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Guide: Legal Overview of Renewable Energy in CEE

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The European Climate Change Act sets ambitious decarbonisation targets for the European Union (EU): By 2050, the EU is to become climate neutral. The priority target is to reduce greenhouse gas emissions by 55 % compared to the reference year 1990. Achieving this target requires fundamental changes to the way we generate and consume energy in the future.

The European Green Deal contains a vision of the European Commission on how we can achieve the set climate protection targets. As part of the implementation of the Green Deal, the European Commission is working on a comprehensive legislative package (Fit for 55 Package), because only with the right legal framework can a successful energy transition be possible.

On 18 May 2022 the European Commission published the RE PowerEU Plan which is an immediate reaction of EU energy policy makers to the energy market disruption caused by Russia's invasion of Ukraine. It aims to end the EU's dependence on Russian fossil fuels. Based on this plan, the Fit-for-55 Package will likely be revised once again to tighten targets and accelerate implementation.

This particularly concerns the Renewable Energy Directive II (RED II) which will provide for (even) more ambitious renewable energy (RE) targets. Moreover, it will introduce binding reduction targets for the industrial sector, consumption targets for green hydrogen, amended sustainability criteria and the promotion of renewable PPAs, as well as an increased role for certificates of origin.

These developments at EU level will certainly result in a further immediate (and mid-term) boost for development of renewable energy projects and related financing in the CEE region. This is confirmed by recent developments on the CEE energy markets which have been experiencing an upswing in renewables project finance, especially in wind and photovoltaic.

About this guide

Against the above outlined background, we take pleasure in providing a CEE-overview: We are looking at the situation from different angles:

  • on the current renewable energy support schemes,
  • key project milestones, and
  • financing-risks.

Currently, these countries are covered in this guide:

  • Austria
  • Bulgaria
  • Bosnia and Herzegovina
  • Croatia
  • Czech Republic
  • Hungary
  • Moldova
  • Montenegro
  • Poland
  • Romania
  • Serbia
  • Slovakia
  • Slovenia
  • Turkey

Please note: This guide reflects the legal situation as of 30 June 2022. Since the legal situation keeps changing, we will update this guide regularly.

 

austria

  • Existing RE plants: FiT
  • New RE projects: market premium (competitive auction) with CfD component

bulgaria

  • Existing RE plants: Feed-in premiums
  • New RE projects: None (preferential purchase price only for small-scale projects up to 30 kW)

bosnia & herzegovina

  • Market premiums in the Republic of Srpska for large-scale RE projects (competitive auctions)
  • FiT for small facilities in the Republic of Srpska

croatia

  • FiT (competitive auction) for RE projects up to 500 kW
  • Market premium (sliding/floating) with CfD components for RE projects above 500 kW

czech republic

  • Existing RE plants: FiT
  • New RE plants: market premiums

hungary

  • Existing RE plants: FiT with offtake obligation
  • New plants: Market premium (CfD)  

moldova

  • FiT and market premium (competitive auction or administrative tariff)
  • Mandatory offtake of energy produced by solar-PV installations, wind turbines, biogas fired power plants and biomass power plants

montenegro

  • FiT up to 1 MW with offtake obligation
  • Priority dispatch

poland

  • Existing RE plants: Green certificates
  • FiT / FiP (micro, small and medium biogas installations and hydro plants only)
  • Market premiums / CfD (competitive auction)

romania

  • Existing RE plants: Green certificates
  • New RE plants: CfD / market premium under discussion (expected to launch 2023)

serbia

  • Market premiums in the form of contracts for differences (CfDs), awarded through competitive auctions. Applicable for RES capacities exceeding 500 kW (3 MW for wind).
  • FiT awarded through competitive auctions. Applicable for RES capacities exceeding 500 kW (3MW for wind).

