How Dobrich is Pioneering the Energy Transition in Bulgaria
By the municipality of Dobrich
For many years, the city of Dobrich has been drawing on a broad network of partners and funding sources to implement energy efficiency projects. With its continuous efforts, the municipality has become a role model for other European cities seeking to change their energy system despite limited financial and material capacities.
The municipality is situated in the area of Dobrich District in Northeastern Bulgaria, about 500 km away from the capital and close to the Black Sea and the Romanian border. It stretches over 109km2 and is the second largest economic centre and the industrial and transport hub of the Dobrudja region. The city with 90000 inhabitants is a common tourist destination, welcoming up to half a million tourists per year. In recent decades, however, this regional capital has faced a decline in population, with many young people moving to bigger cities like Sofia or to other Central European countries to look for better work and education opportunities.
Energy poverty in Bulgaria and Dobrich
The difficult economic situation in the region has triggered rising energy poverty among the population. According to official figures, Bulgaria is one of the European countries most affected. Over 67% of households limit their heat comfort in the winter due to lack of financial resources, a distressing number compared to the European average of 8% (and 16% in other Post-Soviet countries).i The reasons for this are manifold. Although gas prices in Bulgaria are in fact some of the lowest in the EU, inefficient systems in old, multi-storey modular buildings from the Soviet era lead to significant losses in the energy grid. The removal of subsidies towards the end of the 90s, combined with comparatively low incomes, further exacerbates the problem. In Dobrich, residents simply cannot afford to heat their homes permanently with gas, and have no choice but to heat their homes only temporarily with electricity instead. And the situation is fuelled by bigger political issues. Bulgaria is said to fall short in complying with EU targets of increasing renewable energy to 32% as it currently only accounts for 25% in the national energy mix.
According to the report issued by the EU commission, there are no national measures whatsoever for tackling energy poverty. Geopolitical tensions on the Eastern European energy market concerning national monopolies and supply chains restrict the scope of action for responsible national authorities, and make creative solutions on a local level even more crucial. The municipality of Dobrich has recognized this as a chance to launch projects with a holistic perspective on interrelated issues such as energy, poverty and mobility. It positions itself at the forefront of the fight against climate change in Bulgaria, advancing municipal policies for a more renewable and efficient energy grid.
Regional networking and knowledge exchange
In the Black Sea region in Bulgaria, the municipality’s commitment towards an ambitious energy transition is unique, as the city has been participating and leading in various projects regarding energy efficiency. An important prerequisite for realizing these projects however is the local authority’s membership in the Municipal Energy Efficiency Network EcoEnergy.ii The network unites the efforts municipalities and also seeks to learn from other European experiences.
In order to fulfil its ambitions, Dobrich works in collaboration with the Local Agency for Energy Management (DLAEM).iii The agency aims to bring together actors from the region to increase energy efficiency, stimulate renewable energy sources, and to preserve and restore the environment of the Bulgarian Black Sea municipalities. DLAEM was established in 2005 as a not-for-profit organisation, with financial support from the Intelligent Energy program run by the European Commission.iv Information campaigns are crucial to encourage concrete actions. As one of the first Bulgarian members of the Covenant of Mayors (CoM), Dobrich also set up an information desk in 2008 to raise awareness on energy efficiency among the population.
In 2009, Dobrich was subsequently recognized by the alliance Energy Cities and the EU Commission as the best pilot city in the “Management of Domains related to Energy in Local authorities” (MODEL project).v
Pilot city Dobrich – Integrated planning and international projects
The administration is currently in the final stage of realising SEAP, a plan for a “Energy Sustainable Dobrich 2020”, which exceeds current national and EU goals.vi As part of the EU-funded program IMAGINE, which is coordinated by the Energy Cities network in partnership with 8 pilot cities to support local authorities to draw local energy road-maps, Dobrich has set the following goals until 2020:
- 25% reduction in carbon emissions
- 25% reduction in energy consumption
- 20% share of renewables in total energy consumption.
In order to pursue these ambitious goals, Dobrich has implemented projects encompassing the public and the private sector. In 2012, the municipality supported the construction of a photovoltaic power station. Built by a private energy company, the plant is the biggest in the region, featuring 60,000 panels with the capacity to supply 12,000 households. Dobrich also renewed its streetlighting, replacing 1500 old light bulbs with energy-efficient LED units. While a luminance level of 90% was achieved, electricity use was decreased by 47%. The project is expected to generate annual savings of nearly €20,000 over its lifetime of 15 years. Furthermore, the entire municipal stock has been gasified, while a variety of energy efficiency measures have been implemented in other public and private buildings.
