The successful implementation of best policies : Barriers to be overcome

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The successful implementation of best policies
Barriers to be overcome
The Republic of Slovenia Ministry of the
Economy Directorate for Energy

• Jadranko Medak
• Ministry of the Economy
• Slovenia
• Poznan, December 2008

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Content of the presentation

• Slovenia energy figures
• National targets
• Electricity from RES in Slovenia
• Barriers for the development of electricity
  generation from RES and how to overcome them
• Conclusions

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Gross Inland Energy Consumption in Slovenia
Gross Consumption in Slovenia 2006 7,34 Mtoe
or 307 PJGross Production 2006 3,46 Mtoe or
144 PJ Source SURS
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Composition of primary energy supply in
Slovenia and in EU- 27
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Final energy consumptionFinal energy consumption
in 2007 4.956 ktoe or 207,5 PJSource SURS
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Sectors dependence on imported energy in
2006Source IJS, SURS
Transport
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National targets

• Directive 2001/77/EC on the promotion of
  electricity produced from renewable energy
  sources in the internal electricity market
• Slovenia RES-E 2010 33,6 of gross
  electricity consumption in 2010
• Directive XXXXX/EC on the promotion of the use
  of energy from renewable energy sources
• Slovenias share of energy from RES in
  gross final consumption of energy 2005 16,0
• Slovenias share of energy from RES in
  gross final consumption of energy
• 2020 25,0
• 20 energy efficiency improvement in primary
  energy supply till 2020.
• Directive 2006/32/EC on energy end-use
  efficiency and energy services
• Slovenias National action plan for energy
  efficiency in period 2008-2016 at least 9 or
  4261 GWh saved energy in final energy consumption

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Shall we reach our targets?(1)Present appraisal
Electricity

• Slovenia RES-E 2010 Indicative national target
  - 33,6 of gross electricity consumption in 2010

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Shall we reach our targets?(2)Present appraisal
RES in gross final consumption

• Slovenias share of energy from RES in gross
  final consumption of energy
• from 16 in 2005 to 25,0 in 2020
• Long term energy balances of Republic of Slovenia
  for 2006-2026 draft (IJS, CEU 2008)
• national target share of 25 of RES in
  final energy consumption is not reached in any
  balance scenario what shows the complexity of
  the target as well as the needed additional
  efforts to reduce the final energy consumption
  as well as the increase of the use of RES

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Shall we reach our targets?(3)Present appraisal
Energy saving 20 ( primary energy) in 2020
(Partial target at least 9 or 4261 GWh saved
final energy consumption in period 2016-2020)

• Long term energy balances of Republic of
  Slovenia for 2006-2026 draft (IJS, CEU 2008)
• In INT (intensive) strategy of efficient use
  of energy significant reduction of final energy
  consumption in comparison to REF (reference)
  strategy is achieved what is line with Directive
  2006/32/EC. The target of 20 energy efficiency
  improvements till 2020 is more complex and is not
  reached in any strategy

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Responsibility for energy matters in Slovenia
Ministry of the economy
Ministry for the environment and spatial
planning -Primary energy from RES -Energy
saving -Efficient use of energy

• Ministry of the economy
• Electricity from RES
• Electricity from high efficient cogeneration

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Electricity from RES in Slovenia (1)Basic data
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Electricity from RES in Slovenia(2)History

• Before the adoption of Energy Law (1999) which
  was based on the directive on liberalisation of
  electricity market, Slovenia had the system of
  supporting the power generation from hydro power
  plants (less than 10 MW) and industrial power
  plants ( less than 10 MW).
• Electric utilities were obliged to purchase all
  the electricity from the above power plants using
  the prices which were equal to the tariff prices
  for the household consumers.
• Energy law (1999) introduced
• - Qualified producers ( all RES power
  plants , but hydro and cogeneration power plants
  only up to 10MW of the installed capacity)
• - system of supporting of qualified
  producers feed-in and premiums
• - system of supporting was not notified as a
  State aid but many provisions from the
  Community guidelines on state aid for the
  environmental protection (2001/C 37/03) were
  included in the scheme of supporting.

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Electricity from RES(3)State aid issue

• In February 2005 European commission launched
  formal procedure (case C 07/05) against Slovenia
  following the doubt that the scheme for the
  supporting of the qualified producers may not
  compatible with the principles of free market.
• Slovenia defended the scheme with ECJ
  PreussenElektra ruling (Case C-397/98) but
  Commission concluded that circumstances in
  Slovenia are different than those in the
  mentioned ruling.
• 2007 the case C 05/07 was concluded with the
  Commissions decision (2007/580/ES) the system
  of supporting the qualified producers is State
  aid and should follow the guidelines on State
  aid.
• Slovenia decided to modify the supporting to be
  fully compatible with the State aid principles
  laid down in the mentioned guidelines.