slovakia

  • Existing RE plants: FiT
  • New RE plants: market premium / CfD (competitive auction)

slovenia

  • FiT for RES capacities below 500 kW
  • Market premium (for larger RES capacities up to a maximum of 10 MW in general and 50 MW for wind)

turkey

  • FiT for small plants
  • Market premium (competitive auction) for large scale wind and solar projects

austria

  • OTC trading through PPAs
  • Centralised power exchange trading at EXAA/EEX
  • On-site Corporate PPAs upcoming, others in an early stage of implementation

bulgaria

  • OTC trading through PPAs (RE plants with installed capacity
    below 500 kW and all RE plants commissioned after
    1 January 2019)
  • Centralised power exchange trading (mandatory for RE plants with installed capacity 500 kW and above, commissioned before 1 January 2019)
  • Corporate PPAs in an early phase of implementation

bosnia & herzegovina

  • OTC trading through PPAs
  • Centralised power exchange trading
  • Only on-site Corporate PPAs, others in an early stage of implementation

croatia

  • OTC trading through PPAs
  • Centralised power exchange trading (Cropex)
  • Only on-site Corporate PPAs, others in an early stage of implementation

czech republic

  • Bilateral trade
  • Power exchange trading (organised market)
  • Corporate PPAs have yet to gain traction

hungary

  • OTC trading through PPAs (only RE plants commissioned after 1 January 2019)
  • Centralised power exchange trading (HUPX)
  • Only on-site Corporate PPAs, others in an early stage of implementation

moldova

  • Standard offtake agreement in case of mandatory offtake
  • Corporate PPAs not available

montenegro

  • Bilateral trading
  • Trading at centralised power exchange
  • Corporate PPAs not available

poland

  • OTC trading through PPAs
  • Centralised power exchange trading
  • Corporate PPAs in an early stage of implementation

romania

  • Bilateral trading
  • Trading at centralised power exchange
  • Corporate PPAs in an early phase of implementation

serbia

  • Bilateral trading through PPAs
  • Centralised power exchange
  • Corporate PPAs have yet to gain traction but the market seems to be shifting in this direction

slovakia

  • Bilateral trade
  • Power exchange trading
  • PPAs are not specifically regulated and used in practice

slovenia

  • Bilateral trading
  • Centralised power exchange trading (BORZEN as the market operator)
  • Corporate PPAs not yet available  

turkey

  • Bilateral trade through PPas
  • Power exchange trading with the Turkey electricity market operator (EPIAS)

austria

  • Available for PV, wind, biomass and biogas as well as green hydrogen generation facilities (electrolysers)

bulgaria

  • EUR 341m RRF funds (2022-2026) for RE projects in combination with batteries (tender calls expected from Q4/2022). The scheme includes private co-financing.
  • Upcoming: Framework for investment aids under the Modernisation Fund

bosnia & herzegovina

  • n/a

croatia

  • EUR 46m under the NRRP (2021-2026) for renewable hydrogen, roll-out of refuelling infrastructure and carbon-and-capture (CCS) projects

czech republic

  • Modernisation fund aimed at supporting investment in the construction/development of renewables was introduced

hungary

  • RRF – in order to integrate at least 2,000 MW new solar power plant capacity, EUR 289m would be allocated to electricity grid development

moldova

  • EUR 7m for RE and energy efficiency projects in 2022

montenegro

  • n/a

poland

  • Grants and local government refundable loan for the construction of RE installations

romania

  • EUR 600m available under PNRR for 2022-2026
  • A share of the EUR 14bln of the Modernisation Fund
    (2022-2030 period) is allocated for RES (no call for projects has been launched to date)

serbia

  • n/a

slovakia

  • Modernisation fund: indicative amount of expenditure planned for RES for 2021-2030 is EUR 400m

slovenia

  • RRF – EUR 292m package for a bundle of investments in a target area that includes decarbonisation, including RE
  • Open public tenders for PV plants (up to 10 MW, initial funds up to EUR 19m, deadline in September 2022)
  • New public tender for RE expected in July 2022

