Renewable Energy - a Priority in The

Franc Feri Horvat, Chairman of the Committee on the Economy, National Assembly of the Republic of Slovenia E-mail: franc.horvat@dz-rs.si Renewable energy - a priority in the sustainable development of the Republic of Slovenia (Legal aspects, strategies, policies) Introduction The development vision of the Republic of Slovenia is being implemented within the context of the European Union. With a GDP per capita of EUR 13,103, Slovenia is the most developed among the ten new Member States of the enlarged European Union (EU-25) and records a relatively stable annual economic growth amounting to about 4%. The key development goal of the recently adopted strategy for economic development is continuous economic growth and increase of employment based on the principles of sustainable development and long-term preservation of economic, social and environmental balance (the three pillars of the development strategy). The strategy also defines the energy policy, with particular emphasis on promoting the use of renewable energy. The energy review for Slovenia (current situation, trends) The rapid development of renewable energy sources and intense energy saving are being promoted mostly as a result of: 2 1. Relatively high energy intensity which, although decreasing, still exceeds the EU-25 average by about 10% (calculated as energy consumption per GDP unit). 2. Relatively high energy dependency (about 53%), mostly resulting from a large share of imports of oil derivatives and natural gas. 3. Huge increase of the price of oil and oil derivatives in the past months. Energy balance of Slovenia (consumption) for 2004 (in %): - Liquid fuels 48.8 - Natural gas 12.6 - Liquefied petroleum gas 2.1 - Electricity 23.8 - Solid fuels 8.2 - Heat 4.5 Structure of electricity production sources for 2005 (in %): Conventional thermal plants 41.38 Hydroelectric power plants 33.59 Nuclear power plant 25.03 For the last five years, no significant changes have been recorded in the structure of electricity production sources; since 2003, the share of conventional thermal plants has decreased while the shares of hydroelectric power plants and of the nuclear power plant have risen (the latter by slightly more than 1%). 3 On the other hand, Slovenia has a relatively large share of renewable sources in primary energy supply. In 2003, renewables accounted for 10.8% of the total primary energy supply, which was considerably above the EU-25 average (5.7%). In 2005, the share of renewables in the total electricity production is 33.6%. In terms of natural sources facilitating a further development of renewables, Slovenia has a high hydropotential (rivers) and a rich wood biomass, as 55% of its territory is covered by woods. Legislation and strategic development documents The international document promoting the use of renewable energy sources is the Kyoto Protocol which Slovenia ratified by a special act in 2002. A further support to the use of renewables is provided by EU legislation or guidelines concerning the promotion of electricity production and a 12% share of renewables in the total energy supply, which Slovenia will attain soon. Other important documents include the Directive on the promotion of the use of biofuels and other renewable fuels in transport and the Directive on the energy performance of buildings. In the past years, the Slovenian parliament and government have applied themselves to create the conditions for restructuring production and the national use of energy and adopted measures for environmental protection and increase of economic competitiveness. Below is a list of the most important documents. 4 The legal basis for the energy system and the development thereof is the Energy Act. Also important is the Environmental Protection Act as well as individual provisions of other laws. The Strategy for the Economic Development presents the basic policies for increasing energy efficiency, promoting the use of renewables, promoting energy savings, and meeting the obligations set in the Kyoto Protocol. The main programming document including detailed objectives, policies, instruments and projections is the National Energy Programme, adopted on the proposal of the government by the Slovenian parliament in 2004. The parliament is also responsible for monitoring the implementation thereof. The programme provides the goals and measures for increasing the efficiency of energy use by 2010 as follows: - in industry and services: by 10%; - in the public sector: by 15%; - in buildings: by 10%; - in transport: by 10%; - increase of the share of renewables in primary energy supply to 12%; • in heat supply: from 22 to 25%; • in electricity production: from 32 to 35%; • increase of the share of biofuels in transport: to about 5%. Another important document which the parliament adopts on the proposal of the government is the state budget, which provides the funds for the implementation of the energy policy (investments, research, promotion of saving, etc.). The parliament and the government also adopt decisions regarding the institutions responsible for implementing the energy policy. Such issue mainly falls within the 5 competence of the Ministry of Economy, and partially also within the competence of the Ministry of the Environment and Spatial Planning. The implementation of saving measures and the promotion of the use of renewables are monitored by the Energy Efficiency Agency. In addition to that, energy issues are dealt with by the Energy Association under the Slovenian Chamber of Commerce and Industry as well as by several non-governmental institutions and organisations. Mechanisms and measures for promoting the use of renewable energy The measures for promoting the use of renewable energy include: - saving and use of renewables for heating in public and private buildings (investment subsidies, lower interest rates, expertise and counselling, standards, encouraging the use of biomass, etc.); - promotion of combined production; - higher taxes on fossil fuels; - promotion of district heating systems; - development of integrated local energy concepts; - mechanisms and measures (financial measures, regulatory measures, price policy, research/development) for increasing the share of renewables in energy supply; - measures for increasing the use of biofuels (financial incentives, regulatory measures, fiscal policy, promotion of biofuels production, etc.). Financing of renewable energy Considering the high capital intensity, high initial costs and low revenues (output), the potential project developers - including banks - are often not capable of or interested in investing into renewable energy. Therefore Slovenia, in cooperation with the European 6 Union, applies itself to provide the financial instruments and means for financing renewable energy. Such instruments include: - EU structural funds, special energy programmes (e.g. Intelligent Energy-Europe); - grants from the state budget (subsidies); - favourable loans (e.g. the Environmental Fund of the Republic of Slovenia) for energy saving and renewables; - tax incentives for investments into environment-friendly technologies; - subsidies for investments into innovative energy technologies; - co-financing of research, education, counselling and promotion concerning the efficient use of renewable energy and energy saving; - other measures. Abstract and conclusions The problems, experience and policies of Slovenia as a medium developed country and a new EU Member State might prove very useful to other countries and regions, particularly to the developing countries with natural sources of renewable energy. Slovenia's experience has been both negative and positive. Slovenia is an interesting example also because - being a small country and economy - it is very internationalised and integrated in the regional environment of the EU also in terms of energy. This may be proved by the fact that the average exchange of electricity is 7% in the EU and 20% in Slovenia. The recent developments in the world, particularly the dramatic rise of the prices of oil and oil derivatives, force the developed countries, the EU and Slovenia as well as the 7 developing and less developed countries into intense efforts to organise themselves and take international action in order to survive and develop. As indicated by the Slovenian experience, it is extremely important to have a clear picture of the situation in the country, region, and in the world. Thus, it is necessary to adopt laws and national programmes for the supply, rational use and maximum exploitation of renewable energy. Such laws and programmes must be implemented by institutions with professionally competent and politically influent staff. The public-private partnerships at the state, regional and local levels are also very important. In addition to laws and national programmes, the financial resources for the rational use and the use of renewable energy should be provided in state and other budgets. Parallel to their own activities and policies, the developing countries (such as the African countries) - experiencing energy shortcomings, elevated prices of imported energy, and negative social and ecologic consequences - need international assistance for the promotion of the efficient use and exploitation of their renewable energy sources. This is also one of the conditions to stop the increasing gap between the developed and the developing countries that is no longer merely an economic, social, and political problem, but has become a problem of the modern civilization.

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