COMMISSION STAFF WORKING DOCUMENT Energy Union Factsheet Bulgaria Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK Third Report on the State of the Energy Union
Date: 2017-11-23
Institutions: European Commission, Secretariat-General
Subjects: Bulgaria, climate change policy, competitiveness, economic and social cohesion, energy cooperation, energy policy, innovation, investment, regional cooperation, single market

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 23.11.2017 SWD(2017) 386 final  COMMISSION STAFF WORKING DOCUMENT Energy Union Factsheet Bulgaria  Accompanying the document  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK  Third Report on the State of the Energy Union  {COM(2017) 688 final} - {SWD(2017) 384 final} - {SWD(2017) 385 final} - {SWD(2017) 387 final} - {SWD(2017) 388 final} - {SWD(2017) 389 final} - {SWD(2017) 390 final} - {SWD(2017) 391 final} - {SWD(2017) 392 final} - {SWD(2017) 393 final} - {SWD(2017) 394 final} - {SWD(2017) 395 final} - {SWD(2017) 396 final} - {SWD(2017) 397 final} - {SWD(2017) 398 final} - {SWD(2017) 399 final} - {SWD(2017) 401 final} - {SWD(2017) 402 final} - {SWD(2017) 404 final} - {SWD(2017) 405 final} - {SWD(2017) 406 final} - {SWD(2017) 407 final} - {SWD(2017) 408 final} - {SWD(2017) 409 final} - {SWD(2017) 411 final} - {SWD(2017) 412 final} - {SWD(2017) 413 final} - {SWD(2017) 414 final}  
 
 
                              Energy Union – Bulgaria 

 Bulgaria 

    Energy Union factsheet1 

1.  Macro-economic implications of energy activities 

Energy and transport are key sectors for the overall functioning of the economy as they provide an 
important  input  and  service  to  the  other  sectors.  Together,  the  activity  in  these  two  sectors2 
accounted  for  10.3%  of  the  total  value  added  of  Bulgaria  in  2015.  Similarly,  their  share  in  total 
employment3 was 6.5% in 2015, of which 5.6% in the transport sector and 0.9% in the energy sector.  

(source: Eurostat) 

The  decarbonisation  of  the  energy  and  transport  sectors  will  require  significant  investments  and 
economic  activity  beyond  the  remit  of  these  sectors  themselves.  The  energy  transition  implies  a 
structural  shift  in  economic  activity.  Energy-related  investment  and  jobs  will  in  part  migrate  from 
traditional  fossil  fuel  based  activities  towards  construction,  equipment  manufacturing  and  other 
services related to the deployment of low carbon and clean energy technologies. At the moment, the 
efforts related to the low-carbon and clean energy transition in sectors beyond energy can only be 
partially quantified and are therefore not included in this analysis. 

In the case of renewable energy sector, both the direct as well as the indirect effects on employment 
are  being  estimated.  According  to  EurObserv'ER,  in  2015,  the  share  of  renewable  energy  related 
employment in total employment of the economy in Bulgaria was about 0.25%. The turnover of the 

1   The indicators used in this country factsheet largely build on indicators developed for the Commission Staff 
Working  Document  "Monitoring  progress  towards  the  Energy  Union  objectives  –  key  indicators" 
(SWD(2017)  32 
final)  https://ec.europa.eu/commission/sites/beta-political/files/swd-energy-union-key-
indicators_en.pdf  

2   Gross value added and employment in NACE sectors D-Electricity, gas, steam and air conditioning supply 

and H-Transportation and storage 

3   National accounts, Eurostat 

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renewable energy industry in the same year was estimated at around EUR 0.68 billion, about three 
quarters being attributed to the biomass (50% of total renewable turnover) and to the heat pumps 
(25.7%) industries. 

(source: EC based on Eurobserv'Er and Eurostat) 

An indication of the level of investments in the energy sector in Bulgaria is given by the Gross fixed 
capital  formation  (GFCF)4.  These  investments  in  the  electricity  and  gas  sectors,  which  are  taken  as 
reference  sectors,  represented  around  4%  of  the  country's  GDP  in  both  2012  and  2013,  which  is 
higher than in the pre-crisis period. 

(source: Eurostat) 

In terms of trade, Bulgaria has a deficit in fossil fuels and a surplus in electricity. In 2006 the country 
showed  a  positive  trade  balance  in  oil  accounting  for  around  4%  of  GDP,  whereas  by  2015  it  had 
turned into a deficit of about 2% of GDP. Similarly, trade deficit in gas increased in the same period, 
while the deficit in coal decreased considerably. This evolution reflects also the fall in global energy 
prices,  which  may  have  made  imports  of  fossil  fuels  more  attractive.  Finally,  the  trade  balance  in 
electricity became positive in 2015. 

4 Gross fixed capital formation consists of resident producers´ acquisitions, less disposals, of fixed tangible or 
intangible assets. This covers, in particular, machinery and equipment, vehicles, dwellings and other buildings. It 
also includes foreign direct investment (FDI). Steam and air conditioning supply are also included in the figures 
mentioned above as Eurostat reports electricity, gas, steam and air conditioning supply together. 

