On 27.07.2026, the Energy and Water Regulatory Commission (EWRC) published a highly important Report for public consultation regarding the regulatory conditions for the participation of energy storage systems (BESS), Demand Side Response, and the rollout of smart metering devices. The report was prepared in connection with the implementation of milestone 351 under Reform C13.R3 of the National Recovery and Resilience Plan (NRRP).
The public consultation will take place this Friday, 31.07.2026, at 10:00 AM at the EWRC building (8–10 Knyaz Al. Dondukov Blvd., 4th floor) and can also be followed online on the Commission’s website.
In the published report, EWRC provides a detailed analysis of the current market model and outlines a series of regulatory and technical changes directly affecting the energy storage sector in Bulgaria.
The main findings and Regulator-proposed changes with a focus on BESS are:
1. Impressive Growth and Current Status of BESS in Bulgaria
The data in the report reflects a rapid uptake of battery systems. As of early June 2026, the installed BESS capacity in the country has reached 4,011 MW with a energy capacity of 12,240 MWh (over 85% of which is connected to the transmission grid). The Electricity System Operator (ESO) expects these capacities to exceed 6,000 MW / 18,000 MWh by the end of 2026.
Currently, the primary business model for BESS operators remains price arbitrage on the Day-Ahead and Intraday markets, including cross-border trading. At the same time, BESS and PSHPP (pumped-storage hydro) already account for over 31% of the registered capacity for balancing services, with batteries actively participating in the balancing energy market for manual frequency restoration reserves (mFRR) and downward regulation.
2. Main Regulatory Barriers to BESS Participation in the Balancing Market:
Despite the rapid uptake, EWRC identifies several key barriers preventing batteries from unlocking their full potential in the capacity/balancing market:
· Unsuitable Market Products: Capacity auctions are held for excessively long periods and do not account for the specifics of Limited Energy Reservoirs (LER) technologies, such as BESS.
· Price Caps: Existing administrative caps on capacity procurement (€25/MW for FCR and aFRR; €5/MW for mFRR) limit the financial incentive for BESS to participate in these auctions.
· Lack of Technical Requirements in the Electricity Grid Code: There is a lack of detailed technical requirements for BESS grid connection and operation (e.g., specifics regarding voltage control in charging mode).
· Underdeveloped Aggregation Framework: There is no functional market mechanism for independent BESS aggregators to participate, nor are there clear rules for baseline determination, managing the “rebound effect,” or avoiding double counting.
3. Proposed Changes and Measures by EWRC:
To eliminate the identified barriers, the Regulator envisions the following steps:
· New Market Products for BESS: ESO plans to implement capacity auction procedures for shorter time slots and intraday products. The introduction of two-way auctions (separate for upward and downward reserves) is also planned, perfectly aligning with the technical capabilities of BESS to charge and discharge.
· Revision of Price Caps: Phased removal or revision of maximum capacity prices to encourage competition and attract new technologies.
· Updating Grid-Related Rules: Amendments to the Electricity Grid Code, the Electricity Trading Rules, and ESO’s Auction Rules to accommodate the specifics of limited energy resource (LER) facilities and create clear technical conditions for their pre-qualification and dispatching.
· Development of Small/Behind-the-Meter BESS and Independent Aggregators: EWRC identifies residential and industrial behind-the-meter batteries as the resource with the highest potential (100%) for providing flexibility. In this regard, amendments to the Electricity Trading Rules are being prepared to regulate independent aggregators, establish compensation rules among participants, and eliminate the risk of double counting.
· The report includes an economic feasibility assessment for an accelerated 5-year rollout of over 3.3 million smart meters (with 15-minute settlement), serving as the technical foundation for flexibility aggregation and dynamic pricing.
4. Timeline for Adopting the New Regulatory Acts
EWRC sets the following timeframe for implementing the reforms:
– By the end of 2027: Adoption of amendments to the Electricity Trading Rules, the Electricity Grid Code, the Distribution Grid Code, and ESO’s Auction Rules.
– By mid-2028: Adoption of specialized technical rules by ESO and DSOs for providing flexibility services.
– Ongoing Measures: ESO will organize public training sessions for BESS operators, aggregators, and potential balancing service providers.
>> You can read the proposed text in the draft “Report on the regulatory conditions for the participation of energy storage systems and industrial consumers in the balancing market, the costs and benefits of installing smart metering devices, and demand side response measures” here (in Bulgarian).
If you have any comments regarding the published Draft that you would like included in the public hearing, please send them to us by the end of the business day on 30.07.2026.
Given the announced deadline of 14.08.2026 for submitting written position papers, please send any comments or proposals for us to consider while drafting APSTE’s official position paper by 12.08.2026.
