Bulgaria’s building photovoltaic panels and batteries at Luxembourg’s expense

Our country’s joining Finland as a “host country” under the European Union’s Financial Mechanism for Renewable Energy for 2026. This’ll give the coal-mining regions of Pernik, Kyustendil and Stara Zagora access to fresh resources in the energy transition.

To this end by decision of the Council of Ministers our country’s responding to the invitation of the European Commission’s Directorate-General for Energy, paving the way for investments under an upcoming procedure amounting to €55 million, provided entirely by Luxembourg.

The investment support aims to build ground-mounted photovoltaic power plants combined with energy storage systems (batteries). What’s specific in this case is that while the funding comes from outside, all new capacity will be located on Bulgarian territory.

How the mechanism works

The deal between Sofia and Luxembourg’s based on the principle of statistical transfer. The Grand Duchy provides the money but Bulgaria provides the land for the construction of the facilities as it doesn’t have enough land to install sufficient RES. However the infrastructure, energy and part of the statistical effect remain in Bulgaria. In addition the batteries will contribute to grid stabilization.

Luxembourg receives the “statistical asset” (green energy certificates) to meet its climate targets set by Brussels. Typically 80% of the “зелена енергия” produced by the project will be statistically recorded in the account of the financing country (in this case Luxembourg) and 20% in the account of the host country (Bulgaria).

The European Climate, Environment and Infrastructure Executive Agency will manage the procedure, announcing the call for proposals, collecting and evaluating project proposals and monitoring their implementation. Public or private legal entities from any country in the world can apply for funding.

Focus on coal regions

This mechanism isn’t an isolated action but a key instrument of European cohesion policy. The projects will be concentrated in the three regions that are at the heart of Bulgaria’s energy transition.

The investments will complement the activities under the Territorial Plans for a Just Transition, with the aim of compensating for the phasing out of coal-fired power plants with new, environmentally friendly alternatives.

An important condition is that the facilities must operate for at least 15 yr, ensuring long-term employment and energy security in these areas.

Translated with DeepL.

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