In December 2022, the Bulgarian Ministry of Energy completed public consultations for legislation that amends the Renewable Energy Act and changes the Energy Act, Energy Efficiency Act and the Protection of Agricultural Land Act in line with EU Directive (EC) 2018/2011 of 11 December 2018 on the promotion of the use of energy from renewable sources.
This Draft Act increases renewable energy deployment in Bulgaria in 2023 and beyond in the following way:
Simplification of grid connection procedures and allowing additional projects to get grid connection contracts
The Draft Act simplifies grid-connection procedures by introducing a universal grid connection agreement for greenfield projects, which replaces the current system of preliminary and final grid connection agreements for one and the same project. In case of lack of availability or partial availability of grid connections, the Draft Act provides for temporary grid connection whereby the TSO/DSO is obliged to invest into its grid in parallel with the investment of the producer. (Under the current rules, the bidder is rejected from obtaining a grid connection.)
Under the Draft Act, the grid-connection agreement is signed when the investor provides a grid-connection reservation payment or bank guarantee in favour of the TSO/DSOs. This will allow for earlier stage reservation of the grid connection and more clarity of the projects in the pipeline that are likely to be implemented vis-à-vis TSO/DSOs.
Furthermore, the Draft Act provides for a deadline of six months for the completion of all necessary acceptance tests and implementation of new renewable-energy projects, thus avoiding any delays by TSO/DSOs detrimental to the interests of investors.
The Draft Act empowers the Energy and Water Regulatory Commission (EWRC) to carry out checks with TSO/DSOs and to impose administrative sanctions in case of breaches of the terms and conditions for grid connections of renewable-energy projects.
The Draft Act also provides for simplification of procedures for grid connections of renewable energy project with installed capacity of up-to 1 MW, and shortened deadlines for assessment and grid connection statements.
Each end consumer of electricity could become a producer of electricity from renewable energy sources if the consumer produces and stores electricity from renewable energy sources, installs and maintains electricity storage devices and sells surplus at market prices.
TSO/DSOs will maintain web-based IT systems to provide up-to-date information on signed grid-access agreements and on available electricity capacities for grid connection of renewable-energy projects.
Implementation of Directive (EC) 2018/2011
The Draft Act implements the following measures for promoting the use of energy from renewable sources:
- As EU member states collectively ensure that the share of energy from renewable sources in the Union's gross final energy consumption in 2030 is at least 32%, Bulgaria is focused on its national target of at least 27.09%. This is a substantial increase from Bulgaria's 2005 level (9.4%) and its target for 2020 (16%).
- As part of the provisions of Directive (EC) 2018/2011 related to the Organisation and duration of the permit-granting process (Article 16), the Draft Act provides that local municipalities will be the contact points for smaller scale projects thus providing that municipal administrative support centres will be “one-stop shops” for the administration of these projects. The mayors of Bulgarian municipalities will therefore no longer be obliged to develop and present short-term municipal renewable energy support programmes to their respective councils for approval.
- The Draft Act regulates the producers of renewable energy for self-consumption and the opportunities for the use, storage and external sale of excess quantities of produced energy.
Involvement of other authorities
The Draft Act strengthens the power of other Bulgarian authorities in the process of deployment of renewable energy projects.
The Minister of Environment and Waters together with the Minister of Energy is preparing a plan for determination of one or more preferred zones onshore and offshore, which are appropriate for each renewable energy technology. The plan will give special priority to artificial or constructed sites, as well as poor quality lands unfit for agricultural production, including sites with less environmental impact by wind-power plants. The plan for determination of one or more preferred zones onshore and offshore will be subject to Environmental Assessments (EA) or Environmental Impact Assessments (EIA), and so the renewable energy projects developed in these preferred zones will not be subject to individual EAs or EIAs.
The mayors of municipalities will provide assistance and instructions to investors through administrative support centres regarding procedures for the planning and construction of renewable energy projects, including projects for their own consumption.
The Minister of Agriculture will implement a shorter procedure for changing of designation of agricultural lands for the purpose of renewable-energy investments.
The EWRC will have the right to intercede and change the reference price for renewable-energy projects, which started operation under a Feed-In Tariff (FiT) if the there is a substantial change (over 5%) in the reference price for the period and the market price on the electricity exchange. The purpose of this participation is to make sure that investors are not overcompensated above FiT levels.
For more information on this Draft Act and opportunities in Bulgaria's renewable-energy sector, contact your CMS contact or local CMS experts: Kostadin Sirleshtov, Borislava Piperkova and Diyan Georgiev.