a survey of the legal framework and current issues in the european energy sector
sector survey the European eighth EDITION ISBN 978-0-9555037-6-4 energy handbook March 2014 2014 9 780955 503764 T hird Energy Package Throughout this publication, we refer to the two directives and three regulations adopted by the European Council and the Parliament on 13 July 2009 as the “Third Energy Package”. For ease of reference, the directives and regulations adopted as part of the Third Energy Package: EU Directives 2009/72/ EC, 2009/73/EC and Regulations (EC) No 713/2009, No 714/2009 and No 715/2009 are referred to as the “Third Electricity Directive”, the Third Gas Directive”, the “ACER Regulation”, the “Third Electricity Regulation” and the “New Gas Regulation”, respectively. Where the context so requires, we refer collectively to the two Directives as the “Third Electricity and Gas Directives” and to the Regulations as the “New Electricity and Gas Regulations”, as appropriate.
C limate Change Package We refer to the four Directives, one Regulation and one Decision adopted by the European Parliament on 17 December 2008 and the European Council on 6 April 2009 as the “Climate Change Package”. For ease of reference, throughout this publication, we refer to EU Directives 2009/29/EC, 2009/28/ EC, 2009/31/EC and 2009/30/EC as the “New EU ETS Directive”, the “Renewable Energy Directive”, the “CCS Directive” and the “Biofuel Directive” respectively. Further, we refer to EU Decision No 406/2009/EC and Regulation (EC) No 443/2009 as the “GHG Reduction Decision” and the “Emissions Standards Regulation”, respectively.
Where required, we have referred to the previous internal energy market directives 1996/92/EC and 1998/30/EC as the "First Electricity Directive" and the "First Gas Directive", respectively and to Directives 2003/54/EC and 2003/55/EC as the "Second Electricity Directive" and the "Second Gas Directive", respectively.
Throughout the publication, we refer to Transmission System Operators as “TSO” and to Distribution System Operators as “DSO”.
L egal advice Please note that the content of this publication does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances. C ontents
02 Introduction 275 Former Yugoslav Republic 03 European Union of Macedonia 28 Albania 285 Malta 35 Austria 293 Montenegro 44 Belarus 301 The Netherlands 51 Belgium 320 Norway 63 Bosnia and Herzegovina 329 Poland 72 Bulgaria 339 Portugal 83 Croatia 349 Romania 95 Cyprus 358 Russia 106 Czech Republic 368 Serbia 114 Denmark 379 Slovak Republic 132 Estonia 387 Slovenia 140 Finland 396 Spain 152 France 405 Sweden 169 Germany 414 Switzerland 183 Greece 424 Turkey 193 Hungary 436 Ukraine 203 Iceland 447 United Kingdom 213 Ireland 466 Overview of the legal and 224 Italy regulatory framework in 41 jurisdictions 235 Kazakhstan 505 Overview of the 244 Latvia renewable energy regime 249 Lithuania in 41 jurisdictions 265 Luxembourg 02 HERBERT SMITH FREEHILLS
I ntroduction
It is with great pleasure that I introduce the EDITORS 2014 edition of “The European Energy Handbook” which provides an in-depth survey of current issues in the energy sector in 42 European jurisdictions.
The handbook includes a summary of each legal and regulatory energy framework and analyses issues such as industry structure, the design of electricity markets, energy trading regimes, third party access, the framework applying to use of systems both at the transmission and distribution levels, market entry, nuclear power and Mark Newbery Silke Goldberg Global head of energy Counsel cross-border interconnection as well as climate change related T +44 20 7466 2225 T +49 30 221 510 419 regulations. Chapters covering those jurisdictions with significant [email protected] [email protected] upstream oil and gas activities also include an overview of the main features of the legislative features of the upstream regime.
In addition to contributions for the European Union, France, Germany, Spain, Russia and the United Kingdom from our own offices, this year we have contributions from Schönherr (Albania, Austria, Bulgaria, Croatia, Czech Republic, Hungary, Montenegro, launched a pilot project for joint electricity trading, so-called Romania, Serbia, Slovakia and Slovenia), Peterka & Partners (Belarus), day-ahead market coupling. The newly coupled market combines Stibbe (Belgium and the Netherlands), Karanovic-Nikolic (Bosnia and 75% of today’s electricity consumption in the EU. In the wake of this Herzegovina and the former Yugoslav Republic of Macedonia), PWC pilot project, the Commission has announced plans for an EU Legal / Landwell (Cyprus), Kromann Reumert (Denmark), Raidla Regulation to be published later this year to make market coupling Leijns & Norcous (Estonia, Latvia and Lithuania), Roschier (Finland), binding across the entire EU. Kyriakides Georgopoulos & Daniolos Issaias (Greece), Arthur Cox (Ireland), Studio Legale Legance (Italy), Linkage and Mind The internal energy market and will also bring new challenges for the (Kazakhstan), Arendt & Medernach (Luxembourg), Buttigieg, Refalo & future of the European electricity market, in particular for national Zammit Pace Advocates (Malta), Arntzen de Besche Advokatfirma policies in relation to national support schemes for renewables and AS (Norway), WKB Wierciński, Kwieciński, Baehr (Poland), EsquÍvel adequate generation capacities to ensure the security of electricity Advogados (Portugal), Mannheimer Swartling (Sweden), Homburger supply. The Commission has recently issued guidance on this. It is (Switzerland), Kolcuoğlu Demirkan (Turkey), BBA//Legal (Iceland) likely that 2014 will see the practical implication of these guidelines and Sayenko Kharenko (Ukraine). as many EU Member States are reviewing the design of their electricity markets in light of financial pressures on existing support According to the policy aims of the European Union, 2014 is supposed mechanisms, environmental commitments and concerns regarding to be the year in which the internal market for energy will be the integration of renewable energies into the electricity grid whilst completed. However, not all Member States have transposed the Third maintaining high supply standards. Energy Package into national law and the European Commission has referred a number of Member States to the European Court of Justice In 2014, the European energy sector will also follow with interest the for either partial or complete failure to implement the same. Whilst the reform of the state aid guidelines which was kicked-off by a development of a European gas market seems somewhat hesitant, Commission consultation on new draft Guidelines on allocating there are there are a number of developments to announce in the support for energy and environmental projects and a consultation on electricity market: the Notice on the notion of State aid itself.
In February 2014, transmission system operators and power Silke Goldberg exchanges from 14 EU Member States (Belgium, Denmark, Estonia, Counsel, Herbert Smith Freehills LLP Finland, France, Germany, Austria, UK, Latvia, Lithuania, Luxembourg, the Netherlands, Poland and Sweden) plus Norway March 2014
© Herbert Smith Freehills LLP 2014
The contents of this publication, current at the date of publication set out in this document, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication. rway N 320 HERBERT SMITH FREEHILLS o
E nergy law in Norway
Recent developments in the Norwegian energy market
Karl Erik Navestad, Torkjel K. Grøndalen and Dag Erlend Henriksen, all partners, Arntzen de Besche, Norway
F ull-scale carbon capture and storage price of US$372.3. Spring Energy is an oil exploration company facility at Mongstad holding 28 offshore licences across Norway's continental shelf in On 20 September 2013 the Norwegian government announced the North Norwegian and Barents Seas.
that the development of full scale CO2 capture at Mongstad is In August 2013 Statoil announced that they had reduced their discontinued. The Technology Centre Mongstad, which is one of participating interest in the Gullfaks and Gudrun fields. Statoil sold a the world's largest and most advanced, will be continued. The 19% participating interest in Gullfaks and 24% participating interest government did also announce its objective to realise another full in Gudrun to the Austrian oil and gas company OMW. Statoil still
scale CO2 capture project by 2020. However, following the general remains the operator. In addition to the cash consideration of election in September, a new government took office on US$2.65 billion, the transaction includes a contingent payment and 16 October 2013, and it is yet to be seen whether it will continue involves a partnership between the two companies. the previous government's CCS projects. The Canadian oil company Talisman Energy has announced that Gassled tariffs they are interested in selling all their Norwegian assets in the North Sea. Talisman Energy Norway has a participating interest in By an amendment to the Tariff Regulation (Regulation of several producing fields, like Brage, Varg, Veslefrikk and Gyda and 20 December 2002 No. 1724) in June 2013, the regulated tariffs has about 500 employees. The process is still on-going. for the use of the upstream gas pipeline network at the Norwegian continental shelf (owned by Gassled joint venture) were reduced RWE DEA AG has announced their intention to sell all their oil and by 90%. The reduction applies for capacity reservations made gas upstream activities, including the Norwegian assets. after 1 July 2013 for transportation after 1 October 2016. The Fortum Nordic AB has announced its intention to sell its electricity decrease in the cost for transportation and processing of natural distribution and district heating assets in Norway. gas is considered to strengthen the incentives for exploration and development of marginal fields, and was made to promote Discoveries resource management. The government was also of the opinion that the owners of Gassled have received reasonable profits on 2013 has seen several significant oil and gas discoveries, their investment. During 2010 and 2011 some financial investors particularly in the Barents Sea. Previous successes in the region became owners in Gassled, and such investors have announced such as the on-going development of the Goliat field and the that they will challenge the decision by the government. discovery in 2011 of the Johan Castberg field were bolstered by the Wisting Central and Gohta discoveries in 2013. Following the Cost overruns in development projects bilateral agreement between Norway and Russia which settled a 40 year long dispute over offshore delimitation, focus on the The Norwegian Petroleum Directorate ("NPD"), on assignment from Barents Sea region is increasing. A key question concerning the the Ministry of Petroleum and Energy ("MPE") has reviewed five field area is how to provide evacuation routes for gas developments. developments on the Norwegian shelf to uncover why some Currently the Snøhvit field is the only Barents gas field in developments finish in line with their estimated cost target, while production, relying on its LNG facility. others are much more expensive than planned. The background for the report partly lies in a few troubled development projects which New government have taken place over the last few years, most notably the Yme development, which resulted in the unprecedented decision to scrap The new conservative government took office mid-October 2013, a nearly finished oil platform, without any petroleum having been after eight years of social democratic rule. While the oil and gas produced. The report also discusses the Skarv development and the community in general looks favourably upon the change, the new Valhall redevelopment which have both been subject to significant government has already surprised many commentators by cost overruns. These recent projects have also caused reactions declaring, contrary to previous statements, that it will not open the among the public, where certain oil companies in an advantageous area outside the Lofoten archipelago for oil activities within this tax position can deduct 78% of their development costs irrespective four year period. The political environment has usually been of cost overruns. sensitive to the concerns of the Norwegian oil and gas industry, and while the previous government was generally looked upon as Mergers and acquisitions industry friendly, expectations are that the new government will be even more receptive to the views of the industry. Amongst During late 2012 and 2013 to date, several major mergers and others, the new government has stated that it will sustain the acquisitions have been made, and several have been announced. Norwegian opposition against the EU Directive for Offshore Safety In late 2012, Tullow Oil acquired 100% of the shares in the (Directive 2013/30/EU). Norwegian exploration company Spring Energy for a purchase rway N EEH - The European Energy Handbook 2014 321 o
New legislation In June 2013, the Energy Act was amended and new requirements were introduced in relation to cross border interconnections between the Norwegian market and foreign markets. The effect of the new requirements is that the TSO for the high voltage transmission system, Statnett, is the only entity that is allowed to hold concessions to build and operate cross border interconnections. rway N 322 HERBERT SMITH FREEHILLS o
O verview of the legal and regulatory framework in Norway
A. ELECTRICITY Regulatory responsibility and supervision within the electricity sector is to a large extent delegated from the MPE to the national A1 . industry structure regulatory authority, the Norwegian Water Resources and Energy Norway's domestic electricity production is based almost entirely Directorate ("NVE"). This includes activities such as granting on hydropower, accounting for approximately 96% of the energy concessions, in the first instance, for the building and operation of mix. Under the Act relating to acquisition of waterfalls, mines and electricity production plants7 and grid infrastructure and the other real estate of 14 December 1917 no. 16 ("Norwegian Industry setting of overall grid tariff levels ("Income Frames"). Concession Act") only public undertakings may acquire concessions for the ownership of hydropower resource.1 Public The Energy Act represents the backbone of Norwegian electricity undertakings are defined as undertakings where the Norwegian market regulation, covering all parts of the resource chain from public sector directly or indirectly control at least two thirds of the electricity production to consumption.8 With the adoption of the shares and the capital, and which are organised in such a manner Energy Act in 1990, full competition was (at least in principle) that genuine public ownership exists.2 Consequently, in Norway, introduced in the Norwegian electricity sector, with effect from large and medium scale hydropower must be publically owned 1 January 1991. Latterly, this regime has been developed into a Nordic and this has been the case since the first developments in the competitive electricity market which can be characterised today as electricity sector at the start of the last century. With regards to an advanced regulatory market model which functions effectively. electricity production from other energy sources, such as wind power, the same ownership restrictions are not applicable. The Energy Act is a framework act which, inter alia, sets out the general concession requirements for local area licences for the The largest Norwegian electricity producer is Statkraft SF3 construction of distribution grids, construction and operating ("Statkraft") which is a 100% state-owned enterprise. Statkraft licences for other installations including power stations and owns approximately 36% of the Norwegian electricity generating transmission grids, trading licences applicable to monopoly grid capacity. A large number of local municipalities and county operators as well as electricity producers and traders, marketplace authorities own approximately 52% of the generating capacity, licences, and import and export licences. The key group of licences mostly exercised through ownership interests in public are the trading licences which provide, inter alia, the power to undertakings. Private companies4 still own roughly 12% of the govern grid company operations and tariffs as further set out in generating capacity on the basis of previous concession legislation.5 the regulations which accompany the Energy Act.9 As from 1 July 2013, import and export licences are only granted to the projects Unlike most other European countries, Norway has three grid levels where the TSO (Statnett) has a controlling interest. rather than two: the central grid; the regional grid; and the local distribution grid. The central grid, which for most practical purposes The Norwegian electricity market regime generally complies with is the Norwegian transmissions grid, is operated by the wholly most of the provisions of the Third Electricity Directive, although state‑owned enterprise Statnett SF ("Statnett"). Statnett is some amendments may be necessary, in particular in relation to the designated as the TSO with particular system responsibility Third Electricity Directive's comprehensive new set of provisions pursuant to the Norwegian Energy Act (the "Energy Act").6 Statnett governing national regulatory authorities. The Third Electricity owns around 87% of the central grid and operates the remaining Directive is expected to be EEA relevant, but the EEA Committee has parts of the central grid on the basis of rental agreements. not yet been asked. Consequently no time limit has been set for the EEA countries to transpose the Third Electricity Directive in internal The state's interest in Statnett is held by the Ministry of Petroleum legislation. It is expected that changes need to be made in Norwegian and Energy ("MPE") whereas the state's interest in Statkraft is legislation, but as this depends very much of the outcome of political held by the Ministry of Trade and Energy. Consequently the processes, it remains to be seen what such changes may entail. structure of public ownership in Statnett and Statkraft complied from the outset with the full ownership unbundling requirements A2 . third party access regime of the Third Electricity Directive. This position was made clear in Regional grid and distribution grid companies operate the grid Article 9(6) of the Third Electricity Directive which states that pursuant to a trading licence.10 The objective of this licensing regime is two separate public bodies are not deemed to be the same person. to facilitate an efficient electricity market and efficient operation, utilisation and development of the grid.11 The licence requirements for The regional and distribution grids are owned by a large number of grid operators include conditions concerning, inter alia, organisation, companies, mostly owned, in turn, by county and municipal non-discriminatory market access, impartial behaviour and the authorities. Privately owned companies are more common within calculation of tariffs.12 In this respect, licensees must ensure market electricity trading than other areas of the industry although there access for all customers who want grid services at non-discriminatory are private companies in all parts of the resource chain. and objective point tariffs and terms.13 rway N EEH - The European Energy Handbook 2014 323 o
