Published on and written by Cyril Jarnias
Bulgaria, situated at the crossroads of Eastern Europe, is undergoing a significant energy transformation, influenced by complex geopolitical and economic factors. In a context where the energy transition is becoming crucial, the country is striving to reduce its dependence on fossil fuels and ensure sustainable energy security. Growing investments in renewable energy, such as solar and wind, along with the optimization of distribution networks, play a key role in this transition. Simultaneously, government policies are evolving to encourage innovation and energy efficiency, shaping a dynamic and rapidly changing landscape that is increasingly attracting the attention of international investors.
Evolution of Bulgaria’s Energy Landscape
The Evolution of Bulgaria’s Energy Landscape
The Bulgarian energy sector has undergone significant transformation over the decades, shifting from near-total dependence on fossil fuels to a more diversified energy mix. In the 1950s, the country began exploiting its lignite resources, particularly in the Maritsa Iztok basin, which became a cornerstone of electricity production. The communist era saw the emergence of nuclear energy with the construction of the Kozloduy plant in 1974, marking a turning point in the national energy strategy.
Today, the Bulgarian energy landscape relies on a balance between nuclear, coal, natural gas, and renewable energy. In 2023, the electricity mix consisted of approximately 34% nuclear, 35% coal, and a growing share of renewables. This diversification has allowed Bulgaria to reduce its energy dependency to 45%, a figure significantly lower than the European average of 58%.
Reforms and European Union Influence
Bulgaria’s accession to the European Union in 2007 catalyzed a series of reforms in the energy sector. The country had to align its policies with European directives, particularly regarding energy market liberalization and the promotion of renewable energy. The European Green Deal played a crucial role in accelerating the Bulgarian energy transition.
In 2023, Bulgaria raised its target for the share of renewables in gross final energy consumption to 42.5% by 2030, in line with EU ambitions. This decision spurred investments in the solar and wind sectors, leading to a significant increase in their contribution to the national energy mix.
The Rise of Renewable Energy
Renewable energy has experienced remarkable growth in Bulgaria in recent years. In 2023, they accounted for 22.5% of the country’s gross final energy consumption, a notable increase from the 19% recorded in 2022.
Solar energy has expanded particularly rapidly, reaching 12% of electricity production during the first months of 2023. The country benefits from strong solar potential, with large-scale projects like the 124 MW photovoltaic plant commissioned in late 2024 in the southwestern part of the country.
Wind energy and hydropower also contribute significantly to the renewable mix. In June 2023, hydropower accounted for 17% of electricity production. Ambitious projects, such as the construction of two pumped-storage hydropower plants with a capacity of 800 MW each, demonstrate the country’s commitment in this area.
Persistent Challenges
Despite this progress, the Bulgarian energy sector faces significant challenges. Dependence on natural gas imports remains a major concern, although diversification efforts are underway, including through LNG imports via the Alexandroupolis terminal in Greece.
Aging infrastructure, particularly in the coal sector, also poses a problem. The Maritsa Iztok-2 thermal power plant, although the most powerful in the country, is also considered the most polluting industrial site in the European Union. The transition to cleaner energy sources requires massive investments and a restructuring of the sector.
Future Prospects
Bulgaria is firmly committed to the energy transition, with innovative projects and ambitious policies. The country plans to invest heavily in energy storage infrastructure, with a goal of adding at least 3 gigawatt-hours of new electricity storage facilities to the energy system by 2030.
In the nuclear field, construction of a new AP1000 reactor at the Kozloduy plant began in late 2023, with a second one planned, for a total capacity of 2.3 gigawatts. These projects aim to maintain the significant share of nuclear in the energy mix while reducing dependence on coal.
The Bulgarian government has also launched initiatives to promote the adoption of renewable energy at the individual level. A program offering financial incentives for the installation of photovoltaic systems and solar water heaters in households was established in 2023, with a total budget of approximately 59.8 million BGN.