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(source: Eurostat) 

2.  Energy security, solidarity and trust 

2.1. Energy Mix 

Bulgaria's gross inland consumption of energy stood at 18.5 Mtoe in 2015, an increase of about 4% 
compared  to  the  previous  year  but  still  in  line  with  a  long  term  trend  of  decreasing  demand. 
Domestic  energy  production5  increased  for  a  second  year  in  a  row  and  reached  12.1  Mtoe,  the 
second highest production value since 1990. The increase was mainly driven by lignite extraction and 
renewables. The country's electricity generation in 2015 reached 49.2 TWh, with strong contribution 
from lignite,  hydro, other RES and to a lesser extent, nuclear.  The 2015 level is the second highest 
since 1990 and represents a year-on-year increase of more than 3.5%. 
Compared  to  the  EU  average,  the  energy  mix  of  Bulgaria  has  a  higher  use  of  solid  fuels  (34.1%  vs 
16.2%) and nuclear (20.5% vs 13.6%) and lower share of petroleum and products (21.6% vs 34.5%) 
and gases (13.4% vs 22%) whereas the share of renewables is roughly similar (10.3% vs 12.9%). 

 (source: Eurostat) 

2.2. Import dependency and security of supply 

5 Primary production, recycled and recovered products 

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The  overall  energy  import  dependency  of  Bulgaria  is  well  below  the  EU  average.  It  marked  a  solid 
improvement in the last 10 years while that of the EU increased marginally to 51.4%. From 2005 to 
2015, the Bulgarian energy import dependency decreased by more than 10 p.p. and reached 35.4%, 
driven  by  a  strong  domestic  production  of  lignite,  a  relatively  high  share  of  nuclear  electricity 
production and by a robust expansion of renewable output.  
However, Bulgaria imports almost all of its petroleum products and natural gas needed for domestic 
consumption.  In  2015,  the  net  import  dependency  of  petroleum  fuels,  natural  gas  and  hard  coal 
stood respectively at 100%, 97% and 94.9%, even if uses of hard coal are relatively limited. Bulgaria 
purchases  its  gas  from  a  single  trading  partner,  the  Russian  Federation.  That  same  partner  also 
provided 81.2% of the crude oil and products in 2015. As a result, the supplier concentration  index 
for  gas  and  oil  in  2015  stood  at  94.2  (4th  highest  in  the  EU)  and  67.1  (5nd  highest  in  the  EU) 
respectively.  
In addition to relying on a single supplier and on a single route for its gas imports, Bulgaria has still 
very limited solutions for alternative supplies such as LNG and gas storage. Bulgaria is consequently 
vulnerable to gas disruptions.  

 (source: Eurostat) 

Imports of uranium and nuclear fuels are not included in Eurostat's energy balances and therefore 
import  dependency  cannot  be  calculated  in  the  same  way  as  for  the  main  fossil  fuels.  Bulgaria 
purchases its nuclear fuel from a single supplier, the Russian Federation. In 2015, about 31.3% of the 
electricity  generated  was  based  on  Russian  nuclear  fuel  deliveries.  This  corresponds  to  the  total 
amount of electricity generated from nuclear plants, 15.4 TWh in 2015. 

The Regulation concerning measures to safeguard security of gas supply  requires that, if the single 
largest gas infrastructure fails in one Member State, the capacity of the remaining infrastructure is 
able to satisfy total gas demand during a day of exceptionally high gas demand. Bulgaria is currently 
not  complying  with  this  rule,  reaching  just  50.6%  of  the  required  level.  Bulgaria  is  using  a 
combination of measures to mitigate the risks on security of gas supply. These measures are related 
to  grid  reinforcement  (refurbishment  of  several  compressor  stations),  new  interconnectors  with 
neighbouring  systems  (the  new  link  Romania  became  operational  in  2016)  and  demand-side 
measures that can lead to the interruption of supply to non-protected suppliers, in case of a severe 
crisis situation (defined as level 5-7 crisis). 

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(source: gas coordination group) 

3.  Internal market 

3.1. Interconnections and wholesale market functioning 

3.1.1.  Electricity 

 (source: EC based on ENTSO-E scenario 
outlook and adequacy forecast 2014) 

(sources: EC services based on Eurostat for the left graph  and based 
on Platts and European power exchanges for the right graph) 

In 2017, the electricity interconnection level6 of Bulgaria was assessed at 7.1%, well below the 2020 
target of 10%. Nevertheless, the country is on the path to reach the 10% target by 2020 through the 
completion of PCIs currently under way. Bulgaria participates in the TEN-E Central Eastern and South 
Eastern  regional  group  for  North-South  electricity  interconnections  which  can  help  it  reach  the 
interconnection targets. 

6 The interconnectivity level is calculated as a ratio between import interconnection and net generation capacities 
of the country (i.e. the 2017 value is the ratio between simultaneous import interconnection capacity [GW] 
and net generating capacity [GW] in the country at 11 January 2017, 19:00 pm as resulted from ENTSO-E 
Winter Outlook 2016/2017) 

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The market concentration in the Bulgarian power generation sector is below EU average. The 2015 
HHI7  respective  values  for  Bulgaria  and  EU  are  estimated  at  3210  and  3726  respectively.  The 
combination  of  a  large  number  of  sellers  and  a  well-supplied  market  represent  a  strong  strategic 
resource that could allow Bulgaria to play a leading role in the South Eastern electricity market. Yet 
those  advantages  are  hampered  by  the  segmentation  of  the  wholesale  market.  Furthermore,  the 
regulated segment is organised as a single buyer model with a quota system granting priority access 
to uncompetitive power plants. The free segment faces its own problems with market transparency 
and  liquidity  that  can  be  further  improved  by  setting  up  a  strong  and  truly  independent  power 
exchange trading on the whole spectrum of products, from intra-day and day-ahead to year-ahead 
and contracts and other derivative products. 

