Implementing the European Union Renewable Energy Policy Targets in Bulgaria

Introduction

Renewable energy is becoming a valuable source of widely available, cleaner, and relatively inexpensive electricity, yet the transition to non-fossil fuel-based economies is far from over. Since 2007 European Union (EU) member states have been working to increase the share of renewables in EU energy consumption, increase energy efficiency, and reduce greenhouse gas (GHG) emissions by 20% from 1990 levels by the year 2020. A cornerstone of the EU 2020 strategy is the Renewable Energy (RE) Directive (2009/28/EC), which set a 20% target for the overall share of renewables in EU gross final energy consumption.¹ Article 4 of the RE Directive mandates that member states develop National Renewable Energy Action Plans, which detail how member states envisage implementing the Directive and reaching the 2020 targets (European Parliament [EP], 2009).

To achieve the common 20% policy target for renewables, each EU member state has agreed to binding, country-specific targets for the overall share of renewable energy sources (RES) in three areas: 1) electricity (RES-E), 2) heating and cooling (RES-H&C), and 3) transport (RES-T). National renewable energy targets differ for each member state because they are calculated as the share of renewable consumption to gross final energy consumption, and take into consideration member states' different starting points, renewable energy potential, and economic performance (e.g., GDP per capita, economic growth forecasts). There is substantial variation in national RES targets, which range from 10% in Malta to 49% in Sweden, placing the overall EU countries’ mean at 21% and the median at 18% (2009/28/EC)². Bulgaria’s national target for the share of RE consumption was set at 16%.

This chapter examines Bulgaria’s experience with the implementation of the national renewable energy policy target under the EU 2009 Renewable Energy Directive. Bulgaria is a fairly recent EU member state (since 2007), whose size and resource endowments are similar to those of other Southeast European countries (e.g., Serbia, Croatia, Moldova). Given the strong trend for policy diffusion in Europe, Bulgaria’s implementation of the RE Directive could provide lessons for other countries in the region with comparable political history and aspirations for EU membership. The case also illustrates the challenges of implementing EU policies in recent member states, and the potential for unintended consequences associated with top-down policy goals. Ambitious policy measures can backfire, i.e. they can create unintended consequences or contradictory responses, known as boomerang effects. Boomerang effects reduce the prevalence of desired policy goals and the effectiveness of measures promoting those goals (Kinzig et al. 2013; Brehm & Brehm 1981).

Our case reveals that there were serious boomerang effects in the implementation of the 2020 RE policy targets in Bulgaria. A rapid and poorly regulated growth in wind and solar energy production in the period 2007-2011 led to the achievement of the national target in 2012, eight years earlier than mandated. This outcome, itself a boomerang effect, was followed by a series of retroactive, restrictive policy measures, increased regulatory uncertainty, and market stagnation that undermined RE sector growth (Hiteva & Maltby 2017; Nikolaev & Konidari 2017). In 2013, Bulgaria’s Ministry of Economy and Energy (MEE) introduced restrictions on new renewable generation capacity and previously contracted RES capacities were put on hold (MEE, 2014). The period 2012-2014 included a series of anti-RE interventions, restrictions of new solar and wind power installments, retroactive and discriminatory policy measures, and increasing uncertainty in the regulatory framework. These were combined with a growing public discontent and opposition to renewables, as well as spiraling debt and financial difficulties for the main utility and electricity distribution companies. As our case illustrates the boom in renewable energies did not contribute to a sustainable long-term RES development, but rather to a crisis in the energy sector and increased regulatory uncertainty that ultimately undermined RE growth in the country.