Executive Summary
Current Market Trends
Recent Market Trends
Competitive Landscape
Best Prospects for U.S. Exporters
Market Entry
Regulations / Registration Process
Technical Barriers & Tariffs
Procurement & Tenders
Upcoming Trade Events
Local Industry Resources
U.S. Commercial Service Information
Tab Options
Executive Summary
Current Market Trends
Recent Market Trends
Competitive Landscape
Best Prospects for U.S. Exporters
Market Entry
Regulations / Registration Process
Technical Barriers & Tariffs
Procurement & Tenders
Upcoming Trade Events
Local Industry Resources
U.S. Commercial Service Information
Executive Summary:
Bulgaria started renewable energy promotion, including the establishment and implementation of the institutional and legal framework only in 2007 , which is far later than the other old EU member states. The state experienced the strong RES development in two periods (2007-2012 and 2012-2016 )and increased its share dramatically. Currently the installed output of RES plants in Bulgaria stands at well over 1700 MW (mostly wind and photovoltaic). Bulgaria is among the 11 EU member states that have already hit their 2020 renewable energy target. According to the National Statistic Institute the share of renewable energy in gross final energy consumption in 2018 was 20.5% (https://www.nsi.bg/en/content/5068/share-renewable-energy-gross-final-energy-consumption ).
At the end of 2019 Bulgaria pledged to update its national target for renewable energy and raised the share of wind, solar and other renewables to 27% of their energy consumption respectively by 2030. Hydropower plays an important role in the energy production of Bulgaria with a share of approximately 14% of the total installed capacity. Electricity generation from hydro power makes a substantial contribution to meeting the increased electricity demand and is currently the most used resource which is not fossil fuel or nuclear-based electricity generation technology. Bulgaria has a total installed generation capacity of12.6 GW (2017), including 4.5 GW lignite and hard coal, 2.0 GW nuclear, 0.6 GW natural gas, 3.2 GW hydropower including pumped storage, and 1.8 GW other renewables. (see the picture below).
Source: ENTSO-E
In Bulgaria, there are 242 hydropower plants in operation. In total, the National Electric Company (NEK) owns 30 conventional hydro and pumped storage plants with a total installed capacity of 2,713 MW in generating mode and 937 MW in pumping mode. Hydropower’s importance is not limited to the production of energy. It plays a key role in greenhouse gas emissions reduction.
Hydropower contributes to an annual avoidance of 491,690 tons of CO2 emissions, which translates into an annual CO2 cost avoidance of $3,5 million. Another significant benefit of the sector is the opportunity for integrated water resource management to reduce the risk of natural disaster.
Current Market Trends:
Bulgarian electricity transmission system operator (ESO) has announced its plan to add additional installed capacity of 647 MW by 2027. Renewable energy will be accounted for 401 MW. The forecast is based on ESO’s ten-year plan for the development of the electricity transmission network. This effort is expected to increase the country’s annual electricity production to 49,400 GWh. According to the plan, $824.1million will be invested in electricity transmission network in Bulgaria until 2027. Approximately $87 million will come from EU funds. Out of 401 MW of new installed renewable capacity in the next ten years, new wind farms will contribute with 141 MW of installed capacity, solar farms with 161 MW, small hydropower plants with 35 MW, and biomass power plants will add 64 MW. Bulgaria must take urgent control measures on small hydropower to avoid EU sanctions: the local authorities need to take urgent measures to effectively control small hydroelectric power plants. Bulgaria has set some measures to reach the targets established for 2030.
Some of them are listed below, and describe some possible ways in which Bulgaria could
One of the new directives regulates the introduction of economic support for all those users who have a plant in renewable energy production or a demonstration project of a plant with the same sources, with a power less than or equal to 10.8 kW.
Introduction of systems with a total installed capacity of 30 kW and which are planned to be built on structures such as roofs and building walls.
In the period 2021-2030, opportunities will be sought for financing of renewable resources unit projects and measures will be considered to guarantee access to consumption of electricity from renewable sources for low-income consumers.
Recent Market Trends:
Bulgaria was designed to allocate 33 million EUR for the development of renewable energy sources and to improve energy efficiency. These investments will allow sectors like solar energy, wind energy etc. to grow further in the coming years.
The data shown below indicate the growth trend for the solar energy sector, in particular, linked to solar panels, which constitute a fundamental part of the electricity market. Shortly, the installed capacity in the coming years will range from 1286 to 1415 GWh per year. It will allow reaching a quantity of installed power of 1320 MW by 2030.
Bulgaria have substantial hydro (storage) capacities and unlike most other SEE countries already considerable wind and solar capacity installed due to a successful five-year implementation of feed-in tariffs. Bulgaria’s electricity export tariff was abolished on July 1, 2019 according to the proposed changes to the energy law, which brought also bring 750 MW of renewable capacity to the free market, creating more competition and liquidity.
Hydropower has shown a relatively slow growth rate in the past 6 years with a net addition of only some 50 MW. Depending on the available water supply, hydropower production can vary significantly. For example, the range of the capacity factor in the years 2011-2017 was between 13% (2017) and 20% (2015), which equals to full load hours of 1,200 h/a and 2,400 h/a, respectively. However, since the contribution of hydropower to the total annual electricity generation is relatively small – on average 11% in the years 2011-2017 – and the generation portfolio is well diversified, security of supply is generally not affected from the availability of hydropower capacities.
