Unchartered waters: Towards a strategic legal framework for offshore wind in Bulgaria

Bulgaria, together with Cyprus and Croatia, have been the only two EU member states with access to the sea that are yet to start developing the sector. After passing at first reading, the special Renewable Energy in Mari- time Spaces Act that draws out a concrete regulatory pathway for offshore wind investments never reached the next phase after a targeted political campaign by pro-Russian parties, civil society organisations and media outlets fuelled local protests and undermined the public’s trust in the sector. The dissemination of various false narratives by fringe political actors, about the risks associated with the development of the offshore wind sector in the Black Sea spilled into the mainstream policy and media narrative weakening the political consensus around the support for the creation of a special regulatory framework for the sector.
The adoption of a special law, a Bulgarian Renewable Energy in Maritime Spaces Act, would be the optimal approach to avoid potential conflicts with other existing legislative acts and secondary legislation. The law would coordinate the competencies of the authorities that govern the different phases of offshore wind project implementation (including planning, construction, operation and decommissioning) of power generation facilities at sea. The law will open up market competition and would attract experienced companies from mature markets in Europe. It would guarantee that the Bulgarian government will be positioned to develop the areas with the best natural wind energy potential in the Bulgarian section of the Black Sea at the lowest cost for society and in the most sustainable manner.
UNLEASHING THE EXISTING POTENTIAL
Large-scale deployment of wind energy in the Bulgarian section of the Black Sea coast could strongly contribute towards the achievement of the country’s energy transition objectives. Offshore wind will stimulate low-carbon economic development, the uptake of competitive and secure energy production and the reduction of the country’s dependence on fossil fuel imports. This will help reduce carbon emissions from coal and natural gas-fired power plants and will also ease the burden of balancing the electricity system. Offshore wind power might improve energy security especially during peak demand, and by reducing the need to use baseload generation that has a higher emission factor. Despite the key role that offshore wind energy could play in Bulgaria’s decarbonisation, the National Energy and Climate Plan (NECP) only envisages a total installed capacity of offshore wind of 3.84 GW by 2050 in its most ambitious scenario, while the National Recovery and Resilience Plan (NRRP) simply mentions the need to develop the regulatory environment, but neither provides any further analysis on the sector’s potential or concrete measures to boost its development.
The Center for the Study of Democracy (CSD) estimates that Bulgaria’s technical potential for offshore wind in the Black Sea is approximately 116 GW, to be realised through 26 GW of mature bottom-fixed technology and 90 GW through floating power plants. Despite the higher cost of offshore wind compared to other renewables, the unit cost of electricity generated by bottom-anchored plants is around EUR 90 per megawatt-hour (MWh), which is likely to be competitive with average electricity market prices over the next decade. During periods of peak demand, average day-ahead electricity prices have already reached EUR 100/MWh (and much higher during the actual peak hours). Annual average prices are forecast to be around EUR 70/MWh in 2025 and projected to be around EUR 85-90/MWh by 2030. Due to the considerably capital intensity of investments in floating installations in sea depths beyond 60m, the average cost per unit of electricity produced is estimated to be in the range of EUR 120-158/MWh.
STRATEGIC FRAMEWORK
Despite the significant potential for development, offshore wind energy faces several structural barriers, slowing down its deployment. The hardest roadblock is the lack of a regulatory framework based on transparent, consistent and competition-friendly principles and procedures. The first crucial step towards enabling the development of the offshore wind industry and providing clarity and predictability to potential investors is to develop a sound policy and regulatory framework. Bulgaria should sign the EU Wind Charter, which will help align Bulgarian energy policy aims with the common European wind energy development targets. The Charter could be a platform, based on which Bulgaria can gain greater access to the sector’s best practices and technologies, while also boosting investor confidence based on a common policy approach.
Bulgaria must set a national offshore wind energy deployment target to attract investment interest in specific Black Sea deployment areas. It should be included in the revised NECP and be linked to a detailed timeline with specific milestones, policy measures and funding mechanisms. A dedicated legal framework should feature auctions initially for areas with a minimum of 1 GW capacity until 2027 and another 2 GW by 2030, ensuring a basic level of market scale and steady growth.
