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Bulgaria Simplifies Rules for Own-Consumption Electricity Generation

Bulgaria Simplifies Rules for Own-Consumption Electricity Generation

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Bulgaria is making significant efforts to boost the share of renewables in its energy mix and reduce its dependence on fossil fuels. The new REPowerEU Plan provides for a massive scaling-up and speeding-up of renewable energy in power generation, industry, buildings, etc.

The proposal of the European Commission is the headline 2030 target for renewables to be increased from 40% to 45% under the Fit for 55 package. A Solar Rooftop Initiative with a phased-in legal obligation to install solar panels on new public, commercial, and residential buildings is also on the table.

In compliance with the European Union’s goals, Bulgaria will strive to achieve at least a 27.09% share of energy from renewable energy sources (RES) in gross final energy consumption by 2030. The National Recovery and Resilience Plan (NRRP) outlines the need for stimulating the production of electricity from RES by reducing the administrative burden on renewable investments with regard to the installation, connection, and operation of the facilities.

Consequently, on June 7, 2022, an act supplementing the Energy from Renewable Sources Act (ERSA) was published in the Bulgarian State Gazette No. 42. The amendments’ aim is to optimize the deadlines for the construction of power plants up to 5 megawatts for covering own consumption and its faster implementation to optimize electricity costs.

The act introduces a notification regime in the cases where an end customer installs a power plant on the roof or facade of buildings or properties in urban areas, the energy from which will be used only for own consumption. The notification shall be addressed to the electricity transmission network operator, the relevant electricity distribution network operator, or the closed electricity distribution network, as the case may be. Prior to entry into force of the amendments, the investors had to follow the procedure for connecting to the grid, which, in some cases, could take considerable time.

In order to avoid any possibilities to circumvent the law, it was decided that in order to build the power plant in the simplified order, the total installed capacity of the power plant could be up to twice the amount of the capacity provided to the end customer as a consumer but not more than 5 megawatts.

According to the new provisions of the ERSA, the respective operator shall provide an additional agreement to the access and transmission agreement signed with the end customer within 14 days of receipt of the notification, in which the technical requirements for the connection scheme of the power plant to the electrical system are specified and the rights and obligations of the parties are regulated. The agreement shall serve as a guarantee for the security of the power grid and prevention of the entry of electricity and disturbances in the network, as a statement of opinion on the conditions and manner of connection is no longer required. It is also expressly regulated that the owner of such a power plant may return surplus or sell electricity to the distribution network only after fulfilling the requirements of the procedure for joining as a producer.

In view of the applicability of the new rules, the respective provisions of the Spatial Development Act and Excise Duties and Tax Warehouses Act have also been supplemented. Unlike under the previous regime, approval of development-design projects is no longer required for the issuance of a construction permit for such projects. For the constructions in question, only an opinion of a specialist engineer and the additional agreement to the access and transmission agreement are now required.

Given the energy crisis, society, businesses, and the government realized the significant importance of having an accessible, reliable, and sustainable form of energy. Thus, the interest of businesses in investments in the RES sector for their own consumption is rising and further law amendments favorable to investors are expected.

By Kostadinka Deleva, Partner and Head of Energy, and Mihaela Dimitrova, Associate, Gugushev & Partners

This Article was originally published in Issue 9.8 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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