Why is electricity expensive even though we have enough electricity? MEP Tsvetelina Penkova in front of FACT

Electricity prices in Europe continue to be one of the most sensitive topics for both households and businesses. The paradox is that despite sufficient electricity production in many EU countries, bills often remain high, and price differences between individual regions are deepening. The reason is increasingly not the lack of energy, but the limitations of the electricity transmission infrastructure, insufficient connectivity between countries and the inability for cheaper electricity to reach markets with higher prices in a timely manner. In this context, the TEN-E regulation is becoming a key instrument for the modernization of the European energy network and for the construction of a more connected, sustainable and predictable energy market. MEP Tsvetelina Penkova, Chief Negotiator of the European Parliament on TEN-E.

- Ms. Penkova, how would you explain in simple words what the TEN-E regulation is and why it is so important for the EU?
- The TEN-E regulation is the instrument through which the European Union determines how to build and modernize the energy infrastructure so that the individual national systems function as one common network. This mainly includes the electricity transmission connections between countries and the capacity of the network to transport energy to where it is needed.
This is a key point because Europe's Energy Union is conceived as a single one, with common rules, common mechanisms for trading and the free movement of electricity. This will mean more affordable and more predictable bills for households. But this system can only function in reality if there is a physical possibility for energy to be transported between countries. This is particularly important for Bulgaria, because our region is one of the most affected by connectivity restrictions. At the same time, this also puts us in a strategic position - Bulgaria is the beginning of the corridors, which should connect Europe along the two axes - east - west and south - north.
This is precisely the problem. There is enough electricity at the European level, but it remains “locked“ in certain regions because the network does not allow it to be transported. Thus, prices are not only determined by supply and demand, but also by infrastructure constraints. People feel it directly in their electricity bills.
TEN-E is so important because it is the tool that should remove these constraints and reduce electricity prices for our households and industries. TEN-E has the potential to transform Bulgaria from an end point into an active participant in this network.

- What are the biggest changes that this regulation can bring to the energy market in Europe?
- The very approach to energy infrastructure is changing from reactive to strategic and systematic. Until now, the process was largely oriented towards specific projects proposed by the countries member states. Investments often followed ready-made initiatives, and not always the real needs of the system. Situations were created in which infrastructure was built without addressing the most critical constraints in the network. With the new revision of the regulation, the logic is reversed. First, the problems are analyzed, where there are system overloads, where there is a lack of capacity and where this is already leading to imbalances in the system and prices, and only then are investments directed. This directly affects prices and is particularly important for regions such as South-Eastern Europe, where these effects are already visible in the competitiveness of the industry and on household costs. Another key element is financing.

When there is congestion in the electricity transmission network, significant revenues are generated.

Until now, these funds have largely remained at the national level. Now an approach is being introduced in which part of these resources will be directed to pan-European projects, that is, to solutions that have an effect on more than one country.
If the network constraints are systematically eliminated, price differences between regions will decrease and, accordingly, our household bills will fall significantly, and the conditions for industry will level out. The change is not just technical, but is directly related to the competitiveness of the European economy. Because when electricity is more expensive and more unstable in a region, this directly affects investments, production and jobs.

- It turns out that the problem is not only in production, but also in the transmission of electricity, what are the main “bottlenecks“ in the European energy system?
- The main “bottlenecks“ in the European energy system are concentrated in Central Europe, especially in sections around Austria and Hungary, which play the role of key transit corridors between the different price zones on the continent.
These are places through which large volumes of electricity pass, for example from Northern and Western Europe to Central and Southeastern Europe. The problem is that the capacity of the network there is not sufficient in relation to the actual flows. This results in what we call “congestion“ in the energy sector. Electricity is available, but it cannot pass in the required volume. It can be explained very simply, if you have a highway with intensive traffic, but in one section it narrows, this creates a congestion that blocks the movement back along the entire line. The same thing happens in the electricity transmission network. When such a section reaches its limit, the flow is limited and this interrupts the connection between the systems.
This is where the systemic effect comes in. The constraints in Central Europe do not remain local, they are transmitted throughout the chain and are strongly felt in regions such as Southeastern Europe. This means that even when there is cheaper electricity in other parts of the EU, it cannot reach our region. Thus, prices between different parts of Europe begin to diverge not because of a lack of energy, but because of a lack of transmission capacity. In certain periods, these differences can be multiple, which shows that we are talking about a structural problem in the network, not a market imbalance. Therefore, solving these “bottlenecks“ is key, not only for better infrastructure, but for whether the European energy market will actually work. And when this does not work, the effect does not remain in the system, it is seen directly in people's bills.