turkey

  • n/a

austria

  • Additional 20 TWh by 2030

bulgaria

  • 3.5 GW by 2026

bosnia & herzegovina

  • Target of 40 % of RE in total electricity consumption by in BiH
  • RES capacity target of 342 MW by 2035 in the Republic of Srpska (wind:  148 MW)
  • RES capacity target of 1.111 MW by 2035 in FBiH (wind: 795.5, biomass: 19.3 MW, solar: 97.6)

croatia

  • Onshore wind capacity target of 1,364 MW by 2030
  • PV capacity target of 768 MW by 2030
  • Additional 1,500 MW RE by 2025
  • Additional 2,500 MW by 2030

czech republic

  • RES target for the share of energy from RES in 2030 is 22.8 %

hungary

  • Increase the RE share in the gross energy consumption mix to 21 % by 2030
  • Net zero emissions by 2050
  • 2,000 MW new nuclear generation capacity by 2030
  • 6,500 MW new solar capacities by 2030

montenegro

  • 33 % RES by 2030

poland

  • n/a

romania

  • 6 to 6.5 GW additional wind and PV plants expected until 2030 (according to NECP and PNRR), of which 3 GW by 2026

serbia

  • Planned RES based on the Integrated National Energy and Climate Plan (INECP), not adopted yet

slovakia

  • 120 MW new RE capacities by 2026

slovenia

  • Additional 0.53 GW of new RES is expected by 2026 (of which 0.51 GW PV and wind plants) and an additional 1.25 GW of new RES is expected by 2030 (of which 1.2 GW PV and wind plants)

turkey

  • Increase of RES share by 53 % by the end of 2026 (+ 26 GW), out of which 48 % provided by solar energy and 30 % by wind energy

austria

  • Yes, investment aids for combined PV and batteries
  • Hydrogen/electrolysers

bulgaria

  • EUR 799m RRF funds (2022-2026) for storage of electricity produced by renewables
  • EUR 35m RRF funds (2022-2026) for the development of new green hydrogen and biogas installations

bosnia & herzegovina

  • n/a

croatia

  • Yes, under the NRRP (2021-2026) for new energy storage (20 MW) and new hydrogen production capacities up to 10 MW by 2025 as well as for at least six hydrogen charging stations by 2026 and for pilot CCS investments

czech republic

  • n/a

hungary

  • n/a

moldova

  • n/a

montenegro

  • n/a

poland

  • Yes. Consumption of energy by storage systems being a part of a renewable source will not mean loss of the right to use green certificates or other RES support schemes.

romania

  • EUR 515m allocated through PNRR for hydrogen (hydrogen-ready gas networks and 100 MW green hydrogen production capacities)
  • EUR 280m allocated through PNRR for the production/recycling of batteries and for energy storage capacities
  • EUR 14bln of the Modernisation Fund (2022-2030 period) is allocated for storage capacities (no call for projects has been launched to date)

serbia

  • n/a

slovakia

  • Investment support of EUR 62m for storage systems with capacity up to 68 MW (call expected in 2022).

slovenia

  • n/a

turkey

  • n/a

austria

  • Energy tax applicable

bulgaria

  • Yes
  • Monthly contributions to the Energy System Security Fund in the amount of 5 % of the RE producer's revenue without VAT
  • Tax exemption for RE / green hydrogen projects commissioned after 1 January 2021

bosnia & herzegovina

  • n/a

croatia

  • n/a

czech republic

  • Sustainable energy may be exempt from tax if the installed capacity does not exceed 30 kW. Energy producers above 30 kW are still obliged to pay electricity tax on electricity consumed by the relevant entity.

hungary

  • Yes, RE plants that do not benefit from a support scheme (FiT, market premium) are subject to an additional 31 % tax of their revenues

moldova

  • Tax benefits to certain RE plant operators

montenegro

  • n/a

poland

  • The sale of electricity to the final purchaser is subject to excise duty.