The Renewable Energy in Maritime Spaces Act should clearly define the duties and responsibilities of all public authorities, which have specific relevant competencies related to offshore wind. Тo better coordinate all activities related to offshore wind projects and reduce bureaucratic hurdles for investors a cross-institutional authority should be appointed, for example as permanent advisory body of the Council of Ministers with dedicated administrative staff with relevant expertise to manage the different stages of each projects.
Any government action in the sector should be established on evidence-based analysis of the offshore wind energy potential in national waters to align the realistic short, medium and long-term targets for new capacity additions, considering different constraints such as power transmission network limitations, conflicts with environmental zones, marine traffic routes and competing economic activities.10 The analysis should be reflected in all relevant strategic documents.
A crucial part of the policy framework are the Marine Spatial Planning (MSP) and the relevant auctioning, permitting and licensing procedures. Bulgaria’s 2023 MSP only mentions offshore wind, but no official studies have been performed to assess how it can coexist with other marine economic activities. The draft Renewable Energy in Maritime Spaces Act provides a framework for site-development models, but once it is adopted, relevant authorities will need to streamline and simplify the existing time-consuming and administratively heavy procedures for grid connection.
Finally, Bulgaria’s slow and incomplete electricity market liberalisation has increased price volatility, reduced market liquidity, and regional integration, complicating pricing assessments of renewable energy investors. Given the high upfront capital costs involved in technologically complex projects with longer return on investment periods, such as offshore wind farms, the lack of predictability about revenues significantly increases borrowing costs.
BARRIERS TO DEPLOYMENT
Regulatory Framework
There is currently no specific regulatory framework for the development of offshore wind energy. This leads to long administrative procedures, unclear competences and responsibilities of state bodies during project implementation and decommissioning.
The most promising areas could be auctioned. This approach allows potential investors to propose the development of projects at the lowest possible cost of electricity production.
Under the centralised model proposed by the draft law, the Ministry of Energy, in cooperation with other relevant authorities, will identify priority areas and ensure grid access to new projects before auctioning the marine zones. Developers will enter the process at the pre-construction stage by submitting the lowest strike price in Contract for Difference (CfD) auctions for a given included in the concession agreement, stabilising the expected revenue for power plant operators at a pre-agreed level for the duration of the contract. This financial mechanism helps investors secure more favourable bank loan
conditions. In return, concession holders must sell all the electricity they produce on an organised exchange, with the government calculating the compensation as the difference between the average monthly day- ahead market price and the strike price. The CfDs can be managed by the Energy Security System Fund (ESSF), which would compensate operators when market prices fall below the strike price and collect payments from developers during periods of high market prices.
Under the open-door procedure included in the draft law, offshore wind developers can carry out preliminary studies for non-priority areas. Exclusive development and exploitation rights will be granted if the studies confirm the feasibility of the site. The holder of the site exploration permit will have the exclusive right to become the concession holder. The open-door procedure will allow simultaneous identification of sites and implementation of projects in non-priority areas. This strategy allows interested project developers to benefit from economies of scale in purchasing equipment and transportation to emerging Black Sea markets.
Environmental co-existence
Balancing the protection of the environment with the development of offshore wind projects is a critical challenge. Ensuring that offshore wind development is in harmony with marine ecosystems requires careful spatial planning and adherence to best practice. This includes developing strategies to ensure that wind projects co-exist with other marine activities, such as fishing and shipping, while protecting the environment.
Early stakeholder engagement in the planning process is also essential to address local concerns and community support for projects. The draft law was met with strong public backlash from the tourism and fishing industries and environmental organisations, who have been misled to believe that the construction of offshore wind parks in the Black Sea will lead to lower fishing yields, lower number of tourists and negative impacts on biodiversity. This has highlighted the need to raise awareness about the many socio- economic benefits from developing industry and the available strategies to mitigate potential risks, thus countering disinformation efforts.
By adopting a proactive approach to environmental assessment and incorporating protection measures early on in the development process Bulgarian authorities can achieve sustainable balance between renewable energy development and environmental protection. Environmental Impact Assessments (EIAs) should be comprehensive, covering potential impacts on marine biodiversity, water quality and habitats. Bulgarian authorities can introduce Mitigation strategies such as those developed by the Offshore Energy and Nature Coalition (OCEaN) to help developers avoid or minimise the environmental impacts of offshore wind farms. The creation of artificial reefs or the use of noise reduction technology during construction can minimise the environmental footprint of offshore wind projects. Ongoing environmental monitoring and adaptive management practices will ensure that any adverse impacts are promptly addressed and mitigated.
