The Development of Renewable Energy Sector in Bulgaria
The renewable energy sector in Bulgaria has been growing rapidly in recent years. This growth is important to examine at a regional level, which is why this week in the “265 economic stories” series, we turn our attention to the data on installed renewable energy capacities in the country by municipalities. This data is taken from the Sustainable Energy Development Agency (SEDA), which maintains a register of power plants for which SEDA has issued guarantees of origin for energy from renewable sources.
The role of these guarantees is to demonstrate that the energy produced comes from renewable sources and to promote transparency in the sector. By looking at the distribution of renewable energy capacities across municipalities, we can gain insights into the progress and potential of the renewable energy sector in Bulgaria.
The Importance of Renewable Energy Trading Volume
The trading volume of electricity is renewable, and its validity is one year, so active producers must regularly submit applications to the AUEB. This means that the database mainly covers active power plants, such as those of PAVEC “Chaira,” which are installed but have not been in operation for over a year, do not appear in it. Currently, we have installed 6757 MW of RES capacities. Of these, 3612 MW (53.4%) are photovoltaic, 2375 MW are hydro, 707 MW are wind, and 64 MW belong to other renewable sources. The dominance of photovoltaic energy is significant, indicating a shift towards cleaner and more sustainable energy sources.
The Growth of Renewable Energy in the Country
The mix of renewable energy sources in the country is a relatively new phenomenon. By 2022, hydro energy holds the largest share among renewable sources. In fact, the majority of wind energy capacity in our country was installed in two time periods. The first was between 2010-2012, when new capacities were installed rapidly due to decreased investment costs and state policies promoting preferential prices and long-term energy purchase agreements. The second period began around 2021, when energy prices in our country reached record levels and solar power plants began to generate more electricity.
The Impact of Renewable Energy Investments in Bulgaria
Bulgaria has seen significant profits in recent years due to its low production costs, making it an attractive investment opportunity. However, the gap in the construction of new renewable energy facilities between the two periods is largely due to the discontinuation of stimulating policies for RES investments.
Against this backdrop, other types of RES capacities are developing much slower. Most of the wind power capacity in the country was also built before 2013, which could again be explained by the support policies for RES investments at that time. The majority of renewable energy facilities in Bulgaria were built before 19.
The Growth of Renewable Energy Capacity in Bulgaria
In 1999, renewable energy sources were practically the only source of electricity in Bulgaria, totaling 2067 MW. Since then, the hydroelectric capacity in our country has only increased by 300 MW.
The installed renewable energy capacities in Bulgaria are relatively evenly distributed across the country, with the exception of the Northwest and parts of Northeast Bulgaria, where renewable electricity production is not as well developed. Only five municipalities in the country do not have a single power plant generating renewable energy – Biala (Ruse region), Mir?
Renewable Energy in Bulgaria
Bulgaria has been making significant progress in the field of renewable energy, with an average of 1.05 kW of installed capacity per person across the country. This number is even higher in 84 municipalities. In terms of population, the highest capacity of renewable energy sources is found in Central and Southeastern Bulgaria, near the Black Sea, as well as in some mountainous regions in Rila and Pirin.
Interactive Map
When looking at specific types of renewable energy sources, hydroelectric power is mainly concentrated in 95 municipalities, mostly in mountainous areas due to the technology’s requirement of uneven terrain.
Hydropower and Wind Energy in Bulgaria
Bulgaria has several hydropower plants with significant capacities, such as Belovo (736.2 MW), Krichim (261 MW), Devin (238.5 MW), and Peshtera (136.6 MW). The two largest hydropower plants in the country, Belmeken HPP (375 MW) and Sestrimo HPP (240 MW), are both located in Belovo. The third and fourth largest, Orpheus HPP (160 MW) and Peshtera HPP (136 MW), are situated in Krichim and Peshtera, respectively.
Wind energy, on the other hand, is more geographically limited in Bulgaria, with wind power plants found in only 28 municipalities, mostly around the Northern Black Sea and the slopes of the Central and Eastern Balkan Mountains, which are known for their windy conditions.
Wind and Solar Power in Bulgaria
Bulgaria has a significant amount of wind power capacity, with the municipality of Kavarna leading the way with 398.88 MW. The largest wind park in the country, “Sveti Nikola,” is located in Kavarna and has a total capacity of 156 MW. Following Kavarna are Kazanlak with 72.5 MW and Suvorovo with 60 MW, both of which are part of the Suvorovo Wind Turbine Energy Complex.
