Bulgarian greenhouse production and geothermal energy report
Sector trends, challenges and opportunities for investors and suppliers are highlighted in the comprehensive market study, commissioned by Netherlands Agricultural Network
With its abundant resources, Bulgaria has prioritized the role of geothermal in its energy transition, while Bulgarian greenhouse production seeks for cheaper and more sustainable alternatives due to struggles with high energy prices. In the same time, the Netherlands has vast experience and knowledge in both green energy and greenhouse horticulture, suggesting a double intertwine with high-yielding potential between both countries and themes.
Identifying these significant cooperation opportunities, in 2024, the Netherlands Agricultural Network commissioned a market study called Bulgarian Greenhouse Production. Potential for Implementation of Geothermal Energy. The extensive report highlights trends, strengths, weaknesses, opportunities and threats in Bulgarian greenhouse production with focus on the energy factor and the potential of the country to achieve sustainable growth by applying geothermal energy in its protected cultivation of fruit and vegetables.
“Bulgaria has this green energy treasure in hands for a more sustainable food production and for more resilient food systems. On the other hand, over the last decades, the Netherlands has developed more specific knowledge, experience and businesses in the use of geothermal and terrestrial heat in the agrifood production, amongst others in greenhouses. I believe this report provides Dutch companies and individual entrepreneurs with helpful and comprehensive information and opportunities for investments.” – writes Sophie Neve – the agricultural counsellor of the Netherlands for Bulgaria, Romania and Moldova, in the foreword of the report.
Bulgarian greenhouse production
Large-scale greenhouse production in Bulgaria was introduced in the 1970s. During this period, Bulgaria invested in modern agricultural infrastructure, including large (glass) greenhouse complexes. Some of these facilities were planned and executed with technology and under the guidance of French and Dutch specialists.
Bulgarian greenhouse industry has a solid foundation in terms of climate, tradition, and market access. Industrial off-season production exploits the temperate climate and relatively shorter heating season compared to Northeastern Europe, which was its main export market till the early 1990’s.
The sector, however, faces many challenges in terms of technological adoption and operational costs. The overall economic downturn in the end of the 20th century led to abeyance in many facilities and to a technological gap that the industry was not able to catch up despite of the EU pre-accession funds, CAP instalments and private investments. To remain competitive, producers need to address threats like increasing competition from countries like Greece, Spain, Turkey, etc. Increasing labour costs can be a limiting factor as well, but can also provide opportunity for investment in automation and robotics.
Despite of this, Bulgarian greenhouse industry seems to be back on expansion track, supported by increasing demand for locally grown vegetables, creating opportunities for innovative technology integration. It has significant opportunities for growth by leveraging EU funding, improving energy efficiency and technology adoption, and targeting niche markets like organic produce. The sector has in front of itself not only a substantial seasonal demand gap for import replacement on the local market, but could also play an important role towards secure and affordable fruit and vegetable supplies in Europe.
The energy factor
Bulgaria borders the Mediterranean climate zone where its main competitors enjoy more sunny days and less energy demand for heating. With energy being the biggest production costs component, it represents both a primary competitive challenge and a key for unlocking growth potential in Bulgarian indoor horticulture. Energy price volatility, especially in recent years can be a threat to regular fresh produce supply. Energy costs can be a drag to greenhouse production not least because of the limited adoption of more energy efficient solutions. Therefore, Bulgarian growers are actively seeking for cheaper and more sustainable alternatives to current energy sources, along with more energy efficient production models.
Geothermal energy potential
In the last few years, Bulgaria has been focusing on how it can make use of its abundant geothermal potential and public funding is expected to be channeled towards development of geothermal usage for electricity and heat.
Few smaller greenhouse projects based on geothermal energy have been already established in the past several years with this alternative energy source gaining more and more attention from growers. While geothermal energy still has a limited penetration in greenhouse production in the country, Bulgaria’s potential in this field is promising. Many greenhouse facilities are in areas with already explored and developed thermal water deposits. While this can be a fast, easy and low-cost energy source, in many places, where the spa industry has already seen strong development, thermal springs might have limited capacity for new industrial users.
Opportunities for Dutch investors and suppliers
Based upon the overview provided in this report, we can conclude that there is a relatively good potential for Dutch suppliers of greenhouse equipment for the Bulgarian market in the long term, the Netherlands being a well-known, leading supplier in technology, know-how and turn-key solutions, including in geothermal integration. However, addressing cost barriers, building local partnerships, and navigating regulatory complexities will be crucial for long-term success.
The supply/demand gap for locally produced fruit and vegetables, along with export opportunities, suggest also potential for those investors in greenhouse horticulture who manage to overcame existing business challenges and unlock strengths.
If you have further interest and questions on the topic, we would be happy to assist you. Please contact the LVVN Attaché Netwerk office in Sofia at sof-lvvn@minbuza.nl
“Bulgarian Greenhouse Production. Potential for Implementation of Geothermal Energy” report is commissioned by LAN and prepared by InteliAgro – independent market research and consultancy think tank in Bulgarian agri-food sector - www.inteliagro.bg