These combined efforts demonstrate Bulgaria’s commitment to modernizing its energy sector, reducing its carbon footprint, and aligning with European Union climate goals. The transition towards a more sustainable energy mix is underway, although challenges persist, particularly in managing the gradual phase-out of coal and the large-scale integration of renewables.
Good to Know:
In Bulgaria, the energy sector has historically relied on coal and nuclear power, but recent decades have seen the gradual introduction of renewable energy. Since joining the European Union, the country has implemented several reforms to diversify its energy sources, notably by increasing solar and wind capacity, which now account for about 20% of the energy mix. Nevertheless, dependence on imports, primarily natural gas, remains a major challenge, exacerbated by aging infrastructure. To address these weaknesses, Bulgaria is investing in projects like solar and wind farms and plans to modernize its electrical grid. A recent innovative project includes a pumped-storage hydropower initiative aimed at stabilizing the supply. However, the country still faces regulatory and financial hurdles to accelerate its transition to green energy.
Renewable Energy: A Turning Point for the Bulgarian Market
A Major Turning Point for the Bulgarian Energy Market
Bulgaria is firmly committed to the transition towards renewable energy, marking a decisive turning point for its energy market. The country aims to increase the share of renewables in its total consumption to over 30% by 2030, in line with the objectives of the European Green Deal. This ambition is reflected in massive investments and innovative projects across various clean energy sectors.
Large-Scale Wind and Solar Projects
The solar sector is experiencing remarkable growth in Bulgaria. In December 2022, construction began on the country’s largest solar power plant, with a peak nameplate capacity of 124 MW. This flagship project is expected to increase Bulgaria’s total solar power generation capacity by 12%. In the wind sector, although recent data is limited, the country continues to exploit its favorable geographical potential.
Biomass and Storage: Complementary Solutions
Bulgaria is also investing in energy from biomass, using organic materials like wood and agricultural waste to produce heat and electricity. Energy storage is receiving particular attention, with a 2024 call for projects attracting 151 proposals for standalone storage systems, totaling nearly 2.55 billion euros.
Economic and Environmental Impacts
The transition to renewable energy promises significant economic benefits. It is expected to stimulate job creation in green sectors and strengthen the country’s energy independence. Environmentally, this transition will contribute to the reduction of greenhouse gas emissions, with existing projects already enabling savings of over 95,000 MWh/year and a reduction in emissions of 75,000 tons/year.
Challenges and Obstacles to Overcome
Despite these advances, Bulgaria faces several challenges. Integrating renewable energy into an aging grid requires substantial infrastructure investment. Financing these projects remains a major issue, although the country benefits from European support, notably through the National Recovery and Resilience Plan.
Government Initiatives and Incentives
The Bulgarian government is multiplying initiatives to encourage the development of renewable energy. In January 2023, a financial assistance program was launched to support the installation of solar systems for households, with grants covering up to 70% of costs. Similar calls for projects target businesses, with funding potentially reaching 50% of investment costs for solar and storage installations.
Prospects for Consumers
For Bulgarian consumers, this energy transition could translate into greater long-term price stability. However, significant initial investments could lead to a temporary increase in energy costs. For example, an average increase of 8.42% in the price of electricity for households was announced for January 2025.
A Promising Future Despite Challenges
Bulgaria is positioning itself as a key player in the energy transition in Southeastern Europe. With ambitious projects like the construction of pumped-storage hydropower plants, the country aims to strengthen its energy security while contributing to the stability of the regional power grid. These developments pave the way for a greener, more resilient, and better-integrated Bulgarian energy market within the European Union.
Good to Know:
Bulgaria has recently invested in wind, solar, and biomass, following government targets to increase the share of renewable energy to 25% of the energy mix by 2030. This transition is expected to boost the economy through the creation of green jobs and reduce CO2 emissions, but faces obstacles such as funding, aging infrastructure, and sometimes complex regulation. To address these challenges, the country is implementing subsidies, tax incentives, and public-private partnerships to encourage renewable initiatives. However, consumers might face a temporary increase in energy costs, although this transition potentially improves long-term energy security. For example, recent collaborations with the European Union aim to modernize the electrical grid to effectively integrate these new energy sources.
