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With a cumulative score of 1.7, Bulgaria ranks number 26 among emerging markets and number 54 in the global ranking.

  • Emerging markets
  • Europe

1.78 / 5

Power score

1.26 / 5

Transport score

1.90 / 5

Buildings score


Low-carbon strategy

Net-zero goal and strategy

As a member of the European Union, Bulgaria shares the ambition for the bloc to reach net-zero emissions by 2050.

Nationally Determined Contributions (NDC)

EU members submit a joint Nationally Determined Contribution (NDC) to the United Nations Framework Convention on Climate Change (UNFCCC), outlining the bloc’s plan to help achieve the goals of the Paris Agreement. The EU’s initial NDC aimed to lower emissions by at least 40% by 2030 compared to 1990 levels. It submitted an updated NDC in December 2020, which strengthened that target to a 55% reduction in emissions by 2030.

Fossil fuel phase-out policy

Bulgaria’s National Recovery and Resilience Plan targets a phase-out of coal by 2038.


Power policy

EU members were required to develop a 10-year National Energy and Climate Plan (NECP) to help address the bloc’s transition goals. Under Bulgaria’s NECP, the country is aiming for renewables to account for 27% of gross final energy consumption by 2030, up from 20% in 2020.

As of July 2018, feed-in tariff contracts for renewable energy producers with at least 4 megawatts (MW) of capacity are no longer being offered. Other renewable energy producers that were getting feed-in tariffs have been offered feed-in premium contracts instead which, unlike feed-in tariffs, are based on market prices. In 2021, record-high electricity prices led to a zero premium for renewable energy producers and a moratorium on the regulated market.

Renewable electricity producers with a capacity below 4MW and feed-in tariff contracts in place prior to July 2018 – as well as new rooftop or facade photovoltaic installations with a maximum installed capacity of 30 kilowatts, and certain installations using combined cycle and indirect use of biomass – are still eligible for a feed-in tariff.

As part of the ongoing reform of Bulgaria’s energy sector, the parliament’s Energy Commission filed a new bill for amending and supplementing the Energy Act in November 2020. It continues the policy of pursuing full liberalization of the wholesale energy market and integration of the national market into the common European energy market. The bill proposes two main changes: the replacement of cold reserve transactions with auctions, and the conclusion of feed-in premium agreements for renewable producers with a total installed capacity of between 0.5MW and 1MW. However, the bill has yet to come into force.

Power policies

Renewable energy auction
Feed-in Tariff
Import tax incentives
Net Metering
Renewable energy target
VAT incentives

Power prices and costs

Bulgaria is among the last markets in Europe to liberalize its power sector, with state-owned generators continuing to sell electricity on a regulated basis directly to some of the country’s largest consumers.

In 2021, for the first time in a while, residential customers paid higher electricity tariffs, seeing an increase to an average of €207 per megawatt-hour ($206/MWh), from €194/MWh in 2020. There is a taxation scheme applied to the revenue of renewables generation in Bulgaria, with 5% of producers’ revenues being directed toward subsidizing energy prices for end users.

Bulgaria’s wholesale power exchange went live in 2016, but sales volumes have remained below 25% of final electricity consumption. Since October 2020, all non-residential customers have been purchasing their electricity through the free market but state utility NEK is still the industry's default supplier.

The government's decision to switch existing renewables and other regulated generation to a contract-for-difference remuneration system aims to increase liquidity in the market.


Power market

The share of renewables in Bulgaria’s total power mix has doubled over the past decade and currently sits at 20%. This reflects a generous feed-in tariff that fueled a solar investment boom. At the end of 2021, the country had around 2.5 gigawatts of renewables capacity installed, excluding large hydro.

Bulgaria’s energy market is dominated by state-owned players. Liberalization and unbundling reforms rolled out since 2010 have opened up the generation, distribution and retail sector to only limited levels of competition.

Despite the legal unbundling of the three distribution system operators, there is no real competition in the distribution market. There is only one licensed supplier in each geographical region. Meanwhile, investment company Bulgaria Energy Holding (BEH) owns both transmission and generation capacity.

The Independent Bulgarian Energy Exchange (IBEX) was sold by BEH to the Bulgarian Stock Exchange in 2018. All electricity produced in the country is sold through IBEX. The wholesale market operates on a non-discriminatory basis, but the transmission system operator, known as the Electricity System Operator (ESO), can refuse to purchase or transmit renewable electricity if there is no grid capacity, or if it could compromise grid stability.

Corporate power purchase agreements are allowed in Bulgaria, but a small and fragmented market means it is not easy to find large offtakers. The electricity distribution companies and the transmission system operator are not obliged to buy back renewables.

The Bulgarian electricity market is currently in transition with the support of the EU Commission and development banks, but nuclear power is expected to remain dominant. Construction of the Kozloduy nuclear power plant could provide a significant opportunity for investment, although the government is gradually decreasing its coal power capacity to replace it with renewables.