- How does the fact that Bulgaria has limited connectivity affect the price of electricity for households and businesses?
- Connectivity practically determines whether a market is open or operates in a more closed environment. In the case of Bulgaria, limited connectivity means that the country cannot fully participate in the process of price equalization within the EU.

In a well-integrated union, electricity moves from cheaper to more expensive areas.

This leads to a natural balancing of prices. But when there are restrictions in the network, this mechanism does not work effectively. That is, even when there is a lower price in another part of Europe, this energy cannot reach our market in sufficient volume. Bulgaria practically operates in a more limited market, instead of taking advantage of the entire European energy potential. In such conditions, greater fluctuations are observed and, in certain periods, even higher levels compared to other parts of Europe. This directly affects households and industry. For households, the effect is often not immediately visible due to regulated prices, but it accumulates. Both through higher costs in the system, and through inflation, and through the prices of services. In the long term, limited connectivity means higher and more unstable electricity bills. For businesses, the effect is direct, but ultimately it comes back to people.
Limited connectivity is not just a technical issue, it is a factor that determines whether the price of electricity is formed in the conditions of a real market or in the conditions of partial isolation. This is what makes the topic so important for Bulgaria.

- What is your main objective as the European Parliament's chief negotiator on TEN-E?
- My main objective is to ensure that this regulation will lead to a real change in the way the energy system in Europe functions and to significantly and permanently reduce electricity prices.

At the moment, there is enough clarity where the problems are, where the network is overloaded, where there is a lack of capacity and where this is already leading to serious price differences between regions.

The challenge is to translate this information into concrete decisions and priority investments. Therefore, for me, the key question is which projects will be identified as strategic and will receive funding. This process must be as closely linked to the real effect on the system as possible. To invest where the removal of a restriction is important not only for one country, but for entire regions. Especially when this has an effect on entire regions such as South-Eastern Europe, which are currently less integrated. The other important element is related to funding. Significant funds are currently being generated from network congestion. These funds must be used more efficiently and directed towards projects of pan-European interest that actually increase capacity and improve connectivity. Last but not least, it is important for me to ensure that regions such as South-Eastern Europe do not remain on the periphery of this process. This means paying special attention to the connections that integrate these regions into the common network. I believe that Bulgaria has a strategic and key role in this process and I will defend it within the negotiations.
Ultimately, the role of the chief negotiator is to ensure that the regulation will be politically balanced and effective from a system point of view. Because this is what will determine whether we will have better connectivity and more stable prices in Europe.

- Why are cross-border electricity connections so crucial for lower and more predictable prices?
- The price of electricity in Europe is not determined in one place, it is formed in different price zones depending on demand, supply and the available production mix. Under normal conditions, these zones should “connect“ through the grid, so that electricity moves from places where it is cheaper to those where it is more expensive.

When there is sufficient transmission capacity, this process works automatically, the cheaper energy enters the more expensive market and starts to lower the price.

This leads to equalization between regions and greater predictability, because the system reacts faster and more effectively to changes.
The problem arises when this capacity is limited. Then the connection between price zones is “broken” and each market starts to form independently. In such a situation, even if there is cheaper electricity in another part of Europe, it cannot reach the more expensive market and the price difference is maintained or even increases. The lack of cross-border connections or their insufficient capacity practically leads to higher and more unstable prices. Not because there is no energy, but because it cannot move to where it is needed. Therefore, these connections are not just infrastructure. They are the condition under which the system can balance itself more effectively. And when this mechanism works, we will have lower and more predictable bills for households.

