Bulgaria

Overall assessment

Updated December 2023

In October 2023, Bulgaria amended its Law on Energy from Renewable Sources, where it defines renewable energy communities (RECs) and ‘civil energy communities’ (CECs). The Law on Energy, which was also amended in November of 2023, makes a couple references to CECs. The Law on Energy from Renewable Sources provides a basic definition of RECs and CECs. However, details on how to ensure autonomy of RECs has not been clearly elaborated. The Geographical proximity requirement for RECs is also unclear and appears to restrict RECs to urban areas. This will limit their ability to grow or utilise different technologies (e.g. wind), and citizens living in rural areas may not have access to the same rights. Further clarity on principles on including autonomy and decision-making control, and geographic proximity for RECs in both urban and rural areas, and how to enter and exit the community, would help enable their development. Nevertheless, there are requirements for the statutes or founding documents of CECs to elaborate the rights, responsibilities, and conditions for participating in an energy community, as well as provisions on the purpose/objective, conditions for the raising and use funds, and the distribution of dividends. Furthermore, companies whose participation in a CEC or REC relates to their main commercial or professional activity are not allowed to participate. While this could prevent corporate capture of energy communities by energy companies, it could also prevent RECs and CECs from collaborating together. No authority has been assigned to oversee, register, or monitor RECS or CECs. This creates a risk that new initiatives, potential and barriers cannot be properly monitored and fed into further policy making, and that abuse corporate capture, and non-respect for the non-commercial principles that should relate to energy communities, cannot be deterred.

Detailed assessment

Criteria of EU definition reflected in national definition

RECs

  • Open and voluntary participation is covered
  • Independence/autonomy is covered
  • Geographical proximity is only partially covered
  • Effective control is covered

CECs

  • Open and voluntary participation is covered
  • Effective control is covered

Level of detail in the elaboration of principles contained in EU criteria

RECs

  • No elaboration on how open and voluntary participation is ensured.
  • No elaboration on how independence is ensured.
  • Control is defined as ownership and management, particularly with regard to renewable energy production.
  • The Law on the Renewable Energy Sources refers specifically to ‘urbanized areas’ where production facilities and members are located, indicating a very restricted notion of ‘local’. This could significantly limit the potential of RECs, particularly outside of urbanized areas. It is also unclear, and could use further elaboration to establish legal certainty.
  • Eligibility: natural persons, SMEs and municipalities. Private enterprises whose participation relates to their main commercial or professional activity are not allowed to participate .

CECs

  • Private enterprises whose participation relates to their main commercial or professional activity are not allowed to participate (similar to RECs).
  • Statutes must state the terms and conditions for protecting the rights of community members as energy users.

Clearly defined purpose

RECs and CECs

The primary objective should be to providing environmental, economic or social benefits to its shareholders, associates or members or to the areas in which it operates, rather than financial benefits.

RECs

May produce, consume, store and sell excess amounts of energy from renewable sources, including through agreements for the purchase of electrical energy (PPAs). RECs may also share within the renewable energy community the energy produced by installations owned by the renewable energy community.

CECs

may carry out production, including energy from renewable sources, distribution, supply, consumption, aggregation, storage of electric energy, energy efficiency improvement services or electric vehicle charging services or provide other energy services to its members or shareholders. Relations must be determined by statutes or contract that contain the following information:

  • the main goals related to environmental, economic and/or social benefits of members and/or the region;
  • the conditions regarding the development of projects for the production, consumption, storage, sale and/or sharing of energy within the community in accordance with the subject of the community's activity and the relevant rights and obligations of the members of the community;
  • the conditions for raising and spending the funds regarding the environmental, economic and/or social activities and goals of the community; and
  • the types of funds, the conditions for distribution of dividends and the method of determining their amount.

While the statues or founding documents/contracts for CECs must state the principles, there are no procedures or mechanisms to ensure that CECs actually comply with their stated objectives. Moreover, this requirement does not apply to RECs, which presents a potential gap or loophole with regard to respecting the stated objectives of energy communities in the Law on Energy from Renewable Sources.

ICA cooperative governance principles reflected

Partially, to the extent that the REC and CEC definitions comply with the EU level definitions. Cooperatives, as a legal form, will also comply with the ICA principles.

Legal entities allowed

RECs

There are no limitations on the legal organizational form that can be used to set up a REC.

CECs

Commercial company, cooperative, non-profit association under the Law on Management of Condominiums, or civil society.

There are, however, two significant limitations on how cooperatives may be used to set up a REC or CEC. First, cooperatives may only be set up in the agricultural sector. With the geographical scope limited to urban areas, it is hard to see how a cooperative could be used to set up a REC. Second, members of cooperatives can only be natural persons, excluding municipalities and SMEs. As such, it would be very hard to set up a REC or CEC using the cooperative legal form.

Citizen participation is ensured

No.

Designated authority to oversee

Legislation does not appoint an authority to oversee. This could result in an inability to properly register, monitor and oversee the development of RECs and CECs, and deter abuse. This is a particular risk when it comes to making sure RECs and CECs respect objectives established in the law for energy communities to respect.

Number of definitions

2

Coherency between both definitions

The relationship between CECs and RECs is not entirely clear. However, the same enabling framework and limitations on participation of energy companies applies to both concepts, which suggests intent for a certain amount of coherence between the two.