Bulgaria  has  recently  embarked  on a  series  of  difficult,  overdue  reforms  in the energy sector,  with 
some  tangible  results  including:  enforcing  the  independence  of  the  energy  regulator  through 
amendments  of  the  Energy  Bill;  the  setting  up  of  a  power  exchange  and  steps  for  opening  of  the 
retail competition; the payment of arrears and restructuring of the long term purchasing agreements 
with some lignite power generators and the switching to market-based mechanisms for renewables 
support.  

3.1.2.  Gas 

Bulgaria  is  buying  almost  all  its  gas  from  its  single  supplier  via  the  single  supply  route  through 
Ukraine,  the  Republic  of  Moldova  and  Romania.  The  relatively  poor  trading  choice  is  further 
compounded by a market structure which is dominated by a traditional incumbent company and a 
lack of transparency and influence on wholesale price formation.  

Market  concentration  numbers  and  price  levels  compare  very  poorly  to  the  EU  average:  2015  HHI 
numbers for Bulgaria and the EU stood respectively at 9484 and 4771. In addition, Bulgaria is among 
the Member States that are still vulnerable to supply disruption. 

On the positive side, Bulgaria is a member of the Central Eastern and South Eastern Gas Connectivity 
(CESEC)  regional  initiative  and  3  of  the  7  high  priority  infrastructure  projects  in  the  CESEC  region 
relate  to  Bulgaria.  These  include  the  interconnector  Greece-Bulgaria,  the  interconnector  Bulgaria  – 
Serbia and the phased reinforcement of the Bulgarian grid.  

The inter-system gas link between Bulgaria and Romania is operational since 2016. Bulgaria has also 
reinforced  several  critical  internal  grid  elements  and  awaits  important  results  of  seismic  studies  in 
several offshore blocks on the Black Sea. 

7 HHI stands for "Herfindahl-Hirschman Index", a measure of market concentration. 

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(source: ACER for the left graph and EC services based on Platts, gas hubs, Eurostat for the right graph) 

3.2. Retail electricity and gas markets 

3.2.1.  Electricity 

In 2016, households' electricity prices in Bulgaria were more than twice below the EU average level, 
when  measured  in  Euro  per  Kwh.  Between  2013  and  2016,  retail  prices  for  the  median  consumer 
band for households increased by less than 1 Euro Cent / kWh, while the shares of taxes and levies 
remained stable. When measured  in purchasing  power  standards  per unit of  energy,  the  Bulgarian 
retail  prices  appear  much  closer  to  the  EU  average,  pointing  to  potential  affordability  issues  for 
certain group of consumers (as presented in sub-section 3.3. below). 
In principle, there are no restrictions for household consumers to switch suppliers but the very vast 
majority of them remains with the traditional, non-competitive offer of the incumbent suppliers that 
operate in separate, precisely defined regional markets. As a result, switching rates are negligible for 
household consumers and companies linked to the grid on a low voltage level. 
Prices  are  regulated  for  both  electricity  and  gas.  However,  Bulgaria  is  envisaging  a  progressive 
deregulation of all prices starting with the electricity sector. 

(source: ACER) 

(source: Eurostat)  

(source: Eurostat) 

7 

 
 
 
 
 
 
 
 
 
                              Energy Union – Bulgaria 

3.2.2.  Gas 

In 2015  Bulgarian  residential consumers  used  51.8  ktoe of  natural  gas,  representing about  2.4%  of 
the  final  energy  consumption  of  households  and  less  than  2%  of  the  gross  inland  consumption  of 
natural gas. In 10 years the amount consumed more than tripled but the retail market is not yet fully 
developed,  remaining  confined  in  several  urban  areas  with  a  single  supplier  per  area.  The  end 
consumer price is regulated on a cost-plus basis. 

(source: ACER) 

(source: Eurostat)  

(source: Eurostat) 

3.2.3.  Market performance indicators 

Bulgarian  consumers  of  electricity  and  natural  gas  are  less  satisfied  than  the  EU  average  with  the 
quality  and  price  of  services  received  on  the  energy  retail  markets.  In  addition,  electricity  and  gas 
supply scores below the average of the broad sample of industries surveyed, with gas supply being 
the  relatively  better  performer.  The  combination  of  low  switching  rates  and  lack  of  switching 
indicates market closure and few incentives for incumbents to improve the service. 

(source: DG JUST survey) 

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3.3. Energy affordability  

In Bulgaria 20% of the poorest households spent more than 14% of their budget on domestic energy 
services – an increase of 3 pp over the period 2005 – 2014.  
In 2015, around 67% of the most socially deprived households were still unable to keep their homes 
warm. This represents a decrease in comparison to 2005 when the share stood at 79%, but it remains 
significantly above the EU average of 23% and makes Bulgaria the worst performer in the EU on that 
metric. 

 (source: ad-hoc data collection of DG ENER based on HBS with the support of Eurostat and national statistics) 

4.  Energy efficiency and moderation of demand 

In 2015, the Bulgarian primary and final energy consumption increased for a second year in a row, 
reaching respectively  17.9  Mtoe and  9.5  Mtoe.  Both values  are  about 1  Mtoe above  the indicative 
national  targets  for  2020,  with  the  road  transport  sector  and  the  industry  recording  the  biggest 
annual increases. 

(source: Eurostat) 

The Bulgarian primary energy intensity decreased by more than 25% over the 2005-2015 period, and 
by more than 39% over the last 15 years, despite a small uptick in 2015. During the same period the 

9 

 
 
 
 
 
 
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GDP rose by 28% (at 2010 EUR) whereas the primary energy consumption decreased by about 5%. 
That being said, Bulgaria remains the most energy intensive economy in the EU by a large margin. 