romania

  • 80 % windfall tax until April 2023 (applies to revenues in excess of RON 90/MWh

serbia

  • n/a

slovakia

  • n/a

slovenia

  • n/a

turkey

  • Wind and solar energy projects benefit from additional tax deduction, interest discount and employer insurance premium up to six years, VAT and customs duty exemption, deduction connection fee and forest land usage fee

austria

  • Yes

bulgaria

  • Yes

bosnia & herzegovina

  • Market operator bears the balancing costs of (i) small-scale RE plants that benefit from a FiT and of (ii) RE plants up to 150kW receiving incentives
  • As regards (ii) cost sharing between market operator and producer in FBiH

croatia

  • No, full or partial exemptions for RE plants, depending on the size of the RE plant and the type of support granted. Legal uncertainties about the balancing responsibility of premium supported RE plants.

czech republic

  • Yes. Nevertheless, each market participant is either directly responsible for its imbalances (is a balance responsible party) or may transfer imbalance responsibility to another subject.

hungary

  • Until 2025 reduction of imbalance penalty payments for PV plants
  • By 2026 full balancing responsibility

moldova

  • Yes

montenegro

  • Yes
  • RE plants benefiting from support scheme are member of a special balancing group (balancing group representative is responsible of balancing all RE plants)

poland

  • Yes

romania

  • Yes. Balancing responsibility is assumed either directly or through a balancing responsible party.

serbia

  • RES producers do not bear full balancing costs given the absence of a liquid intraday market in Serbia. Support relating to imbalances in the form of relieving RES producers for imbalances within a certain percentage and allowing for payment of a fixed fee for every kWh of imbalances for imbalances outside this percentage. Balancing support would be applicable until the establishment of an organised, liquid intraday market.

slovakia

  • Existing RE plants: no responsibility
  • New RE plants: full balancing responsibility (except small plants)

slovenia

  • Yes, producers must as a rule ensure balancing either directly or by joining an existing balancing group (thus passing on the responsibility to the balancing group leader)
  • However, producers that benefit from the mandatory offtake (FiT) are by law included in a dedicated "Eco" balancing group coordinated by the market operator (i.e. no balancing responsibility)

turkey

  • Yes

austria

  • Key ready-to-build permits: Depending on the size and technology: nature protection permit, EIA permit (if applicable), building permit, water use permit (hydro), aviation protection permit (wind)
  • Key ready-to-operate permits: Use permit; grid connection agreement

bulgaria

  • Key ready-to-build permits: Building permit (preconditions: urban planning documents ­ "Zoning Plan, adoption of parcelling plans for the development of technical infrastructure elements beyond the boundaries of urban areas, such as connection cable lines; environmental assessment); preliminary/final grid connection agreement
  • Key ready-to-operate permits: Use permit; network access agreement with the TSO/DSO

bosnia & herzegovina

  • Key ready-to-build permits: Building permit (requiring urban planning documents, EIA/environmental permit, if applicable)
  • Key ready-to-operate permits: use (operational) permit; final connection agreement; network access agreement with the TSO/DSO.

croatia

  • Key ready-to-build permits: Spatial plans on all levels (state, regional, local), Environmental Impact Assessment (EIA) / EIA screening / Ecological Network Impact Assessment (ENIA) studies, EIA / EIA screening / ENIA permits, energy permit, location permit, building permit, grid connection study, grid connection approval permit, grid connection agreement, grid use agreement
  • Key ready-to-operate permits: use permit, energy production licence, decision on acquiring preferential producer status

czech republic

  • Ready-to-build permits: zoning permit, building permit
  • Ready-to-operate permit: use permit, connection agreement, energy licence

hungary

  • Key project permits include: location permit, construction permit, environmental permit, grid connection agreement

moldova

  • Key project permits include:
    - urban planning documents (PUZ);
    - environmental permit;
    - project documentation;
    - building permit;
    - feasibility study (if it is state-owned land);
    - authorisation/licence (ANRE);
    - grid connection agreement;
    - and/or other permits depending on the situation.

