There is a lack of transparency in the decision-making process following public discussions and/or hearings. Even in cases when a public discussion takes place, suggestions of relevant stakeholders are not taken into account. For the most part, the severity of this barrier has increased significantly since 2010.

There are certainly doubts about compromised independency influencing the decision-making of the Energy and Water Regulatory Commission (EWRC). For instance, in the end of April 2017, a specialised anti-corruption unit has begun an investigation on the officials of EWRC. The unit investigates, among others, if crimes were committed during the latest set of natural gas prices, as well as the price of water and district heating in the capital, which led to a significant price jump for the end-users in March 2015.

Furthermore, public authorities and the EWRC often deny requests for access to information such as statistics on the installed RES capacities, signed preliminary and/or final contracts or plans for reconstruction and further electricity grid development. Denial is usually based on the grounds of the non-existence of the requested information or a non-disclosure agreement. According to the Access to Public Information Act, they are obligated to provide the requested information.

The legislation is being amended as often as every six months. Laws, ordinances and other tertiary legislation are being created and amended with no assessment of the impact they might have on the interested parties, without long term planning or even coordination between the responsible authorities. As a consequence, the newly adopted laws contradict with the old ones and investors that have received investment support from institutions might lose it or declare bankruptcy as this state of affairs have not been envisaged.

In September 2012, a grid access fee was introduced by the Energy and Water Regulatory Commission (EWRC) with Decision C-33 of 14.09.2019, however, only for renewable energy technologies and not for conventional power plants. Three years later, in December 2015, the grid access fee was revoked by the Supreme Administrative Court (SAC) with Decision No. 212 of 23.12.2015. Furthermore, RES producers were forced to face complicated administrative procedures that oblige even the small-scale renewable energy producers (up to 200 kW of installed capacity) to obtain all the necessary permits for RES producers. In 2010, there was a moratorium proposal by the Ministry of Economy and the Ministry of Environment and Water (MOEW) for RES producers, which did not apply for conventional energy generators. In the year 2012, a grid connection restriction for RES plants was introduced by the EWRC in the form of upper limits (caps). In 2015, the feed-in tariffs (FiT) for small RES producers (up to 30 kW of installed capacity) have been significantly lowered by the EWRC due to a wrong application of §18 of the Energy Act aiming to avoid double subsidising for projects under energy-related programmes. Nevertheless, only small RES-E plants with subsidy granted by the State Fund Agriculture (SFA) are affected by the FiT shortage. The operators under an energy-related support scheme are not stricken.

In Bulgaria, renewable energy sources generating electricity (RES-E) are curtailed first in cases when the electricity grid is congested. The justification of transmission (TSO) and distribution system operators (DSOs) behind this is the lack of infrastructure to integrate the electricity from renewable energy technologies. According to the TSOs, infrastructure cannot be improved because of the lack of financing for the reconstruction and development of the electricity grid. Although the Bulgarian DSOs are ready to invest in the network infrastructure, the Energy and Water Regulatory Commission (EWRC) is against it because its main aim is to keep low electricity prices in the regulated market.

Moreover, the existing regulations impose an obligation to compensate the curtailment of RES-E, however, this happens only seldom in Bulgaria.

The real issue is not that there are ecological restraints, not that almost a third of the Bulgarian territory is within the borders of Natura 2000, it is the ungrounded bans for certain territories. According to some organisations, the spread of the ban should be throughout Bulgaria, allowing no more than 20% of the land to be used for renewable energy sources, but the Bulgarian authorities have not addressed this issue, yet. The most recent example of the negative impact of this barrier was pointed out by the Bulgarian Hydroenergy Association, according to which 138 small and medium hydropower plants (HPP) are threatened by the possibility of their early closure. The reason for this is the Water Basin Act (2010) which has allowed the Regional Basin Directorates to refuse to continue a water abstraction permit of a certain HPP if its water source falls into a protected area, independently of the location of the HPP. Most of these areas coincide with Natura 2000, but there are also others. This provision applies only to the plants which have been put into operation after 2010, but it also threatens the hydropower facility of NKK Tsankov Kamak with an installed capacity of 80 MW, which started operating in 2013.

According to the Association, several water use permits expired in the first half of 2019 and there are already cases of refusal of an extension. In the next 24 months, the permits are about to expire for approx. 50 HPPs. As of March 2019, 65% of the total renewable energy production in Bulgaria comes from HPPs and half of it is private.

Ordinance 14 on the technical rules and standards for design, construction and use of facilities and equipment for production, transformation, transmission and distribution of electricity should be amended, in order to remove the ban on installation of wind turbines, which are at least 500 m away from any settlement. Furthermore, the competent authority should remove the restriction for installing wind turbines in locations as long as they meet the noise ordinance requirements.