The  structure  of  the  Bulgarian  final  energy  consumption  is  quite  similar  to  that  of  the  EU,  with 
industry,  transport,  residential,  services  and  agriculture taking  the largest  shares.  Compared  to  the 
EU  average,  the  shares  of  industry  and  transport  are  slightly  bigger  in  Bulgaria  and  those  of 
residential and services are smaller by 2 – 3 pp. 

(source: Eurostat) 

The energy intensity of the Bulgarian industry decreased significantly during the first ten years of the 
21st century, starting from around 520 toe per GVA in 2000 and ending at around 270 toe per GVA, 
driven  mainly  by  changes  in  several  energy  intensive  sectors  (iron  and  steel,  non-ferrous  metals, 
chemical and petrochemical, etc.). Since then it seems to have plateaued and remains in the same 
range. 

The evolution of the industrial structure and processes used are all influencing the levels of energy 
intensity of the Bulgarian industry which remains the highest in the EU in 2015. This is also valid, to a 
lesser extent, for the energy intensity of the Bulgarian services sector (3rd highest in the EU in 2015). 
On the other hand, the energy intensity of Bulgarian households is well below the EU average, when 
measured  by  energy  used  per  square  metre  of  habitable  surface  (climate  corrected)  or  by 
consumption per capita. 

Additional efforts could therefore be envisaged to improve energy intensity in these various demand 
sectors.  Furthermore,  the  implementation  of  the  national  energy  efficiency  actions  and  programs 
needs to be pursued in order to meet the cumulative saving requirements stemming from Article 7 of 
the Energy Efficiency Directive. 

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(source: Eurostat)  

(source: Eurostat)  

  (source: Odyssee database) 

Between 2005 and 2015 in Bulgaria, the final energy consumption in transport recorded an average 
annual increase of 1.8%, which is below the 2.6% average annual increase of the GDP. The increase 
of the energy consumption was accompanied by efficiency improvements, both in passengers and in 
freight transport vehicles. Over the period 2005 – 2015, the passenger activity (in bn passenger–km) 
in  Bulgaria  was  steadily  rising  and  increased  by  more  than  35%.  Likewise,  the  freight  transport 
activity  (in  tonne-km)  also  increased  more  dynamically  than  the  energy  consumption  in  transport 
(21.9% vs 18.9%).  

(source: Eurostat)  

        (source: Eurostat and DG MOVE pocketbook) 

The  share  of  collective  passengers  land  transport  in  total  passengers'  transport  decreased 
significantly  between  2005  and  2015  from  31.4%  to  19.8%,  indicating  a  higher  use  of  private 
transport means in Bulgaria.  

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(source: Eurostat)  

Introducing  the  electronic  system  for  road  toll  collection,  along  with  increased  supervision  over 
public  spending  with  regard  to  road  infrastructure  are  among  the  top  priorities  of  Bulgaria's  new 
Government, which took office in May 2017. Among the new priorities will also be the continuous 
use of concessions as a mechanism for developing the transport system.  

Concerning the investments in transport infrastructure until 2020, the most important projects are 
for railways connections (from Sofia via Plovdiv to Burgas and to Svilengrad – Turkish border), with 
the support of the Structural Funds and also the CEF.  

The Integrated transport strategy for the period until 2030 is in the final stages of preparation. Out of 
the  11  activities  included  in  the  scope  of  the  strategy,  10  have  been  implemented  so  far.  The  last 
remaining activity is related to the environmental assessment of the document. 

Concerning inland navigation, there are on-going discussions about improvements of the navigability 
of  the  Danube  and  the  connections  of  the  ports  of  Burgas  and  Varna  with  the  hinterland. 
Nevertheless,  several  bottlenecks  remain,  which  are  hindering  the  navigation  along  the  Danube 
section of the Rhine-Danube Core Network corridor. 

5.  Decarbonisation of economy 

5.1. GHG emissions 

Based on proxy values, in 2016 GHG emissions in Bulgaria were estimated at 58.9 mtCO2eq, 43.5% 
below their 1990 levels. The relative decrease is almost double to that of the EU average. Based on 
national projections, Bulgaria will meet its 2020 emissions target with a margin of 21.7 percentage 
points. In 2016 emissions in the non-ETS sectors (falling under the Effort Sharing Decision) were 12.6 
percentage points below the interim target for 2016. 

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                              Energy Union – Bulgaria 

(source: EC and EEA) 

Bulgaria  remains  the  most  GHG-intensive  EU  Member  State.  According  to  2016  EEA  estimates,  the 
GHG  intensity  of  Bulgaria's  economy,  measured  in  t  CO2eq/M  EUR  (2010),  has  decreased  by  more 
than 60% compared to its level in 1990. Yet, the 2016 level is 4.3 times higher than the EU average 
(in  1990  it  was  almost  6  times  higher).  Since  2005,  the  pace  of  decrease  of  GHG  intensity  of  the 
Bulgarian economy is similar to that observed in the EU.  

In 2016, the GHG emissions per capita in Bulgaria remained below the EU average (8.3 kg CO2eq vs 
8.7 CO2eq), in line with a tendency since 1990. 

