The main purpose of the Energy andEnvironment Review (EER) was to develop and test amethodology to better integrate energy sector developmentand investment plans with Bulgaria's environmentalobjectives. It was undertaken at the request of thecountry's State Agency for Energy and Energy Resources(SAEER). The EER highlights the intrinsic trade-offs betweenBulgaria's objective to ensure least-cost energy supplyto the country and its concurrent objectives of being adominant energy supplier in the region, minimizing itsdependence on imported energy, and meeting its national andinternational environmental commitments. Achievement ofthese objectives is complicated by Bulgaria's heavyreliance on electricity to meet its own energy needs, thevirtual absence of natural gas in the consumption mix ofnon-industrial consumers, and the fact that except forenvironmentally polluting lignite, the country does not haveeconomical energy resources. Since the bulk ofBulgaria's electricity (about 80 percent) is generatedfrom nuclear fuel and indigenous lignite, a disproportionatereliance on electricity would be costly, particularly as thecountry strives to meet the nuclear safety and environmentalcompliance requirements for accession to the European Union.Growing electricity exports over the last few years,however, have been good for Bulgaria, both from a financialpoint of view and in projecting Bulgaria as a stable andreliable source of electricity. Under these circumstances,crafting an energy supply strategy that is cost-effective,provides adequate energy security, and reinforces thenational goals of economic growth and poverty alleviationwill be challenging. Formulation of such a strategy couldbenefit from a wider debate among key stakeholders, such asenergy suppliers, industrial and other consumers,policymakers, regulators, and investors. The Energy andEnvironment Review provides a useful analytical frameworkfor such a debate.
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