Bulgaria's new renewable energy law could discourage investments in wind power projects and disrupt the country's market.

While Bulgaria saw good wind farm growth in 2010, installing 153 MW, which amounts to a total capacity of 488 MW, investors now face increased risk in terms of revised feed-in tariffs and uncertain capacity allocation.

"The new law fixes the feed-in tariff only after the renewable energy project is completed," stated Sebastian Noethlichs, Executive Director of the Bulgarian Wind Energy Association. "But since a wind farm takes 18 to 24 months to be built, tariffs could be revised downward while the project is still under construction. Banks are reluctant to be exposed to this kind of risk" Mr. Noethlichs added.
Moreover, the new law is not clear on whether the new renewable energy project will be able to get a suitable grid connection at the right location. This uncertainty could discourage developers and financiers.

With an adequate legislative framework, Bulgaria has the potential to install 3,000 MW of wind power by 2020, generating between 13.5 and 15% of total electricity consumption from wind energy, according to the European Wind Energy Association (EWEA).