In  2015  in  Bulgaria,  the  largest  sectors  in  terms  of  GHG  emissions  were  the  energy  sector 
(representing  more  than  half  of  the  total  GHG  emissions)  followed  by  transport  (15.2%),  industry 
(13.9%)  and  agriculture  (10.5%).  In  relative  terms,  the  GHG  emissions  from  residential  and 
commercial sectors of Bulgaria were more than 5 times below the EU average (2.2% vs 12.1%).  

(source: EC and EEA)   

Preliminary accounts under the Kyoto Protocol for Bulgaria show overall emissions of +1.1 Mt CO2-
eq. as an annual average in the period 2013-2015. For comparison, the annual average of the EU-28 
accounted for removals of -119.0 Mt CO2-eq. Bulgaria is one of four EU Member States which show 
overall emissions in this preliminary accounting exercise. This is primarily due to Forest Management 

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accounts  showing  emissions;  Bulgaria  is  one  of  only  three  EU  Member  States  with  this  accounting 
issue.  

Emissions  by  Forest  Management  are  notably  higher  than  removals  by  Afforestation  with  only  a 
minor  contribution  of  emissions  by  Deforestation.  Overall,  there  is  no  clear  trend  in  emissions, 
mainly due to varying emissions by Forest Management and Deforestation. Afforestation shows an 
increase in removals over the course of the three-year period. 

Note: Forest Management credits are capped and presented as yearly averages when the total Forest 
Management credits of the considered period exceed the simulated cap over the same period.  

(source: EC and EEA).  

CO2 emissions in transport and alternative fuelled vehicles 
In  Bulgaria,  CO2  emissions  from  road  transport  were  about  53%  higher  in  2015  than  in  1990, 
reflecting  the  consistent  increase  of  passengers  and  freight  traffic  when  moving  towards  market 
economy. The average CO2 emissions of new cars in Bulgaria remained above the EU level in 2016 for 
a value of 126 tons gCO2/km, although decreasing by 26.7% when compared to 2005 levels. 

(source: European Environment Agency/UNFCCC) 

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The  share  of  electric  and  hybrid-electric  cars  in  total  sales  on  the  Bulgarian  market  is  very  small, 
around 0.03% of total cars sales in 2015 (i.e. merely 5 petrol-electric cars out of a total of 17 120 new 
cars sold in 2015). The number of electric charging points in Bulgaria is low, amounting to 22 units in 
2016.   

(European Environment Agency)  

      (European Alternative Fuels Observatory) 

National Policy Frameworks under Directive 2014/94/EU on alternative fuels infrastructure have to 
establish targets, objective and measures for the development of the market of alternative fuels in 
the  transport  sector  and  the  deployment  of  the  relevant  infrastructure.  Bulgaria  has  submitted  its 
National Policy Framework as requested under article 3 of the Directive 2014/94/EU.  

A detailed assessment of the Bulgarian National Policy Framework in terms of its compliance with the 
requirements  of  Directive  2014/94/EU  on  alternative  fuels  infrastructure,  its  contribution  to 
achievement  of  long-term  energy and  climate objectives  of  the  Union  and  coherence of  its  targets 
and objectives in terms of cross-border continuity has been published as part of the Communication 
on  Alternative  Fuels  Action  Plans  (COM(2017)652)  and   the  related  staff  working  document 
SWD(2017)365. 

5.2. Adaptation to climate change 

Bulgaria has not yet adopted its National Strategy on adaptation to climate change. In 2014 a climate 
change  risk  and  vulnerability  assessment  for  the  sectors  of  the  Bulgarian  economy  was  finalised, 
which is serving as a basis for the further development of the National Adaptation Strategy, foreseen 
to  be  finalised  in  2018.  This  framework  document  identifies  agriculture,  forestry,  water,  urban 
environment,  energy,  transport,  construction  and  infrastructure,  ecosystems  and  biodiversity, 
human  health  and  tourism  as  key  vulnerable  sectors.  Since  no  NAS  has  been  adopted  yet,  a 
monitoring and reporting framework does not exist to this date. 

5.3. Taxes on energy and transport  

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The overall tax burden on energy and transport in Bulgaria is equal to around 2.7% of GDP, which is 
slightly  higher  than  the  EU  average  due  to  the  transport  fuel  component.  Taxation  of  heat  and 
electricity is  much below  the EU-average; similarly  the tax burden on transport vehicles  was about 
half of the European average in 2015. Bulgaria does not apply any carbon component in its transport 
fuel or vehicle tax. 

(source: Eurostat) 

5.4. Renewable energy  

Bulgaria  is  on  track  in  attaining  its  renewable  energy  target  for  2020.  Bulgaria  also  met  the 
2013/2014  and  2015/2016  indicative trajectories  as  set  under the  Renewable  Energy  Directive The 
2015  level  of  the  renewable  energy  share  in  gross  final  energy  consumption  stands  at  18.2%,  well 
above the 16% target.  

 (source: Eurostat-SHARES) 

Bulgaria's renewables share in transport stood at 6.5% in 2015, still below the 2020 target, while the 
renewables share in heating and cooling and the renewables share in electricity generation reached 
28.6% and 19.1% respectively in 2015.  

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                              Energy Union – Bulgaria 

(source: Eurostat-SHARES) 

In  Bulgaria,  electricity  from  renewable  energy  sources  is  mainly  promoted  through  a  feed-in  tariff 
scheme. The connection of renewable energy systems to the grid is subject to the provisions of the 
general  legislation  on  energy.  Renewable  energy  is  given  guaranteed  access  to  transmission  and 
distribution networks within a period defined by the law. 

Bulgaria  promotes  the  development,  installation  and  usage  of  renewables-installations  through  a 
professional training programme for renewables-installers, through a building obligation for the use 
of renewable heating and for the exemplary role of public authorities. 

