Energy in transition: renewables, storage & resilience – the next wave in CEE

As a result of increased investment in renewable projects, especially wind and solar, CEE’s share of renewable energy is rising. Across CEE countries, including EU member states such as Bulgaria, the Czech Republic, Croatia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia, the impetus for change is significant.

According to the latest data from the European Environment Agency, six CEE countries boast an above average share of renewable energy sources (25.4% in 2024): Latvia (45.2%), Estonia (40.4%), Lithuania (34.7%), Slovenia (26.9%), Romania (25.3%), and Croatia (25.2%), while five are making progress: Bulgaria (22.1%), the Czech Republic (19.6%), Poland (18.9%), Hungary (18.4%), and Slovakia (17.2%).

The energy crossroads is reflected in CEE deal activity. According to Velizar Velikov, Head of the M&A Database at EMIS, “There is a clear trend of declining M&A transactions in traditional energy.” Ivan Gergov, partner at CMS in Bulgaria, adds that the traditional energy market has been “impacted by geopolitical events,” which has adversely affected deals in the CEE region. This decline is evident from the data, which shows that deal value declined by 76.1% last year from EUR 9.74bn to EUR 2.33bn despite total deal volume rising by 12.6% to 107 transactions.

Velikov notes, “Most interest from investors is in renewable energy.” He points to Romania as a regional leader in renewable energy transactions, where deal volumes are already moving ahead with more than three years of continuous growth in the number of deals and new capacities coming onstream by the end of 2025 with over 4,5 GW contracted through the CFD scheme. “Romania has a national plan to increase the share of renewable energy in the energy generation mix,” he says. “When there are guarantees, especially from the government, and bankable support schemes, the energy sector will continue developing, attracting foreign investors, including from China and Türkiye. This progress stems from regulatory continuity, alignment with EU markets and the determination of companies - both incumbents and newcomers - which stayed the course, despite volatility in power prices over recent years.”

Varinia Radu, partner at CMS in Romania, suggests that the CEE energy market is diversifying. “We’re seeing more standalone and hybrid batteries, hydrogen, and biomethane related initiatives,” she says. “CEE has enjoyed a big appetite for energy M&A thanks to inbound grant funding from the EU: to accelerate the transition from fossil fuels, we’ve had billions of euros in various state aid schemes.”  [1]  In addition to EU grant funding schemes, the sustainable finance market in the CEE region, including Romania, saw a boom in the first half of 2025, with a surge in both green bonds and green loans. The new European Green Bond Standard (EU GBS), which came into force in December 2024, is expected to enhance transparency and further stimulate the market. 

According to Gergov, investors typically fall into three categories: private equity (PE) capital, “because it’s readily available and easy to deploy”; EPC contractors and operators who become owners of projects; and industrial or construction companies, “looking to move to greener sources of electricity or to compensate for coal usage elsewhere in Europe.”

He highlights specialised PE funds investing exclusively in renewables. “If they have experience in the CEE region, they look at 100% acquisition,” he says. “If they don't have experience, they acquire a majority stake in the project alongside a local developer.”

Radu confirms that most cross-border energy deals are in renewables. “We’re seeing more companies from the Middle East, North Africa, Southern Europe, Türkiye, Greece, and quite a few Chinese companies, both IPPs and technology providers,” she says. “Since their initial acquisition, some investment funds have flipped their assets.” Investors are diverse. They include IPPs from west and northern Europe, energy and infra funds, private equity, EPC developers, and sovereign wealth funds.

As a pivotal technology that stores excess electricity from renewable sources and releases it when needed, BESS is attracting significant interest. Driven by supportive EU funding schemes and Capacity Market Auctions, BESS projects are proliferating in parts of CEE where wind and solar energy is already strong. Their structure is primarily defined by national regulations and the growth of co-located/hybrid projects. Typically combining BESS with solar PV or wind farms, hybrid projects have become widespread across CEE, while standalone battery projects see a big rise as the grid complexities increase with more renewables coming into stream.

The development of BESS projects is similar to other renewable projects, Radu explains. “Many owners of solar projects are adding co-located batteries. But we’re also seeing the development of huge standalone batteries – up to 1GW – because they have different revenue models: tolling agreements, hedging agreements, and ancillary services to the grid. The return on investment is very high for early market entrants, which explains the big rush. This is further boosted by increasing cost reduction solutions for batteries, as changing certain parts becomes easier.”

In Bulgaria, the main driver is the RESTORE programme, which finances the development and construction of BESS projects, Gergov notes. Funded by the EU’s National Recovery and Resilience Plan to build BESS for renewable energy, RESTORE offers subsidies for standalone battery systems to enhance grid stability and integrate more solar and wind power. So far, funding has been awarded to 82 projects.

Romania also has a significant pipeline of BESS projects, with major projects underway, such as the large-scale 127 MW/254 MWh Scornicești project by R.Power including Aukera's 250MW/500MWh standalone project in Gura Ialomiței, Engie's two projects (totalling 85MW/170MWh), Nova Power & Gas commissioning its 200MW/400MWh system in Cluj and many others. Primarily driven by EU funding and upcoming support schemes, such projects meet the need for grid stability and renewable integration, with further plans for both standalone and hybrid systems.

The outlook for renewable energy in CEE is strong, underpinned by significant potential for growth in wind and solar capacity which has exceeded the EU average in recent years. Supportive policies and ambitious government targets remain crucial to future success, while the outlook for battery energy storage systems adds further potential for significant growth.