Impact of Electricity Costs on Households and Industries
Evolution of Electricity Tariffs in Bulgaria
In 2025, Bulgaria has one of the lowest electricity prices in the European Union, with an average tariff of €0.0989 per kWh for households. However, despite this relatively low level, prices have seen a significant increase in recent years. Between 2023 and 2025, residential tariffs increased by about 15%, rising from €0.0861 to €0.0989 per kWh. This increase, although moderate compared to other European countries, nevertheless represents a challenge for many Bulgarian households.
Impact on Household Budgets
The increase in electricity costs has a disproportionate impact on low- and middle-income households in Bulgaria. For low-income families, energy expenses can account for up to 17% of their monthly budget, which is considerably higher than the European average. This situation is particularly concerning in a country where nearly 500,000 households, or about 14% of the population, are considered “vulnerable customers” eligible for social protection regarding electricity.
Middle-income households are not spared either. Although their share of energy expenses is lower, the increase in electricity costs reduces their purchasing power and limits their ability to invest in other essential areas like education or health.
Repercussions on Energy-Intensive Industries
Energy-intensive industries, such as metallurgy and chemicals, which are pillars of the Bulgarian economy, are particularly affected by the evolution of electricity costs. These sectors are seeing their profit margins shrink, which affects their competitiveness on international markets. For example, some metallurgical companies have reported an 8 to 12% increase in their production costs due to rising electricity tariffs, forcing them to consider staff reductions or relocations.
Government Mitigation Policies
The Bulgarian government has implemented several measures to mitigate the impact of electricity costs on households and industries:
- A targeted winter allowance for low-income households, aimed at covering part of heating costs
- A mechanism to protect vulnerable customers, guaranteeing a minimum amount of electricity for essential needs
- Subsidies for the energy renovation of residential buildings, with a budget of €880 million allocated to this program
- Financial support for energy-intensive industries for the adoption of more energy-efficient technologies
Regional Perspective
Compared to its neighbors, Bulgaria maintains relatively low electricity prices. In 2025, the average price per kWh in Bulgaria (€0.0989) remains lower than in Romania (€0.1392) or Greece (€0.1827). However, given the lower purchasing power in Bulgaria, the impact on households is proportionally greater than in these neighboring countries.
Adaptation Strategies for Households and Businesses
Faced with rising costs, Bulgarian households and businesses are adopting various strategies to reduce their consumption and energy expenses:
- Installation of domestic solar panels, encouraged by a government reimbursement program covering up to 70% of the total project cost
- Growing adoption of high-efficiency electrical appliances
- Business investment in energy management systems and energy efficiency technologies
- Development of industrial self-consumption, particularly in the manufacturing sector
These initiatives, combined with government policies, aim to mitigate the impact of rising electricity costs on the Bulgarian economy and household well-being. However, challenges persist, particularly for the most vulnerable segments of the population and industries heavily dependent on electrical energy.
Good to Know:
In Bulgaria, electricity tariffs have seen a significant increase in recent years, heavily impacting households, especially those with middle and low incomes, who see a growing portion of their budget allocated to it. Energy-intensive industries like metallurgy and chemicals also feel this pressure, leading to an increase in production costs potentially passed on to consumers. Comparatively, Bulgaria remains one of the EU countries with relatively low costs, but neighbors like Romania and Serbia have implemented similar subsidy policies to mitigate these increases. The Bulgarian government has recently strengthened its aid for families in energy difficulty, while large companies are increasingly adopting energy management strategies and investing in renewable energy to reduce their dependence. Households, for their part, are adopting energy-saving practices such as improved home insulation and the use of more efficient appliances to lighten the bill.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