Due  to  a  consistent  deployment  of  renewables  since  2005,  it  is  estimated  that  Bulgaria  avoided  in 
2015 about 10.3% of the fossil fuel in gross inland consumption and about 8.4% of GHG emissions at 
national level as compared to 2005.   

 (source: EEA) 

5.5. Contribution of the Energy Union to better air quality  

Air quality in Bulgaria continues to give cause for severe concern. For the year 2013, the European 
Environment  Agency  estimated  that  about  13,700  premature  deaths  were  attributable  to  fine 
particulate matter (PM2.5) concentrations and 570 to nitrogen dioxide (NO2) concentrations8.  

8  European  Environment  Agency,  2016,  Air  Quality  in  Europe  –  2016  Report,  table  10.2.  The  report  also 
includes details as regards the underpinning methodology for calculating premature deaths.    

17 

 
 
 
 
 
 
                                                            
                              Energy Union – Bulgaria 

For PM, Bulgaria reported exceedances of the binding EU air quality standards9. For the year 2014, 
Bulgaria reported exceedances of the limit value for PM10 in all of the 6 air quality zones in Bulgaria, 
while exceedances of the limit value for PM2.5 were reported in 4 of the 6 zones10. 

(source: EEA) 

The health-related external costs from air pollution in Bulgaria have been estimated to be more than 
EUR 3 billion/year (income adjusted, 2010), which includes the intrinsic value of living a healthy life 
without premature death as well as the direct costs to the economy such as healthcare costs and lost 
working days due to sickness caused by air pollution11. 

The  Energy  Union  can  substantially  contribute  to  addressing  these  air  quality  problems  through 
measures reducing emissions of both GHG and air pollutants such as PM and nitrogen oxides (NOx)  
from major contributing sectors such as (road) transport, energy production, industry and residential 
heating (e.g. stoves and boilers) as shown below12. 

9 Directive 2008/50/EC of the European Parliament and of the Council of 21 May 2008 on ambient air quality 
and cleaner air for Europe, OJ L 152, 11.6.2008, p.1-44 
10  Compliance  data  as  reported  by  the  Member  States  as  part  of  their  official  annual  air  quality  report  for  the 
calendar year 2015 (available on the European Environment Agency's (EEA) Eionet/Central Data Repository), 
http://cdr.eionet.europa.eu/bg/eu/aqd  
11 See also the EU Environmental Implementation Review Country Report for Bulgaria, SWD(2017)35 final of 
3.2.2017 
12 National emission data as reported by the Member States to the EEA (available on the EEA's Eionet/Central 
Data Repository), http://cdr.eionet.europa.eu/bg/eu/nec_revised 

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                              Energy Union – Bulgaria 

(Source: EEA. This table reflects only sources of primary PM2,5 emissions.)  

6. Research, innovation and competitiveness  

6.1. 

Research and innovation policy  

Energy research is one of the highest priorities in Bulgaria’s National Research Development Strategy 
for  the  period  2011–2020,  which  sets  out  the  national  plan  for  investment  in  R&I.  Investment  in 
energy  efficiency  and  in  renewable  energy  innovations  is  also  covered  by  the  National  Innovation 
Strategy.  The  National  Research  Development  Strategy  aims  to  stimulate  R&I  by  industry  and 
facilitate  cooperation  between  R&I  departments,  universities  and  companies.  It  also  seeks  to 
increase financial resources for innovation by establishing mechanisms to attract private investment.  

Bulgaria is not very active in the ongoing work of the Strategic Energy Technology (SET) Plan: it only 
participates  in  two  (out  of  fourteen)  temporary  working  groups  for  the  implementation  of  the 
integrated SET Plan, those dedicated to energy efficiency in industry and nuclear safety.  

Regarding  the  Horizon  2020  programme,  Bulgaria  has  received  so  far  0.4%  of  the  EU  contribution 
devoted to the 'secure, clean and efficient energy' part of the programme. As of September 2017, 64 
participations  from  Bulgarian  organisations  have  been  awarded  EUR  7.8  million  in  Horizon  2020 
energy  projects.  This  includes  three  grants  totalling  over  EUR  1.1  million  to  Bulgarian  beneficiaries 
participating in project InDeWaG (building glazing systems), and a grant of almost EUR 0.5 million to 
Albena AD for its participation in project INVADE (renewable energy storage). 

6.2. 

Investments and patents in the Energy Union R&I priorities 

The  European  Commission  does  not  have  data  regarding  the  public  (national)  investments  in  the 
Energy Union R&I priorities in Bulgaria.  

Private investment in the Energy Union R&I priorities in 2013 was estimated at EUR 11 million (0.1% 
of  the  private  R&I  investment  in  Energy  Union  R&I  priorities  in  the  EU).  The  focus  was  on  Nuclear 
Safety,  which  received  39%  of  these  investments,  followed  by  the  Smart  System  and  Sustainable 
Transport priorities with shares of 24 and 23%, respectively.  

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                              Energy Union – Bulgaria 

In 2013, the most recent year for which complete patent13 statistics are available, 7 companies and 
research organisations based in Bulgaria filed 4 patents in low-carbon energy technologies (0.1% of 
the EU total). The focus was on the Smart System, Nuclear Safety and Sustainable Transport priorities 
(29% each).  