Grid tariffs are set by the grid operators on the basis of yearly A4 . Public service obligation and smart metering Income Frames determined by the regulator, NVE. The overall No particular public service obligations apply to specific producers principles for the determination of Income Frames are that the grid and suppliers in Norway (a possible exception being that the TSO, revenues, over a period of time, will cover the costs of operation Statnett, may instruct market participants, typically larger and depreciation of the grid while giving a reasonable rate of producers, to provide regulating capacity at cost plus a reasonable return on invested capital assuming efficient operation, utilisation rate of return). With respect to grid companies, Statnett is subject and development of the grid.14 to a number of obligations in its role as TSO with system The stipulation of point tariffs for individual customers (ie, tariffs responsibility. DSOs are also subject to a number of obligations. referred to the customer's connection point to the grid that are The obligations of the TSO and DSOs to a large extent correspond independent of power purchase and/or sales agreements) must to the tasks appointed to these grid operators under the New be non-discriminatory and objective.15 Further requirements to this Electricity Directive. effect are provided in part five of the Control Regulation. Since 17 July 2011, there has been a regulation setting out an Distribution grid companies with local area licences are at the obligation upon grid companies to install advanced metering outset required to ensure that customers within their grid area are systems at all measuring points within their licensing area by supplied with electricity from their grid.16 Grid companies are also 1 January 2017.22 The regulation assumes a gradual approach, required, if necessary, to invest in new grids in order to connect to whereby the grid companies shall submit plans for procurement new production or supply facilities.17 Grid companies may be and installation of metering systems by 2012, report periodically exempted from the investment obligation in electricity production on progress to NVE and have installed metering systems in facilities if the grid investment is not considered to be 80% of their measuring points by 1 January 2016. socio-economically efficient, while an exemption from the investment obligation in new supply will only be granted in A5C . ross-border interconnectors exceptional cases. On the production side, the investment Cross-border interconnector capacity from Southern Norway obligation is likely to be of greatest practical significance for new today amounts to a total of 3,700MW (under normal conditions), small-scale renewable production facilities where project including 2,050MW capacity to Sweden, 950MW to Denmark financing of a separate production grid may be difficult to obtain. and 700MW to the Netherlands (the NorNed cable). Interconnector capacity in Mid and Northern Norway includes A3M . arket design another 1,400 to 1,700MW to Sweden, 120MW to Finland and Section 3-1 of the Energy Act sets out the licence requirements for 50MW to Russia23. A 700MW cable to Denmark (Skagerrak 4) is the construction, ownership or operation of electrical installations under construction, planned to be operational in 2014. Planned such as electricity generation and transmission facilities. new projects include a new 1,400MW cable to Sweden Electricity distribution grids are in practice governed by a separate (Sydvestlinken) which was notified to the NVE in October 2011, area licence requirement pursuant to section 3-2 of the Energy and planned to be operational by 2020, as well as two new cables Act. The Qualifications Regulation sets out certain qualification to Germany and the UK, called Nord.link /NorGer and NSN, requirements for the staff of companies with licences pursuant to respectively. One of these is planned to be operational in 2018 and sections 3-1 and 3-2 of the Energy Act.18 The Planning and Building the other one in 2021.24 In total, the new planned cross-border Act sets out requirements for construction projects, including, transmission capacity is 4,000MW in the coming 10 years. inter alia, impact assessment requirements including environmental impact assessments.19 In addition, there are also As mentioned above, with effect from 1 July 2013, the Energy Act other requirements which will not be dealt with here. was amended such that Statnett is now the only entity who is allowed to hold concessions for cross-border interconnectors. This Ownership of hydropower resources over a certain potential has stirred debate both among politicians and in the industry. In its capacity threshold (in practice large and medium scale hydropower political platform the coalition government has stated that this production) is subject to specific restrictions pursuant to the amendment will be revoked, however no steps to that effect have Industry Concession Act (see section A.1 above). Consequently, been taken yet. foreign and private market participants cannot be granted such hydropower licences and may only participate in their capacity as B. GAS minority shareholders in Norwegian public companies. B1 . industry structure Trading licences must be obtained by companies trading Norway is a gas exporter; only small quantities of gas are electricity in their own name. The process for obtaining a trading transported onshore for domestic use. For a description of the licence for a trading company is standardised, and applications Norwegian upstream licensing regime, an overview of key market may be filed online to the regulator, NVE. As of 1 January 2008, players, the national regulatory authority, key legislative, regulatory 355 companies held a trading licence in Norway, including and contractual features etc, please refer to section F below. producers, grid companies and trading companies as well as integrated companies performing several of the aforementioned The Norwegian domestic downstream gas market has not yet services.20 Companies must sign a standardised participant matured and is considered an emergent market for the purposes agreement in order to trade electricity on the Nord Pool Spot.21 of the Second Gas Directive. Unbundling in the downstream gas market has not yet been considered a pressing issue in Norway. The balancing power forward market established by Statnett as The Third Gas Directive which at the time of writing is not yet TSO in fulfilment of its balancing service requirements functions included in the EEA agreement and incorporated under as a capacity market in as much as it provides an operating Norwegian law will most likely not alter this. reserve capacity; offerers are paid to guarantee that they are participating with capacity reserves in the balancing power market. rway N 324 HERBERT SMITH FREEHILLS o
B2 . third party access to gas networks B4 . market entry Access to the Norwegian upstream pipeline system is regulated by In order for a company to be eligible for the award of a production MPE, through the Petroleum Act25 and the Petroleum Regulation,26 licence, it must be pre-qualified as a licensee, meaning that the which follow the principles of third party access laid down in the company must fulfil certain criteria as to its qualification, financial upstream pipeline system provision of the Second Gas Directive. strength etc. In practice it is required that the licensee is The Third Gas Directive has not yet been implemented, but the incorporated and registered in Norway. While the award of MPE considers that it will not necessitate any changes to the licences is subject to the principles set forth in the Licensing current upstream regime. Directive,30 the authorities will, when considering whether a pre-qualified company will be awarded production licence(s), take Natural gas undertakings and eligible customers with a "duly into account the particular features of the application in question, substantiated reasonable need" (behørig begrunnet rimelig behov) such as the applicant's proposed work obligations etc. The final for transportation (shippers) are entitled to access the system on award is subject to negotiations with the authorities. objective and non-discriminatory conditions. B5 . Public service obligations and smart metering It is the responsibility of Gassco, as the system operator to operate the access regime, which consists of a primary and a secondary Concessions to construct or operate downstream gas and market. In the primary market the shippers reserve capacity LNG facilities may include public service obligations relating to, through Gassco. If the requested reservations are higher than the inter alia, security of supply, regularity, quality and price of spare capacity, the right to use the spare capacity is allocated supplies etc. Moreover, licensees on the Norwegian Continental according to an allocation formula. Shelf ("NCS") can be required by the MPE to give third parties access to transportation and processing facilities.31 In the secondary market, natural gas undertakings and eligible customers may transfer their reserved capacity to other natural B6C . ross-border interconnectors gas undertakings and eligible customers with a duly substantiated The Norwegian natural gas transportation system is complex, with reasonable need for transportation, either through the market several interconnections and export pipelines. Currently, there are place organised by Gassco or by bilateral agreements. seven major pipelines transporting natural gas from the NCS to the UK and continental Europe; the Vesterled pipeline, the The transportation (and/or processing) of natural gas within Langeled pipeline, the Franpipe pipeline, the Zeepipe pipeline, the Gassled is regulated by a standard agreement entered into Norpipe pipeline, and the Europipe I and II pipelines. In addition, between Gassco (on behalf of Gassled) and the shipper. The tariff Norwegian gas is also transported to the UK through the 27 is regulated in a separate Tariff Regulation and is payable on a British Flags pipeline. ship-or-pay basis. The tariffs consist of a capital and an operating element,28 and the transportation system is divided into different C. energy TRADING zones, with separate tariffs applying for each zone. C1E . lectricity trading Onshore gas distribution in Norway is limited to a small Electricity can be traded bilaterally or on the regulated market distribution network which is linked to the Kårstø gas processing places Nord Pool Spot or NASDAQ OMX Oslo AS. The Nordic facility on the Norwegian West Coast. Gas distribution is power exchange, Nord Pool Spot,32 offers physical trading with regulated by the Natural Gas Act29 and pertaining regulations. both day-ahead ("Elspot") and intra-day ("Elbas") markets. Gate There is currently no particular legislative framework addressing closure for day-ahead trades on the Elspot market is 12pm.33 In transportation tariffs in the Norwegian downstream gas market. order to participate in Nord Pool Spot's physical markets, participants must, inter alia, sign a participant agreement which B .3 lng and gas storage also applies Nord Pool Spot's trading rules.34 In Norway, domestic gas consumption is limited, and there are Market participants are required to achieve a balance between only a few small scale facilities for receiving LNG, located on the commitments and rights for each hour in each Elspot area.35 Several Norwegian West Coast. The Snøhvit LNG facility, located in instruments are available to achieve such hourly balance. The Elbas Hammerfest in Northern Norway, is a full scale facility for market opens up for hourly trade and consequently also provides a exportation of LNG, processing gas from the Snøhvit field in the balancing market. In addition, the Norwegian TSO Statnett Barents Sea. administers a regulating power market (where market participants Upstream LNG facilities also fall within the Petroleum Act and bid for regulating power) and a regulating power options market for follow the same regulatory regime as other petroleum activities. balancing purposes. In the latter options market, which is operated Downstream LNG facilities are governed by the Natural Gas on a weekly basis, participants may commit to future bids in the Act, and, as part of an emergent market, are subject to less regulating power market for a fee paid by Statnett. detailed regulation and no general third party obligations Financial trading is organised by the power derivate exchange (although such access may be stipulated by the government on NASDAQ OMX Oslo ASA (formerly known as Nord Pool ASA). a case-by-case basis). Through the brand name NASDAQ OMX Commodities, the There is no onshore gas storage in Norway, except some storage financial power trading exchange provides trading and clearing facilities at the Kårstø gas processing facility. services for power derivates (and carbon contracts), thus providing price hedging possibilities for participants also engaged in physical trade as well as trading opportunities for participants solely engaged in financial transactions.36 Contract terms of up to six years are offered. rway N EEH - The European Energy Handbook 2014 325 o
C2 . gas trading forests will be included in this calculation as carbon sinks, which means that two thirds of Norway's total reductions will be Gas produced on the NCS is the property of the respective achieved nationally. The main Norwegian measures are to licensees, who are obliged to market, transport and sell their gas; increase the use of renewable energy and carbon capture and the exception being that the equity gas of the State's Direct storage ("CCS"); for further detail see section D.3 below. With Financial Interest ("SDFI") is marketed and sold by Statoil together regard to the Climate Change Package, since Norway is not an with its own equity gas. Gas sales are carried out by the individual EU member, the Climate Change Package needed to be licensees on a bilateral basis. implemented in the EEA agreement prior to implementation in Norwegian legislation (see further details below). Trading is primarily carried out on a physical basis and there is very little financial trading in natural gas in Norway. Although gas volumes are increasingly being sold on short term contracts, most D2E . mission trading Norwegian natural gas is still sold on long term take-or-pay The emissions trading scheme is regulated by the Greenhouse contracts to UK and continental buyers, typically with durations of Gas Emissions Trading Act which introduced a quota system for 20 years or more. Most of the long term contracts are traditionally carbon dioxide emissions which has been effective since 1 January based on price formulas which are linked to the price of alternative 2005.37 The authorities then allocated a certain number of free sources of energy. However, there has been a transition to the use tradable allowances for carbon dioxide emissions among certain of more gas indices in long term contracts as well. Short term entities in the business sectors subject to the quota system. contracts are typically entered into on the basis of market standards such as the NBP, ZBT and EFET contracts. Norway did not implement the earlier emission trading directive (2003/87/EC) in the 2005 to 2007 period, but as of Licensees are required to submit to the authorities, on a January 2008 the Norwegian emissions trading system was quarterly basis, information regarding their gas delivery merged with the EU scheme, allowing Norwegian businesses to obligations, including information on volume profiles and main trade allowances within the EU. The Third EU ETS Directive was contractual terms. incorporated into the EEA agreement in July 2012, and the allowance award rules are identical as the EU rules. Norwegian As there is no gas hub trading taking place in Norway there is no businesses may trade and surrender both European Union downstream imbalancing regime as such. In the upstream sector, Allowances and Certified Emission Reductions issued directly by Gassco is responsible for balancing the inlet and outlet of natural the Norwegian authorities in addition to allowances when fulfilling gas and maintaining necessary pressure in the Gassled their obligations under the aforementioned Act. transportation system. D3 . carbon capture and storage In order to use the upstream transportation system, shippers need to reserve capacity with Gassco. Apart from providing the The possible storage locations for carbon dioxide in Norway are volume information as required pursuant to the access regime located offshore, either in empty or active hydrocarbon reservoirs (see section B.2 above), no particular notification requirements or in aquifers. Currently, carbon dioxide storage in Norway is apply with regard to contractual volumes. regulated either by the Petroleum Act or the Act concerning Subsea Natural Resources.38 C3 . introduction of EMIR and REMIT There are already existing carbon dioxide storage projects in The Regulation for Wholesale Energy Market Integrity and Norway at the Sleipner field and the Snøhvit field, where carbon Transparency ("REMIT") is considered EEA relevant and will be dioxide is removed from the gas to meet quality specifications and implemented into the EEA agreement. REMIT is relevant both to injected into the reservoir. In these cases, carbon dioxide storage the Norwegian electricity sector and Norwegian upstream gas is treated as an integrated part of the petroleum activities and sector. In general, it is not foreseen that any major changes to the regulated by the petroleum legislation. A CCS project from a land legislation will be required due to REMIT. However, with regard to based industrial plant like a gas power plant falls outside the the upstream gas sector it is not currently clear who will act as the petroleum legislation and separate regulation is therefore required. national regulatory authority in accordance with the regulation. As a consequence of REMIT, Gassco, the operator of the upstream There is also an on-going CCS project in connection with the pipeline network at the NCS, has started to publish planned and combined heat and power plant at the Mongstad refinery. The unplanned incidents in the pipeline network through the webpage project originally had two stages. The first stage, the technology http://flow.gassco.no. centre, completed start up in May 2012. Its aim is to test, verify and demonstrate technology suitable for deployment at large The European Market Infrastructure Regulation ("EMIR") is EEA scale carbon dioxide facilities. This project is based on cooperation relevant and is approved by the EEA committee. Under EMIR between the owners of CO2 Technology Centre Mongstad DA, some changes in Norwegian legislation will be required, both with which are currently the Norwegian state (75.12%), Statoil (20%), regard to over-the-counter ("OTC") derivatives and requirements Norske Shell (2.44%) and Sasol (2.44%). The second stage, related to clearing houses. establishing a full scale CCS facility for the capture of carbon dioxide from the combined heat and power plant at Mongstad D. climate CHANGE AND SUSTAINABILITY with storage on the Norwegian continental shelf, was terminated D1 . climate change initiatives by the Norwegian state in September 2013. Nevertheless, the government has stated that it is still aiming at realising a full-scale In early 2008 the major political parties entered into a climate CCS facility by 2020. agreement with the overall goal for Norway to become carbon neutral by 2030. The parties set targets to reduce the Norwegian greenhouse gas emissions by 15 to 17 million tCO2e by 2020, when rway N 326 HERBERT SMITH FREEHILLS o
The CCS Directive does not distinguish between storage of carbon sustainable cultivation of the raw material used, and that dioxide as a means to decrease carbon dioxide emissions or as an production and use of biofuel must lead to reduced emissions of integrated part of petroleum activities. This means that the greenhouse gases compared to fossil fuels. Such regulation will requirements in the CCS Directive will also apply to carbon dioxide enter into force 1 January 2014. storage as an integrated part of petroleum activities. A harmonisation between the CCS Directive and the petroleum D6E . nergy efficiency legislation with regard to carbon dioxide storage is therefore Norway has a cold climate and heating of houses and buildings necessary. The CCS Directive is still not implemented in requires a substantial amount of energy. Therefore, energy Norwegian legislation and Norway received from the EFTA efficiency is part of the Norwegian government's measures to Surveillance Authority on 25 September 2013 a letter of formal reduce greenhouse gas emissions. This is mainly done by notice for failure to implement the CCS Directive. introducing new requirements for the construction of new houses In addition to the petroleum regulations, the current Norwegian and buildings in order to decrease energy consumption for view is that the Act concerning Subsea Natural Resources will heating, and by introducing an energy label for all houses and cover carbon dioxide storage, and further regulations subordinate buildings to be sold. Furthermore, different support schemes have to this Act are currently being developed. been established dealing with energy efficiency which is administered by the state enterprise Enova SF.
