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Macedonia taking steps to market-based support scheme for renewables

August 8, 2018

Photo: Pexels
Macedonia taking steps to market-based support scheme for renewables

Macedonia has recently taken legislative steps toward introducing a market-based support scheme for renewable energy, as well as prosumers that would produce electricity for self-consumption and feed surpluses to the grid. The 2018-2020 Economic Reform Program (ERP), produced as part of the country’s EU accession process, provides a timeline for preparing implementing regulations and carrying out bidding procedures to award premiums.

In a recent interview with news agency MIA, state power utility ELEM General Manager Dragan Minovski discussed the introduction of premiums envisaged by the new energy law, as well as an option envisaged under the law for electricity consumers to become “advanced consumers.” Electricity production does not have to be “a one-way street,” he said, noting that this is usually achieved through the installation of rooftop solar panels.

The new energy law, whose “unofficial text” is available on the website of the Macedonian Ministry of Economy, envisages awarding premiums – additional amounts paid to renewable energy producers for energy sold on the electricity market – through tendering procedures with an auction.

According to the 2018-2020 ERP, available on the website of the Ministry of Finance, the adoption of implementing regulations to define procedures for awarding premiums, the preparation of tendering documentation and the standardized premium agreement, and the issuance of an invitation to award premiums for precisely determined locations are all planned in 2018.

Tendering is expected to be completed and agreements concluded in 2019, when the construction of renewable energy facilities backed by premiums would begin, according to the ERP.

Macedonia targets a 23.9% share of renewable energy in final energy consumption in 2020, up from 19.9% in 2015.

Montenegro advised by EU to move to auction system

In its 2018 report on Montenegro, the European Commission advises the country to move to market-based support schemes for renewable energy production given that it overshot its 33% renewables target for 2020 back in 2016, when the share stood at 41.6%.

“The country needs to move to an auction system compliant with the 2014-2020 Guidelines on State aid for environmental protection and energy,” the report reads.

The Montenegrin government recently said that the Ministry of Economy has registered strong investor interest in the construction of facilities using renewable energy sources without incentives for generated electricity.

The EU executive advised Serbia to “promote investment” in renewable energy, recalling that close to 500 MW in wind energy projects have been agreed thanks to the feed-in tariff scheme.

Serbian Prime Minister Ana Brnabić has said that feed-in quotas for electricity produced by wind farms will not be increased over the coming period, noting that the construction of new wind farms will primarily depend on bids in tenders.

Albania, which depends almost exclusively on hydropower for its electricity generation, making it vulnerable to unfavorable hydrological conditions, should further explore “investments in renewable energy projects other than hydropower,” according to the commission’s 2018 report on the country.

Albania has an ongoing bidding procedure for the construction of a solar photovoltaic (PV) plant for the generation of electricity with an installed capacity of 50 MW, to be backed by support measures approved by the government on June 12, 2018, plus an additional capacity of between 20 MW and 50 MW, which will not be subject to the support measures.

Kosovo* should revise its action plan to get on track to reach the renewable energy target of 25% in 2020, according to the European Commission. The level of investment remains minimal despite the existing legal framework for support schemes for energy produced from renewable sources, the report reads, adding that Kosovo* needs to introduce a market-based approach for cost-effective promotion of renewable energy and integration of renewable energy into the market.

The report on Bosnia and Herzegovina notes that the country, which has an “insufficiently developed” energy infrastructure, faces investment delays due to “a lack of coordination and cooperation between government levels.”

( * This designation is without prejudice to positions on status and is in line with UNSCR 1244/99 and the ICJ Opinion on the Kosovo declaration of independence.)