Bulgaria’s energy sector has been undergoing deep and rapid reforms. The combination of the effects of the war in Ukraine and the related sanctions, the European Green Deal and the rapid decrease of investment costs for renewables, the commitments for a coal-free future, and the neighboring discoveries of natural gas in the Black Sea – all combined with the unprecedented support for nuclear energy – is putting Bulgaria on the global investment map.
The investment in photovoltaic plants is the most obvious change, as over the last three years Bulgaria added additional 5 gigawatt-peak new capacities to its existing 12 gigawatt fleet of electricity units. In the pipeline for 2026 are another 10 gigawatt-hours of battery storage (BESS) projects, some of which are stand-alone, while others are co-located to existing renewable facilities. In 2028-2030, we envisage the deployment of an additional 2-3 gigawatts of wind, which will complete the renewable energy transition of Bulgaria. In April 2025 alone, some 60% of the consumed electricity was produced by renewable energy sources.
Efforts toward the discovery of natural gas in the Bulgarian section of the Black Sea are fueled by the recent successes in Romanian and Turkish waters. Supported by major international energy players such as OMV, Shell, NewMed Energy, and others, Bulgaria is betting on a lesser dependence on imported natural gas. Following the recent completion of the Balkan Stream pipeline and the ICGB interconnector with Greece, Bulgaria has substantially increased its transit capacities and actively participates in the Northern gas corridor and BRUA projects.
The increase in renewables adds an extra complication for the balancing of the electricity system of Bulgaria. Therefore, the government is putting special focus on refurbishment of the existing Chaira Pumping Hydro power plant and on building four additional such facilities.
In the nuclear energy field, Bulgaria selected Westinghouse and Hyundai as leading international technology providers and EPC contractors for its intention to build Units 7 and 8 of Kozloduy Nuclear Power Plant, where the first four units are being decommissioned, and units 5 and 6 are operational. As the largest project in the Bulgarian energy sector to date, it requires special regulatory focus and Bulgaria intends to step up to the challenge. Both the Energy Law and the related and secondary legislation will need to be updated to provide for the required regulatory support, allowing financing of renewable and nuclear projects of such magnitude. Contracts for difference are a much-needed instrument that would allow for more affordable prices and a predictable environment for upcoming investments.
The predictability and stability of the investment climate of Bulgaria is a prerequisite for the success of these plans. Bulgarian legislation therefore requires both the government and Parliament to prepare and adopt a Strategy for Sustainable Energy Development by 2050, which will be the legitimate basis for the deeper regulatory reforms. This strategy will follow from the recently adopted Governance Program (2025-2029). The upcoming adoption of the euro in Bulgaria from January 1, 2026, will also provide benefits for the successful financing of the upcoming energy projects.
The independence and the increased administrative capacity of the regulator – the Energy and Water Regulatory Commission and the TSOs (ESO EAD and Bulgartransgaz EAD) are of fundamental importance for the success of the upcoming reforms. The timely adoption of the EU legislation and the involvement of the EU Commission in the upcoming projects are needed – an area where Bulgaria has been lagging behind in the past.
The transition of the Bulgarian coal regions is a key focus for both the Bulgarian government and civil society. The infrastructure, which has been built around the Bulgarian coal-fired thermal power plants, needs to be used as part of the transition to a carbon-free energy sector. With Bulgarian construction companies leading the way in renewable energy projects construction on five continents and with the availability of new technologies replacing coal, we are quite confident that the Bulgarian coal regions will see a much-anticipated revival. With the largest ESG renewable energy projects already being implemented there, the country is off to a promising start.
By Kostadin Sirleshtov, Managing Partner, and Borislava Piperkova, Partner, CMS Bulgaria
This article was originally published in Issue 12.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
