Renewables

Solar power plants in Serbia, North Macedonia, Slovenia and Austria: Regulations are key tool to drive investment

Solar power plants in Serbia, North Macedonia, Slovenia and Austria, Regulations are key tool to drive investment

Photo: Balkan Green Energy News

Published

June 6, 2023

Comments

0

Share

Published:

June 6, 2023

Comments:

0

Share

Solar energy is currently the fastest growing energy source in the EU. In 2021 alone, the 22,817 MW of new photovoltaic solar power plants were installed across the EU member states, bringing the total capacity to 158,911 MW at the end of the year, according to data from the EurObsev’ER portal. While the European Union (EU) members combined appear to make good progress in the field of developing and expanding photovoltaic power plants, countries of Central and Southeast Europe lag far behind current photovoltaic capacities in the EU. Improvements in the regulatory framework and its harmonization with EU rules are the key incentives to drive new investment.

Solar energy is expected to significantly contribute to the European Commission’s REPowerEU plan, which is aimed at quickly reducing the EU’s dependence on Russian fossil fuels and speeding up the green transition. It should also help implement the EU’s Solar Energy Strategy, which was adopted in May last year. EU countries are trying to stimulate demand for these projects, among other things, by changing regulations to increase energy consumption from their own or nearby sources, simplify grid connection procedures, or gradually introduce the obligation to install solar panels on buildings, starting with public and commercial facilities.

Data from the law firm CMS, which operates in more than 40 countries around the world, on new photovoltaic solar power plants in the region of Central and Southeast Europe on the one hand and the EU member states, on the other hand, show a big discrepancy in the utilization of potentials, even within the region of Central and Southeast Europe. For example, the total installed capacity of photovoltaic power plants in four Western Balkan countries – Serbia, North Macedonia, Bosnia and Herzegovina and Montenegro – amounted to 175 MW in 2021.

The total installed capacity of photovoltaic power plants in four Western Balkan countries – Serbia, North Macedonia, Bosnia and Herzegovina and Montenegro – amounted to 175 MW in 2021

In the observed period, the total installed capacity of photovoltaic power plants in these four countries was about half of the capacity installed in Slovenia, which had 367 MW, or in Romania (398 MW). Bulgaria had seven times as much capacity (1,186 MW), Hungary 12 times as much (2,131 MW), and Austria 16 times as much (2,809 MW). On the other hand, even countries like Austria, which is in Europe’s top 10, are trying to increase their capacity and close the huge gap between them and the European leaders in this area, such as Germany (58,728 MW), Italy (22,600 MW), France (14,780 MW) or the Netherlands (14,249 MW).

CMS’ representatives from Serbia, North Macedonia, Slovenia, and Austria, who took part in Belgrade Energy Forum 2023 talked about the main challenges for investing in renewables in the region, as well as challenges and best practices in EU member states.

Serbia needs to complete the regulatory framework to unlock renewable energy projects.

Investor interest in the renewables sector in Serbia has increased greatly since adopting the country’s first law on renewable energy in 2021. In the two years, requests for connecting solar power plants and wind farms to the grid have exceeded 20 GW, which is 50 times as much compared to the combined installed capacity of all wind farms built in Serbia so far (398 MW) and several hundred times more than the total capacity of existing solar power plants in the country.

Changes to the law on renewable energy sources were adopted in April this year, to eliminate the status quo in deciding on grid connection requests for new renewable energy capacities and better protecting the transmission and distribution system in case of the integration of large-scale intermittent energy sources.

The new regulations changed the rules for conducting auctions for market premiums for renewable energy producers

The new regulations, among other things, changed the rules for conducting auctions for market premiums for renewable energy producers and set capacity limits for prosumers. The guaranteed supplier retains balancing responsibility only for power plants in the incentive scheme, while market-based projects will have to ensure balancing under commercial terms.

Also under the new regulations, the transmission system operator is required to conduct an analysis of the adequacy of electricity production and the transmission system as part of a transmission system development plan, and propose postponement of connection procedures if the adequacy study indicates risks to the safe operation of the transmission grid due to a lack of system balancing reserves.

“That could result in delaying the connection of new capacities to the grid until sufficient balancing reserves are ensured. On the other hand, faster project implementation in these cases can be achieved, among others, by providing additional balancing capacities. The adoption of by-laws is expected, after which it will be possible to see how the new solutions will work in practice,” says Tamara Zejak, senior lawyer at CMS Serbia.

Tamara Zejak
Tamara Zejak, senior lawyer at CMS Serbia

North Macedonia: land use conversion and grid connection are biggest challenges for investors

Despite having the second-highest number of sunshine hours in Europe, after Sicily, North Macedonia still hasn’t built a single large-scale solar power plant. In practice, most of the investment has gone towards rooftop solar power plants, whereas investors are primarily interested in developing large-scale solar power plants and wind farms.

Marija Filipovska Jelčić, partner at CMS in North Macedonia, believes the main challenges faced by investors in the country, apart from the vagueness of the law and lack of practice, are grid connection issues and the procedure for land use conversion from agriculture to construction use.

