Bulgaria has low taxes, low labour costs and a lot of wind – a good combination for any company seeking to develop wind parks. The generous feed-in tariff, the incentive structure put in place by the Government to encourage the development of renewable energy sources, is another boon to prospective investors.

The European Union’s member states from the former communist bloc are lagging far behind their western neighbours in developing renewable power and Bulgaria is no different. Still, in some respects it has done well given its size.

Only Poland, with 472MW, has a larger wind energy capacity among the EU’s eastern member states. Bulgaria now has 158MW and is set to double that when US firm AES Corp. begins commercial operation on its 156MW wind park in Bulgarevo, near Kavarna in northeastern Bulgaria, in autumn 2009.

"Bulgaria is a good place to invest because legislation is supportive of renewable energy," AES Wind Bulgaria managing director Teodor Bobochikov told a roundtable on renewable energy, organised by law firm Wolf Theiss in Sofia on June 30. "Clearly, the feed-in tariff is a good one, since there are so many wind operators."

The main driver, like in the rest of Eastern Europe, is the EU-wide target that 20 per cent of all energy should come from renewable sources by 2020. Bulgaria’s share of renewables in the overall energy generation was 9.4 per cent in 2005, boosted by its older hydro-power plants. Its individual target under the EU directive 2009/28/EC on the promotion of the use of energy from renewable sources, passed in April, is 16 per cent.

That target provides a strong incentive, but there is also opposition – some from opponents who decry the preferential treatment given to renewables and others who are not convinced by the reliability of wind power. "There are numerous studies that show the reliability of wind power and over the long-term, it is not more expensive," Bobochikov said.

Quality projects can survive even during times of scarce financing. "A good project will get funding even now. AES got a loan for the project in Kavarna in December 2008," Bobochikov said.

Just how big a role wind will play as Bulgaria looks to meet its renewables target will become clear later in the year, when the Government will have to draft a national renewable energy action plan, in line with directive 2009/28/EC. Although the final document is not due until June 30 2010, preliminary forecasts on estimated demand and possible excess capacity have to be made public by the end of 2009.