In Bulgaria, renewable energy sources (RES) have been declared costly, inefficient, and even harmful to the climate. The Prime Minister, having his third mandate currently, gave a series of interviews where he indicated that, for example, PV installations cause climate change due to the increased temperatures in their surroundings. In addition, wind turbine generators, in his opinion, lead to deaths of insects and birds.

Over the last couple of years, the government has used the media to create and maintain a negative image of RES. They have been blamed for every rise in electricity prices, by continually reminding that Bulgarians are paying high energy prices only because of the investments into renewable energy.

Currently, the administrative procedures and the requirements for these procedures are neither harmonised nor standardised, which leads to a lack of information exchange between the different national and local authorities and to slow RES development process, increased costs and additional and unnecessary burden for RES developers and investors. The Local Authorities Act has in a highly arbitrary manner imposed fees and requested tariffs for their services that are several times higher than the average ones. Especially troublesome is the issue with the administrative procedures where, correspondingly, there is arbitrariness in interpreting the law. However, a significant step for removing this bureaucratic burdens took place in March 2019, as the Chairman of the Energy Committee in the National Assembly introduced amendments to the Energy Act (EA) concerning the continuation of the process of liberalisation of the electricity market. According to the draft amendment to the EA, the so-called electricity export tax should be revoked (currently, Bulgaria is the only EU country that levies a charge on the electricity produced on its territory and destined for export). Furthermore, consumers using electricity generated for self-consumptionwill be exempted from the tax payment of the so-called Duty to the public(over € 19 per MWh). The document removes further bureaucratic barriers and administrative burdens for small producers while also regulating preferential prices for new cogeneration plants. All this is expected to have a significant positive impact on both traders, producers and consumers. Electricity costs are unlikely to decrease, but market participants will have greater security for prices, more choices and fewer barriers to their business. The new amendments are expected to become effective as of June 2019.

When discussing the preliminary stages of an investment project, it has to be noted that although relief and topographic maps, maps of solar and wind potential, etc. are publicly accessible, the finding of these documents is rather a lengthy and difficult process associated with personal connections, trial-and-fail attempts in communication, pulling strings, etc. Moreover, despite the requirements of the EC Directive, there are still no publicly available cadastral maps. Under these circumstances, there is no coordination between the stakeholders as to where a RES power plant could be installed in line with the requirements and restrictions of all the public authorities.

The government and energy institutions show no intention to provide any incentives to support the further deployment of small RES plants in residential buildings compared to other neighbouring countries such as Greece.

In general, the state does not express any interest in making good use of its geographic features and, instead of this, it is keeping its polluting coal-fired power station like Maritsa East 2 TPP, even at the price of more expensive electricity for the consumers. Notwithstanding the above, the Bulgarian energy experts consider reclaimed fields from the Maritsa East mines ideal for creating large solar power stations that could power the entire Stara Zagora Region.

Since June 2012, a moratorium on all kinds of new large-scale RES-E plants has been introduced by the Energy and Water Regulatory Commission (EWRC). The moratorium is still valid, and it does not apply only to wind and PV installations (rooftop as well as ground-mounted) with a maximum capacity of 30 kW and to biomass and hydropower plants up to the capacity of 1.5 MW.

In Bulgaria, the Electricity Trading Rules were adopted in May 2014, and, starting from June 2014, the balancing market has been launched. However, the Electricity Trading Rules fail to take into account the specifics of renewable electricity generation, which cannot achieve the desired forecasting accuracy in the “day-ahead” framework set by the energy regulator (EWRC). For wind power producers, for example, the balancing cost in June 2018 amounted to approx. 10% - 30% of the purchase price of the produced electricity.

In 2015, the Bulgarian parliament imposed a cap on the quantity of electricity purchased at feed-in tariff (FiT) up to the average annual operating hours for the respective producers. At a preferential price are bought only the quantities up to the amount of "net specific production" (NSP), as defined by the Energy and Water Regulatory Commission (EWRC; Decision SP-19). The NSP is defined as the average annual electricity output for installations from 1 kW of installed capacity after deducting the own electricity consumption of the RES producer. However, in October 2018, one of the affected by the NSP-restriction producers, Televic Bulgaria, won the trial against the Regulator. The Supreme Administrative Court (SAC) fully adopted the reasoning of the law firm defending the affected company, stating that the EWRC has no justification as to how and in what way is established the amount of NSP, which led to an act lacking motivation. SAC's decision on termination of the EWRC's restriction to the electricity production of RES affects only the company which won the case against the Regulator. However, there are still hundreds of identical pending claims of RES producers against the Decision SP-19 of EWRC, and if the case law of the above case is maintained, they will all be able to bring claims against the electricity buyers CEZ, EVN and Energo-Pro and the National Electric Company (NEK) to recover unrealised revenues. For most plants, the introduction of NSP has resulted in a third less revenue than expected.

