Electricity and heat “spring” from Bulgaria’s depths

The country already has legislation for geothermal energy, which opens a new stage in the development of the sector

Currently, over 409 geothermal plants are operating in Europe, and more than 360 new geothermal heating and cooling projects are in various stages of development or exploration. © Shutterstock / Capital

The topic in brief

• The state granted the first concession for geothermal energy in Zlatograd, without having a comprehensive study of the potential across the entire country.

• A simplified and accelerated regime has been introduced for building heat pumps and shallow geothermal systems, including in multi-family and single-family buildings.

• According to the current legislation, a concession for geothermal resources can also be granted to private investors, but the monopoly of district heating companies is preserved.

Against the backdrop of high oil and gas prices, as well as difficulties in developing the electricity transmission network and connecting new capacities, geothermal energy is being discussed more and more. Here, however, it is about the heat of the Earth, not the warm mineral waters that are used in some areas for heating.

In Bulgaria, there are currently over 3,000 boreholes made as a result of geological explorations, mainly for oil and gas, which prove the presence of high temperatures in the Earth’s depths. By 2030, this could provide 200–300 MW of electric capacity and around 3,000 MW for district heating—a scale comparable to “Toplofikatsiya Sofia.” By 2050, the potential reaches 1,500–2,000 MW for electricity and 30,000 MW for heating and industry. This is entirely separate from the officially registered mineral water deposits—over 500 water sources, managed under the Water Act and largely allocated to municipalities for drinking needs, balneology, and others.

In other words, the underground heat resource can be used to produce energy (thermal and electrical) without putting at risk the quality of drinking and healing waters. The question is to use it properly.

Where are we?

In the European Union (EU) there is still no unified directive or regulation governing geothermal energy. Bulgaria has legislation from 2023 and is already one of 15 countries with a clear framework for the development of geothermal resources. Instead of a separate law, the country chose to amend several нормативни acts—the Renewable Energy Act, the Subsurface Resources Act, the Water Act, and the Spatial Planning Act.

For the first time, geothermal resource is defined as heat in the Earth’s depths, not simply as a water resource, although water is considered the carrier of this energy. This allows for a broad technological approach and the development of solutions not limited only to mineral waters, as outdated perceptions suggest. This enables a new stage in the sector’s development—from exploration to real projects for heating, cooling, and electricity generation.

What Bulgarian legislation provides—the French model

Bulgaria uses the French model for geothermal development. Resources are clearly divided into shallow (up to 200 m) and deep (over 200 m), which provides predictability for both investors and administration. Deep geothermal energy is regulated under the Subsurface Resources Act with a regime similar to oil and gas—an exploration permit for up to 5 years followed by a concession for extraction. There is also a provision for associated extraction of strategic raw materials such as lithium. Shallow geothermal falls under the Water Act and the Spatial Planning Act, here the approach is maximally relaxed.

The key issue remains the management of geological risk—the risk that a borehole will not reach the necessary flow or temperature. Practice in France shows a working solution: the investor pays a premium of 3–5%, and in case of an unsuccessful borehole, a specialized fund covers 70–90% of the costs (5–15 million euros). This makes the creation of a national guarantee fund the next necessary step for Bulgaria, experts say.

“The biggest challenge for the administration was to define an underground resource for concession that is practically unlimited as an energy source,” recalls Georgi Stefanov, climate expert and board member of the Bulgarian Association Geothermal Energy (BAGE). As early as the 1980s, Bulgaria had practical experience with geothermal applications—in areas such as Pleven and Dolni Dabnik, small systems linked to oil and gas exploration operated for about two decades but were later abandoned.