- What role will PVPPs and other energy storage systems play in the future European network?
- Storage systems are a key element for the stability and security of the EU energy system. The reason is that traditionally the electricity system operates under a very strict condition - production and consumption must be in balance at any given moment. With the increase in the share of renewable sources, this balance becomes much more difficult to maintain, because they do not produce constantly, but depend on the weather and natural conditions.
This is exactly where storage comes into play. It allows energy to be “moved“ over time, to store when there is a surplus and to use when there is a shortage. This makes the system much more flexible and much more resilient. We are talking here not only about short-term, but also about seasonal energy storage, which will be increasingly important as renewable sources grow.
PWPPs are particularly important because they are one of the few technologies that allow for large-scale and fast-response storage. They can absorb large amounts of energy and return them to the system within minutes, which is critical for the stability of the grid. Bulgaria has serious expertise in this area and already built capacities, which is a huge advantage. This is one of the few areas where we are not starting from scratch, but can build on it. Therefore, the development of PWPPs and energy storage should not just be part of the policy, but a strategic priority for the country.
They also have another advantage. They are a proven and reliable technology! They can be integrated into the system without additional risk. In the future, storage will not be just an addition to the grid, but part of its management. Without sufficient storage capacity, we will continue to see inefficient use of the energy produced and greater price fluctuations. The development of CHP and storage technologies is a strategic priority in European energy policy.

- To what extent is energy infrastructure now seen as a security issue, and not just a market and economy issue?
- Already to a very large extent, and this is not just a change in rhetoric, but a real change in the way the EU thinks about energy.
For a long time, energy infrastructure was seen mainly as an economic issue, how to ensure a more efficient market, better competition and lower prices. Events in recent years have shown that this is a much broader topic. In the event of a supply or key route problem, the effect does not remain within the energy sector; it is transferred to the entire economy, industry and inflation. That is why it is now considered part of the EU's strategic security.

The EU is increasingly placing emphasis on diversification not only of suppliers, but also of infrastructure. That is, to have enough connections, alternative routes and capacity so that the system does not depend on one point or one solution.

TEN-E also fits into this logic. It is not just a tool for a better market, but for a more sustainable and secure system. Because if the infrastructure is not sufficiently developed, any crisis, geopolitical or economic, is felt much more strongly. That is why today we are talking about energy policy not only as an economic policy, but as part of the Union's overall security. And this will remain the leading one in the coming years.

- You often emphasize the role of clean technologies, what do you think are the realistic solutions for Bulgaria in the next 10 years?
- The realistic approach for Bulgaria is to build on what already works, namely stable base capacities such as nuclear energy, and to build on it with new technologies. Bulgaria undoubtedly has the potential to develop renewable sources and this potential is already being used. It is necessary to develop a network and storage systems in order to guarantee the stability and accessibility of electricity produced in Bulgaria.
Therefore, the solution for Bulgaria lies in the balance. This means developing renewable sources where there is economic and technical logic, but at the same time serious investments in the electricity grid, in smart management systems and in energy storage. Without these elements, clean technologies cannot show their full effect. Nuclear energy is the basis of stability in the Bulgarian energy system. It is already recognised at European level as a clean and sustainable technology, which was achieved through the active work of our team in the previous mandate.

- How can Europe combine energy security with decarbonisation objectives without increasing prices for consumers?
- This can only be done if the EU stops considering decarbonisation and energy security as two separate objectives. The truth is that they can go together, but only if the approach is built on a stable system, not just on ambitious targets. In recent years, it has been seen that when investment is mainly in new capacity, without developing the grid, storage and baseload sources in parallel, the system becomes more vulnerable. This creates instability, and instability is almost always passed on to the price. Therefore, for me, the right approach is for Europe to think in three directions at the same time. Firstly, more low-carbon production, including renewables and baseload energy capacities such as nuclear power. Second, serious investment in electricity transmission infrastructure, because without connectivity, even the cheapest energy cannot reach the market. And third, storage systems that can absorb fluctuations and make the system more flexible. If one of these three elements is missing, price pressure returns and it always reaches households.
This change must be economically sustainable. This means not shifting the burden onto people's bills. If we want public support for decarbonisation, citizens must see that it brings more security, more predictable prices and a more stable system, not new uncertainty. This is precisely why good energy policy is not just about climate targets, but about how they are achieved with sufficient grid, storage and stable baseload capacity. When these elements are aligned correctly, security, lower prices and decarbonisation can be mutually supportive.