In September 2012, the Energy and Water Regulatory Commission (EWRC) introduced a "temporary grid access fee" for renewable energy producers. They were obligated to pay a fee amounting to approx. 2 - 40% of their income. The EWRC justified the fee with the need to cover the costs related to the operation of RES power plants in the energy system. Several months before introducing the fee, EWRC underestimated the actual size of the newly connected RES capacities, and the projected surplus in the electricity price was not enough to cover the height of their feed-in tariffs (FiT). The specified access fee was matched with this deficit and not with the operation costs. The “temporary grid access fee” was revoked in March 2013 by the Supreme Administrative Court (SAC), which confirmed the decision of the first instance court from 13 March 2013.

Since April 2017, the grid access fee, which replaces the already revoked "temporary grid access fee" for PV and wind installations by the Supreme Courth, amounts to BGN 0.01651 per kW per day (approx. € 0.0084) for non-household customers, and for household customers BGN 0.00503 per kWh (€ 0.0027). The amount of the fee is set by the EWRC and cannot be predicted.

According to § 43 (9) Commission Regulation (EU) No 651/2014 of 17 June 2014, the Member States have the right to exempt renewable energy producers up to 500 kW without wind energy producers from contributing access charges, balancing fees and payments under the SES fund as operating aid. Moreover, according to § 43 (1) of the same Regulation, such aid is compatible with Articles 107 and 108 TFEU (Treaty on the Functioning of the European Union), thus, no notification to the EC will be required when making such a legislative change.

In pursuance of § 22 para. 1 of Directive 2009/28/EC on the promotion of renewable energy, the Ministry of Energy sent to the European Commission its Second National Report on Bulgaria’s Progress in the Promotion and Use from Renewable Energy Sources (2013). The report formally states that Bulgaria has reached its binding national target of 16% renewable energy energy (RES) in the final energy consumption in 2012. The Ministry has indicated 16.4% overall share of energy from RES in the gross final consumption of energy reached until 2012, which was published in the National Renewable Energy Action Plan (NREAP) from December 2013. However, associations argue that the report does not provide accurate information on the actual situation in the biogas sector. Furthermore, an industry report published by the Association of Producers of Ecological Energy (APEE) in 2013 shows that Bulgaria has only reached a share of 14.7% RES in the gross final energy consumption until 2012.

The misleading results and the provision of false information in the NREAP from 2013 have completely stopped the construction of new biogas plants, and indeed of all other RES because Bulgaria has met its target for the share of green energy eight years earlier, according to the APEE's Report.

The Bulgarian Wind Energy Association (BGWEA) insists on providing a clear methodology for adjusting the difference between the estimated market price and the actual market price so that RES producers can secure their current revenues from long-term contracts. This could be achieved by introducing a compensation component or a factor for any deviation between the predicted market price of and the actual one.

Currently, there is no national authority responsible for the implementation of an integrated national plan to promote the development of renewable energy and energy efficiency in all sectors. There is an agency responsible for sustainable energy development, called the Sustainable Energy Development Agency (AUER). However, this agency is subordinated to the Ministry of Energy, which limits its competences.

One of the most significant risks for future investors is public opposition. In Bulgaria, the local communities often have a negative attitude towards e.g. the biogas installations, mainly the NIMBY effect. The problem is that biogas installations are usually located very close to the populated areas. The lack of awareness campaigns among the people who live near future biogas plant leads to incomprehension, resistance and speculation. However, sometimes public opposition persists even when investors have explained that the fear of possible negative externalities (e.g. bad smell and/ or noise) is unfounded and that the new jobs would have a beneficial impact on the local employment in the region.

The energy sector in Bulgaria is characterised by its low scientific and technological level, focusing on energy sources such as coal and nuclear energy. In terms of competitiveness, the current technological development potential of Bulgaria only represents a small part of the added value of the energy sector. Both public and private expenditures for research and development (R&D) in the field of energy continue to be low compared to investments in other industries. When introducing a new energy technology, the return on investment (ROI) is too vague and uncertain.