From a geological perspective, the country has clearly defined regions with potential for geothermal energy development. In Northern Bulgaria, there are deep sedimentary horizons with temperatures above 150°C at depths of 4–6 km, suitable for electricity production. In Southern Bulgaria, conditions differ, with an active rift terrain featuring high temperatures and significant potential for direct heat use (over 100°C). However, geological, geophysical, and deep drilling information remains significantly limited, and the question of the regional consistency of these elevated temperatures remains. Areas such as the Sofia field, Kyustendil, Sapareva Banya, Blagoevgrad, Sandanski, Petrich, Velingrad, Zlatograd, Burgas, and others are proven zones with elevated temperatures at relatively shallow depths, according to BAGE.

This resource has many applications—from shallow heat pump systems for buildings, through direct use of heat for district heating and industry, to electricity generation. Geothermal energy is characterized by a high capacity factor (typically 70–95%) and the ability for continuous production of thermal energy. This makes it suitable for district heating systems and urban infrastructure.

Despite this potential, the sector’s development remains limited by the lack of systematized and modern digital geological information. Under the Recovery and Resilience Plan, over 150 million euros were allocated for geological mapping, pilot projects, and digitalization of the National Geological Fund, but the project failed.

The first geothermal concession in 35 years in Zlatograd

By a decision of February 4, 2026, the Council of Ministers granted the first concession in Bulgaria’s history for the extraction of deep geothermal resources in Zlatograd for 35 years to businessman Nikolay Valkhanov. Without the adopted legislative changes, such a procedure would not have been possible.

It is planned to build a system for extracting geothermal energy from the “Shumachevski dol – Androu” deposit, as well as a geothermal power plant for electricity production.

The average annual electricity production for the concession period is set at 135,955 MWh. The concession payment will be 4% of net revenues from electricity sales, with 50% of the proceeds excluding VAT going to the Zlatograd municipality budget. This first case highlights the need for a more systematic national assessment of geothermal potential so that future investments are based on a more complete geological and economic foundation, experts comment.

Sofia “sleeps” on a sea of heat

The Sofia field has significant geothermal potential. Evidence of this is the numerous mineral springs in the area—in Bankya, Knyazhevo, Pancharevo, and over forty other natural and drilled points with mineral waters whose heat is close to the surface. Potential geothermal systems for energy purposes target deep layers in the Earth’s crust, where high temperatures can be extracted without affecting shallow aquifers that provide drinking mineral water. This means geothermal energy development and the preservation of mineral waters not only do not contradict each other but develop in parallel, according to BAGE.

The city has an additional strategic advantage—the district heating system, which allows integration of new heat sources. At the same time, the lack of detailed and systematized geological and drilling information—flow rate, temperature, depth, structure, and resource sustainability—remains a limitation to faster development. Therefore, detailed studies are needed before drilling and commissioning stages begin.

Meanwhile, “Toplofikatsiya Sofia” is in a critical financial condition with debt exceeding 1.4 billion euros. It consumes between 30 and 50% of the country’s natural gas. Here geothermal energy emerges as the best option—it operates as a base load 24/7, with price stability.

European legislation also requires other heat sources to use existing networks. Under Bulgarian law, a concession—including for geothermal resources—can be granted to private investors, but access to the heat transmission network remains entirely under the control of district heating companies. Thus, the centralized management model is preserved, making it harder for new energy carriers and producers to enter. District heating companies are allowed to introduce new heat carriers into the network but do not do so. The Energy Act creates a regulatory framework for operation but not for transformation—it allows new sources without creating real conditions for their entry. This hinders innovation.

Sapareva Banya—an “unused” geothermal jewel

Southwestern Bulgaria is one of the most promising regions for geothermal development. It hosts the hottest drilled mineral spring in continental Europe, with a temperature of about 103°C. The hydrogeothermal resource lies at relatively shallow depths—from about 73 m to several hundred meters. High temperatures likely extend across a large rock mass both in area and depth, which is a significant advantage compared to regions like Northern Bulgaria, where such temperatures require drilling several kilometers deep.

Sapareva Banya clearly has the potential to demonstrate how natural resources can be used much more efficiently. However, such projects require further detailed studies, modern techniques, expertise largely derived from the oil industry, investment, and strategic planning.