Prospective investors in North Macedonia should check the possibilities for grid connection at the earliest possible stage of the project. Another issue is land use conversion, where there is a lack of practice to convert only the part of the agricultural land needed for a power plant. Instead, it is generally done for the entire plot. In addition, the adoption of spatial plans is under the remit local governments, and the procedure to prepare and adopt these documents can take up to three years, according to Marija Filipovska Jelčić.

Marija Filipovska Jelčić
Marija Filipovska Jelčić, partner at CMS in North Macedonia

Slovenia: harnessing solar energy is key to achieving energy and climate goals

In order to meet the goals from its national energy and climate plan until 2030, which is currently being revised, and respond to the expected increase in energy consumption through 2050, Slovenia needs to speed up the growth of solar and wind capacities.

Currently, hydropower plants account for more than 90% of the electricity produced from renewable sources, while there are obstacles to the development of large-scale renewables projects, such as the lack of sufficient land area, the strong role of the NGO sector, and limited capacities for connecting large power plants to the grid. The number of prosumers in Slovenia reached 14,451 in 2021, and their total installed capacity was 195 MW.

The number of prosumers in Slovenia reached 14,451 in 2021, and their total installed capacity was 195 MW

A new law regulating the positioning of renewable energy capacities, according to Dunja Jandl, partner at CMS Slovenia, stipulates the obligation to install photovoltaic power plants on new buildings, buildings that are being reconstructed, and parking lots with a roof area of ​​more than 1,000 square meters, while allowing a transition period of 2-10 years for existing buildings.

Dunja Jandl
Dunja Jandl, partner at CMS Slovenia

Other changes include the possibility to simplify, by government decision, the procedures related to planning documents and building permits for innovative projects and to use the same land for multiple purposes, as well as lowering the threshold for tenant consent to install solar panels on jointly owned buildings from 100% to 75% and introducing the obligation to include photovoltaic power plants in national and local spatial plans.

Slovenia, according to Dunja Jandl, can reach its renewable energy goals if it significantly increases solar capacities, boosts investment in the grid, further increases prosumer numbers, develops the electric charger network, invests in energy storage technologies, and introduces “smart” land use, for example by installing solar panels on plots used for road infrastructure and at landfills.

Austria: energy communities are becoming increasingly popular

In Austria, the concept of producing, sharing and consuming renewable energy locally, such as by way of shared Roof-Top PV plants or in the realm of (renewable) energy communities, has become increasingly popular in the past few years. This increased interest has not only been triggered by rising energy prices in the past years but also the legislative framework.

In 2017, Austria enabled the owners and/or tenants of residential buildings to participate in the production and consumption of energy produced with rooftop solar panels (shared self-consumption rooftop projects). Since these kinds of projects are usually limited to small-scale projects, there are normally no problems with grid capacity in practice.

Austria introduced so-called citizen energy communities, making it possible to produce and consume energy in multiple buildings

Two years ago, Austria introduced so-called citizen energy communities, making it possible to produce and consume energy not only within one building, but in multiple buildings using the low- and medium-voltage network and applying significant cost savings for grid access and grid use. These communities are organized as separate legal entities that can be organized as associations, cooperatives, or limited liability companies. Although corporations can also be members, these energy communities bring together mostly households and small businesses, while the focus is on benefits for the community, not commercial use.

Georg Gutfleisch, attorney-at-law at CMS Vienna, says that opportunities for development in this area can be found in complying with the requirements of the European Solar Rooftops Initiative, linking projects with the installation of electric chargers, overcoming the limited storage capacity by combining multiple projects, as well as facilitating access to “green” bank credit lines and reducing costs.

Georg Gutfleisch
Georg Gutfleisch, attorney-at-law at CMS Vienna
Comments (0)

Be the first one to comment on this article.

Enter Your Comment
Please wait... Please fill in the required fields. There seems to be an error, please refresh the page and try again. Your comment has been sent.

Related Articles

vienna-green-hydrogen-bus-wien-energie

Vienna, Budapest inaugurate green hydrogen plants

12 April 2024 - Within just a few days, two green hydrogen plants were inaugurated in Central and Eastern Europe - in Austria and Hungary

European Parliament passes electricity gas market reform

European Parliament passes electricity, gas market reform

12 April 2024 - European lawmakers adopted the energy market design reform proposal to facilitate decarbonization and ease the impact of sharp price swings

Europe largest solar farm Witznitz eastern Germany

Europe’s largest solar farm Witznitz commissioned in eastern Germany

11 April 2024 - Hansainvest and developer Move On inaugurated the Witznitz solar park of 605 MW in peak capacity on coal land near Leipzig in Germany

Romania offshore wind energy law first megawatts 2032

Romania adopts offshore wind energy law to get first megawatts in 2032

10 April 2024 - More than two thirds of lawmakers voted for Romania's first offshore wind energy law, aimed at getting the first turbines online in 2032