D4R . enewable energy E. nuclear energy The Renewable Energy Directive is EEA relevant and was Norway does not have any nuclear energy production. However, a incorporated into the EEA agreement in December 2011 and made separate nuclear licensing Act does exist; The Act concerning
applicable to Norway.While almost all electricity production in Nuclear Energy Activities of 12 May 1972 no. 28, which sets out Norway is currently based on renewable energy sources, the the regulatory framework for granting licences to construct, own extended scope of the Renewable Energy Directive (compared to and operate a nuclear plant. Directive 2001/77/EC) to include other categories of energy production holds challenges for Norway in meeting its target of F. UPSTREAM increasing the total share of gross domestic energy consumption The ultimate authority for the regulation of petroleum activities on originating from renewables to 67.5% by 2020 from the NCS lies with the Norwegian Parliament (Stortinget). The approximately 60%. The Norwegian government submitted its overall responsibility for ensuring that the petroleum activities are action plan for meeting this target just before summer 2012. It is carried out in accordance with the regulatory framework rests foreseen that energy efficiency measures will play a major role, as with the MPE. Below the MPE there are two entities, the will electrification of the transportation sector (where we already Norwegian Petroleum Directorate (the "NPD") and the Petroleum see a huge increase in the presence of electric cars), decreased Safety Authority (the "PSA").39 Policy and legislation concerning use of fossil fuels for heating, and a decrease in the total energy petroleum taxation is handled by the Ministry of Finance (the consumption. In addition, Norway has large potential with regard "MoF") and annual tax assessments are carried out by the Oil to the development of electricity production from renewables, in Taxation Office. particular wind power, upgrading existing hydropower facilities and investment in new small scale hydropower. Norway and The legal basis for government regulation of the petroleum sector Sweden have a common system with green certificates, and have is found in the Petroleum Act which provides the legal framework a combined goal of establishing 26.4TWh new electricity for the licensing system. The legal basis for taxation of offshore production based on renewable energy in 2020. Norway and petroleum activities is the 1975 Act relating to Taxation of Subsea Sweden are each responsible for financing 13.2TWh in the Petroleum Deposits.40 certificate system, regardless of the amount of production that is located in each of the two countries. In addition to the high level provisions in the Petroleum Act, offshore petroleum activities in Norway are subject to a very The electricity certificate system is a market based support comprehensive system of regulations and approvals, including the scheme to promote new electricity production based on Petroleum Regulation, which mainly addresses resource renewable energy sources. Producers will receive one certificate management, and the HSE Regulations41, which address the per MWh renewable electricity that is generated for a period of health, safety and environmental aspects of the activities. As a 15 years. Electricity suppliers and certain consumers have a general approach, the HSE Regulations are function based and risk statutory duty to buy electricity certificates. Norway and Sweden based, leaving it up to the oil companies to choose how to fulfil the have a common system with green certificates in place. requirements. The Norwegian system also implies a "see-to" duty (påse-plikt) on the licensees, meaning that the oil companies have Furthermore, as part of the path towards reaching the national a duty to ensure that all of its contractors and subcontractors target, NVE has significantly improved its case handling capacity comply with applicable regulations. The non-operators also have a and efficiency, which in 2012 has resulted in concessions "see-to" duty towards the operator. encompassing almost twice the generating capacity compared to the same in 2011. The level of state participation in the Norwegian oil and gas industry is high. The Norwegian state is the largest player on the D5 . Biofuel NCS, by way of its shareholdings in Statoil ASA, and through the The Biofuel Directive is considered EEA relevant and will be SDFI, whereby the state participates directly in various implemented in Norwegian law, as the amended Directives production licences.42 98/70/EC and 99/32/EC. The Norwegian Environment Agency has proposed the introduction of requirements with regard to the rway N EEH - The European Energy Handbook 2014 327 o
The Norwegian offshore licensing system comprises various In order to develop a petroleum discovery, the licence partners licences, approvals, agreements and other mechanisms. must submit a plan for development and operation ("PDO") to the authorities. The PDO sets out, inter alia, the development The production licence is the core document in the licensing solution, estimated development costs and a production profile system, and gives the licensee an exclusive right to explore for, for the deposit.44 develop and produce petroleum in the block(s) covered by the licence. Production licences are normally awarded through annual Based on the PDO, the NPD issues annual production permits licensing rounds. In addition, all unlicensed acreage in the mature which allow the licensees to produce defined volumes of North Sea area is open for application in annual award procedures, petroleum. The export of petroleum is not subject to a specific a process known as awards in predefined areas ("APA"). legal regime as such. Companies can apply for licence awards individually or in groups. The licensees are also required to submit a plan for The production licence can be awarded to one or several oil decommissioning and cessation of the petroleum activities to the companies. To become licensees, companies must fulfil certain MPE. The MPE then decides, based on the plan, on the disposal of criteria regarding technical qualifications, organisational the facilities. In relation to transfer of the production licence requirements, financial strength etc. The MPE offers a interest, the transferor will remain liable to the remaining licensees pre-qualification procedure which outlines these criteria in order for the share of the decommissioning costs associated with the to facilitate the application preparations of prospective licensees. transferred licence interest. This requirement which was The same criteria will apply to a prospective assignee of a introduced in 2009 has in practice affected the market for licence production licence interest. Transfer of a licence interest and share transactions, as transferors will regularly demand additional transfer of shares in a company holding a licence interest is subject security from the assignee in order to be held harmless for such to approval by the MPE and MoF.43 potential secondary liability. Contractually, this is usually structured around a decommissioning security agreement, which The company appointed as operator by the MPE becomes is appended to the sale and purchase agreement. responsible for executing the day to day management of the petroleum activities on behalf of the licensees. In addition to Construction and operation of transportation and/or processing fulfilling the general requirements for all licensees, the operator facilities is subject to a plan for installation and operation ("PIO"), must have the additional capabilities necessary to carry out the which must be submitted to the MPE for approval.45 day to day activities of the licence group. No particular corporate structure requirements apply, although in practice most licensees The Norwegian offshore gas transportation infrastructure system are set up as Norwegian limited companies. The qualifications of ("Gassled") is organised as one joint venture. Historically, Gassled the operator will in practice vary with the developing stages of the has been owned by the main shippers of natural gas from the NCS. licence, and stricter requirements will apply for operating a licence However, ExxonMobil, Total, Norske Shell and Statoil have sold in the production phase than in the exploration phase. Transfer of their ownership interests to financial investors (but with Statoil operatorship is subject to government approval, and the same retaining a 5% ownership interest). Standard provisions apply for requirements will apply to the prospective new operator. access to the Gassled facilities (see section B.2 above). The Gassled system is operated by Gassco, a 100% state owned The production licence is awarded for an initial period (which may company which is not a shareholder in Gassled. Gassco exercises be up to 10 years), within which period a specified work obligation its operator duties as an independent system operator (ISO), must be fulfilled (often an obligation to procure seismic data and pursuant to the provisions of the Petroleum Act and in accordance to drill an exploration well). After such fulfilment, the duration of with an operator agreement with Gassled. the licence is normally extended. An area fee also applies after the initial period, based on the size of the licence acreage. If the work For companies engaged in oil and gas operations on the NCS, obligation is not fulfilled within the stated time limit, the licence there are two, partially overlapping income tax regimes: ordinary will generally be revoked. A licence can also be withdrawn as a income tax imposed by the general rules in the Norwegian General result of serious or repeated violations of the Petroleum Act, Tax Act of 1999 ("GTA") and the special petroleum tax on income pertaining regulations, licence conditions etc. imposed by the Petroleum Tax Act ("PTA"). As a result, the total marginal income tax rate for companies engaged in exploration If a licensee wants to grant security over a production licence and production activities on the NCS is 78%, consisting of a 27% interest to finance its activities associated with the licence, the general income tax and a 51% special petroleum tax to the state. consent of the MPE is required, which is regularly given. The MPE These rates were changed in 2013, with effect from 1 January can also "in special cases" consent to allow the financing to include 2014, from 28% general income tax and 50% special petroleum activities pursuant to a licence other than the one which is tax. The marginal income tax is thus the same. mortgaged. While the possibility for extending the purpose of financing was originally meant to be limited, such consent has in Gross income generated by oil sales is assessed according to a practice been granted quite often. norm price system, where sales prices are fixed by an administrative body, whereas income generated by gas sales is assessed on actual One of the conditions of the award of the production licence is that sale prices. A licensee on the NCS that is subject to Norwegian the licensees enter into a joint operating agreement (the "JOA") in taxation will be entitled to tax deductions against income taxed at a standard format prepared by the MPE. The JOA governs the 78% with regard to exploration and production costs (running relationship between the licensees, forming the basis for day to expenses, net financial items, depreciations and uplift) and day management of the activities, allocation of costs, decision transportation costs (tariff payments). Production installations making processes etc. All petroleum produced is allocated to the depreciate over six years, and an uplift is granted on a special tax licensees in accordance with their participating interest. basis for a four year period for investments in production and rway N 328 HERBERT SMITH FREEHILLS o
pipeline facilities. The uplift was changed from 7.5% to 5.5% per financial charges, incurred in exploration for petroleum year by law in 2013 with effect from 5 May 2013.46 resources.47 The tax value is currently 78%. The refund will reduce in correspondence with the tax loss carried forward. An exploration refund scheme was introduced in 2005, whereby companies not entitled to deductions may annually claim a refund from the state of the tax value of direct and indirect costs, except
endnotes 1. Other than small scale hydropower. 2. Norwegian Industry Concession Act, see in particular sections 1 and 2. 3. Formally its wholly owned subsidiary Statkraft Energi AS. 4. Although with some minority public shareholding. 5. See further The Norwegian Ministry of Petroleum and Energy, Facts 2008 – Energy and Water Resources in Norway, pp. 78 et seq. for an overview of ownership shares www. regjeringen.no/en/dep/oed/Documents-and-publications/Reports/2008/fact-2008---energy-and-water-resources-i.html?id=536186 (url last visited on 14 September 2010). 6. Act 29 June 1990 No. 50, section 6(1). See also the appurtenant Regulation 7 May 2002 No. 448 concerning system responsibility in the power system. 7. This does not include licences for acquisition of hydropower resources pursuant to the Norwegian Industry Concession Act. 8. See section 1(1) of the Act. 9. The more specific provisions relating to market operation follow from regulations to the Energy Act, including the Energy Regulations of 7 December 1990 No 959, which is a Royal Degree, and subordinate regulations such as the Control Regulation of 11 March 1999 No 302 and the Electricity Supply and Grid Services Regulation of 11 March 1999 No 301. Other important regulatory instruments relevant to the electricity market include the Industry Concession Act of 14 December 1917 No 16 and the Watercourse Regulation Act of 14 December 1917 No 17 (both for hydropower development), the Planning and Building Act of 27 June 2008 No 71 and the Competition Act of 5 March 2004 No 12). 10. Awarded under Section 4-1 of the Energy Act. 11. Section 4-1 of the Energy Regulation. 12. Section 4-1 of the Energy Act and Chapter 4 of the Energy Regulation. 13. Section 4-1(2)(2) of the Energy Act and section 4-4(d) of the Energy Regulation. 14. Section 4-4(b) of the Energy Regulation. More detailed provisions on how to achieve this result are given in the appurtenant Control Regulation. 15. Section 4-1(2)(2) of the Energy Act and section 4-4(d) of the Energy Regulation. 16. Section 3-3 of the Energy Act. 17. Section 3-4 of the Energy Act. 18. Regulation 10 March 2011 No. 263. 19. Act 27 June 2008 No. 71. See also section 2-1 of the Energy Act. 20. The Norwegian Ministry of Petroleum and Energy, Facts 2008 – Energy and Water Resources in Norway, p. 76. 21. See section A.2 above. 22. Regulation 24 June 2011 No. 726, which introduces a new chapter 4 concerning advanced measuring and control systems in the Electricity Supply and Grid Services Regulation. 23. See Statnett, Netutviklingsplan 2011, p. 80, available at http://www.statnett.no/Documents/Kraftsystemet/Nettutviklingsplaner/Nettutviklingsplan%202011.pdf. (last visited 25 October 2013). 24. See further ibid, p. 11. 25. Act 29 November 1996 No. 72. 26. Regulation 27 June 1997 No. 653. 27. Regulation 20 December 2002 No. 1724. 28. The capital element is stipulated by the MPE and will give the investors about 7% interest on the invested capital before tax. The operating element is cost based and laid down by the operator. 29. Act 28 June 2002 No. 61. 30. Directive 94/22/EC. 31. Such third party access is governed by section 4-8 of the Petroleum Act and by Regulation 20 December No. 1625. 32. Owned by the Nordic TSOs. 33. The power exchange had a turnover of 310TWh in 2010 (including the auction volume in the UK market N2EX for energy contracts), and approximately 74 % of the total electricity consumption in the Nordic countries was traded on Nord Pool Spot, see further Nord Pool Spot's web pages www.nordpoolspot.com/About-us/ with further presentations (last visited 3 October 2011). 34. Documents are available on www.nordpoolspot.com/TAS/Day-ahead-market-Elspot/Rulebook-for-the-Physical-Markets/ (last visited 3 October 2011). 35. Section 8 of the System Responsibility Regulation. 36. See further NASDAQ OMX Commodities' web pages www.nasdaqomxcommodities.com/. 37. Act 17 December 2004 No. 99. 38. Act 21 June 1963 No. 12. 39. The main functions of the NPD relate to resource management while the responsibilities of the PSA relate to issues regarding health, safety and environment. 40. Act 13 June 1975 No. 35. 41. The Framework Regulations (Regulation 12 February 2010 No 158), the Management Regulations (Regulation 29 April 2010 No 611), the Facilities Regulations (Regulation 29 April 2010 No 634), the Activities Regulations (Regulation 29 April 2010 No 613), and the Technical and Operational Regulations (Regulation 29 April 2010 No 612). 42. The SDFI is managed by the state-owned company Petoro AS. 43. The tax effects of a transaction are normally approved by default pursuant to Regulation 1 July 2009 no. 956. 44. The PDO must be approved by the MPE, and must also be presented to Stortinget if the estimated investment is more than NOK 10 billion. 45. A PIO is not required if the facilities are already covered by a PDO. 46. Section 1 Act 21 June 2013 No. 66. 47. PTA section 3(c)(5). erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 467 v