409 geothermal plants operate in Europe

Currently, more than 409 geothermal plants operate in Europe, and over 360 new geothermal heating and cooling projects are at various stages of development or exploration, according to the European Geothermal Energy Council. This clearly shows that the district heating sector is the next key element of the energy transition. In 2024 alone, eight new geothermal plants started operation in Greece, Poland, the United Kingdom, France, and Romania.

How much will it cost

According to the International Renewable Energy Agency (IRENA), geothermal energy is among the most predictable and sustainable renewable sources. In recent years, investment costs have dropped to approximately 1,400–2,100 euros per kW of installed capacity—about 50% lower than five years ago. This is roughly ten times cheaper than new nuclear capacity in terms of CAPEX.

In terms of electricity cost, geothermal projects are also highly competitive. According to IRENA and IEA analyses, the levelized cost of electricity (LCOE) for modern geothermal projects ranges between 60 and 100 euros/MWh, depending on geological conditions and project scale. Importantly, geothermal energy does not depend on imported fuels or volatile international markets.

According to Velichko Velichkov, chairman of the Groundwater Association, Bulgaria lacks sufficient studies to determine the exact geothermal potential. Only some boreholes are suitable for direct energy use beyond traditional applications such as balneology and spa.

For energy purposes, waters unsuitable for drinking or medicinal uses but containing significant heat resources are appropriate. Expert estimates suggest thousands of boreholes exist in Bulgaria, many containing elevated concentrations of elements such as manganese and lithium, making them unsuitable for direct consumption but potentially usable for geothermal energy.

To preserve ecological balance and avoid depletion of underground resources, global practice in geothermal systems uses a closed cycle. After heat extraction, the water is reinjected into the same aquifer, preventing resource loss and contamination risks.

Technologically, geothermal plants operate by extracting fluid from depths of 1,500 to 6,000 meters, transferring heat via heat exchangers, and using it for electricity or direct heating. The fluid is then returned, making the system closed and sustainable.

“The latest generation of geothermal plants—deep, closed systems—fundamentally changes the sector’s economics and opens unlimited development potential,” explained engineer Nikola Sechkaryov, chairman of BAGE.

These systems do not rely on groundwater and are not dependent on flow or chemical composition, but use heat from rocks at depths of 3,000 to 6,000 meters or more. “The resource is not water, but heat in the Earth’s depths. This is the fundamental shift,” he added.

New technologies allow utilization of temperatures above 250°C, enabling efficient electricity production in base mode. “Geothermal energy is one of the few sources that provides a constant and predictable energy flow, independent of weather, and can be used almost indefinitely,” Sechkaryov noted.

The main risk remains economic, related to drilling, which is capital-intensive and geologically specific. Therefore, many countries apply drilling risk guarantee mechanisms. Currently, leading global companies are developing ultra-deep drilling technologies reaching 11,000 to 14,000 meters, where temperatures may exceed 350–450°C—potentially transforming the market entirely.

Strategy for geothermal energy developmentOn May 19, the European Commission will present a strategy for geothermal energy development, an action plan, and long-term goals to 2040. The aim is to create a clear framework for accelerated deployment across the EU.

By 2050, geothermal potential is estimated at about 200 GW for electricity and over 800 GW for heating, according to analyses by the IEA, IRENA, and the European Geothermal Energy Council.

As of 2023, approximately 3.5 GW of geothermal capacity for electricity generation is installed in the EU. At the same time, over 100 projects are underway, indicating accelerating investment activity. Geothermal energy has the potential to cover over 75% of heating and cooling needs in Europe and more than 15% of electricity consumption by 2050 under full utilization scenarios.

The original text of the article: https://www.capital.bg/zelen-kapital/2026/04/20/4896108_tok_i_toplina_ot_zemnite_nedra_na_bulgariia/