On the other hand, photovoltaic power capacity is more evenly distributed across the country, with only seven municipalities not having any installed solar power plants. In 130 municipalities, solar energy is the only source of renewable electricity, while in 71 municipalities, over half of the renewable energy capacity comes from solar power plants. Solar electricity production is strongest in areas where there is abundant sunlight, providing a reliable source of clean energy.
The Potential of Solar Power in Bulgaria
Bulgaria is a country with great potential for solar energy, especially in the Upper Thracian Plain and the middle part of the Danube Plain. The flat terrain and abundant sunshine throughout the year make these areas particularly suitable for solar power plants. The municipality of Pazardzhik has the highest installed solar power capacity in the country, with 304 MW. The largest solar park in Bulgaria, the “Rial States” solar power plant in the village of Apriltsi, is also located in Pazardzhik municipality, with a capacity of 251.2 MW. Following Pazardzhik are the municipalities of Sliven (295.5 MW), Galabovo (204.5 MW), and Kaloyanovo (201.5 MW).
Compared to previous years, the development of solar power in Bulgaria has been significant, with more and more solar power plants being installed across the country. As a result, Bulgaria is becoming a key player in the field of renewable energy in Europe.
Renewable Energy Capacity Growth in Bulgaria
As of August 2023, the renewable energy capacity in Bulgaria has significantly increased, reaching a total of 1578 MW in less than a year. This growth is primarily attributed to the installation of photovoltaic power plants. During this period, new photovoltaic plants were constructed in 226 out of 265 municipalities, with a focus on the central regions of the country.
The highest increase in new photovoltaic capacity was recorded in the municipalities of Sliven (220.4 MW), Galabovo (203.4 MW), Sevlievo (150 MW), and Lovech (117.5 MW). While the growth in Sliven and Sevlievo was driven by numerous small solar investments, Galabovo and Lovech saw the introduction of new, larger solar power plants.
Increasing Photovoltaic Capacity in the Municipality
The significant increase in photovoltaic capacity in the municipality is mainly due to the construction of a large solar power plant in the area. Interactive data clearly shows that the investment interest in renewable energy sources, particularly solar power plants, remains strong in the country. The rapid growth of solar capacity has made photovoltaics the leading renewable technology in recent years, with reasons ranging from the high profits generated by these types of plants during the energy crisis to their environmental benefits.
This trend is not unique to our municipality, but is seen across the entire country, indicating a shift towards cleaner and more sustainable energy sources. The construction of more solar power plants is not only beneficial for the environment, but also for the economy, creating jobs and attracting investments in the renewable energy sector.
The challenges of oversupply in the solar energy market
One of the key issues facing the solar energy market is oversupply, particularly in countries like Bulgaria where there has been a surge in the production of photovoltaic energy. This oversupply has led to a decrease in energy prices, and in some cases, even negative pricing, which has had a detrimental impact on the profits of solar power plants. Not only does this result in reduced profit margins, but it also leads to increased costs for balancing the grid, especially when these plants generate more (or less) energy than is needed.
This issue has become more apparent in recent months, highlighting the challenges that solar power plants face in a market that is already saturated with excess energy. Despite the benefits of renewable energy and the green policies of the EU, the oversupply of solar energy presents a significant obstacle for the profitability and sustainability of solar power plants in Bulgaria and beyond.
The Impact of New Energy Pricing Methodology on Electricity Producers
KEVR has implemented a new methodology for determining the prices of balancing energy, resulting in significant costs for balancing excess or shortage of energy in the order of thousands of levs per megawatt-hour – several times more than before May of this year. This has led to a sharp reaction from the electricity producers industry, including protests at the end of June. Ultimately, many producers were compensated once with funds from accumulated financial surplus in the ESO.
If the growth of photovoltaic capacity in our country continues at its current pace, these issues could escalate and lead to further challenges for the energy sector in the future.
The Need for Sustainable Growth in Renewable Energy Sector
The rapid growth of renewable energy sources could potentially harm the financial stability of the entire sector, unless consumption increases at the same pace, for example, due to widespread electrification of the economy. Another way to ensure sustainable growth in renewables is to invest simultaneously in technologies such as batteries or pumped hydro storage, which would allow for balancing the initially inflexible production of solar and wind energy.
Source: Market Economy Institute