A ustria (continued) P riNCIPAL electricity Eg, Verbund Hydropower AG generator(s) Tiroler Wasserkraft AG Vorarlberger Illwerge AG Kelag Kärntner Elektrizitäts AG Steweag Steg ImWind GmbH Transmission system Verbund Austrian Power Grid operator(s) TIWAG Netz AG VKW Netz AG Electricity distributor(s) >130, eg, Wien Energie Stromnetz EVN Netz GmbH Steweag-Steg BEWAG Netz GmbH Kelag Netz GmbH Salzburg Netz GmbH VKW Netz AG EnergieAG Oberösterreich Netz GmbH
l TIWAG Netz AG E ECTRICITY Principal electricity eg Verbund supplier(s) AAE Naturstrom Vertrieb GmbH MyElectric Energievertriebs- u.dienstleistungsGmbH oekostrom Vertriebs GmbH Switch BEWAG Energie AG Oberösterreich EVN AG KELAG ... Salzburg AG A
TIWAG LBANIA Wienstrom Interconnectors Austria has interconnections with the Czech Republic, Hungary, Italy, Germany, Slovenia and Switzerland. -
A u stria erview of the legal the erview of regulatory and in... framework O 468 HERBERT SMITH FREEHILLS v
A ustria (continued) I mpORTER or exporter Importer (mainly from Russia) country? (name origin of gas if importer) Transportation system Gas Connect Austria operator(s) TAG GmbH BOG GmbH Gas distributor(s) Eg Wien Energie Gasnetz EVN Netz GmbH Gasnetz Steiermark Principal gas supplier(s) Eg Wien Energie Vertrieb Erdgas Oberösterreich GmbH & CO KG GAS switch My electric Energievertriebs- u.dienstleistungsGmbH Unsere Wasserkraft Kelag Kärntner Elektrizitäts-AG Interconnectors Trans-Austria-Gas-Pipeline ("TAG"); South-East-Gas-Pipeline ("SOL"); West-Austria-Gas-Pipeline ("WAG"); Hungarian-Austria-Gas Pipeline ("HAG"); and PENTA-West-Pipeline
B elarus
National regulatory President authority (-ies) Council of ministers Ministry of energy Ministry of nature Ministry of economy Unbundling regime (full N/A ownership unbundling general ("FOU"), independent system operator ("ISO"), independent transmission ... operator ("ITO") model A u P riNCIPAL electricity Belenergo, State Industrial Group stria - - stria generator(s) Transmission system Belenergo, State Industrial Group operator(s) Electricity distributor(s) Belenergo, State Industrial Group Principal electricity Belenergo, State Industrial Group B
l supplier(s) E ECTRICITY e
larus Interconnectors Belenergo, State Industrial Group Interconnections with Russia (four), Ukraine (two), Lithuania (five main - and seven low-capcity) and Poland (one, not in operation) erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 469 v
B elarus (continued) I mpORTER or exporter Importer (Russia) country? (name origin of gas if importer) Transportation system Gazprom Transgaz Belarus Ojsc operator(s) Beltopgaz, State Industrial Group Gas distributor(s) Gazprom Transgaz Belarus Ojsc
GAS Beltopgaz, State Industrial Group Principal gas supplier(s) Gazprom Ojsc (Russia) Belneftekthim Interconnectors The “Yamal-Europe” main gas pipeline (passes through Belarus from the Russian border to the Polish border) Low-capacity interconnections with Russia (one), Ukraine (three), Lithuania (two) and Poland (three)
BELGIUM
National regulatory CREG (Federal regulator) authority (-ies) VREG, BRUGEL, CWAPE (Regional regulators) Unbundling regime (full Full ownership unbundling ("FOU") ownership unbundling ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity EDF Luminus, Electrabel (GDF Suez), E.ON generator(s) Transmission system ELIA operator(s) Electricity distributor(s) Aieg Aiesh, Gaselwest, Ideg, Ieh, Infrax West, Inter-Energa, Interest/Interost, Intergem, Interlux, Intermosane, Imea, Imewo, Iveg, Iveka, Iverlek, PBE, Regie De Wavre, Sedilec, Sibelga, Sibelgas, Simogel, Tecteo l E ECTRICITY Principal electricity Electrabel (GDF SUEZ), EDF Luminus, Eneco, Eni Gas & Power, E.ON Belgium, Lampiris, supplier(s) Essent Belgium Interconnectors France, The Netherlands, United Kingdom (forthcoming)
I mpORTER or exporter Importer (Norway, The Netherlands, Russia, United Kingdom, and other LNG-producing countries)
country? (name origin of elarus ... gas if importer) B Transportation system Fluxys operator(s) Gas distributor(s) Gaselwest, Ideg, Igh, Infrax West, Inter-Energa, Intergas Netbeheer, Intergem, Interlux, Imea, GAS Imewo, Iveg, Iveka, Iverlek, Sedilec, Sibelga, Sibelgas, Simogel, Tecteo Principal gas supplier(s) Electrabel (GDF SUEZ), Eni Gas & Power, EDF Luminus, Wingas, Essent Belgium, Lampiris, E. ON Belgium Interconnectors France and Southern Europe, Germany, Luxembourg, The Netherlands, United Kingdom - BELGIUM eve ftelgladrgltr rmwr n. ... legal the erview of regulatory and in... framework O 470 HERBERT SMITH FREEHILLS v
BOSNIA AND HERZEGOVINA National regulatory Authorities in the electricity sector are divided between the central level government and the authority (-ies) entities. The central government does not have authority in other energy sectors (renewables, oil, gas). At central level: State Electricity Regulatory Commission ("SERC") In the Republic of Srpska ("RS"): Regulatory Commission for Energy of Republic of Srpska ("RCERS") – authoritiy in all energy sectors In the Federation of Bosnia and Herzegovina ("FBH"): Regulatory Commission for Energy of Federation of Bosnia and Herzegovina ("FERC") – authority in
general the electricity sector only. Ministry of Energy, Mining and Industry – authority in oil and gas sector Unbundling regime (full The functions of transmission and distribution of electricity are unbundled in different public ownership unbundling enterprises. ("FOU"), independent system Generation and supply/distribution are legally unbundled in the RS, but not in the FBH. operator ("ISO"), independent transmission Supply and distribution of electricity are still united in state owned entities in both the RS and in FBH. operator ("ITO") model BO SNIA
AND
HERZEGOVINA erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 471 v
BOSNIA AND HERZEGOVINA (continued) P riNCIPAL electricity In the RS: generator(s) Mixed Holding Electric Power Company of the Republic of Srpska ("EPC") through its subsidiaries. In the FBH: Electric Power Company of Bosnia and Herzegovina ("EPBH"); and Electric Power Company of Croatian Community of Herceg Bosnia ("EPCUHB"). Transmission system Independent System Operator of Bosnia and Herzegovina ("ISO"), responsible for the operation of operator(s) the transmission grid, provision of auxiliary services and coordination of Bosnian cross-border transmission capacities. Transmission Company (Elektroprenos), responsible for management, maintenance and improvement of the transmission grid. Electricity distributor(s) In the RS: Five subsidiaries of the EPC: Elektro Doboj Elektro – Bijeljina Elektrokrajina Elektrodistribucija Elektro-Herzegovina
In the FBH: l E ECTRICITY EPBH EPCHUBG Principal electricity In the RS: supplier(s) Five subsidiaries of the EPC: Elektro Doboj Elektro – Bijeljina Elektrokrajina Elektrodistribucija Elektro-Herzegovina
In the FBH: EPBH EPCHUBG snia ... Interconnectors Bosnia and Herzegovina has interconnections with Serbia, Croatia and Montenegro BO Inter-connectors are co-ordinated by the ISO. Cross-border capacities are awarded in auctions conducted by the ISO.
I mpORTER or exporter Importer (Russia)
country? (name origin of AND gas if importer) Transportation system In the RS:
operator(s) Gas Promet HERZEGOVINA In the FBH: BH GAS Gas distributor(s) In the RS: Gas Promet, Zvornik Stan GAS In the FBH: BH GAS Principal gas supplier(s) In the RS: Gas Promet. Zvornik Stan, Sarajevo Gas a.d. Istočno Sarajevo In the FBH: KJKP Sarajevo Gas d.o.o. Sarajevo, Visoko Gas Interconnectors BH GAS erview of the legal the erview of regulatory and in... framework O 472 HERBERT SMITH FREEHILLS v
BULGARIA National regulatory State Energy and Water Regulatory Commission authority (-ies) Minister of Economy, Energy and Tourism Agency for Sustainable Energy Development Unbundling regime (full ITO ownership unbundling
general ("FOU"), independent system operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Nuclear power plant Kozloduy (2,000MW) generator(s) Thermal power plant AES Maritza East I (670MW) Thermal power plant Maritza East II (1,556MW) Thermal power plant Maritza East III (906MW) CEZ thermal power plant in Varna (1,260MW) Transmission system Electricity System Operator EAD (a wholly-owned subsidiary of Bulgarian Energy Holding EAD) operator(s) Electricity distributor(s) EVN Electrorazpredelenie AD (EVN Grid) ČEZ Razpredelenie Bulgaria AD (ČEZ Grid) Energo-Pro Mrezhi AD (Energo-Pro Grid) Principal electricity NEK EAD l
E ECTRICITY supplier(s) EVN Electrosnabdyavane AD ČEZ Electro Bulgaria AD Energo-Pro Prodazhbi AD Interconnectors Greece (1) Macedonia (3) Romania (4) Serbia (3) Turkey (2)
I mpORTER or exporter Importer (Russia) ... country? (name origin of
B gas if importer) ULGARIA Transportation system Bulgartransgaz EAD operator(s) Gas distributor(s) Local distribution companies, most of which are subsidiaries of Overgas AD
GAS Principal gas supplier(s) Bulgargaz EAD Interconnectors Greece
- Macedonia
CROATIA Romania Turkey
CROATIA
National regulatory The Croatian Energy Regulatory Agency (Hrvatska energetska regulatorna agencija; "HERA") authority (-ies) Unbundling regime (full Electricity – ITO ownership unbundling Gas – FOU ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 473 v
CROATIA (continued) P riNCIPAL electricity According to HERA's licence registry a total of 28 companies are licensed as electricity generators, generator(s) among which the two most important are: HEP Proizvodnja d.o.o TE Plomin d.o.o. Transmission system Hrvatski operator prijenosnog sustava d.o.o. ("HOPS") operator(s) Electricity distributor(s) HEP Operator distribucijskog sustava d.o.o. ("HEP-ODS")
Principal electricity HEP – Opskrba d.o.o. supplier(s) GEN-I Zagreb d.o.o. RWE ENERGIJA d.o.o. Interconnectors Croatia ("HEP") has cross border interconnections with all of its neighbours (Slovenia, Serbia, Bosnia and Herzegovina and Hungary) save for Montenegro and Italy. These are, inter alia, the following: Mraclin–Prijedor (Bosnia and Herzegovina) Ernestinovo-Pecs (Hungary) l
E ECTRICITY Savudrija – Planais (Italy) Melina –Divača (Slovenia) – Redipuglia (Italy) Pehlin – Divača (Slovenia) - Padriciano (Italy) Tumbri – Krško (Slovenia) Đakovo – Tuzla (Bosnia and Herzegovina) Đakovo – Grad Žerjavinec – Heviz (Hungary) Međurić – Prijedor (Bosnia and Herzegovina) Plat – Trebinje (Bosnia and Herzegovina) – Podgora (Monte Negro) Konjsko – Podgora (Monte Negro) Zakučac – Podgora (Monte Negro) Ernestinovo – Ugljevik (Bosnia and Herzegovina) – Sremska Mitrovica (Serbia)
I mpORTER or exporter PRIRODNI PLIN d.o.o. atia ... country? (name origin of The company has entered into a formal gas import agreement with the Italian company Eni for the CRO gas if importer) period of 1 January 2011 until 31 December 2013. Transportation system PLINACRO d.o.o. operator(s) Gas distributor(s) According to HERA's licence registry a total of 36 companies are licensed as gas distributors, among which the two most important are: HEP Plin d.o.o. GRADSKA PLINARA ZAGREB d.o.o. Principal gas supplier(s) According to HERA's licence registry a total of 54 companies are licensed as gas suppliers, among
GAS which the most important are: PRIRODNI PLIN d.o.o. ENERGO d.o.o. PLIN-PROJEKT d.o.o. GRADSKA PLINARA ZAGREB – OPSKRBA d.o.o. INA-INDUSTRIJA NAFTE d.d. Interconnectors Rogatec between Croatia and Slovenia (Geoplin) as the supply route for Russian gas since 1978 Slobodnica-Donji Miholjac-Dravaszerdahely-Bata-Városfold between Croatia and Hungary (Földgázszállító Zrt.) since August 2011 eve ftelgladrgltr rmwr n. ... legal the erview of regulatory and in... framework O 474 HERBERT SMITH FREEHILLS v
Cyprus National regulatory Cyprus Energy Regulation Authority ("CERA") authority (-ies) Unbundling regime (full Liberalised by approximately 65% in total with effect from January 2009. ownership unbundling ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Electricity Authority of Cyprus ("EAC") generator(s) Transmission system The transmission system operator which was established pursuant to electricity market operator(s) regulation law. Electricity distributor(s) The distribution system operator which remains under EAC. Principal electricity EAC ELECTRICITY supplier(s) Interconnectors Cyprus currently has no cross-border links.
I mpORTER or exporter N/A country? (name origin of gas if importer) Transportation system N/A operator(s) GAS Gas distributor(s) N/A Principal gas supplier(s) N/A Interconnectors N/A
C zech Republic
National regulatory The Energy Regulatory Office (Energetický Regulační Úřad) authority (-ies) Unbundling regime (full FOU in electricity sector, ITO in gas sector ownership unbundling ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model C y P riNCIPAL electricity ČEZ (70% from overall electricity production) p generator(s) r Transmission system ČEPS us - us operator(s) Electricity distributor(s) ČEZ, EON, PRE Principal electricity ČEZ C ELECTRICITY supplier(s) zech Interconnectors Two cross-border inter-connectors with Germany, two with Austria, five with Slovakia and four with Poland.
