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Cost Curves for Gas Supply Security: The Case of Bulgaria

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  • Silve, F.
  • Noel, P.

Abstract

We evaluate the cost-effectiveness of various policy options and infrastructure investment proposals to improve the security of gas supply in Bulgaria, one of the most gas insecure countries in the European Union. We do this by computing ‘security of supply cost curve’ for different gas supply disruption scenarios. The curves show the cumulative amount of security of supply on the horizontal axis and the unit cost of security on the vertical axis. Measures should be implemented by order or rising unit cost until the public authorities’ preferred level of security is achieved. Our results show that a costeffective gas supply security policy for Bulgaria would concentrate on two measures: (1) allowing reverse-flow transactions on the transit pipelines to Greece and Turkey to access the LNG terminals in these countries in case of disruption in Russian gas supplies and, (2) ensuring effective dual-fuel capability for Bulgaria’s heat generation plants. The infrastructure options actually considered by the Bulgarian authorities and gas industry (expanding the withdrawal rate of the Chiren underground gas storage and building a new gas interconnector pipeline with Greece) appear to be much more costly.

Suggested Citation

  • Silve, F. & Noel, P., 2010. "Cost Curves for Gas Supply Security: The Case of Bulgaria," Cambridge Working Papers in Economics 1056, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:1056
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    File URL: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe1056.pdf
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    References listed on IDEAS

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    1. Le Coq, Chloé & Paltseva, Elena, 2009. "Measuring the security of external energy supply in the European Union," Energy Policy, Elsevier, vol. 37(11), pages 4474-4481, November.
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    Cited by:

    1. Noël, P. & Findlater, S. & Chyong, C. K., 2012. "The Cost of Improving Gas Supply Security in the Baltic States," Cambridge Working Papers in Economics 1204, Faculty of Economics, University of Cambridge.
    2. Chyong, Chi Kong & Hobbs, Benjamin F., 2014. "Strategic Eurasian natural gas market model for energy security and policy analysis: Formulation and application to South Stream," Energy Economics, Elsevier, vol. 44(C), pages 198-211.
    3. Pierre Noel & Sachi Findlater & Chi Kong Chyong, 2013. "Baltic Gas Supply Security: Divided We Stand?," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
    4. Edward Hunter Christie & Pavel K. Bev & Volodymyr Golovko, 2011. "Vulnerability and Bargaining Power in EU-Russia Gas Relations," FIW Research Reports series III-003, FIW.

    More about this item

    Keywords

    Natural Gas; Security of Supply; Energy Policy; Bulgaria; EU;

    JEL classification:

    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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