In mid-2023, the Bulgarian Parliament finally formed a steady Government. The Parliament also introduced predictability in the regulatory environment for renewables along with several legislative developments.
Energy Market at a Glance
The Bulgarian energy market is undergoing significant changes to decrease its CO2 emission by 55% until 2030 (compared to 1990) and reach net-zero by 2050.
At the end of 2023, the Parliament adopted the country’s road map for decarbonization. The main milestones envisage (i) the phase-out of 1,600 megawatts of its thermal power plants until 2026; (ii) new nuclear and RES capacities of 14,000 megawatts, offshore wind capacities of 2,500 megawatts, and 2,000 megawatts storage capacities until 2040; and (iii) the refurbishment of the Chaira Pumped Storage Hydropower Plant with a power production capacity of 864 megawatts and pumping capacity of 788 megawatts, which is a key asset in the energy balancing market.
Renewable Energy
The Bulgarian renewable energy market continues its quick development and attracts major investors in utility-scale projects. Currently, over 2,800 megawatts of solar and over 700 megawatts of wind are operational.
For now, Bulgarian legislation does not provide for a tender or other competitive procedures for securing grid connections for new RES projects. Grid connection contracts are provided on a first-come-first-served basis to greenfield projects. By the end of 2023, the Bulgarian Transmission System Operator confirmed that it had received applications for the construction of RES projects with a total installed capacity of over 45,000 megawatts. Nevertheless, in October 2023, the Parliament introduced amendments to the legislation, requiring developers to pay a deposit in the amount of EUR 25,000 per MW installed capacity to secure their grid connection, thus urging the developers to implement their projects and terminate speculative applications.
The upward trend continues in 2024 as the largest photovoltaic project in Bulgaria (the 229-megawatt St. George power plant) has received an energy generation license. As of 2025, it will produce 13% of the country’s installed solar capacity. And a new major strategic investor entered the Bulgarian market in 2024, acquiring three photovoltaic projects with a total installed capacity of over 80 MW.
It is highly expected that the Government will start the long-awaited grant scheme in accordance with the National Recovery and Resilience Plan for supporting new RES capacity and storage of electricity. The scheme shall enhance RES production with storage capacity and envisages investment support only for the storage facilities component of projects.
Additionally, at the end of 2023, the EU Commission approved the Bulgarian Just Transition Budget in the amount of EUR 1.2 billion supporting the coal power plant’s phase-out and enhancement of renewable energy in the regions affected by the CO2 emissions reduction.
Offshore wind appeared on the Parliament members’ agenda in 2024, as an offshore renewable energy draft act was adopted at first voting. The act shall regulate how Bulgaria’s offshore wind potential will be exploited and how major investors will be courted. It is expected that in the upcoming months, the draft will pass into law.
Nuclear Power
At the end of 2023 the Parliament adopted a decision assigning the Minister of Energy to initiate a procedure for the construction of two new AP 1,000 Westinghouse nuclear reactors at the sittings number 7 and 8 of the single operating nuclear power plant Kozloduy NPP. As per the draft timeline, the two new nuclear reactors shall be put into operation at the end of 2034.
At the beginning of 2024, the special purpose company Kozloduy NPP - New Builds EAD initiated the procedure for proposal of interest in the construction and announced that five companies declared their interest in the construction. The proposals are currently being reviewed by the Ministry of Energy.
Furthermore, in January 2024, the Nuclear Regulatory Agency issued a license to Kozloduy NPP AD for the storage of Westinghouse nuclear fuel. However, the Nuclear Regulatory Agency is expected to license the use of the Westinghouse nuclear fuel itself for Unit 5 of Kozloduy NPP only in spring 2024.
Natural Gas
At the end of 2023, Bulgaria and Serbia put into operation the Interconnector Bulgaria – Serbia with a capacity of 1.8 billion cubic meters per annum. It aims to enhance the gas supplies to Bulgaria from Western Europe.
In addition, in early 2024, the Bulgarian gas transmission operator Bulgartransgaz signed an interconnection agreement with BOTAS A.S which allows for 4.2 billion cubic meters of natural gas per annum to enter Bulgaria from Turkiye.
Leading upstream companies such as OMV Petrom remain committed to Bulgaria and continue the oil and natural gas exploration in the Black Sea.
By Kostadin Sirleshtov, Managing Partner, Borislava Piperkova, Counsel, and Dian Boev, Associate, CMS Bulgaria
This article was originally published in Issue 11.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