R I mpORTER or exporter Importer (Russia and Norway)
e country? (name origin of
p gas if importer) u Transportation system NET4GAS blic operator(s) Gas distributor(s) RWE , E.ON, VČP NET, SMP NET, JMP NET, PRAŽSKÁ PLYNÁRENSKÁ DISTRIBUCE GAS Principal gas supplier(s) RWE Interconnectors Five international transfer stations: BRANDOV, HORA SV. KATEŘINY, WAIDHAUS, LANŽHOT, CIEISZYN. Six compressor stations erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 475 v
D enmark National regulatory The Danish Energy Regulatory Authority ("DERA") (Energitilsynet) authority (-ies) Unbundling regime (full Electricity & Gas: FOU already completed ownership unbundling ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Dong Energy A/S Vattenfall A/S generator(s) Transmission system Energinet.dk operator(s) Electricity distributor(s) Approximately 75 grid companies Principal electricity Dong energy supplier(s) Energi danmark Nordjysk elhandel Sydenergi Seas-nve Interconnectors Eastern Denmark: ELECTRICITY Sweden: four AC connections – two 400kV cable connections and two 132kV cable connections with a total capacity of some 1900MW Germany: one 400kV dc connection with a transmission capacity of 600MW Sweden: two 250kV dc connections with a total transmission capacity of 740MW Norway: three dc connections with a total transmission capacity of 1,040MW. An expansion of this interconnection is being planned, and is due to be commissioned by the end of 2014 Germany: four ac connections. the capacity is northbound 950MW and southbound 1,500MW
I mpORTER or exporter Exporter country? (name origin of gas if importer) Transportation system Energinet.dk operator(s) Gas distributor(s) Dong Energy A/S enmark ... HMN Naturgas I/S D Naturgas Fyn Aalborg Municipality Principal gas supplier(s) Dong Energy HMN Naturgas I/S
GAS Naturgas FYN Aalborg Municipality OK Shell Nordjysk Elhandel Sydfyns Elforsyning TRE-FOR Energi Nord A/S Sydenergi Interconnectors One between Denmark and Sweden and one between Denmark and Germany. erview of the legal the erview of regulatory and in... framework O 476 HERBERT SMITH FREEHILLS v
E stonia National regulatory Estonian Competition Authority authority (-ies) Unbundling regime (full Electricity sector: FOU ownership unbundling Gas sector: Estonia is exempt from the unbundling requirement, however, has decided to apply FOU ("FOU"), independent system from 2015 general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Eesti Energia Narva Elektrijaamad AS (c.85%) generator(s) Transmission system Elering AS operator(s) Electricity distributor(s) Elektrilevi OÜ (c.88%) Principal electricity Eesti Energia AS (c.70%) supplier(s) Elektrum Eesti OÜ (c.13%) ELECTRICITY Interconnectors Isolated from the main European grid and directly connected to the Russian transmission grid. The only exception is Estlink 1 cable (350MW) between Estonia and Finland. Construction of Estlink 2 (650MW) between Estonia and Finland is under way. It is expected to be commissioned at the beginning of 2014.
I mpORTER or exporter All gas supplies are imported from Russia (either directly or via Latvia). country? (name origin of gas if importer) Transportation system AS EG Võrguteenus operator(s)
GAS Gas distributor(s) AS Gaasivõrgud (c.69%) Principal gas supplier(s) AS Eesti Gaas (c.90%) All other suppliers purchase gas for re-selling from AS Eesti Gaas Interconnectors Only connections are with Russia and Latvia ... E s tonia erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 477 v
FINLAND National regulatory The Finnish Energy Market Authority ("FEMA"). FEMA is within the administrative branch of the authority (-ies) Finnish Ministry of Employment and the Economy. FEMA supports and monitors the activities of the electricity and natural gas market. Unbundling regime (full Electricity: FOU regarding the sole TSO has been carried out in practice. ownership unbundling Legal and operating unbundling required for large and mid-size DSOs and unbundling in accounts for ("FOU"), independent system
general small DSOs. operator ("ISO"), independent transmission Gas: Finland has made use of an exemption from the unbundling requirements under the Third Gas operator ("ITO") model Directive.
P riNCIPAL electricity Fortum Oyj, Helsingin Energia Oy, Pohjolan Voima Oy, Teollisuuden Voima Oy and Kemijoki Oy. generator(s) Further, Vattenfall and E.ON. have a notable market share. Transmission system Fingrid Oyj. operator(s) Owned by the state and institutional investors. Electricity distributor(s) Licences issued to 83 distribution network operators (below 110kV lines) for specific geographic areas and to 13 regional network operators (110kV lines). Most of the DSOs are owned by municipalities and the smallest companies serve only the area of a single municipality. Principal electricity Today, the number of retailers is less than 100. ELECTRICITY supplier(s) Electricity retail supply does not require a licence. Customers may purchase the electricity from any supplier. Retail sales are carried out directly by electricity suppliers or smaller local retailers. Interconnectors To Sweden, Norway, Estonia and Russia. Fingrid Oyj owns the interconnectors to Sweden, Norway and Russia. One interconnector to Estonia is currently owned by Nordic Energy Link AS, but it will be acquired by Fingrid Oyj. Further, Fingrid Oyj is in charge of the construction project of a second submarine interconnector to Estonia.
I mpORTER or exporter Importer (Russia). country? (name origin of gas if importer) Transportation system Gasum Oy. operator(s) Major shareholders are Fortum, Gazprom the Finnish State and E.ON. Gas distributor(s) Licenses issued to 23 distribution network operators (including Gasum Paikallisjakelu Oy).
Many of the DSOs are owned by municipalities. inland ... GAS
Principal gas supplier(s) Approximately 95% of gas consumed in Finland is transmitted directly by Gasum Oy to end-users, F mainly industrial operators. About 5% of the imported gas is being sold through local retailers and energy companies. Selling natural gas does not require a licence, but the vendor must nevertheless fulfill certain requirements. Interconnectors Two pipelines between Finland and Russia and they are operated by Gasum Oy. The construction of a pipeline (Balticconnector) between Finland and Estonia is being planned. erview of the legal the erview of regulatory and in... framework O 478 HERBERT SMITH FREEHILLS v
france National regulatory Ministry of Energy authority (-ies) Commission de régulation d'énergie ("CRE") Unbundling regime (full ITO model. ownership unbundling ("FOU"), independent system general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity EDF, Compagnie du Rhône, E.ON. generator(s) Transmission system Réseau de transport d'électricité ("RTE") operator(s) Electricity distributor(s) Electricité Réseau Distribution France ("ERDF") and approximately 160 local distributors. Principal electricity EDF, GDF SUEZ, E.ON, Alpiq, Enel, Poweo and Direct Energie ELECTRICITY supplier(s) Interconnectors Italy, UK, Germany, Spain, Belgium and Switzerland
I mpORTER or exporter Importer, notably from Norway, the Netherlands, Algeria and Russia. country? (name origin of gas if importer) Transportation system GRTgaz and TIGF operator(s) GAS Gas distributor(s) GrDF and approximately 25 local distributors. Principal gas supplier(s) GDF SUEZ, Direct Energie, EDF, E.ON, Eni, Iberdrola, Gazprom and other suppliers. Interconnectors Belgium, Germany, Switzerland and Spain. ... F RANCE erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 479 v
G ermany National regulatory Federal Network Agency (Bundesnetzagentur); Network Agencies of the Federal States authority (-ies) Unbundling regime (full FOU, ISO, and ITO ownership unbundling ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity EnBW, E.ON, RWE, Vattenfall, and municipality owned companies (Stadtwerke) generator(s) Transmission system 50Hz Transmission, Amprion, EnBW Transportnetze, TenneT TSO operator(s) Electricity distributor(s) Approx. 850; more than 700 have < 30,000 customers Principal electricity EnBW, E.ON, RWE, Vattenfall, and municipality owned companies (Stadtwerke)
ELECTRICITY supplier(s) Interconnectors Austria, Switzerland, France, Luxembourg, Belgium, Netherlands, Denmark, Poland, Czech Republic
I mpORTER or exporter Importer (35% from Russia, 25% from Norway, 20% from the Netherlands; the remaining 20% are country? (name origin of produced domestically) gas if importer) Transportation system Bayernets, operator(s) Eni Gas Transport Deutschland, Erdgas Munster Transport, EWE Netz, Gasunie Deutschland ("GUD"), GRTgaz Deutschland, GVS Netz, GAS ONTRAS – VNG Gastransport, Open Grid Europe, Statoil Deutschland Transport, Thyssengas, rmany ... WINGAS TRANSPORT G Gas distributor(s) Federal Network Agency (Bundesnetzagentur); Network Agencies of the Federal States e Principal gas supplier(s) FOU, ISO, and ITO Interconnectors EnBW, E.ON, RWE, Vattenfall, and municipality owned companies (Stadtwerke) erview of the legal the erview of regulatory and in... framework O 480 HERBERT SMITH FREEHILLS v
G reece National regulatory Regulatory Authority for Energy ("RAE") authority (-ies) Unbundling regime (full Independent Transmission Operator ("ITO") ownership unbundling ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Public Power Corporation ("PPC"), Heron Thermoilektriki I, Heron II Viotia, Motor Oil, Elpedison, generator(s) Protergia Transmission system ITO (ex Hellenic Transmission System Operator or HTSO) operator(s) Electricity distributor(s) Hellenic Distribution Network Operator ("HDNO") Principal electricity PPC, Heron Thermoilektriki ELECTRICITY supplier(s) Interconnectors Albania, FYROM, Bulgaria, Turkey, Italia
I mpORTER or exporter Importer (Piped gas from Russia and Turkey and LNG from Algeria) country? (name origin of gas if importer) Transportation system National Natural Gas Transmission System Operator (NNGTS Operator or DESFA as per its Greek operator(s) initials) GAS Gas distributor(s) Gas Distribution Companies (EPAs as per their Greek initials) Principal gas supplier(s) Public Gas Company (DEPA as per its Greek initials), M&M Interconnectors Turkey, Bulgaria
Hungary
National regulatory Hungarian Energy and Public Utility Regulatory Authority authority (-ies) (Magyar energetikai és közmű-szabályozási hivatal)
Unbundling regime (full ITO ownership unbundling
general ("FOU"), independent system
... operator ("ISO"),
G independent transmission operator ("ITO") model reece -
P riNCIPAL electricity MVM Zrt. (Paksi Atomerőmű Zrt.), GDF SUEZ (Dunamenti Erőmű Zrt.), RWE (Mátrai Erőmű Zrt.), generator(s) Alpiq (Alpiq Csepeli Erőmű Kft.), AES (AES-Tisza Erőmű Kft.), EDF (Budapesti Erőmű ZRt.) Transmission system Mavir Zrt. operator(s) H Electricity distributor(s) Elmű Hálózati kft., E.on Dédász zrt., E.on Édász zrt., E.on Titász zrt., EDF DÉMÁSZ Hálózati Elosztó u Kft., ÉMÁSZ Hálózati Kft. ngary Principal electricity AES Hungary Energiaszolgáltató Kft., Alpiq energia magyarország kft., Elmű Nyrt., E.ON supplier(s) Enrgiaszolgáltató kft., EDF Démász Zrt., Émász Nyrt., Dalkia Energia Zrt., Mász Kft., GDF Suez Energia Magyarország Zrt., MVM Trade Zrt. ELECTRICITY Interconnectors Göd – Levice (Slovakia), Győr – Gabčikovo (Slovakia), Albertirsa – Zakhidnoukrainska (Ukraine), Kisvárda – Mukačevo (Ukraine), Sajószöged – Mukačevo (Ukraine), Tiszalök – Mukačevo (Ukraine), Békéscsaba – Nadab (Romania), Sándorfalva – Arad (Romania), Hévíz – Zerjavinec (Croatia), Sándorfalva – Subotica (Serbia), Győr – Wien Südost (austria), Győr – Neusiedl (Austria), Győr – Wien Südost (Austria) erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 481 v
Hungary (continued) I mpORTER or exporter Importer (Russia) country? (name origin of gas if importer) Transportation system Földgázszállító Zrt. operator(s) Gas distributor(s) Dbgáz kft., E.ON Ddgáz Zrt., Égáz-Dégáz Földgázelosztó Zrt., ISD POWER Kft., FŐGÁZ
GAS Földgázelosztási Kft., Magáz kft., Oerg kft., TIGÁZ-DSO kft., E.ON Kögáz zrt., Alpiq Csepeli Erőmű Kft., NGS Kft. Principal gas supplier(s) GDF SUEZ Energia Magyarország Zrt., ISD POWER Kft., Főgáz Zrt., Tigáz zrt., Magyar Földgázkereskedő Zrt., Alpiq csepeli erőmű kft., EDF Démász Zrt., Mol Energiakereskedő Zrt. Interconnectors Beregdaróc/Ukrtansgas (Ukraine), Mosonmagyaróvár/OMV Gas (Austria), Kiskundorozsma/ Srbijagas (Serbia), Csanádpalota/Transgaz (Romania), Drávaszerdahely/Plinacro (Croatia)
ICELAND
National regulatory National Energy Authority (Orkustofnun) authority (-ies) Unbundling regime (full Hybrid of ITO and FOU. An obligation to become FOU by 1 January 2015. ownership unbundling ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Landsvirkjun, Reykjavík energy (Orkuveita Reykjavíkur), HS Energy (HS Orka), Fallorka and Rarik. generator(s) Transmission system Landsnet operator(s) Electricity distributor(s) Rafveita Reyðafjarðar, HS Veitur, Norðurorka, Rarik, Reykjavík Energy (Orkuveita Reykjavíkur) and Orkubú Vestfjarða.
ELECTRICITY Principal electricity Orkusalan, Reykjavík Energy (Orkuveita Reykjavíkur), Hs Energy (HS Orka), Fallorka and Orkubú supplier(s) Vestfjarða. Interconnectors No interconnectors in place. Several submarine cable projects are being considered.
I mpORTER or exporter N/A country? (name origin of gas if importer) ngary - ... Transportation system N/A H operator(s) GAS u Gas distributor(s) N/A Principal gas supplier(s) N/A Interconnectors N/A ICELAND erview of the legal the erview of regulatory and in... framework O 482 HERBERT SMITH FREEHILLS v
I reland National regulatory Commission For Energy Regulation ("CER") authority (-ies) Unbundling regime (full Electricity Sector: ISO Model ownership unbundling Gas sector: ito model ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity ESB, SSE, Viridian and bord Gáis Éireann generator(s) Transmission system Eirgrid operator(s) Electricity distributor(s) ESB Networks Limited Principal electricity Electric Ireland ("ESB"), Airtricity ("SSE"), Bord Gáis Éireann and Energia (Viridian) supplier(s) ELECTRICITY Interconnectors 500MW East-West interconnector between Ireland and Wales (operated as a single transmission system with Northern Ireland: 500mw HVDC moyle interconnector between Northern Ireland and Scotland)
I mpORTER or exporter Ireland Is a net importer of gas from The United Kingdom country? (name origin of gas if importer) Transportation system Bord Gáis Éireann was certified as ITO on 23 July 2013. It is anticipated that BGE will also be certified operator(s) as ISO.