This has put pressure on retail prices and attracted international investors such as CEZ from the Czech Republic. In 2021, CEZ won regulatory approval to sell its Bulgarian assets to local financial group Eurohold in a long-delayed €335 million ($328 million) deal.

Installed Capacity (in MW)

2012201420162018202005K10K MW

Electricity Generation (in GWh)

20122014201620182020010K20K30K40K50K GWh

Utility privatisation

Which segments of the power sector are open to private participation?


Wholesale power market

Does the country have a wholesale power market?

Not available

Doing business and barriers

The rules for connecting new projects to the grid were standardized and simplified in 2019. The ESO has developed an electronic map with up-to-date information on the operational opportunities to connect producers and consumers of electricity.

However, there remain a number of major challenges for Bulgaria’s energy market: frequent changes in the legislative and regulatory environment; battles with the government across transmission and generation due to the low capacity of the ESO to take care of connections; lengthy permitting processes; energy poverty; and political uncertainty.

Confidence in the renewables space remains fragile due to a retroactive cut to subsidies in 2012. The country has not recorded any significant volumes of clean energy asset finance since this intervention. Meanwhile, changes to the feed-in tariff scheme through the addition of fees also damaged investor confidence. In addition, Bulgaria lacks strong national, commercial and industrial offtakers for renewables projects.

Domestic policy has focused on adding new small hydro capacity, but Bulgaria’s damaged ecosystem is unlikely to be able to support the volume of small hydro projects that have already received permits. Backing for small-scale solar could restore some of the lost faith in the Bulgarian renewables sector.

Currency of PPAs

Are PPAs (eg. corporate PPAs and all other types) signed in or indexed to U.S. Dollars or Euro?

Not available

Bilateral power contracts

Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?

Not available

Fossil fuel price distortions - Subsidies

Does the government influence the wholesale price of fossil fuel (used by thermal power plants) down through subsidies?

Not available

Fossil fuel price distortions - Taxes

Does the government influence the wholesale price of fossil fuel (used by thermal power plants) up through taxes or carbon prices?

Not available


EV market

The electric vehicle (EV) market in Bulgaria remains small, with sales growing by around 50% year-on-year in 2021 to 821.

EV policy

The country’s Deputy Prime Minister for Climate Policy and Minister of Environment and Water, Borislav Sandov, announced in April 2022 that a law to promote electric mobility in Bulgaria will be drafted. He also said the country would target having at least 30,000 EVs on the road by 2026, up from 3,000 in 2020, and build 10,000 charging stations.

The main sources of financing for “green” public transport projects in Bulgaria are the EU Structural Funds and the Cohesion Fund disbursed via different operational programs.

Transport policies

Electric vehicle target
Electric vehicle purchase grant or loan incentive
VAT incentives for EV
Import tax incentives for EV
EV charging infrastructure target
EV charging infrastructure support

Fuel economy standards

Does the country have a fuel economy standard in place?

Not available


Buildings market

Much of Bulgaria’s multi-apartment housing stock was built across the 1960s to 1980s and comprises prefabricated panel buildings. These are low energy efficiency buildings that have been poorly maintained are in severe need of an upgrade.

Energy efficiency policy

Does the country have a national energy efficiency plan?

Not available

Energy efficiency policy

Are there minimum energy performance standards for buildings?

Not available

Energy efficiency incentives

Is there access to loans or grants for energy efficiency measures (i.e. Wall or loft insulation or double glazing)?

Not available

Buildings policy

Bulgaria’s NECP aims for renewables to account for almost 43% of the energy used for heating and cooling by 2030, up from 31% in 2020. This is based on increasing the role of biomass and solar, as well as geothermal power and heat pumps to a lesser degree. The plan also envisages energy efficiency improvements decreasing the amount of energy used for heating and cooling by 2% across 2020-2030.

Renovating the building stock is a key element of the country’s strategy to boost energy efficiency. Bulgaria’s NECP lays out an objective for 8% of the residential and non-residential building stock to be upgraded from 2021-2030, rising to a 20% share from 2041-2050. Priority will be given to introducing more efficient heating and cooling systems.

The country says that both EU and other funding programs will be used to finance its energy efficiency initiatives. For example, the Energy Efficiency and Renewable Sources Fund is the Bulgarian government’s soft loan program for fossil-fuel powered and renewable energy heating systems. It covers new high-efficiency boilers, separate domestic hot water heaters for summer usage, and high-efficiency fossil-fuel or electric-powered heat pumps – among other things. There is also a local-level grant scheme for renewable energy heating systems as part of the “Bulgarian Municipalities Working Together to Improve Air Quality” project, which runs to 2024.

There are also tax breaks on offer. Energy performance standards are directly connected to tax credit incentives. Improving the use of renewable energy in buildings is promoted through a tax rebate granted for those with a class A or B energy performance certificate. In addition, machinery and equipment acquired that increases energy efficiency is eligible for an accelerated tax depreciation benefit.

Buildings policies

Low-carbon heat target/roadmap
Tax credits
Boiler scrappage schemes
Heat pumps purchase grants/loans incentive
Ban on boilers: new build homes
Ban on boilers: all homes

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