The city participated in the “Green Public Procurement Supporters for Innovative and Sustainable Institutional Change” (GreenS) project. This alliance of mostly East European local government and energy agencies aims to strengthen the capacity of the public authority administrations, and to pursue Green Public Procurement (GPP) by training municipal staff, facilitating a learning exchange and providing technical support between the partners.
Following up on a previously completed program in cooperation with Innovation Norway, aimed at reducing Greenhouse Gases in the Public Sector in the Black Sea Region, Dobrich continues its partnership with Norway in the BANCAGE project. This is a bilateral program, set up to strengthen the mutual relations between Norwegian and Bulgarian green clusters and to promote green entrepreneurship in the region.vii It facilitates knowledge transfers for Energy Management Systems and the exchange of best practice experiences related to public buildings and the marine sector in the Bulgarian Black Sea region.
The initiative “Sustainable Integrated Multi-Sector Planning” (SIMPLA), which is funded by the EU commission’s program Horizon 2020, supports Dobrich as one of the pilot cities.viii SIMPLA seeks to empower public authorities to develop their capacity for the smart integration of the city’s SEAP and its social urban mobility plans.
Retrofitting and renovation of residential buildings
The municipality has recognized the necessity to increase energy efficiency by retrofitting poorly insulated residential building, which also includes the upgrade of district heating.
Benefitting from a national program on energy efficiency for multi-family residential buildings, Dobrich managed to renovate 41 buildings.ix Ever since the 2,400 families living in these apartment blocks are saving 30-60% on their energy bill while increase the comfort of living. The project was established in continuous consultation between the mayor and the tenants exchanging ideas and concerns in over 30 meetings.
Funding the local energy transition
Like many other municipalities working to improve their energy supply system, the lack of access to financial resources is one of the biggest constraints Dobrich faces. Consequently, the implementation of transition policies strongly depends on external resources from EU grants and other sources. Hence, a crucial task for municipalities like Dobrich is to build local capacity by engaging with relevant partners in the public and the private sector. Accessible finance includes bank loans and municipal bonds, project funds from national and European institutions, as well as grants resulting from the partnership with Norway.x
In order to conduct retrofitting works to make public buildings energy-efficient, the municipality contracts an Energy Saving Company (ESCO), a model that is increasingly popular in Bulgaria.xi Dobrich decided to enter into an ESCO agreement instead of a more traditional Public-Private Partnerships (PPPs) because the latter tends to prioritise private profits over the public interest. In contrast, an ESCO contract explicitly guarantees a strong performance by the private company by obliging the latter to generate a contractionary set level of energy and/or financial savings for the municipality. This is designed ensure that the public – and not the private company – is the main beneficiary of this partnership instead of bearing the risk only. According to the research centre “European Energy Efficiency Platform” (E3P), the three main characteristics of an ESCO are:xii
- ESCOs guarantee energy savings and/or provision of the same level of energy service at lower cost. A performance guarantee can take several forms. It can revolve around the actual flow of energy savings from a project, can stipulate that the energy savings will be sufficient to repay monthly debt service costs, or that the same level of energy service is provided for less money.
- The remuneration of ESCOs is directly tied to the energy savings achieved;
- ESCOs can finance, or assist in arranging financing for the operation of an energy system by providing a savings guarantee.
In the case of Dobrich, the refurbishment of the kindergarten “Prolet” (meaning Spring) was carried out through an ESCO contract with the private company ENEMONA. In one month, the building was insulated, the kitchen modernized, and thermal solar panels installed. The energy savings objective of 40% was achieved, as well as an annual reduction of CO2 by 112 tonnes, generating annual savings of roughly €15,000.
Additionally, the renovation of four municipal buildings through ESCO services achieved more than 50% of energy savings, proven through energy monitoring systems in the renovated buildings.xiii The measure was implemented through the energy performance contract within three months. Municipal experts coordinated the work of the contractor, which was selected under public procurement law.
After investing more than €2.6 million funded by an operational program for regional development, a wide range of renovation measures were carried out, such as energy audits for each of the seven buildings, to replacement of windows, insulation and repairing of roofs, and upgrading of the district heating systems. By 2019, Dobrich refurbished over half of the 70 municipal buildings in the city.
In its efforts to address the energy transition, Dobrich has shown that with continuous commitment and long-term planning – spanning several legislative periods – a small municipality can become a pioneer and role model on the national level. Its holistic and multi-sectoral approach, bringing together various strategies and partners in the energy transition, has proven successful in tackling fuel poverty, reducing its carbon footprint and eventually fostering sustainable livelihoods for residents.
This blog article was co-created by Lukas Toedte and is part of the mPOWER blog series in which cities and towns share how they are building better energy futures.