GAS Gas distributor(s) Gaslink (wholly owned subsidiary of bord gáis Éireann) Principal gas supplier(s) Bord Gáis Éireann, Viridian, Electric Ireland, Airtricity And Vayu Interconnectors Two sub-sea interconnectors between Ireland and Scotland South North pipeline connecting Ireland and Northern Ireland
I taly
National regulatory Ministry of Economic Development; authority (-ies) Authority for Electricity and Gas (Autorità per l'Energia Elettrica ed il Gas, "AEEG") Antitrust Authority (Autorità Garante della Concorrenza e del Mercato, "AGCM")
... Unbundling regime (full FOU model with reference to both the major Italian electricity (Terna S.p.A.) and gas (Snam Rete
I ownership unbundling Gas) TSOs RELAND ("FOU"), independent system general operator ("ISO"), independent transmission operator ("ITO") model -
P riNCIPAL electricity ENEL Group (25.4%), ENI Group (9.5%), EDISON Group (7.2%), E.On Group (4.4%), Edipower ITALY generator(s) Group (3.9%), GdF Suez (3.6%), A2A (3.2%) Transmission system Terna S.p.A. operator(s) Electricity distributor(s) Enel Distribuzione (86%), A2A Reti Elettriche (3.9%), Acea Distribuzione (3.2%), Aem Torino Distribuzione (1.3%) Almost 140 distributors with less than 1% of volume of electricity distributed. Principal electricity Enel Group (38%), Edison Group (6.4%), Acea Group (4.3%), Iren Group (3.7) supplier(s)
ELECTRICITY Interconnectors Italy imports approximately 13.2% of electricity through the interconnection lines along the Northern border. 22 cross-borders interconnection lines are currently in operation with Switzerland, Austria, France, Slovenia and Greece. Three new cross-borders interconnections were authorised in 2013 and they will operate in the next future with France, Montenegro and Malta. erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 483 v
ITALYcn ( o tinued) I mpORTER or exporter Approximately 90% of Italian gas consumption is imported from abroad, mainly from the following country? (name origin of countries: gas if importer) Russia (about 35%) Algeria (about 30%) Qatar (about 9%) Netherlands, Norway and Northern Europe (about 13%) Libya (about 9%) The 10% of gas which originate in Italy is predominantly produced by Eni S.p.A. Transportation system Snam Rete Gas S.p.A. operator(s) Società Gasdotti Italia Infrastrutture Trasporto Gas (formerly Edison Stoccaggio) Gas distributor(s) Snam S.p.A. (23.1%) F2i Reti Italia (16.9%) Hera Group (6.5%) A2A Group (5.9%) Iren (5.9%) Several Local Authorities (Municipalities) owned and minor private companies. Principal gas supplier(s) Eni (28.1%) Enel Group (10.9%) GAS Edison Group (8.8%) Gdf Suez Group (5.5%) Iren Group (4.3%) E.On (4.2%) Hera Group (3.7%) Interconnectors Gas cross-borders interconnection currently in operation (managed by Snam Rete Gas) are connected to the Italian grid at the following entry points (five pipelines and two LNG regasification terminals): Mazara del Vallo (Sicily) Tarvisio (Friuli Venezia Giulia) taly ... Passo Gries (Lombardy) I Gela (Sicily) Gorizia (Friuli Venezia Giulia) Panigaglia (Liguria) Rovigo (Veneto) New interconnection projects include the Trans Adriatic Pipeline ("TAP") between Italy and Greece via Albania, the IGI Poseidon interconnector between Italy and Greece, the GALSI project, between Algeria and Italy and the Tauer Gas Pipeline ("TGL") between Italy Austria and Germany currently under evaluation. erview of the legal the erview of regulatory and in... framework O 484 HERBERT SMITH FREEHILLS v
KAZAKHSTAN National regulatory Government of the Republic of Kazakhstan authority (-ies) Ministry of Industry and New Technologies of the Republic of Kazakhstan – the Committee of the State Energy Control and Supervision and the Committee on Atomic Energy Ministry of Oil and Gas of the Republic of Kazakhstan Agency of the Republic of Kazakhstan for Regulation of Natural Monopolies ("AREM") Agency of the Republic of Kazakhstan for Competition Protection
general Unbundling regime (full FOU ownership unbundling ("FOU"), independent system operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Thermal stations of national importance: generator(s) LLP Ekibastuz GRES-1; JSC Ekibastuz GRES -2; JSC Eurasian Energy Corporation( Aksu TPP); LLP TPP Kazakhmys Corporation; JSC Jambul TPP. Republican hydropower stations: Bukhtarminskaya HES; AES Ust-Kamenogorskaya HES; AES Shulbinskaya HES; Moinakskaya HES. Transmission system National Electrical Grid operated by KEGOC JSC operator(s) Electricity distributor(s) Regional Electricity Companies, for example: ELECTRICITY Akmolinskaya Raspredelitelnaya Electrosetevaya Kompaniya JSC Mangistauskaya Raspredelitelnaya Electrosetevaya Kompaniya JSC Pavlodarskaya Raspredelitelnaya Electrosetevaya Kompaniya JSC
... Principal electricity Ontistyk Zharyk LLP, supplier(s) K AktobeenergosnabLLP,
AZAKHSTAN Karagandyzhylusbyt LLP, SeverEnergoTradeLLP, Zhezkazganenergosbyt LLP, Severo-Kazakhstanskyi Energocentr LLP, Shygysenergotrade LLP Overall about 45 companies. Interconnectors Interconnected with 11 CIS power systems.
I mpORTER or exporter Importer and exporter. Imported Russian and Uzbek gas is swapped with Karachaganak exporting country? (name origin of gas at the same price and in equal amounts. gas if importer) The volume of imported gas is approx. 1/3 of exported gas. Transportation system KazTransGas JSC is the national gas operator. operator(s) Gas distributor(s) National Company KasTransGas JSC and its subsidiary companies, for example, KazTransGas Distribution JSC GAS Principal gas supplier(s) National Company KasTransGas JSC and its subsidiary companies, for example, KazTransGas -Almaty Interconnectors The gas pipelines in Kazakhstan, which functioned as an integral part of the USSR single-union system, mainly serve the transit flows of natural gas from Central Asia to the European part of Russia, Ukraine and the Transcaucasian states. Projects on development of interconnectors, for example, with Russia and China, are in process. erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 485 v
LATVIA National regulatory Ministry of Economics, Public Utilities Commission authority (-ies) Unbundling regime (full ISO ownership unbundling ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity AS Latvenergo generator(s) Transmission system AS Augstsprieguma Tikls operator(s) Electricity distributor(s) AS Sadales Tikls Principal electricity AS Latvenergo ELECTRICITY supplier(s) Interconnectors Estonia, Lithuania, Finland (Estlink)
I mpORTER or exporter Importer (Russia) country? (name origin of gas if importer) Transportation system AS Latvijas Gaze operator(s) GAS Gas distributor(s) AS Latvijas Gaze Principal gas supplier(s) AS Latvijas Gaze Interconnectors Estonia, Lithuania
LITHUANIA
National regulatory National Control Commission for Prices and Energy authority (-ies) Unbundling regime (full FOU ownership unbundling ("FOU"), independent system
general operator ("ISO"), independent transmission
operator ("ITO") model atvia ... L P riNCIPAL electricity Lietuvos Energijos Gamyba AB (includes Lietuvos Elektrinė Power Plant, Kruonis Hydro Pumped generator(s) Storage Power Plant and Kaunas Hydropower Plant), Vilniaus energija UAB, Kauno termofikacijos elektrine UAB, INTER RAO Lietuva UAB (importer), Panevėžio energija AB. Transmission system LITGRID AB
operator(s) -
Electricity distributor(s) LESTO AB LITHUANIA Principal electricity LESTO AB, INTER RAO Lietuva UAB, Enefit UAB, Electrum Lietuva UAB (previously known as
ELECTRICITY supplier(s) Latvenergo Prekyba UAB), Energijos Tiekimas UAB, SBE Energy UAB. Interconnectors Four 330kV and three 110kV lines connecting to the Latvian system; five 330kV and seven 110kV lines connecting to the Belarusian system; three 330kV and three 110kV lines connecting to the Kaliningrad system
I mpORTER or exporter Importer (Russia) country? (name origin of gas if importer) Transportation system Amber grid AB operator(s) GAS Gas distributor(s) Lietuvos dujos AB Principal gas supplier(s) Lietuvos dujos AB, Dujotekana UAB Interconnectors Minsk (Belarus) – Vilnius (Lithuania) pipeline, Riga (Latvia) – Vilnius (Lithuania) pipeline, Kaliningrad (Russia) – Vilnius (Lithuania) pipeline. erview of the legal the erview of regulatory and in... framework O 486 HERBERT SMITH FREEHILLS v
LUXEMBOURG National regulatory Institut Luxembourgeois de Régulation authority (-ies) Unbundling regime (full Exemption for small grids (art. 44(2) Electricity Directive/article 49(6) Gas Directive) ownership unbundling ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Societe Electrique de L'our (SEO) generator(s) Twinerg
Transmission system Creos operator(s) Sotel (industrial grid) Electricity distributor(s) Creos Electris Sudstroum Ville d'ettelbruck Ville de diekirch Principal electricity Enovos
ELECTRICITY supplier(s) Leo Electris Sudstroum Steinergy Eida Nordenergie Interconnectors Creos (Germany) Sotel (Belgium)
I mpORTER or exporter Importer (Norway, Russia, Qatar, Netherlands) country? (name origin of
... gas if importer)
L Transportation system Creos
UXEMBOURG operator(s) Gas distributor(s) Creos Sudgaz GAS Ville de Dudelange Principal gas supplier(s) Enovos Leo Sudgaz Interconnectors Creos (Germany, Belgium and France) erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 487 v
former yugoslavia REPUBLIC OF MACEDONIA National regulatory The national regulatory body in the energy sector in the Republic of Macedonia is the Energy authority (-ies) Regulatory Commission ("ERC"). Unbundling regime (full In 2006 the the Electric Power Company of Macedonia ("ESM") was transformed and the ownership unbundling distribution of electricity was unbundled from the transmission and production of electricity. ("FOU"), independent system Today, the main producer of electricity Macedonian Power Plants JSC Skopje ("ELEM"), the system general operator ("ISO"), operator and the transmission operator ("MEPSO") and a private distributor ("EVN Macedonia") independent transmission are derived companies from the ESM. The first two companies are 100% state owned companies. operator ("ITO") model
P riNCIPAL electricity ELEM operates with two out of three thermal power plants in the Republic of Macedonia. ELEM also generator(s) operates the significant hydropower plants in the country. ELEM produces over 90% of the domestically produced electricity. Transmission system The Macedonian Energy System Operator MEPSO is a 100% state owned company with three operator(s) main activities: (i) transmission of electricity, (ii) operating of the electricity market, and (iii) management of the power system in the Republic of Macedonia. MEPSO holds the respective exclusive licences issued by the ERC for these activities, for the period until 2040. Electricity distributor(s) EVN Macedonia operates the distribution and electrical supply system in the Republic of Macedonia. ELEM also has a licence for distribution of electricity. Principal electricity EVN Macedonia operates the distribution and electrical supply system in the Republic of supplier(s) Macedonia. ELECTRICITY ELEM, MEPSO and GEN-I are companies that have obtained licences for supply of electricity. Interconnectors There are cross-border interconnectors between the Republic of Macedonia and: (i) Serbia (400kV lines); (ii) Republic of Bulgaria (400 kV lines); (iii) Greece (400 kV lines). The system operator MEPSO organises joint auctions for granting the right to use of the available cross border transmission lines between MEPSO and the neighbouring system operators. The right to use is granted on the principle of marginal price.
I mpORTER or exporter Republic of Macedonia is an importer of natural gas, trough Russian transit gas pipeline on country? (name origin of International Corridor 8 which passes through Ukraine, Moldavia, Romania and Bulgaria. gas if importer) ...fyro ...fyro Transportation system Jointly owned joint stock company GA MA is the national operator of the natural gas network, operator(s) owned by the Government of the Republic of Macedonia and local oil derivatives distribution "Makpetrol AD Skopje". The company operates and manages the natural gas transmission system and third party access. Gas distributor(s) The Directorate for Technological Industrial Development Zones is the licence holder for implementation of energy-relating activities of natural gas distribution, natural gas distribution MACEDONIA system management and natural gas supply to tariff-based consumers in its scope which are connected to the natural gas distribution system. JP Kumanovo Gas and JP Strumica Gas also hold licences for natural gas distribution and natural gas
GAS supply to tariff-based consumers connected to the natural gas distribution system in the respective municipalities (i.e. Kumanovo and Strumica). Principal gas supplier(s) Makpetrol-Prom Gas DOOEL Skopje has a licence for national supply of natural gas to tariff consumers. The Directorate for Technological Industrial Development Zones is licensed for supply of natural gas in the zones it manages. JP Kumanovo Gas and JP Strumica Gas have licences for supply of natural gas in the respective municipalities. Interconnectors The cross border interconnection, where Republic of Macedonia is currently connected to the gas pipe is on the border between Republic of Macedonia and Republic of Bulgaria, in the area called Deve Bair. As system operator, the company GA MA is authorised for granting the right of use of available cross border transmission lines. erview of the legal the erview of regulatory and in... framework O 488 HERBERT SMITH FREEHILLS v
MALTA National regulatory MRA (Malta resources Authority) authority (-ies) Unbundling regime (full In relation to electricty, there is a derogation from requirements of TSO's and DSO's and in relation ownership unbundling to gas, there is also a derogation from the requirements of unbundling of TSO's. ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Enemalta Corporation generator(s) Transmission system N/A operator(s) Electricity distributor(s) Enemalta Corporation Principal electricity Enemalta Corporation supplier(s) ELECTRICITY Interconnectors Electricity Interconnector linking Malta to the European Power Grid in Sicily which is to be commissioned by the end of 2014. A second interconnector is being considered for construction by end 2015.
I mpORTER or exporter Malta remains an importer of gas. No data is available as to the current name and origin of gas. country? (name origin of However by spring 2015 Electrogas Malta Consortium will be required to construct a gas if importer) ombined-cycle gas turbine ("CCGT") power plant, and lng floating storage unit and an onshore regasification unit at Delimara. Transportation system Easygas (Malta) Ltd and Liquigas Malta Ltd operator(s) GAS Gas distributor(s) Easygas (Malta) Ltd and Liquigas Malta Ltd Principal gas supplier(s) Easygas (Malta) Ltd and Liquigas Malta Ltd Interconnectors There is a proposal for the construction of a 150km gas pipeline between Malta and Sicily and this was recently included in the list of projects for EU funding.
MONTENEGRO
National regulatory Regulatory Agency for Energy authority (-ies) Unbundling regime (full ITO
... ownership unbundling ("FOU"), independent system MAL
general operator ("ISO"), independent transmission operator ("ITO") model TA
- P riNCIPAL electricity EPCG
MONTENEGRO generator(s) Transmission system Crnogorski elektroprenosni sistem ("CGES") operator(s) Electricity distributor(s) EPCG Principal electricity EPCG supplier(s) Interconnectors Serbia - (two interconnectors of 220kV, one interconnector of 110kV and one interconnector of ELECTRICITY 440kV Kosovo); Bosnia and Herzegovina – (one interconnector of 400kV and two interconnectors of 220kV and two interconnectors of 110 kV); and Albania (one interconnector of 220kV and one interconnector of 400kV) erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 489 v
MONTENEGRO (continued) I mpORTER or exporter N/A country? (name origin of gas if importer) Transportation system N/A operator(s) GAS Gas distributor(s) N/A Principal gas supplier(s) N/A Interconnectors N/A
NETHERLANDS
National regulatory Authority for consumers and markets (autoriteit consument en markt) authority (-ies) Unbundling regime (full FOU model ownership unbundling ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Essent (RWE), Nuon (Vattenfall), Eneco, e.on, Electrabel and Delta generator(s) Transmission system Tennet operator(s) Electricity distributor(s) Various regional grid operators owned by (local) authorities
l Principal electricity Eneco, Essent (RWE) and NUON (Vattenfall) E ECTRICITY supplier(s) Interconnectors Interconnectors with Belgium, Germany, Norway and the United Kingdom
I mpORTER or exporter Exporter country? (name origin of gas if importer) Transportation system GTS operator(s) GAS Gas distributor(s) Various regional grid operators owned by (local) authorities Principal gas supplier(s) Gasterra ontenegro ... Interconnectors Various interconnectors with Belgium, Germany and the United Kingdom M -
NETHERLANDS eve ftelgladrgltr rmwr n. ... legal the erview of regulatory and in... framework O 490 HERBERT SMITH FREEHILLS v
NORWAY National regulatory Norwegian Water Resources and Energy Directorate (NVE) – not for upstream gas activities authority (-ies) Unbundling regime (full FOU (electricity sector) ownership unbundling ISO (upstream gas sector) ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Statkraft SF/Statkraft Energi AS generator(s) Transmission system Statnett SF operator(s) Electricity distributor(s) A total of 159 companies were involved in grid operations at one or more grid levels in 2008. Hafslund Nett AS is the largest distribution grid company. Principal electricity A large number of companies involved in generation, supply and trading. Statkraft Energi AS is the l E ECTRICITY supplier(s) largest supplier. Interconnectors 3700MW capacity from Southern Norway (2050 MW to Sweden, 950MW to Denmark, 700MW to the Netherlands). From Mid and Northern Norway 1400-1700MW to Sweden, 120 MW to Finland and 50MW to Russia.
