The document discusses Bulgaria's targets for 2020 related to renewable energy sources and reducing CO2 emissions. It analyzes different scenarios for meeting renewable energy consumption targets and the capacity needed from various renewable sources like wind, solar, biomass and hydro. Meeting renewable targets could require 3,000-7,600 MW of additional renewable capacity at an estimated total cost of $36-113 billion. Government actions like long-term contracts and increased involvement in grid development are recommended to stimulate growth in renewables.

1. RENEWABLE ENERGY SOURCES AND
REDUCING CO2 EMISSIONS
Bulgaria’s 20/20/2020 Targets:
What do they Mean for the Renewables Industry?
05 November 2009
05 November 2009
Presentation by: Kenneth Lefkowitz
Managing Partner
New Europe Corporate Advisory Ltd.
www.necadvisory.com

2. Bulgaria’s 20/20/2020 Targets: What do they Mean for the Renewables Industry?
Indicative trajectory of renewables as fraction of
Final Energy Consumption (FEC) until 2020
17,00%
16% (binding)
16,00%
15,00% 13,69%
14,00%
13,00% 12,37%
12,00% 11,38%
11,00% 10,72%
10,00% 9,40%
9,00%
8,00%
Source: Directive 2009/28/EC 2

3. Bulgaria’s 20/20/2020 Targets: What do they Mean for the Renewables Industry?
Renewables consumption scenarios (TWh)
25
23,19
Historic Scenarios 20,25 Scenario 1: 7%
20 annual growth
17,69 (based on
projection of the
15,45 17,80 Ministry of
16,15
Economy, Energy
15
13,49 and Tourism)
14,65
11,79
13,28
10,29 12,05
Scenario 2: 5%
10 10,93
annual growth
8,99 9,91 (2003-2006
8,67
average,
7,93 Eurostat)
5 6,28
5,08
2,72
2,07
1,33 1,36
0
Source: Eurostat 3

4. Bulgaria’s 20/20/2020 Targets: What do they Mean for the Renewables Industry?
Final Energy Consumption by fuel/product
2006
Bulgaria EU-27
Derived heat Solid fuels
and Industrial
waste
Solid fuels 4,71%
9,52% 9,61% Electricity
Renewables
7,71% 20,67%
Renewables 5,10%
42,23% Oil
Electricity 23,04% 38,44%
Oil 22,83%
Gas
11,68%
Gas
Source: Eurostat 4

5. Bulgaria’s 20/20/2020 Targets: What do they Mean for the Renewables Industry?
Scenarios for Final Energy Consumption until 2020 (TWh)
250 236
225 Scenario 1: Minisrty
Historic Scenarios 214 of Economy, Energy
204 and Tourism's
194 projection, according
200 189
182 181 to the long-term
174 173 program for
165 166 development of
157 159
153 Renewables
149 146
150 141 140 Scenario 2: Based
133 134 on Eurostat data;
127 129
124 142 145 convergence with
119
135 137 140
130 132 EU-27 FEC/capita
125 128 average; 4,3%
120 123
100 annual growth
Scenario 3: Based
on NSI data; 2%
50 annual growth
(2002-2006 average)
-
5

6. Bulgaria’s 20/20/2020 Targets: What do they Mean for the Renewables Industry?
Energy Efficiency 2002-2007 and NECA projection
Final Energy Consumption/Gross Inland Consumption
70,00%
64,10% 64,31% 64,40% 64% 64%
65,00%
Historic 75% convergence with
60,78%
60,00% EU-27 until 2020
58,63%
56,55%
55,00% 54,56% Bulgaria
52,63% EU-27
50,77%
50,00%
48,60% 48,70% 48,97%
45,80%
45,00%
40,00%
Source: Eurostat 6

7. Bulgaria’s 20/20/2020 Targets: What do they Mean for the Renewables Industry?
Final Energy Consumption, Gross Inland Consumption
and renewables (NECA projection, TWh)
350
300 311
296
282
250 268
255
239 244
233 Final energy
200 221 221 189 consumption
173 (Scenario 2)
159
146 Gross inland
150 134 consumption
124
116 114
101 107
100 Renewables
consumption
(Scenario 1)
50
17,69 20,25 23,19
10,29 11,79 13,49 15,45
7,44 8,25 8,99
0
7

8. Bulgaria’s 20/20/2020 Targets: What do they Mean for the Renewables Industry?
Renewables as percentage of FEC
Worst-case and best-case scenarios
Best-case scenario
20,00%
15,99%
14,46%
15,00% 16% Worst-case scenario
13,10%
11,88%
10,79%
13,69%
12,37%
11,38% 11,77%
10,00% 10,72% 11,01%
10,33%
9,76% Indicative trajectory
9,23%
7,68% 7,63% 7,55% 7,55% 7,54%
5,00%
Worst-case scenario
0,50% 0,73% 0,77% (Scenario 1 for Final Energy
0,07%
0,00% Consumption, scenario 2 for
-0,01% consumption of renewables)
-3,04% Best-case scenario (Scenario
-5,00% -3,75% 3 for Final Energy
-4,82% Consumption and scenario 1
-6,14% for consumption of
renewables)
-8,46% Base case scenario
-10,00%
8

9. Bulgaria’s 20/20/2020 Targets: What do they Mean for the Renewables Industry?
Capacity needed to meet 20/20/2020
NECA estimations
Estimated average
Estimated total cost
Base case Assumed Incremental marginal cost
for incremental
Type (Installed average capacity to fill (million Euros per
capacity to fill gap
capacity, MW) efficiency gap (MW) MW installed
(billion Euros)
capacity)
Wind 30% € 1,2 – 1,5 € 4,1
1,419 3,040
Small
50% € 2,5 € 4,6
hydro 450 1,824
Large
75% €3 € 3,6
hydro 80 1,216
Solar 12% € 2- 2,5 € 17,1
200 7,601
Biomass 95% €2-4 € 2,9
1,762 960
Geother
80% € 2- 5 € 4,0
mal 159 1,140
* The expected indirect sanctions for every GWh unproduced energy from
renewables are around € 1,2 million, or a total of € 42,5 billion until 2020 for the
base-case scenario and € 113,6 billion for the worst-case scenario 9

10. Bulgaria’s 20/20/2020 Targets: What do they Mean for the Renewables Industry?
Government actions
• Introduce long-term contracts at a pre-agreed
price to stimulate renewables growth
• The government should get more actively
involved with grid development
• The government should increase its financial
and supervisory functions
• Most importantly, the government should seek
constant dialogue with the parties involved
Source: AmCham Bulgaria 10

11. Bulgaria’s 20/20/2020 Targets:
What do they Mean for the Renewables Industry?
05 November 2009
Kenneth Lefkowitz
Managing partner
New Europe Corporate Advisory Ltd.
www.necadvisory.com
99 Evlogi Georgiev Blvd.
Bulgaria, 1142, Sofia
tel.: +359 (2) 988-7390
cell: +359 (88) 631 5375
fax: +359 (2) 981-6206
e-mail: neca@necadvisory.com
11