Bulgaria to develop 62 GW capacity of offshore wind potential

The Energy from Renewable Sources at Territorial Waters of Bulgaria Bill (the “Bill”) governs the public relations regarding the power production from offshore wind farms in the sea waters of Republic of Bulgaria. The Bill envisages the regulation of the exploration of the development potential of the offshore wind farms and aims at promoting effective utilisation of the natural resources for offshore power production.

The Bill is envisaged to enter into force on 1 January 2023.

Inter-ministerial Expert Council for Development of Offshore Energy (“IECDOE” or “Council”) shall be established and it will act as an advisory body of the Council of Ministers, chaired by the Prime Minister.

The Council conducts preliminary exploration in the priority zones (i) in order to provide the participants in the concession procedureinformation sufficient to prepare a tender and (ii) to determine the suitability of the zones for wind farms development. Therefore, to provide that information, the Council shall conduct assessment of the wind potential in the designated zone and research the maritime environment.

The right to build and operate an offshore wind farm for priority and non-priority zones is granted by means of concession. The concession is granted for a period of up to 25 years and covers all the activities – planning, designing, construction, operation and decommissioning of the wind farm.

Concession procedure for construction and operation of a wind power plant in a suitable priority zone is initiated (i) upon the initiative of IECDOE or (ii) upon application of an interested business operator. If the statutory conditions are met, upon filing of an application of an interested business operator, IECDOE cannot refuse to initiate a concession procedure.

The criterion for granting a concession is the lowest price proposed by a participant for power purchase per unit of power produced under the Contract for Difference (“CfD”). In case two or more tenders have equal price, the criterion for highest financial investments proposed applies.

The concession is launched by virtue of Energy and Water Regulatory Commission’s decision after the approval of the Council of Ministers. The notice of initiation contains the maximum price to be proposed under the Contract for Difference.

For non-priority zones a permit for exploration of potential and possibilities for construction an offshore wind power plant is granted for a period of up to 3 years. After IECDOE gives a positive assessment of the potential for power generation from an offshore wind farm located in the permitted area, the permit holder is enabled to request before IECDOE to obtain a concession by right for constructing and operating an offshore wind farm.

Contract for Difference shall be introduced and shall apply for construction and operation of an offshore wind farm in a suitable priority zone. Therefore, the amount of the rates, timeframe and payment mechanism under the CfD shall be reflected in the concession agreement. The CfD shall be concluded between the concessionaire and the Electricity System Security Fund (“ESSF”) where the price under it represents the lowest possible price guaranteed by ESSF for purchasing electricity produced from an offshore wind farm.

For more information on offshore wind in Bulgaria, contact your regular CMS source or local CMS experts: Kostadin Sirleshtov and Dian Boev. This law now alert has been co-authored by Lyubomira Tanchovska.