montenegro

  • Key ready-to-build permits include: energy permit, urban planning documents, building permit, approval of EIA study (if applicable) and preliminary grid connection agreement
  • Key ready-to-operate permits include: operational permit, final connection agreement, electricity generation licence

montenegro

  • Key-ready-to-build permits: building permit, plot/area development design and architectural-construction design; notification of installation connection, grid connection agreement, confirmation of installation contractor's qualifications
  • Key ready-to-operate permits:
    Energy licence  

romania

  • Key ready-to-build permits include: urban planning documents (PUZ), building permit, setting-up authorisation (ANRE), technical connection permit (ATR), grid connection agreement
  • Key ready-to-operate permits: energy production licence and environmental authorisation

serbia

  • Key ready-to-build permits: energy permit, urban planning documents, building permit, approval of EIA study (if applicable) and preliminary connection approval
  • Key ready-to-operate permits include: operational permit, final connection to the grid and electricity generation licence

slovakia

  • Key ready-to-build permits include: EIA, zoning permit, building permit, grid connection agreement
  • Key ready-to-operate permits: energy licence/notification and occupancy permit

slovenia

  • Key ready-to-build permits include:
    - zoning regulation (spatial plans);
    - energy permit (for capacities above 10 MW);
    - construction permit;
    - EIA / environmental consents (if applicable);
    - water permit (notably for hydro);
    - consents and agreements with the network operator in relation to grid access.
  • Key ready-to-operate permits include:
    - operating permit (in relation to the construction permit);
    - environmental permits (if applicable).

turkey

  • Key ready-to-build permits: energy permit, zoning permit, urban planning documents, building permit, approval of EIA study (if applicable) and connection approval
  • Key ready-to-operate permits: operational permit, final connection agreement, electricity generation licence, EIA certificate, YEK-G certificate

austria

  • n/a

bulgaria

  • Yes, if above 5 MW

bosnia & herzegovina

  • Yes

austria

  • Purchase, lease or superficies rights

bulgaria

  • Purchase or superficies rights
  • State or municipal land in the private domain needs to be purchased through public tender

bosnia & herzegovina

  • Project lands are secured from private owners by purchasing or by acquiring certain rights to the land (right of use, lease, easement rights (right of passage), etc.)
  • Project lands secured from the state by purchasing or by acquiring concession rights (up to 50 years in both RS and FBiH)

croatia

  • Purchase, right to build, easement rights or land lease rights
  • Project lands from the state by acquiring the right to build and/or easement rights over state-owned land

czech republic

  • Purchase or easements
  • Lease is less frequent and less reliable

hungary

  • Most common: purchase
  • New trend: long-term land lease or usufruct right

moldova

  • Purchase (not possible for foreign buyers in the case of agricultural lands)
  • Usufruct rights (for up to 30 years for legal persons)
  • Right of superficies (for up to 99 years)
  • Concession rights

montenegro

  • Purchasing, leasing or acquiring easement rights
  • Project lands secured from the Government and/or municipalities by way of lease (up to 30 years by a decision of the Government and up to 90 years by a decision of the Parliament)

poland

  • Lease agreement

romania

  • Purchase or rights of superficies (for up to 99 years)
  • Project lands from municipalities by purchasing (lands in the private domain) or by acquiring concession rights (lands in the private/public domain)

serbia

  • Purchase, lease or easement rights
  • Project lands from municipalities by leasing through a competitive tender

slovakia

  • Purchase or lease
  • Infrastructure-related use usually ensured via easements

slovenia

  • Purchase
  • Right of superficies
  • A right of easement (available for certain small-scale projects not firmly attached to the soil)

turkey

  • Purchase, right to build, easement rights or land lease rights, or by combining two or more of these rights
  • Secure project lands from the state by acquiring the right to build and/or easement rights over state-owned land