I mpORTER or exporter Norway is a gas exporter country? (name origin of gas if importer) Transportation system Transmission system not developed. Gassco AS is an ISO for the upstream gas pipeline system on operator(s) the Norwegian continental shelf. GAS Gas distributor(s) N/A Principal gas supplier(s) N/A Interconnectors N/A
P Oland
National regulatory The President of the Energy Regulatory Authority (Prezes Urzędu Regulacji Energetyki) authority (-ies) Unbundling regime (full IIn practice the FUO model has been adopted, however the State Treasury, which is the sole ownership unbundling shareholder in gas and electricity TSOs, is also a major shareholder in trade and ("FOU"), independent system generation companies
general operator ("ISO"),
N Nonetheless the Minister of Economy supervises the TSOs, whereas the Minister of State Treasury independent transmission supervises other State Treasury entities, including e.g. trading and generation companies ORWAY operator ("ITO") model - P O LAND erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 491 v
P Oland (continued) P riNCIPAL electricity PGE Polska Grupa Energetyczna S.A. generator(s) Tauron Wytwarzanie S.A. ENEA Wytwarzanie S.A. ZE PAK S.A. ENERGA S.A.. Transmission system PSE Operator S.A. fully state owned operator(s) Electricity distributor(s) Principal distributors: PGE Dystrybucja S.A. TAURON Dystrybucja S.A. ENERGA – Operator S.A. ENEA Operator sp. z o.o. RWE Stoen Operator sp. z o.o l E ECTRICITY Principal electricity PGE Obrót S.A. supplier(s) ENERGA-Obrót S.A. ENEA S.A. TAURON Sprzedaż sp. z o.o. Interconnectors Seven with Czech Republic Two with Germany Two with Ukraine One with Slovakia One with Sweden One with Belarus (not operational)
I mpORTER or exporter PGNiG S.A. from Russia, Ukraine, Germany, Czech Republic country? (name origin of gas if importer) Transportation system GAZ-System S.A.– fully state owned operator(s) Gas distributor(s) One DSO – Polska Spółka Gazownictwa Sp. Z o.o. fully owned by PGNiG S.A.
GAS Principal gas supplier(s) PGNiG. S.A. Interconnectors Three with Germany land ...P Two with Czech Republic O Two with Belarus Two with Ukraine erview of the legal the erview of regulatory and in... framework O 492 HERBERT SMITH FREEHILLS v
P Ortugal National regulatory Portuguese Energy Services Regulatory Authority: Entidade Reguladora dos Serviços authority (-ies) Energéticos ("ERSE"); Governmental Directorate of the Ministry of Economy: DGEG - Direcção-Geral De Energia E Geologia ("DGEG"), Unbundling regime (full N/A ownership unbundling
general ("FOU"), independent system operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity EDP – Gestão Da Produção De Energia, S.A., generator(s) Iberdrola, S.A. Ren Trading, S.A. Transmission system REN - Rede Eléctrica Nacional ("REN") operator(s) Electricity distributor(s) EDP Distribuição Energia, S.A. Cooperativa Eléctrica De Vale D'este Cooperativa Eléctrica De Vilarinho, CRL Cooperativa Eléctrica De Loureiro, CRL Cooproriz - Cooperativa De Abastecimento De Energia Eléctrica, CRL A Eléctrica Moreira De Cónegos, CRL A Celer - Cooperativa Electrificação De Rebordosa, CRL Casa Do Povo De Valongo Do Vouga Junta De Freguesia De Cortes Do Meio Cooperativa Electrificação A Lord, CRL l E ECTRICITY Cooperativa Eléctrica s. Simão de Novais Electricidade dos Açores Empresa de Electricidade da Madeira Principal electricity EDP Comercial – Comercialização De Energia, S.A. supplier(s) EGL – Energia Iberia, S.L. ...P Endesa Energia, Sucursal Em Portugal, S.A.
O GALP Power, S.A. RTUGAL Iberdrola Generación, Energia E Serviços, Portugal, Unipessoal, Lda. Union Fenosa Comercial, s.l. – Sucursal Em Portugal Nexus Energia, S.A.. The main supplier of last resort is EDP – Serviço Universal, S.A., covering most of the national territory. Interconnectors N/A erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 493 v
P Ortugal (continued) I mpORTER or exporter Importer country? (name origin of The main suppliers of natural gas are Algeria and Nigeria gas if importer) Transportation system Some of the key players in the gas market in Portugal are: operator(s) LNG Terminal Operator: REN – Atlântico, Terminal de GNL, SA; Operators of Underground Storage: REN – Armazenagem, SA; and Transgás, SA; Operator of Transmission: REN – Gasodutos, SA; Operator of Distribution networks: SETGÁS, SA; Lisboagás, SA; Lusitaniagás, SA;Tagusgás SA, Beiragás SA; EDP Gás Distribuição; Retailers: EDP – Comercial – Comercialização de Energia, S.A.; EDP Gás.Com. – Comercialização de Gás Natural, S.A.; Endesa – Endesa Energia – Sucursal em Portugal; Galp – Gás Natural, S.A.; Galp Power, S.A.; Gás Natural Comercializadora de Energia, S.A.; Gold Energy – Comercializadora de Energia, S.A.; Iberdrola Generación, Lda.; Incrygas, S.A. Gas distributor(s) Operator of Distribution networks: SETGÁS, SA; Lisboagás, SA;
GAS Lusitaniagás, SA; Tagusgás SA, Beiragás SA; EDP Gás Distribuição; Principal gas supplier(s) Some of the key players in the gas market in Portugal are: LNG Terminal Operator: REN – Atlântico, Terminal de GNL, SA; Operators of Underground Storage: REN – Armazenagem, SA; and Transgás, SA; Operator of Transmission: REN – Gasodutos, SA; Operator of Distribution networks: SETGÁS, SA; Lisboagás, SA; Lusitaniagás, SA;Tagusgás SA, Beiragás SA; EDP Gás Distribuição; Retailers: EDP – Comercial – Comercialização de Energia, S.A.; EDP Gás.Com. – Comercialização de Gás Natural, S.A.; Endesa – Endesa Energia – Sucursal em Portugal; Galp – Gás Natural, S.A.; Galp Power, S.A.; Gás Natural Comercializadora de Energia, S.A.; Gold Energy – Comercializadora de Energia, S.A.; Iberdrola Generación, Lda.; Incrygas, S.A.; Molgàs, Energia Portugal, s.a. Interconnectors N/A rtugal ...P O erview of the legal the erview of regulatory and in... framework O 494 HERBERT SMITH FREEHILLS v
ROMANIA National regulatory The Romanian Energy Regulatory Authority – Autoritatea Nationala de Reglementare in domeniul authority (-ies) Energiei - ANRE Unbundling regime (full ISO model ownership unbundling ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Hidroelectrica SA generator(s) Nuclearelectrica SA Complexul Energetic Oltenia SA Transmission system Transelectrica SA operator(s) Electricity distributor(s) CEZ Distributie SA ENEL Distributie Banat SA ENEL Distributie Dobrogea SA E.ON Moldova Distributie SA ENEL Distributie Muntenia SA FDEE Electrica Distributie Muntenia Nord SA FDEE Electrica Distributie Transilvania Sud SA FDEE Electrica Distributie Transilvania Nord SA Principal electricity Principal suppliers to end customers (both regulated and eligible): supplier(s) Electrica Furnizare SA Enel Energie Muntenia SA Enel Energie SA E.ON Energie Romania SA CEZ Vanzare SA Alro SA Principal suppliers on competitive market: Alro SA Electrica Furnizare SA OMV Petrom SA Tinmar Ind SA CE Oltenia Arcelor Mittal Galati Repower Furnizare Romania SRL l E ECTRICITY Interconnectors Existing interconnectors:
... Romania -Bulgaria: Overhead line 400kV Isaccea – Dobrudja R Overhead line 400kV Ţânţăreni – Kozlodui OMANIA Overhead line 400kV Isaccea – Varna Overhead line 220kV Işalniţa - Kozlodui Romania – Serbia: Overhead line 400kV Porţile de Fier – Djerdap Overhead line 110kV Ostrovul Mare – Kusjak Overhead line 110kV Gura Văii – Şip Overhead line 110kV Jimbolia – Kikinda Romania -Hungary: Overhead line 400kV Arad – Sandorfalva Overhead line 400kV Nadab – Bekescsaba Romania -Ukraine: Overhead line 400kV Roşiori – Mukacevo Romania - Moldova: Overhead line 400kV Isaccea – Vulcăneşti Overhead line 110kV Stânca – Costeşti Overhead line 110kV Huşi - Cioara Overhead line 110kV Ţuţora – Ungheni Projects: Overhead line 400kV Romania – Serbia (Reşiţa - Pancevo); Overhead line 400kV Suceava - Bălţi (Moldova); Submarine cable (HVDC Link 400kV) Romania – Turkey erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 495 v
ROMANIA (continued) I mpORTER or exporter Importer country? (name origin of (Russia; Western Europe through Hungary) gas if importer) Transportation system Transgaz SA operator(s) Gas distributor(s) Congaz SA Distrigaz Sud Retele SRL E.ON Gaz Distributie SA Principal gas supplier(s) Competitive market: OMV Petrom Gas SRL Interagro SA Romgaz SA GDF Suez Energy Romania SA Regulated market: GDF Suez Energy Romania SA GAS E.ON Energie Romania SA Interconnectors Hungary – Romania: Csanádpalota - FGSZ Bulgaria – Romania: Negru Voda I, II and III - Bulgartransgaz (only transit) Ukraine – Romania: Medieşu Aurit Import - Ukrtransgaz Isaccea Import (I, III and IV) – Ukrtransgaz (only transit) Projects: Romania – Bulgaria: Ruse – Giurgiu – reverse flow Romania – Moldova: Iasi – Ungheni – under construction
RUSSIA omania ... R National regulatory There is no single authority regulating electricity and gas sectors in Russia. The major regulating authority (-ies) bodies are: (i) the Ministry of Energy; (ii) the Federal Tariffs Service; (iii) the Federal Antimonopoly Service; (iv) the Federal Service for Ecological, Technological and Nuclear Supervision; (v) the Ministry of Natural Resources, including the Federal Service on Supervision in the Sphere of the Use of Natural Resources; and (vi) the Ministry of Economic Development. Unbundling regime (full There is a prohibition for the generation and supply businesses to carry out the network businesses ownership unbundling (except for isolated regions). - general ("FOU"), independent system operator ("ISO"), RUSSIA independent transmission operator ("ITO") model
P riNCIPAL electricity Five wholesale generation companies (i.e. "OGK-1", "OGK-2", "OGK-3", "E.On Russia", "Enel generator(s) OGK-5"); 14 regional generation companies (e.g. "TGK-1", "Mosenergo”, "Quadra"); "Rushydro"; "Rosenergoatom" Transmission system "Federal Grid Company of the Unified Energy System" (controlled by Russian Grids) operator(s) Electricity distributor(s) 11 regional distributional companies, controlling stake of each of them is held by Russian Grids
l Principal electricity Many regional suppliers, e.g., "Mosenergosbyt", "Mezhregionenergosbyt", "Sverdlovenergosbyt", E ECTRICITY supplier(s) "Orenburgenergosbyt" Interconnectors Russia conducts import/export operations in relation to electricity with Finland Lithuania, Latvia, Ukraine, Kazakhstan, Georgia, Azerbaijan, Belarus, China eve ftelgladrgltr rmwr n. ... legal the erview of regulatory and in... framework O 496 HERBERT SMITH FREEHILLS v
R ussia (continued) I mpORTER or exporter Russia is an exporter of gas country? (name origin of gas if importer) Transportation system "Gazprom" operator(s) GAS Gas distributor(s) "Gazprom" Principal gas supplier(s) "Gazprom", "Novatek", "Rosneft" Interconnectors Blue Stream, Nord Stream, Yamal – Europe, Central Asia - Center
SERBIA
National regulatory Energy Agency authority (-ies) Unbundling regime (full ITO ownership unbundling ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity JP Elektroprivreda Srbije ("EPS") generator(s) Transmission system Elektromreže Srbije ("EMS") operator(s) Electricity distributor(s) EPS (through five subsidiaries) Principal electricity EPS (through one subsidiary) supplier(s) Interconnectors Bulgaria (440kV); Hungary (440kV);
l Macedonia (one of 440kV and two of up to 220kV); E ECTRICITY Montenegro (440kV and two of up to 220kV); Albania (up to 220kV); Bosnia and Herzegovina (one of 440 kV and one of up to 220 kV); Croatia (440kV) Romania (440kV) R USSIA I mpORTER or exporter Importer (Russia) country? (name origin of gas if importer) Transportation system Srbijagas - operator(s) SERBIA
GAS Gas distributor(s) Srbijagas and 36 local distributors Principal gas supplier(s) Srbijagas and 36 local suppliers Interconnectors Hungary - annual capacity of 510 million m3 Bosnia and Herzegovina – annual capacity of 80 million m3 erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 497 v
SLOVAK republic National regulatory The Ministry of Economy of the Slovak Republic and The Regulatory Office for Network Industries authority (-ies) Unbundling regime (full ITO ownership unbundling ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Slovenské elektrárne, a.s. generator(s) Transmission system Slovenská elektizačná prenosová sústava, a.s. operator(s) Electricity distributor(s) ZSE Distribúcia, a.s., Stredoslovenská energetika - Distribúcia, a.s., Východoslovenská distribučná, a.s.
l Principal electricity Západoslovenska energetika, a.s., Stredoslovenská energetika, a.s., Východoslovenská energetika, E ECTRICITY supplier(s) a.s. Interconnectors Five interconnectors with the Czech Republic, two with Hungary, one double line to Poland and one to Ukraine.
I mpORTER or exporter Importer (Russia) country? (name origin of gas if importer) Transportation system Eustream, a.s. operator(s) GAS Gas distributor(s) SPP – Distribúcia, a.s. Principal gas supplier(s) SPP, a.s. Interconnectors The interconnectors are with Austria, the Czech Republic and Ukraine.
SLOVENIA
National regulatory Energy Agency of the Republic of Slovenia authority (-ies) Slovenian Environment Agency Energy Directorate within the Ministry of Infrastructure and Spatial Planning The Government office of the Republic of Slovenia of climate change
Unbundling regime (full Electricity: FOU lovak ... S
general ownership unbundling Gas: ITO ("FOU"), independent system operator ("ISO"), independent transmission operator ("ITO") model re p u blic - blic SLOVENIA erview of the legal the erview of regulatory and in... framework O 498 HERBERT SMITH FREEHILLS v
SLOVENIA (continued) P riNCIPAL electricity Holding slovenske elektrarne d.o.o.; generator(s) Nuklearna elektrarna Krško d.o.o.; Termoelektrarna-toplarna Ljubljana d,o.o. Transmission system Public company Elektro-Slovenija d.o.o. ("ELES") operator(s) Electricity distributor(s) SODO electricity distribution system operator, d. o. o. Elektro Celje d.d.; Elektro Gorenjska d.d. Elektro Ljubljana d.d. Elektro Maribor d.d. Elektro Primorska d.d. Principal electricity Gen-I d.o.o. supplier(s) Elektro Ljubljana d.d. Elektro Gorenjska d.d. l
E ECTRICITY Elektro Celje d.d. Petrol d.d. Petrol Energetika d.o.o. Elektro Maribor Elektro Primorska d.d. Interconnectors ELES has a cross border connection with neighbouring countries: Austria (Austria-APG) Italy (TERNA) Croatia (HEP).
