy and Tourism discusses the energy policy, legislation strategies. Some ad hoc groups and task force have been established for elaboration of joint documents or positions at BCSP.

  • Have there been since 2008 any joint initiatives of cooperation between social partners to influence or steer the energy policy developed by the government in your country? Or have such initiatives been taken separately by certain social partner organisations?

There are no social partner’s joint initiatives since 2008. However social partners participated in discussions on energy policy development and in drafting legislation. Some of the social partners’ organisations presented statements and positions on issues related to the development of energy sector, e.g., Statement of NFEEW - CITUB on the energy sector development impact on social and labour relations of employees (2009); Position of the Confederation of Employers and Industrialists in Bulgaria on the draft Renewable Energy Act (April 2011); Statement of BIA on the National Energy Strategy draft (January 2011), etc.

  • Have the social partners been involved in the making of the national action plan to reach the 2020 target, or in issues aiming to secure the supply of enough electricity?

The tripartite Branch Council for Social Partnership in the period between 2008 and 2011 discussed the introduction of big fuel installations’ the sale of energy changes and amendments to the Energy Act, RES act, Energy strategy of Bulgaria up to 2020, the National plan for energy from RES) and the National plan for quota distribution for trading with green gas emissions for the period 2008-2012.

4.4. Please provide information about the views of the trade unions and employer organisations on the main changes regarding employment and working conditions affecting the sector since 2008 and especially on the impact of the current crisis (for instance on employment trends, quality of jobs, working hours, wages, fixed-term employment, part-time, temporary agency work, participation in training, outsourcing, subcontracting etc.).

The social partners share the view that the crisis has not impacted employment in the energy sector at the same level as it has impacted other sectors. The trade unions aimed to preserve the trade union membership in the distribution companies where they claim the employers violate the license agreement provisions and outsource some activities aiming to reduce labour costs. According to trade unions employers in some companies limit their anti-crisis measures to firing employees and cutting social benefits and funds for health and safety.

According to the Bulgarian Branch Chamber of Energy the crisis forced employers to cut spending and to outsource some activities. Some employers (distribution companies) have adopted special measures for the employees laid off, namely higher compensations or programmes for encouraging entrepreneurialship of the employees laid off (EVN).

The main problem the employers in the fossil fuel power plants face is the participation in green gas emissions trading requiring large investments for reduction of CO2 emissions.

5. Commentary

The energy sector will be further developing and restructuring in line with the targets set up in the National energy strategy 2020 and the National action plan for energy from renewable sources. The planed energy mix will lead to the appearance of new companies in RES subsectors and the need to develop meaningful social dialogue. However up to now employers and trade union organisations are not very keen to expand their representativeness towards the newly emerging companies in wind, geothermal, biomass and solar subsectors.

Nadezhada Daskalova and Tatiana Mihaylova, ISTUR

Page last updated: 15 November, 2012
About this document
  • ID: BG1202021Q
  • Author: Nadezhada Daskalova and Tatiana Mihaylova
  • Institution: ISTUR
  • Country: Bulgaria
  • Language: EN
  • Publication date: 15-11-2012