In 2013, private R&I investments and patents in Energy Union R&I priorities were lower than the EU 
average  when  normalised  by  GDP  and  by  population  respectively.  In  the  period  2008-2013,  both 
private R&I investments and the number of patents in Energy Union R&I priorities have decreased on 
average by 17% and 14% per year, contrary to the respective EU indicators that increased at average 
rates of 6% and 15% respectively. 

(Data  sources:  Patent  data  based  on  the  European  Patent  Office  PATSTAT  database14.  Private  investment  as 
estimated by JRC SETIS. Detailed methodology available from the JRC15.) 

6.3. 

Competitiveness 

In the first half of 2016, electricity prices for industry (excluding VAT and other recoverable taxes and 
levies)  were  about  a  fifth  lower  in  Bulgaria  than  the  EU  average  for  medium  level  consumers.  For 
natural gas the Bulgarian price was about a third lower than the average for the EU. Comparing to 
the US, electricity prices in Bulgaria were higher by 10 to 50%, while natural gas prices were 2.5 times 
as much. 
In  2014,  real  unit  energy  costs  (RUEC)16  of  the  Bulgarian  economy  were  however  more  than  four 
times bigger than the average for the EU, an indication that Bulgaria cannot exploit fully the potential 
of the relatively low energy prices because of the inefficient use of energy that is required to produce 
a unit of value added. 

13   In  the  context  of  this  document,  the  term  'patent'  refers  to  patent  families,  rather  than  applications,  as  a 
measure  of  innovative  activity.  Patent  families  include  all documents  relevant to  a  distinct  invention (e.g. 
applications to multiple authorities), thus preventing multiple counting. A fraction of the family is allocated 
to each applicant and relevant technology. 

14   https://www.epo.org/searching-for-patents/business/patstat.html#tab1  
15   https://setis.ec.europa.eu/related-jrc-activities/jrc-setis-reports/monitoring-ri-low-carbon-energy-

technologies  

16  This  indicator  measures  the  amount  of  money  spent  on  energy  sources  needed  to  obtain  one  unit  of  value 

added. 

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                              Energy Union – Bulgaria 

(source: ECFIN) 

                   (source: Eurostat and IEA) 

Bulgaria is performing rather well in the wind sector. The country managed to considerably increase 
its  specialisation  in  2015  compared  to  2005,  as  measured  by  the  revealed  comparative  advantage 
indicator17. Nonetheless, the country still shows a negative relative trade balance18, suggesting that 
Bulgaria is a net importer in the sector. However, the improvement in the wind exports is showing its 
positive  effects,  as  indicated  by  the  reduction  in  the  relative  trade  balance  in  2015.  Conversely, 
Bulgaria  is  not  specialised  in  the  solar  PV  sector.  The  relative  trade  balance  confirms  the  weaker 
position of the country in solar PV, with a negative value and below the EU average. 

(source: UN comtrade) 

7. Regional and local cooperation 

17 The RCA index for product "i" is defined as follows: RCAi =

Xj,i
∑ Xj,i
i
Xw,i
∑ Xw,i
i

 where X is the value of exports, and j is 

the country and w is the reference  group, the World economy. 2005 refers in the text to the indicator average 
over the 2000-2009 period, while 2015 represents the average over the 2010-2016 period. The same applies for 
the RTB indicator - see below. 
18 The RTB indicator for product "i" is defined as follows: 𝑅𝑇𝐵𝑖 =
exports and 𝑀𝑖 imports. 

 where 𝑋𝑖 is the value of product's "i" 

𝑋𝑖−𝑀𝑖
𝑋𝑖+𝑀𝑖

21 

 
 
 
 
 
 
 
 
 
 
 
                                                            
                              Energy Union – Bulgaria 

Bulgaria is a member of the Central East South Europe Gas Connectivity (CESEC) High Level Group. 
The  main  aim  of  the  group  is  to  coordinate  efforts  to  facilitate  cross-border  and  trans-European 
projects that diversify gas supplies to the region, as well as to implement harmonised rules. Bulgaria, 
as a regional gas hub, has an important role there. 3 of the 7 crucial gas infrastructure projects are 
related to Bulgaria (interconnectors with Greece and Serbia and reinforcement of the internal grid).  

In  September  2016  it  has  been  proposed  that  CESEC  should  be  extended  to  electricity  (covering 
issues such as electricity trading and market coupling), to coordinated planning and development of 
power grid infrastructures and to renewable energy and energy efficiency. 

The EU macro-regional strategy for the Danube Region in which Bulgaria takes part can be used as a 
basis  for  regional  cooperation  on  energy.  European  Territorial  Cooperation  –  'Interreg'  –  under  EU 
cohesion policy also provides further opportunities for cross-border, transnational and interregional 
cooperation, including in the Energy Union areas. 

Cities and urban areas have a key role in the energy and climate challenge. The Urban Agenda for the 
EU,  established  by  the  Pact  of  Amsterdam  in  May  2016,  better  involves  cities  in  the  design  and 
implementation of policies, including those related to the Energy Union. It is implemented through 
Partnerships, in which the Commission, Member States, cities and stakeholders work together on a 
number  of  important  areas,  including  on  Energy  Transition,  Urban  Mobility,  Air  Quality,  Climate 
Adaptation and Housing. Bulgaria is participating in the partnership on Urban Mobility, with the city 
of Burgas as member. 

By 2016 on Covenant of Mayors, 23 sustainable energy action plans have been delivered by Bulgarian 
municipalities. Overall, these municipalities cover about 2.25 million inhabitants representing around 
a third of the total population of Bulgaria. All together, these municipalities committed to reduce by 
2020 the GHG emissions by 23.8% (as compared to 1990 baseline).  

