European Funding Measure for Energy Storage Projects Set to Open Soon
The European funding initiative for energy storage projects, valued at over 1.1 billion Bulgarian levs, is expected to open for proposal submissions in the coming days. The likely opening date is August 16, or at the latest, Monday, August 19. Applicants will have a period of 90 days to submit their proposals, which means the deadline will be in November. Contracts for the provision of aid must be signed by January, as the deadline for utilizing European funds is June 2026, with project implementation typically taking longer, particularly since battery production alone takes about a year.
This information was disclosed during a hearing with Energy Minister Vladimir Malinov in the parliamentary committee on energy. The initiative, known as RESTORE, is funded through the Recovery and Resilience Plan and aims to significantly increase the share of energy from renewable sources in the country’s energy mix while simultaneously building the necessary infrastructure for energy storage.
As part of this investment, the construction and commissioning of a national infrastructure of renewable energy storage facilities with a capacity of at least 3000 MWh will be supported. Due to decreasing battery prices, this capacity could now reach as much as 5,000 to 6,000 MWh, as discussed during the meeting. The aid for each project should not exceed 50% of the project’s costs or 371,600 levs (excluding VAT).
Changes to the Funding Application Process
Initially, it was proposed that existing projects could apply for the EU subsidy starting from March 2023, but this has now changed to ensure a level playing field. The first day of public discussion, June 26, 2024, will now be considered the starting date for recognizing expenses. “We need to provide an equal starting point for everyone,” Malinov stated, noting that when the market had some confidence that this program would be launched on June 25, this led to preliminary project activities, making those capital expenditures eligible.
Investments in the electricity distribution network were initially excluded from the measure, but following public discussions, there have been proposals to include them. Malinov explained that this could be accepted but with additional conditions—specifically, that the connected facility must have the capability to transmit data to the nearest point of the Electricity System Operator (ESO).
The program will be technologically neutral, with no specific requirements for the type of battery used. According to the Ministry of Energy’s analysis, the lifecycle of each storage system varies, with an average period between 10 and 20 years. After this period, it will be the investor’s responsibility to decommission the battery. Furthermore, although the initial rules stipulated that projects from a single legal entity could not exceed 600 MWh of capacity, this will likely be reduced to 500 MWh in the final version. The Ministry of Energy supports this reduction, with Malinov commenting that “this would provide even greater opportunities and competition.”
We will fund projects up to the total budget amount without limiting the overall available capacity,” Malinov explained. To ensure that the maximum possible portion of the resource is utilized in a timely manner, a review will take place in mid-period, or June 2025, to assess progress.
Construction Project Update
The construction project currently lacks an issued building permit, which means it will be removed from the approval process. In its place, another project from the reserve list, which already has the necessary permit, will be included.
At present, there are no regulations specifying where the funds collected from connection guarantees for unrealized projects will go, as stated by Malinov. He indicated that these funds are unlikely to remain within the Ministry of Energy and will likely be redirected to the central budget. Consequently, it is proposed that the money from these fees be allocated to the Electricity System Security Fund (ESSF), ensuring that it remains within the sector.
Proposals for Regulatory Changes
Nikola Gazdov, the chairman of the Association for Electricity Production, Storage, and Trade (APSTE), suggested lifting the restrictive requirement for the equity capital of applicant companies. Currently, this requirement stands at 6 million BGN for project proposals up to 50 MWh and 10 million BGN for larger projects.
He believes that when guarantees for proper execution are provided, along with an assurance for the advance payment of aid, it serves as adequate direct and monetary assurance of the investor’s ability to execute the project. According to him, this change would broaden the pool of potential applicants.