- What should be the role of nuclear energy in the European energy mix in your opinion and where is Bulgaria in this process?
- Nuclear energy has a specific and difficult to replace role in the energy mix, it provides stable baseload power. This makes it key to the stability of the entire energy system. Thanks to my efforts in recent years, nuclear energy has already been recognized as a sustainable and strategic technology in the Union's regulatory framework. This means real access to financing, to investments and to long-term development and improvement of the sector. For the first time, it finds a place in the long-term financial and strategic frameworks of the European Union, including in the context of the next Multiannual Financial Framework. This is a very important signal because it opens up opportunities for investment, for the development of new capacities and for maintaining existing capacity. The change is also important politically because it gives countries like Bulgaria the opportunity to develop the sector without ideological restrictions and with access to real investments. It is a key moment for Bulgaria, because here our country has a real competitive advantage.

We have an established infrastructure, we have personnel and we have many years of experience in nuclear energy.

This puts us in a position not only to preserve this sector, but to develop it as a strategic advantage. This also includes the opportunity for Bulgaria to position itself as a regional center for nuclear expertise and training of personnel.

- Do you think that nuclear energy will be key to price stability in the EU in the long term?
- Yes, and the reason for this is purely systemic. Electricity prices are strongly influenced by how predictable production is. When the system relies more on variable sources, such as renewables, the need for balance increases and this creates pressure on prices.
Nuclear energy provides exactly the opposite - long-term predictable production with relatively stable costs. It can act as an “anchor” for the system, limiting sharp fluctuations and giving more certainty to industry and consumers.
When there is enough baseload capacity, the pressure on short-term markets decreases. This also leads to a more stable price environment. Nuclear energy is not just part of the mix, but is an element of the mechanism that makes it possible for prices to be more predictable and lower in the long term.

- In the context of TEN-E and energy infrastructure, what is the weakest point in the energy connectivity of South-East Europe?
- The weakest point of South-East Europe is that the region remains at the end of a system that is not yet sufficiently well connected in its most critical sections. The connection to the European market passes through infrastructure constraints in Central Europe. This is a very important clarification, because the impression is often created that South-East Europe is “separate” problem. Actually, it is not. The region suffers from being the last segment of a chain in which there are, as I said, “bottlenecks“ in sections around Austria and Hungary. And when there is a shortage of capacity there, this automatically limits our region's access to the wider European market.
This makes South-Eastern Europe more vulnerable to price shocks and less able to benefit from more favourable market conditions in other parts of the Union. This means that even when cheaper electricity is available elsewhere, it cannot reach our region in sufficient volume.
That is why the solution cannot be solely national or even solely regional. It is not enough for Bulgaria, Greece or Romania to invest in their domestic infrastructure if further down the chain the constraints remain. That is why TEN-E is so important, because it offers solutions and investments at the level of a pan-European system.

- How do you balance the political, technological and social aspects of energy policy in your work in the European Parliament?
- Balancing these aspects is key. If a measure is good in theory but not technologically feasible, it will not work. If it is technically correct but socially unacceptable, it will create tension. If it is politically convenient but economically unworkable, in the end the price will still be paid by citizens and businesses.
That is why I approach the topic first by asking what the effect on the system is. Is there security of supply? Are consumers protected from excessive price pressure? Is there predictability for industry? If a solution does not provide a clear answer to these questions, then the balance has not been achieved.
The political aspect is also very important, because energy is not an isolated issue. It is related to industry, regional development, social policy and security. It is necessary to see the broader picture and how a decision will affect different countries, different markets and different social groups. The technological aspect is equally important, because in recent years Europe has at times made the mistake of talking about energy in too ideological terms. The system does not work on slogans. It works on physics, capacity, balance and storage and transmission capabilities. Decisions must be based on the real state of the network and the capabilities of individual technologies.
And finally, there is the social aspect - citizens do not measure energy policy through regulations and strategies, but through whether the bills are bearable, whether the industry can operate and whether there is predictability.
The true balance is achieved when political goals, technological capabilities and social impact do not contradict each other, but support each other. This is the meaning of good energy policy. Our goal is to build a fair Energy Union that guarantees low and predictable prices in every region. This depends on infrastructure.