Average  GHG  emission  per  capita  in  Covenant  Baseline  Emission  Inventories  and  corresponding 
estimates by 2020 (source: JRC) 

In  Bulgaria,  by  September  2016,  2  cities  (covering  0.27  million  inhabitants)  have  committed  to 
conduct  a  vulnerability  and  risk  assessment  and  develop  and  implement  adaptation  plans  in  the 
framework of the Covenant of Mayors for Climate and Energy. 

8. Cohesion policy and EU clean energy investments  

EU  cohesion  policy  makes  a  key  contribution  to  delivering  the  Energy  Union  objectives  on  the 
ground,  including  important  investment  possibilities  to  implement  energy  policy  objectives  in 
Bulgaria  which  are  complemented  by  national  public  and  private  co-financing,  aiming  at  optimal 
leverage.  It  also  ensures  integrated  territorial  solutions  to  energy  and  climate  challenges,  supports 
capacity building and provides technical assistance. 

22 

 
 
 
                              Energy Union – Bulgaria 

is 

investing  some  EUR  510  million 

in  energy  efficiency 
Over  2014-2020,  cohesion  policy 
improvements  in  public  and  residential  buildings  and  in  SMEs,  as  well  as  in  smart  energy 
infrastructure  in  Bulgaria.  Cohesion  policy  is  also  investing  significantly  in  R&I  and  in  SME 
competitiveness in Bulgaria, based on the national strategies for smart specialisation and for  SMEs. 
For  Bulgaria,  the  smart  specialisation  includes  a  focus  on  assisting  clean  technologies,  including 
energy  preservation  and  eco-mobility.  At  this  stage,  at  least  EUR  58  million  is  foreseen  for 
investments  in  R&I  and  adoption  of  low-carbon  technologies  in  Bulgaria,  but  this  might  increase 
further in line with the evolving content of the smart specialisation strategy. A further estimated EUR 
1,174 million is invested in supporting the move towards an energy-efficient, decarbonised transport 
sector. 

 (source: DG REGIO) 

These  investments  are  expected  to  contribute  to  around 13 000  households  with improved  energy 
consumption  classification  and  a  decrease  of  around  140,645,000  kWh  per  year  of  primary  energy 
consumption of public buildings, as well as to around 190 km of reconstructed or upgraded railway 
lines.  Overall,  the  EU  Cohesion  policy  investments  in  Bulgaria  over  2014-2020  are  expected  to 
contribute to an estimated annual decrease of GHG emissions of around 198,000 tonnes of CO2eq. 

For example, one of the most important infrastructure projects in Bulgaria in recent history, the Sofia 
Metro,  was  co-financed  by  the  European  Regional  Development  Fund  (ERDF)  in  2007-2013  with 
some EUR 500 million for the completion of its first two lines. Serving 50,000 people hourly, it is used 
by over half a million people every day. It has had enormous benefits for the population of Bulgaria’s 
capital:  from  dramatic  reduction  in  CO2  emissions,  travel  times,  traffic  jams  (by  over  20%),  traffic 
accidents,  fuel  consumption  and  transport  maintenance  costs,  to  generating  savings  for  the  local 
economy of over EUR 20 million. In 2014-2020, European Structural and Investment Funds will invest 
EUR 520 million for an additional 16 km of lines and 19 metro stations, thus bringing the total Sofia 
subway network to 56 km of lines and 53 stations by 2020. 

As another example, preparatory activities under the project for the construction of the section on 
Bulgarian  territory  of  the gas  interconnector  between Bulgaria  and  Serbia  were  co-financed by  the 
European  Regional  Development  Fund  (ERDF)  in  2007-2013.  The  planned  EUR  38  million  of  ERDF 
investment in 2014-2020 is expected to increase security of supply, support the main priorities of the 
Energy Strategy of Republic of Bulgaria till 2020 and meet the EU N-1 infrastructure standard. 

Through  its  support  to  sustainable  transport  systems,  the  Connecting  Europe  Facility  (CEF)  also 
contributes to the goals of the Energy Union. Following Bulgarian participation in the CEF – Transport 
2014-2015 Calls, the Bulgarian action portfolio comprises 9 signed grant agreements, allocating EUR 
294.4  million  of  actual  CEF  Transport  Funding  to  Bulgarian  beneficiaries  (state-of-play  February 

23 

 
 
 
                              Energy Union – Bulgaria 

2017)19.  The  transport  mode  which  receives  the  highest  share  of  funding  is  rail  (97%  of  actual 
funding).  The  main  focus  of  the  Bulgarian  CEF  actions  is  the  Orient/East  Mediterranean  corridor 
railway  line  Sofia  –  Plovdiv,  an  important  element  of  the  Trans-European  Transport  Core  network 
corridors.  The  objective  is  to  remove  bottlenecks  for  the  requirements  for  passenger  and  freight 
transport users and operators in terms of travel time, interoperability, safety and security. Bulgaria is 
also  involved  in  a  multi-beneficiary  action  dedicated  to  the  deployment  of  the  European  Railway 
Transport  Management  System  (ERTMS).  Bulgaria  is  also  active  in  the  inland  waterway  (IWW) 
transport with some actions related to the Romanian-Bulgarian common section of the Danube. The 
actions  aim  to  remove existing  bottlenecks  and to  identify  the  works  to  achieve a  good  navigation 
status all year round.20 

19   Note  that  European  Economic  Interest  Groups  and  International  Organisations  are  excluded  from  the 

analysis. 
20   Source: INEA 

24