Competitive Landscape:
Austrian utility EVN signed a deal with NEK for the long-delayed construction of a chain of hydro power plants in Bulgaria. The agreement was for the implementation of the hydro complex on the Gorna Arda river in southern Bulgaria, close to the border with Turkey.
Austria’s Alpine BAU withdrew from its tie-in with EVN for the construction of the hydro power complex in Bulgaria. Due to changes in the energy policy environment in Bulgaria, Austria-based EVN said it is placing the 175-MW Gorna Arda hydropower plant project on hold because “its realization is not possible under the current circumstances.”
Bulgarian energy solutions provider CEZ ESCO, part of Czech energy group CEZ, will build a 195 kWp solar power plant for the needs of textile products manufacturer Delta Textile-Bulgaria, Sofia municipality completed recently $20.7 million/18.6 million EUR tender for the production of refuse-derived fuel (RDF) from waste. The tender, divided into five lots, envisaged the production of up to 80,000 tons of RDF per year in different forms. The project envisages the processing of municipal solid waste in waste depot Sadinata, near Sofia.
Bids in the tender will be ranked based on price and technical criteria, with a weight of 60% and 40%, respectively. The deadline for submitting offers is September 20.
Best Prospects for U.S. Exporters:
B.S. companies are competing with Chinese and European companies in the renewable energy market. Chinese companies, due to low prices, continue to dominate, however, foreign-owned
Energy storage
Wind Farm Equipment (especially turbines)
Biomass Boilers
Invertors
Distribution Equipment
Biogas Equipment
Technical Consultancy
Market Entry:
Conducting due diligence while searching for reputable local representative is key to successfully enter the market Enlisting a qualified local legal representation for contract negotiations is also highly recommended. The U.S. Commercial Service located in the U.S. Embassy in Sofia can assist with market research, contact facilitation, contact evaluation, and service providers – refer to: https://www.trade.gov/bulgaria
Regulations / Registration Process:
In Bulgaria, the regulation of the activities in the energy sector, water supply and sewerage
Electricity suppliers are obliged to purchase all electricity from renewable sources at the preferential price set by the EWRC (art. 31 par. 1 ERSA). The obligation to purchase electricity is based on long-term purchase agreements, which have a duration of 20 years (hydro-electricity installations with a capacity of up to 10 MW: 15 years, wind power: 12 years) (art. 31 par. 2 ERSA).
The amendments to the Energy Act (EA) and to the Energy from Renewable Sources Act (ERSA) had in 2019 a significant role in the market liberalization process in 2018. Based on the 2019 EA amendments, the electricity market liberalization was put forward when all producers with total installed electrical capacity of and more than 4 MW, incl. those from RES and high efficiency cogeneration (HECG), have been obliged to sell all generated electricity to the various segments of the organized power exchange. Respectively, the public provider had to sell the quantities exceeding the needs of the regulated market and the transmission and distribution system operators had to buy the required electricity amounts for technological costs from the power exchange. In this regard, the existing model of mandatory purchase of electricity generated by RES and HECG generators has been eliminated, as well as the obligation of the public provider to sell electricity to grid operators to cover the transmission / distribution technological costs. EWRC has been delegated additional powers related to the determination of electricity premiums for RES and HECG electricity generated by plants with total installed capacity of and more than 4 MW. EWRC also started to set the forecast market price by generators groups depending on the primary energy source, as well as to determine an estimated market price for technological costs of the transmission system operator and the distribution system operators.
Technical Barriers & Tariffs:
Small hydropower plants may have disadvantages in terms of grid connection compared to large hydropower.
Procurement & Tenders:
Bulgaria launched in mid 2019 its Renewable Energy, Energy Efficiency and Energy Security Program, with an estimated EUR 33 million budget to finance street lighting, geothermal and hydropower utilization, energy efficiency in buildings, and other projects. https://www.eeagrants.bg/programi/energetika .
The program is divided into four areas – developing small hydropower plants (HPPS) in water supply systems, new geothermal energy installations, improved energy efficiency in buildings, industry and municipalities, and competence building in the program relevant areas, according to a document available on the website of the Norwegian Water Resources and Energy Directorate.
The European Commission gave a greenlight to Bulgaria’s proposal to back a project for a
The waste incinerator, a combined heat and power plant or CHP, would be in compliance with the Waste Framework Directive, according to the EU’s executive arm. “Notably, the waste that will be subject to energy recovery in the cogeneration plant has already been subject to preliminary treatment and cannot be recycled any further. If the waste was not used for energy recovery, it would go to landfill,” the regulators in Brussels concluded.
Upcoming Trade Events:
South-East European Energy Efficiency & Renewables event 2020:
InterExpo Center Sofia, 7-9 April, Sofia, Bulgaria international@viaexpo.com
Local Industry Resources:
U.S. Commercial Service Information:
Emily Taneva, Commercial Specialist
