Building the business case for financing BESS in Bulgaria

Rezolv Energy, a leading renewable energy developer backed by Actis, has successfully secured investment and won a government auction to design and build a battery energy storage system (BESS) on their photovoltaic (PV) site in Bulgaria thanks to the comprehensive analysis of the Energy Strategic Consulting Services team at Hitachi Energy.

Working in close collaboration and to tight deadlines, Hitachi Energy delivered a credible and bankable long-term revenue forecast and scenario analysis that met the specific and unique requirements of the evolving Bulgarian energy and storage markets. Rezolv Energy has now begun construction on the BESS plant.

Challenge
The acceleration of the global energy transition means the BESS market is increasing in volume, global reach, and complexity. Rezolv Energy is at the forefront of this, delivering clean renewable power solutions with a focus on Central and Southeastern Europe, which has historically relied on fossil fuels for most of its energy needs. Creating alternative sustainable energy sources is a political, economic, and social priority for governments across the region.

Rezolv Energy sought expert advice and analysis from Hitachi Energy’s Energy Market Advisory team in acquiring the rights to St. George, a co-located 225-Megawatt (MW) solar PV and 90 MW BESS plant in the Silistra municipality of Northeast Bulgaria. It needed an independent, expert asset revenue valuation, which involved several revenue streams available to a solar PV + BESS co-located project, to take to its Board, investors, banks, and the Bulgarian government to proceed.

The BESS market in Eastern Europe is nascent, with few projects delivered or planned, making valuation work more difficult and financing harder to secure for developers. In the case of St. George, the Hitachi Energy team faced a further challenge in demonstrating that the asset could meet a specific requirement for subsidies from the Bulgarian government, which was the battery had to charge 75% of its volume from the solar PV plant for five years. While not unique to Bulgaria, this condition is a relatively new rule in PV + BESS auctions, so Hitachi Energy had to integrate it into its revenue optimization model to produce the desired results.

Final investment decisions on this type of project are usually made fast. Hitachi Energy’s initial contract with this project for Rezolv Energy was six weeks, with the valuation results delivered in just four weeks.

Solution
Hitachi Energy’s assessment was a holistic modelling and simulation of multiple scenarios of the co-located BESS and PV project over a period of 20 years, including:

• Analysing the full revenue stack and forward price projections from different markets, including the wholesale market, intraday market, and balancing services provided by the BESS (such as Frequency Restoration Reserve, or FRR).
• Analysing imbalance costs of the solar PV and considering the imbalance cost-saving impact of the BESS within the optimisation (Imbalance costs are financial penalties that renewable energy producers incur when actual energy generation deviates from forecasted production).
• Precise optimisation constraints to meet the conditions of the Bulgarian government’s subsidy scheme, in order to return accurate BESS revenues while adhering to the subsidy conditions in the revenue scenarios.
• A detailed model of the asset capturing the degradation of the BESS over its lifetime.
• Potential risks and exposures, and how to best manage them.

This was a complex analysis, as Hitachi Energy needed to understand the potential for each revenue stream, the different loss levels caused by the co-location, and implications of the constraints of the solar and PV subsidies applied for by Rezolv Energy.

Hitachi Energy’s Strategic Consulting Services team used its proprietary Asset Optimization Software and configured a bespoke model of the project to reflect the operation of the BESS in the market. It relied on its detailed models of the Bulgarian market underpinned by the Bulgaria Power Reference Case to estimate the sizes and depths of the various markets and the capacity requirements to cover the imbalances of the PV plant. The team drew on Hitachi Energy’s 35-plus years of global BESS experience across 350+ projects totaling over 7,000 MW, much of it co-located with solar, to ensure the model reflected real-world dynamics and commercial potential.

The sophisticated software Hitachi Energy uses, combined with its detailed knowledge and extensive experience of the Eastern European, and in this case Bulgarian, BESS trading markets, meant it was able to quickly provide the analysis necessary to support the investment case that Rezolv Energy needed to take to its Board and investors, satisfy the various authorities, and ultimately win the bid against other companies in the government auction.

Impact
Construction on St. George began in Autumn 2024, and the plant is expected to be completed in early 2026. It will comprise nearly 400,000 solar panels, with an average annual power generation of 313 Gigawatt hours (GWh). The plant will be connected to the main transmission grid, and will be sold to commercial and industrial users through long-term power purchase agreements (PPAs).

St. George will also create many jobs, for skilled and semi-skilled workers, during the build and throughout its 30 plus years of operation. These employment opportunities will bring economic benefits to Silistra and surrounding areas.

When complete, St. George will be one of the largest solar power plants in Bulgaria. This project is another example of Rezolv Energy’s mission to lead renewable energy solutions in the transition to net zero in Central and Southeastern Europe. This aligns with Hitachi Energy’s purpose to inspire the next era of sustainable energy through its commitment to powering the world’s energy system to be more sustainable, secure, resilient, and affordable, making electricity more accessible to all, and empowering societies to thrive.

Future collaboration
Rezolv Energy and Hitachi Energy worked in close collaboration to get the work done on the St. George project to quick turnaround times. 

As more companies plan to invest in the fast-growing, but uniquely challenging Eastern European BESS market, Hitachi Energy’s reputation for delivering bespoke, bankable, and proven asset valuations in stringent conditions (scope and timeframe) is helping advance renewable energy initiatives in Europe.

Learn more about Strategic Consulting Services.