The unfavourable investment climate in Bulgaria hinders investments in renewable energy projects, even though such investments are by definition cost-effective and, therefore, attractive to some other public sector investment. This leads to a weak interest of major international financial institutions in renewable energy projects in Bulgaria.

The aforementioned stems from the specifics of this kind of investment projects, e.g. relatively small volumes of investments with high investment risk and unclear guarantees, uncertainties in ownership and cash flow, lack of state guarantees.

Furthermore, most of the Bulgarian banks are still not interested and willing to participate in the financing of renewable energy projects. The reason for that is rooted above all in the poor knowledge of the specifics of this kind of projects.

The Energy and Water Regulatory Commission's (EWRC) methodology for determining premiums for renewable energy technologies entails a risk for RES producers because of the fix reference market price and fix premium for electricity, both set by the EWRC for the year ahead. This will have a high negative impact, especially on the wind power producers since the estimated stock exchange price for wind is € 34.29 per MWh for the period of 1 July 2018 until 30 June 2019. Accordingly, the premiums will be equal to the difference between the current preferential tariffs and the estimated stock exchange price. However, if free market prices are lower than predicted by the EWRC, RES producers will make less revenue.

According to the current legislation, the regulator can revise the premium amount if the forecast deviates by 30%. The wind energy producers consider this threshold too high and which can lead to severe financial problems long before the limit value is reached.

In Bulgaria, the number of civil society organisations working in the field of renewable energy is still insufficient. Furthermore, government's policy regarding the work with these non-governmental organisations is still unclear. As a result, it encourages unfair lobbying in the interest of monopolistic energy supplying companies or large energy equipment providers.

The Rural Development Programme (RDP) supports only the production of heat from biogas for own heat consumption. Because it is more cost-effective to produce heat and electricity simultaneously, it would be more profitable to change the measures in the RDP and to authorise the sale of surplus electricity. Theoretically, the production of electricity from biogas for its own needs is now allowed, but in practice, the § 43 (4) 1. of the Rulebook for Grid Operation of the Energy and Water Regulatory Commission (EWRC) does not foresee the production of electricity from RES in isolated systems. It means a connection to the grid for simultaneously producing heat and electricity from biogas and conclusion of commercial contracts is contrary to the rules of the RDP.

There is a lack of drivers like, for example, funds to support the environment-related investments.

Biomass sector is insufficiently developed in Bulgaria. The lacking development in the sector can be explained by the fact that in Bulgaria there are only a few big farmers, who would be able to breed energy crop plants. These farmers, however, are usually not willing to change crops, since they receive additional payments from the EU which are considerably higher than the amount of the support tariff they could claim for energy crops.

Before joining the EU in 2007, biofuels were treated as an excise-free product in Bulgaria. After country's accession to the EU, however, biofuels became a subject to the excise tax. Despite the fact that the European Commission has allowed biofuels to be zero-rated, the Bulgarian authorities do not take any actions to exempt them from this tax burden. As a consequence of the existing excise rates, there is only one operational biofuel plant in Bulgaria, while before the implementation of the excise tax ten bio-diesel and six bio-ethanol plants had been operating in the country.

The experts recommend a removal of the excise duty on biofuels.

In Bulgaria, there is a lack of financial incentives for natural persons who want to buy an electric vehicle. The development of the sector is not that fast, nevertheless, efforts are being made. For instance, the network of charging stations in the country expands rapidly, and there is a precise online tool for their location and charger type by cities. Furthermore, since 2014, there is also a national branch organisation for electrical mobility called IKEM, which has been making significant efforts to develop the sector by proposing legislation changes, by cooperating with the state administration, by creating a national charging infrastructure, etc. Public charging stations and free parking lots for electric vehicles are, however, still a rare practice of the Bulgarian municipalities. Nonetheless, according to information presented by the Bulgarian Ministry of Interior, there were 526 electric cars registered in Bulgaria by August 2018 which is twice as much as in the previous year.

The Association of Automobile Manufacturers and their Authorised Representatives in Bulgaria (AAP) recommend the introduction of support initiatives on national level such as free charging stations for electric cars, exemption of municipal and vignette taxes, a subsidy for natural persons for the purchase of a new electric vehicle, free parking areas and VAT reliefs for individuals for electric cars.

Bulgaria is among the very few EU Member States where taxation of vehicles is based on the power of engine instead of emissions. As a result, the annual tax on a 20-year-old diesel car is ten times lower than the one on a new car with a small gasoline engine or a hybrid drive. For example, the tax on a 15-year-old 95-horsepower diesel car in the capital Sofia is approx. € 13 per year, while the tax for a brand new car certified with Euro 6 having 120 horsepower amounts to € 174 per year.