17 June 2024

Rezolv launched 18 months ago to accelerate the energy transition in Central & South Eastern Europe. We already have well over 2GW of clean energy being prepared for construction. This includes St. George, which will become one of Bulgaria’s largest solar plants, and Dama Solar, which will be the largest solar project anywhere in Europe once it is operational. We also have more than 1GW of wind power under construction in Romania.

When you tell people that story, it typically leads to one question: why Romania and Bulgaria? This is the first in a series of articles that we will be publishing about the clean energy transition in Central & South Eastern Europe. We’re going to start by focusing on Bulgaria. The second article, which will be out in a couple of weeks’ time, will answer the ‘Why Romania?’ question.

An ‘Emissions first’ approach.

So Why Bulgaria?

There isn’t a straightforward, single factor answer to that question. There are various reasons, many of which are connected to the characteristics of the St. George project. St. George will be built on the site of the former Silistra airport, a decommissioned airfield covering 165 hectares. At 229MW, it is, like all of Rezolv’s projects, utility-scale. Solar projects of this size require a few different things – not least available land, good solar irradiation and capacity for grid access close to the site. St. George had all of these things.

But if you zoom out from the specifics of the project, there is a broader answer to the question which helps explain Rezolv’s mission – and that of Actis, Rezolv’s single shareholder. Actis is one of the world’s most respected energy investors, and one of the reasons Actis prioritised Central & South Eastern Europe is because it is a region which has historically relied on fossil fuels for most of its energy needs. Replacing fossil fuel production with renewables delivers the maximum possible emissions reduction impact – an ‘emissions first’ approach which aligns with the sustainability policies which are now being adopted by some of the world’s biggest companies, including Meta, Amazon and General Motors.

Bulgaria is a perfect example of this emissions reduction potential. Bulgarian electricity production is still heavily dependent on fossil fuels – particularly brown coal, or lignite, which makes up more than 85% of that fossil fuel total. This is a major problem because while lignite is the cheapest source of electricity from fossil fuels, it causes the highest CO2 emissions per ton when burned, one-third more than hard coal and three times as much as natural gas.

In 2022, 48.8% of Bulgaria’s electricity generation was produced by fossil fuels, almost identical to the situation in 2000 – so limited progress was made in the 20+ years leading up to 2022 in reducing Bulgaria’s dependence on lignite.

One explanation for this is that, over the same period, Bulgaria made limited progress in developing wind and solar capacity. Bulgaria was a relatively slow-starter on renewables: wind power was introduced, in small quantities, in 2006; solar production only got going in 2010. Both industries experienced a ‘boom’ between 2010 and 2013, but after that, the ‘pause’ button was pushed on new renewables capacity for a decade:

Bulgaria’s solar Boom

The good news is that the wheels are now turning and the energy transition is well underway in Bulgaria – in particular on solar, where capacity increased by more than 80% in 2023

The energy transition is an economic as well as a political priority

This progress on solar establishes the extent to which the energy transition has become a political priority. The main drivers are obvious. First, the need to enhance energy security by reducing dependence on foreign sources of energy has, of course, risen to the top of the political agenda since the start of the war in Ukraine. And second, Bulgaria has some challenging climate targets to hit (a topic we will be returning to later in this series).

But there is also a third, slightly lower-profile factor: accelerating the energy transition has become an economic imperative too. Bulgaria is amongst the most heavily industrialised economies anywhere in Europe:

The impact of renewable energy on the Bulgarian public

Finally, let’s not forget the impact of renewable energy on the general public. In Bulgaria, the growth of wind and the further development of solar will have a direct, tangible impact on human health, which is another reason why investing there is so attractive. This is specifically because air quality remains a huge problem. There are many different air pollutants, but one of the most significant for human health is fine particulate matter (PM2.5), with exposure to PM2.5 at above recommended levels a leading cause of premature death and disease (particularly stroke, cancer and respiratory disease).

PM2.5 levels are a serious problem across the whole of Central & South Eastern Europe. Across the region, the European Environment Agency concludes that high PM2.5 levels are “due primarily to the burning of solid fuels like coal for domestic heating and their use in industry”. And it’s a killer – with Bulgaria number one on the EU list when it comes to premature deaths attributable to exposure to PM2.5