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Start for freeNEK's Strategic Vision for Energy Storage
National Electric Company (NEK) of Bulgaria is positioning itself as a key player in the country's energy transition, with a strong focus on expanding and modernizing energy storage capabilities. As the energy landscape shifts towards greater renewable penetration, NEK recognizes the critical role that energy storage will play in maintaining grid stability and enabling decarbonization.
Leveraging Existing Competencies
NEK's strategy for energy storage development builds on the company's core competencies:
- Management of flexible power generation and storage facilities
- Operation of large and complex trading portfolios
- Execution of large-scale projects
By leveraging these strengths, NEK aims to enhance its crucial role in ensuring Bulgaria's energy security.
Current Storage Capacity and Utilization
NEK's existing hydropower facilities already provide significant energy storage capacity. The company's reservoirs can store nearly 2 million megawatt-hours annually, offering crucial flexibility to the grid. This storage capacity has proven invaluable during recent periods of high demand, with NEK able to increase production by around 1000 megawatts on average for extended periods.
Modernization and Expansion Plans
NEK's strategy for future development focuses on two key areas:
- Modernizing existing facilities
- Expanding storage capacity
Modernizing Existing Hydropower Plants
A primary focus is on maintaining and upgrading existing hydropower facilities to ensure their reliability and efficiency. This includes ongoing work at the Chaira Pumped Storage Hydropower Plant (PSHPP), one of Bulgaria's most important energy assets.
Chaira PSHPP Rehabilitation Project
The rehabilitation of Chaira PSHPP has been a complex and challenging process:
- One unit (Aggregate 2) was successfully returned to operation in late 2024 after implementing an innovative technical solution.
- Contracts were signed in early 2025 for the repair of two additional units:
- One with the ABB-led consortium to adapt and apply a similar solution
- Another with Toshiba, the original equipment manufacturer, for a unit that has not been modernized since its 1995 installation
- A tender process is underway for the long-term replacement of two aggregates, with the first stage deadline set for March 11, 2025
The tender process for the long-term solutions has been designed as a multi-stage procedure to better accommodate the limited number of qualified suppliers and allow for progressive engagement in developing technical and financial solutions.
New Pumped Storage Projects
NEK is actively developing new pumped storage hydropower projects to significantly expand the country's energy storage capacity.
Batak and Dospat Projects
Two major new pumped storage projects are in the pre-feasibility study phase:
- The European Investment Bank (EIB) is conducting a comprehensive study
- The first phase of the study is expected to conclude within two weeks
- Initial results appear promising
- The study will assess technical solutions, economic viability, capital expenditure, operational costs, and net present value
NEK is optimistic that these projects will prove attractive and move forward to implementation.
Additional PSHPP Opportunities
Beyond the Batak and Dospat projects, NEK is internally exploring other potential locations for pumped storage facilities. The company aims to identify the best possible sites to match the pace of renewable energy integration in Bulgaria.
These additional studies focus on utilizing existing reservoirs to reduce investment costs, following NEK's strategy of efficient resource use.
Battery Storage Projects
NEK is diversifying its storage portfolio by developing battery energy storage systems (BESS). The company has five BESS projects in various stages of development:
- VEC Vacha 1: Currently under construction, scheduled for completion by mid-2025
- VEC Leko
- VEC Studen Kladenets
- VEC Topolnitsa
- VEC Devin
NEK's approach to battery storage involves co-locating BESS units at existing hydropower plants. This strategy offers several advantages:
- Utilization of existing infrastructure and grid connections
- Increased efficiency through "energy connection densification"
- Leveraging existing expert personnel for operation and maintenance
- Potential synergies between battery systems and hydropower operations
Financing Challenges and Strategies
Securing financing for large-scale energy storage projects, particularly pumped storage hydropower, presents significant challenges:
- Long development and construction timelines
- Extended payback periods
- Market volatility and regulatory uncertainties
NEK is addressing these challenges through several approaches:
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State Support: As a state-owned company, NEK benefits from government backing, which can help mitigate risks for potential financiers.
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International Financial Institutions: NEK is engaging with institutions like the European Investment Bank, which prioritize such strategic energy projects.
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Commercial Banks: Discussions are ongoing with commercial lenders who see value in supporting energy transition projects.
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Risk Mitigation Instruments: NEK recognizes the need for financial instruments to reduce risk for investors in long-term energy storage projects, similar to past support for renewable energy development.
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State Aid: For the Chaira PSHPP rehabilitation, NEK expects confirmation of state aid in the new budget law, with approximately 155 million allocated for the current year.
Project Timelines and Next Steps
Assuming positive outcomes from feasibility studies and progress on financing arrangements, NEK anticipates potential construction starts for new pumped storage projects by late 2027 or early 2028. However, this timeline is subject to complex environmental assessments and regulatory processes associated with large hydropower developments.
Conclusion
NEK's comprehensive approach to energy storage development demonstrates the company's commitment to supporting Bulgaria's energy transition. By modernizing existing assets, developing new pumped storage capacity, and integrating battery storage solutions, NEK is positioning itself as a key enabler of grid flexibility and renewable energy integration.
The success of these initiatives will depend on overcoming financing challenges, navigating regulatory processes, and effectively executing complex technical projects. As NEK moves forward with its storage strategy, the company will play a crucial role in shaping Bulgaria's future energy landscape and contributing to broader European decarbonization goals.
Article created from: https://youtu.be/dKyBadOLE0Q