Rapid climate change is devastating Black Sea ecosystems, which are among the most vulnerable in the world. Both developers and national and local
authorities have sufficient tools to ensure that the risks of offshore wind deployment are minimised and that projects do not contribute to environmental degradation of coastal areas. The Bulgarian government should carry out a thorough strategic environmental impact assessment based on different sensitivity maps before any new capacity auction, and maintain the requirement that developers then plan and carry out a separate site-specific environmental impact assessment for their proposed offshore wind project.
Grid and infrastructure development
Offshore wind energy projects are technically highly complex and require investment in large- scale and capital-intensive infrastructure for the installation, maintenance and servicing of wind farms. This means the expansion of the fleet of specialised vessels, the construction of supporting infrastructure, including in ports, service bases, shipyards and factories.
In addition, to effectively integrate large amounts of wind energy into the national grid, it is essential to upgrade the electrical grid, both onshore and offshore. It is necessary to create interconnection points that allow the generated electricity to be transmitted inland, ensuring the stability and reliability of the power network to cope with the weather-based intermittency of supply. Before offshore wind farms can come online, it is essential to complete the grid investments and strengthen the processing capacity of logistics and manufacturing facilities for wind turbine equipment, which will ensure that projects are completed on time and within the cost schedule. While these investments add complexity and additional costs for infrastructure upgrades for port owners/operators and transmission system operators, they also represent a significant economic opportunity for job creation and the expansion of supply chains.
- Installation terminals act as logistics centres for the assembly, storage and transportation of wind turbine components, which are usually located close to wind farm production sites to facilitate efficient loading and unloading of large, heavy equipment and parts. They also support the pre-assembly of turbine components, which helps streamline offshore installation processes, reducing time and costs. In addition, installation infrastructure terminals have essential infrastructure such as cranes and heavy-lift vessels to ensure that components are transported safely and efficiently to their final offshore locations. However, where foreign offshore wind centres can be used, the use of local ports creates additional economic benefits, increases the growth of the local supply chain and increases employment opportunities. This, in turn, can act as an incentive for public sector investment and government support to mitigate financial risks and develop the necessary infrastructure.
- Operation and maintenance (O&M) bases act as central hubs for the coordination and execution of maintenance activities to ensure the continued and efficient operation of existing offshore wind farms. Located close to the coast, O&M bases house facilities for the storage of spare parts and tools, workshops for equipment repair and offices for administrative and technical staff. They also provide docking and refuelling services for maintenance vessels and helicopters, which are essential for transporting personnel and equipment to and from offshore sites. By centralising these critical functions, O&M bases minimise downtime, improve safety and reduce operating Service bases are typically located in smaller ports closest to the proposed wind farms. These are often tourist towns that are also hubs for fishing activities. While ports provide employment opportunities, there is still a risk of social tension. To mitigate opposition, developers offer support schemes, subsidies and jobs for local communities.
- Manufacturing facilities are essential to the offshore wind industry as they are the primary sites for the assembly of key components such as wind turbine blades, nacelles and towers. These plants are equipped with specialised machinery and technology that enables the mass production of high-quality, precision-engineered parts required for the efficient operation of offshore wind The proximity of manufacturing facilities to installation terminals significantly reduces transport costs and logistical complexity, facilitating a smoother and more efficient deployment of offshore wind projects. Investment in manufacturing, which Europe increasingly needs to meet tightening supply chains, could be attracted by a clear strategy and vision for building offshore wind farms in the Black Sea region. Investors need to be confident that there will be a market for the components they produce.
- Shipyards are used to build and assemble the vessels and platforms needed to install, maintain and operate offshore wind farms. Shipyards have the facilities and expertise to build specialised vessels such as installation vessels, service operation vessels (SOVs) and heavy lift vessels, which are critical for transporting and installing large wind turbine components at sea. In addition, shipyards with large construction sites can contribute to the production of substations and foundations such as monopiles, jackets and floating platforms.
To meet the challenges associated with implementing offshore wind energy, early, integrated, and broadly consulted planning of support infrastructure development is essential. The first step in this process should be a comprehensive analysis of existing facilities, investment areas, and grid connection points, particularly in coastal regions. Established businesses including shipyards, ports, oil & gas companies and steel construction factories can incorporate different aspects of offshore wind into their business strategies and adapt their operations to new opportunities.