Integrated Plan
With regards to hydrogen, the Integrated Plan provides mainly for the development of the transportation sector in Bulgaria where the target is to introduce 32 GWh of hydrogen fuelled vehicles by 2030. Currently, there are no hydrogen powered vehicles in the sector but the aim is that, by 2030, this figure will increase to 2.7 per cent. Same figures and perspectives are mentioned in the Hydrogen Strategy.
It is expected that some of the projected production shall be by way “of Power to X” installations, where surplus solar and wind power generation will be used for the purposes of hydrogen production. It is forecasted that the consumption from such installations will reach 47GWh by 2030.
The Integrated Plan also states that Bulgaria shall invest approximately €3.5 million into hydrogen projects by 2030. Furthermore, Bulgaria is planning to develop hydrogen refuelling stations that will eventually have a total installed capacity of 20MW.
Hydrogen Strategy
The scenarios of hydrogen deployment in Bulgaria pursuant to the Hydrogen Strategy show a substantial potential.
According to the Hydrogen Strategy, the ‘surplus’ electricity production potential can be utilised by developing hydrogen with electrolysers using renewable electricity since to date Bulgaria has not developed its potential for exporting electricity production surpluses. The existence of nuclear power generation capacity in Bulgaria is also an opportunity for the development of the hydrogen sector since these can convert the surpluses into hydrogen while working at full load.
Currently Bulgaria has no salt cavern gas storage sites to be used for hydrogen storage. However, there is salt deposit in the eastern part that should be further explored whether suitable for hydrogen storage.
The strategy indicates opportunities for hydrogen demand in terms of decarbonisation in the sector of industry (e.g. high-temperature heat generation), heating and cooling and transport (road transport, rail sector).
As part of the positive incentives for the hydrogen development, the Hydrogen Strategy indicates the existence of hydrogen national association and the partial existence of hydrogen roadmap/strategy referring to the Strategy for Smart Specialization. However, the lack of national tax incentives and the lack of substantial greenhouse gas reduction measures play the role of contra-incentives.
The development of the hydrogen market may lead to meeting the GHG reduction targets by 2030 as well as to investments in the range of EUR 1.0 – 1.8 billion.
General
Since the market is still under development, there are no clear private financing options so far. However, given that the Energy from Renewable Sources Act (“ERSA”) provides for certificates of origin to be issued to producers of renewable energy, and obliges energy suppliers to purchase this renewable energy. Given the recent changes under the Energy Act, explicitly stating that the energy to be used for the production of green hydrogen shall be subject to certificate of origin, albeit at preferential prices, private investors may be encouraged into the sector.
Much like in other jurisdictions, commercial banks in Bulgaria are starting to opt out of financing carbon intensive, fossil fuel energy projects, choosing instead to provide debt financing to stakeholders investing in new, low carbon technologies, such as hydrogen projects. This will be important given that the infrastructure needed for the development of low carbon hydrogen projects is likely to involve significant capital expenditure (for example, for new pipelines and electrolysers).
Low carbon hydrogen production is currently expensive compared to the production of hydrogen from coal or methane gas, having not yet benefitted from the price reductions seen across other more mature low carbon technologies. Developers, therefore, will often need financial assistance beyond their own equity investment to support hydrogen projects. However, smaller developers are not always able to satisfy the conditions attached to bank financing. State support may, therefore, have a crucial role in funding hydrogen projects at least initially, especially for smaller developers. Such support will be needed until the cost of generation reaches market levels and becomes self-sustainable.
Social Media cookies collect information about you sharing information from our website via social media tools, or analytics to understand your browsing between social media tools or our Social Media campaigns and our own websites. We do this to optimise the mix of channels to provide you with our content. Details concerning the tools in use are in our privacy policy.