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Electricity from RES(4)New legislation

• In July 2007 Slovenian parliament adopted the
  changes and the modification of Energy Law (
  Official gazette of Slovenia, 70/2008) primarily
  in chapters dealing with the electricity from
  RES and from cogeneration. Secondary legislation
  is in the process of adoption by the Government.
• Major provisions of the supporting brought by the
  novel of the law
• - compliance of the supporting with the
  Community guidelines on state aid for
  environmental protection
• - lump sum connection fee for collecting the
  financial sources for the supporting
• - compliance with the directive 20043/54/EC
  regarding the duties of the system operators in
  the process of supporting

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Barriers for the development of electricity
generation from RES (1) Analysis for
EU-25OPTRES report ( D8 report)
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Barriers for the development of electricity
generation from RES (2) (survey made for
distributed generation, mainly CHP, in Slovenia,
2005)
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Barriers for the development of electricity
generation from RES(3) Slovenia case
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Barriers for the development of electricity
generation from RES(4) Slovenia case

• Administrative or legal barriers
• - Long time for permitting, high number of
  authorities involved, lack of spatial planning
  involving RES
• Provisions to overcome the barriers
• No special provisions in Spatial planning Act
  (Of.G.Slo 33/07) and Building Act (Of.G.Slo.
  126/07) on constructions and plants using RES
• Responsibility for planning up to 10MW- local
  authorities, more than 10 MW-state authorities
• Positive steps forward
• - Rules on efficient use of energy in
  buildings (Of. G. Slo 93/2008)
• - Rules on energy concepts of local
  communities ( in preparation, will be issued
  till the end of this year)

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Barriers for the development of electricity
generation from RES(5) Slovenia case

• Social acceptance and awareness
• - Strong citizen and NGO opposition to the
  certain projects
• - wind energy, biogas, some large hydro
  projects,
• Provisions to overcome the barriers
• - NIMBY relations very strong to almost all
  power projects in Slovenia
• Improvement of poor planning of the projects
• Improvement of public communications
• Wide action to improve awareness of benefits of
  RES ( media, schools, fairs, exhibitions)

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Barriers for the development of electricity
generation from RES(6)Slovenia case

• Infrastructural barriers
• - Procedure of grid connection is not fully
  transparent,
• - objectiveness is not always fully guaranteed,
• - costs of grid connection,
• long lead time for authorization
• Provisions to overcome the barriers
• Energy law (Of.G.Slo 70/2008) clauses 64.k
  to 64. m
• -shallow approach for the connection of RES
  and CHP plants on distribution and transmission
  network, costs of studies and analysis born by
  system operator
• - standard rules for the connection and cost
  estimation for power plants lt10MW connected on
  distribution network
• - cost and lead time assessment in 60 days for
  power plants gt10MW connected on transmission
  network
• -

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Barriers for the development of electricity
generation from RES(7) Slovenia case

• Financial
• - Lack of trust of financial sector
• - Low predictability of capital subsidies and
  cash flow
• Provisions to overcome the barriers
• Energy Law (Of.G. Slo 70/2008) clauses 64.n
  to 64.s
• Support to the electricity generated from RES and
  from cogeneration with high efficiency
• Feed-in system ( long term power purchase
  agreement)
• Operating aid

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Barriers for the development of electricity
generation from RES (8) Provisions to overcome
the financial barriers in Slovenia Support to
the electricity generated from RES and from CHP
with high efficiency

• General conditions for aid
• - Electricity from RES must conform to
  Directive 2001/77/EC-Guaranty of Origin (GoO)
• - Electricity from CHP must confirm to
  Directive 2004/8/EC-Guaranty of Origin
• Additional conditions
• - Aid is needed for the depreciation of
  the plant (new, refurbished 50) or not older
  than10 (CHP) or 15 (RES) years
• Level of support
• - Power Purchase Agreement (PPA) for
  smaller plants up to 10 or 15 years
• - Contract for operating aid up to 10 or
  15 years
• - Level of aid PPA Purchase
  priceReference costs Operating aid Reference
  costs-Electricity market price
• Support is granted through Centre for Support (
  special body not linked to the system operators
  or power generation)
• GoO for the supported electricity must be
  submitted to Centre for Support

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Barriers for the development of electricity
generation from RES(9) Provisions to overcome the
financial barriers in SloveniaSupport to the
electricity generated from RES and from
cogeneration with high efficiency
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Conclusions

• Framework for long term financial and economic
  stability of the projects
• Regulatory stability
• All other barriers are of the up front nature
  and the investors usually can find a way to
  handle them

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Thank you for your attention,

• Jadranko Medak
• jadranko.medak_at_gov.si