The interconnection between Slovenia and Hungary is anticipated for 2016. In 2011, a market coupling project on the Slovenian – Italian border was launched.
I mpORTER or exporter 99% of all gas in Slovenia is imported. country? (name origin of Importer Country: Russia, Algeria, Austria, Italy gas if importer)
... Importer: the main importer is Geoplin d.o.o. (95% of all natural gas)
S Origin of gas: from Russia or Algeria LOVENIA Transportation system Plinovodi d.o.o. operator(s) Gas distributor(s) The distribution of natural gas in Slovenia is organised as an optional local commercial public service
GAS and performed by gas distribution system operators in each individual local community. Gas distributors are either public companies or private companies which have acquired a concession. Principal gas supplier(s) Geoplin d.o.o. Interconnectors Three cross-border interconnectors with Slovenian transmission system exist: Ceršak on Austrian border Rogatec on Croatian border Šempeter on Italian border erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 499 v
SPAIN National regulatory National Markets and Competition Commission (Comisión Nacional de los Mercados y de la authority (-ies) Competencia or "CNMC") Ministry of Industry, Tourism and Trade (Ministerio de Industria, Turismo y Comercio) Unbundling regime (full Independent Transmission Operator ("ITO") model ownership unbundling
general ("FOU"), independent system operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Endesa generator(s) Iberdrola Hidrocantábrico Unión Fenosa Transmission system REE (Red Eléctrica de España) operator(s) OMEL (Operador del Mercado Eléctrico) Electricity distributor(s) Endesa Iberdrola Unión Fenosa Principal electricity Iberdrola, S.A.
l supplier(s)
E ECTRICITY Iberdrola Generación, S.A.U. Endesa Energía, S.A. Unión Fenosa Gas Natural Comercializadora, S.A.U. Interconnectors France Portugal Morocco Andorra
I mpORTER or exporter Importer. country? (name origin of Main origin: Algeria. gas if importer) in ... Others: Nigeria, Qatar, Egypt, Trinidad and Tobago, Norway, Oman and Libya S Transportation system Enagas P
operator(s) A Gas distributor(s) Gas Natural Fenosa Principal gas supplier(s) Gas Natural Fenosa, Union Fenosa Gas, GAS Endesa Gas Iberdrola. Interconnectors France (Larrau and Irun), Portugal (Badajoz and Tuy), Morocco Algeria erview of the legal the erview of regulatory and in... framework O 500 HERBERT SMITH FREEHILLS v
SWEDEN National regulatory Swedish Energy Markets Inspectorate authority (-ies) swedish energy agency Swedish Radiation Safety Authority Swedish competition authority Unbundling regime (full Full Ownership Unbundling
general ownership unbundling ("FOU"), independent system operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Vattenfall generator(s) E.ON Fortum Transmission system Affärsverket Svenska Kraftnät operator(s) Electricity distributor(s) Vattenfall E.ON Fortum l E ECTRICITY Principal electricity Vattenfall supplier(s) E.ON Fortum Interconnectors Affärsverket Svenska Kraftnät SwePol Link
I mpORTER or exporter Importe. mainly from Denmark. country? (name origin of gas if importer) Transportation system Swedegas AB operator(s) Gas distributor(s) E.ON Gas Sverige AB, Göteborgs Energi Gasnät AB, Kraftringen Nät AB, Varberg Energi AB,
GAS Öresundskraft AB Principal gas supplier(s) E.ON ...
S DONG Energy
WEDEN Göteborg Energi Interconnectors Swedegas AB
SWITZERLAND
- National regulatory Electricity Commission ("ElCom")
SWITZERLAND authority (-ies) Unbundling regime (full Full Ownership Unbundling as of January 1, 2013 ownership unbundling ("FOU"), independent system
general operator ("ISO"), independent transmission operator ("ITO") model erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 501 v
SWITZERLAND (continued) P riNCIPAL electricity Alpiq Group (ex Atel and EOS) generator(s) Axpo Group (incl. NOK, EGL and CKW) BKW FMB Energie Group Elektrizitätswerke der Stadt Zürich ("EWZ") Repower AG Transmission system Swissgrid AG operator(s) Electricity distributor(s) Hundreds of distributors differing in size and other respects, including municipalities and other regional distributors. Principal electricity Alpiq Group supplier(s) Axpo Group l E ECTRICITY BKM FMB Energie Group EWZ Repower AG Interconnectors Austria (APG) France (RTE) Germany (EnBW TNG, Amprion, Tennt, 50Hertz) Italy (Terna)
I mpORTER or exporter Importer from (in decreasing order of volume): country? (name origin of Netherlands gas if importer) Russia Norway Germany Algeria Transportation system Transitgas AG operator(s) Gas distributor(s) More than 100. eg. Erdgas Ostschweiz AG ("EGO") Erdgas Zentralschweiz AG ("EGZ") witzerland ... S
GAS Gasverbund Mittelland AG ("GVM") Gaznat SA Principal gas supplier(s) Swissgas AG Erdgas Ostschweiz AG ("EGO") Erdgas Zentralschweiz AG ("EGZ") Gasverbund Mittelland AG ("GVM") Gaznat SA Interconnectors Transitgas Pipeline: Wallbach (Germany) Rodersdorf/Oltingue (France) Griess Pass (Italy) erview of the legal the erview of regulatory and in... framework O 502 HERBERT SMITH FREEHILLS v
TURKEY National regulatory Energy Market Regulatory Authority (Enerji Piyasası Düzenleme Kurulu – EPDK) authority (-ies) Unbundling regime (full ISO and ITO models present. ownership unbundling Transmission operators: ("FOU"), independent system operator ("ISO"), Electricity: Türkiye Elektrik İletim Anonim Şirketi ("TEİAŞ") general independent transmission Gas: Boru Hatları ile Petrol Taşıma Anonim Şirketi ("BOTAŞ") operator ("ITO") model Crude Oil: Boru Hatları ile Petrol Taşıma Anonim Şirketi ("BOTAŞ")
P riNCIPAL electricity There are currently 1397 electricity generation licences granted to same number of facilities in generator(s) the market. Amongst them, Elektrik Üretim Anonim Şirketi is the principal electricity generator company holding 92 generation licences amounting to 20852.92MW of established capacity. Elektrik Üretim Anonim Şirketi is a public entity. Transmission system Türkiye Elektrik İletim Anonim Şirketi ("TEİAŞ") operator(s) Electricity distributor(s) Electricty distribution activity in Turkey is currently being privatised. Distribution was conducted by Türkiye Elektrik Dağıtım Anonim Şirketi before its 2004 privatisation and division into sub-companies for different distribution regions. Privatisation of these sub-companies has continued since then and is expected to finish in the near future. Electricity distributors are currently undergoing a mandatory demerger process in the first half of 2013 for the unbundling of distribution and retail services. Principal electricity There are 154 wholesale and 21 retail sale licences in the market.
l supplier(s) E ECTRICITY Interconnectors Interconnection lines with pre-determined capacities to: Bulgaria Azerbaijan (Nakhchivan) Iran Georgia Armenia Syria Iraq; and
... Greece T
URKEY I mpORTER or exporter Turkey exports natural gas to Bulgaria and Greece and imports natural gas from Turkmenistan, country? (name origin of Nigeria (LNG), Algeria (LNG), Iran and Russia. gas if importer) Transportation system Boru Hatları ile Petrol Taşıma Anonim Şirketi (BOTAŞ) operator(s) Gas distributor(s) There are currently 64 gas distribution licences granted for gas distribution activity to be conducted GAS in different regions. Principal gas supplier(s) 38 wholesale natural gas licences exist in the market. Interconnectors Baku-Tbilisi-Erzurum Pipeline Turkey-Greece Interconnector erview of the legal the erview of regulatory and in... framework O T he European Energy Handbook 2014 503 v
UKRAINE National regulatory The Ministry of the Energy and Coal Industry authority (-ies) The National Electricity Regulation Commission The State Service of Geology and Subsoil Use The Ministry of Ecology and Natural Resources Antimonopoly Committee of Ukraine Unbundling regime (full N/A general ownership unbundling ("FOU"), independent system operator ("ISO"), independent transmission operator ("ITO") model
P riNCIPAL electricity Thermal Power Generation generator(s) LLC "vostokenergo" (private) Public JSC "DTEK Dniproenergo" (private) Public JSC "DTEK Zakhidenergo" (private) Public JSC "Donbasenergo" (private) Public JSC "Centrenergo" (state) Hydroelectric Power Generation Ukrhidroenergo (State)
l Nuclear Power Generation E ECTRICITY State Enterprise Energoatom (state) Transmission system State Enterprise National Power Company Ukrenergo operator(s) Electricity distributor(s) State Enterprise Energorynok Principal electricity 27 suppliers, which provide end users with electricity in a particular region (oblenergos) supplier(s) Interconnectors State Enterprise National Power Company Ukrenergo
I mpORTER or exporter Importer (Russia, Hungary, Poland) country? (name origin of gas if importer) kraine ... Transportation system Public JSC "Ukrtransgaz" – subsidiary of PJSC "Naftogaz" U operator(s) GAS Gas distributor(s) Public JSC "Ukrtransgaz" – subsidiary of PJSC "Naftogaz" Principal gas supplier(s) Public JSC "Ukrtransgaz" – subsidiary of PJSC "Naftogaz" Interconnectors Public JSC "Ukrtransgaz" – subsidiary of PJSC "Naftogaz" erview of the legal the erview of regulatory and in... framework O 504 HERBERT SMITH FREEHILLS v
UNITED KINGDOM National regulatory The Gas and Electricity Markets Authority, acting through Ofgem authority (-ies) Unbundling regime (full FOU, ISO and the "unbundling derogation providing greater independence than the ITO model" ownership unbundling pursuant to Article 9(9) of the New Electricity and Gas Directives are available in both the electricity ("FOU"), independent system and gas markets.
general operator ("ISO"), ITO model is only available for gas interconnectors. independent transmission operator ("ITO") model
P riNCIPAL electricity RWE, EDF, E.ON, Scottish and Southern Energy, Scottish Power, Centrica, DRAX Power, GDF SUEZ generator(s) Energy UK and Intergen Transmission system National Grid Electricity Transmission Plc operator(s) Electricity distributor(s) SSE, UK Power Networks, Northern Power Grid, Electricity North West, Scottish Power and Western Power Distribution l
E ECTRICITY Principal electricity EDF, E.ON, RWE (nPower), Centrica, Scottish Power, Scottish and Southern Energy, supplier(s) Interconnectors Interconnexion France Angleterre ("IFA"), BritNed, and Moyle
I mpORTER or exporter Net importer. Gas is imported from Belgium, the Netherlands and Norway via pipelines and as LNG country? (name origin of via ship from several countries including Qatar, Algeria, Australia, Egypt and Nigeria. gas if importer) Transportation system National Grid Gas plc operator(s)
GAS Gas distributor(s) National Grid Gas plc, Scotia Gas Networks, Northern Gas Networks and Wales and West Utilities Principal gas supplier(s) Centrica, E.ON, EDF Energy, RWE (nPower), SSE and Scottish Power Interconnectors Interconnector UK, Balgzand and Bacton Line ("BBL"), an interconnector (consisting of two pipelines) between Moffat in Scotland and the Republic of Ireland ; the Langeled Pipeline and the Scotland to Northern Ireland Pipeline. nited ... U
KINGDOM erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 505 v
O verview of the renewable energy regime in 41 jurisdictions
This table has been collated using information compiled by the contributing authors for their corresponding jurisdictions and on the basis of information available at the time of writing.
ALBANIA PERCENTAGE OF ENERGY Hydro: 28%; Biofuels and waste: 13.4%; other RES: 0.2%. GENERATION FROM RENEWABLE 2020 Target: 38%. SOURCES WITH BREAKDOWN (WIND-, SOLAR-, HYDRO-, GEOTHERMAL POWER, BIOFUELS, WASTE TO ENERGY ETC.) AND 2020 TARGET FOR OVERVIEW RENEWABLE ENERGY KEY GENERATORS OF Kesh Gen. RENEWABLE ENERGY
FEED-IN TARIFFS For small HPPs with installed capacity of up to 10MW. GREEN CERTIFICATES (NAME OF GC and GO issued for 12 years. GCS may be traded for the three subsequent years. THE SCHEME) TAXATION Tax and custom duty exemptions for equipments. FINANCIAL INCENTIVES OTHER Obligation to conclude power purchase agreements of up to 15 years for small HPPs. ...albania - - ...albania A ustria
PERCENTAGE OF ENERGY Compared to 2010, the final energy consumption in 2011 decreased by 3.9% to 1,089,184TJ. GENERATION FROM RENEWABLE The share of renewable energy increased slightly from 30.6% in 2010 to 31.0% in 2011. In SOURCES WITH BREAKDOWN 2005 the share of renewable energy was 23.8%. Consequently, Austria is well on track to (WIND-, SOLAR-, HYDRO-, reach its renewables target of 34% according to the EU Renewables Directive 2009/28/EC by GEOTHERMAL POWER, the year 2020. BIOFUELS, WASTE TO ENERGY ETC.) AND 2020 TARGET FOR Hydropower is the leading source for domestic energy production. In 2011, the share of RENEWABLE ENERGY hydropower amounted to 57.4%. Thermal power sources (fossil fuels and derivates, biofuels and AUSTRIA other fuels) accounted for 39.3% of the domestic energy production in 2011. Wind power, photovoltaics and geothermal power together added 3% to the gross energy generation mix. KEY GENERATORS OF Verbund Hydropower AG RENEWABLE ENERGY Verbund Renewable Power
Tiroler Wasserkraft AG Vorarlberger Illwerke AG
OVERVIEW Kelag Steweag EVN BEWAG Salzburg AG AWP ImWind Ökoenergie erview of the renewable energy regime in... in... renewable the erview of regime energy O 506 HERBERT SMITH FREEHILLS v
A ustria (continued) FEED-IN TARIFFS The feed-in tariffs paid by the green power clearing and settlement agent OeMAG in the first half of 2010 ranged from 5.5c€/kWh to 56.1c€/kWh. On average, hydropower received 5.5c€/kWh, wind 7.8c€/kWh, solid biomass 13.6c€/kWh, biogas 14.2c€/kWh (2008 and 2009 saw a raw material subsidy of 3.9c€/kWh and 3c€/kWh, respectively) and photovoltaics 56.1c€/kWh. The tendency for feed-in tariffs in 2010 was increasing for wind power (9.7c€/kWh) and biogas (up to 22.5c€/kWh including CHP and technology markup), but pointed steeply downwards for photovoltaics (25 to 38c€/kWh) and remained stable for solid biomass (up to 14.98c€/kWh). GREEN CERTIFICATES (NAME OF Austria has formally used a Tradable Green Certificate (“TGC”) scheme for only a short period of THE SCHEME) time (2000 to 2002), linked to its obligations to small-scale hydro production. Under this TGC-scheme, small hydro generators were obliged to issue so-called “Small Hydro Certificates” in denominations of 100kWh, with all distributors having to purchase certificates representing 8% of their total power sales. However, the system was never fully operational and faced certain difficulties (in particular, it lacked homogeneity due to different support schemes in each federal state, meagre market fluidity, opposition to the allocation of the equalisation fund, and doubts concerning compliance with European Community law). Thus, the TGC-system was replaced in 2003 by a new feed-in tariff scheme introducing uniform support for renewables across the federal territory (“Green Electricity Act”). Feed-in tariffs are support schemes for promoting the use of renewable energy. They provide a fixed price incentive wherein a fixed tariff is granted for each kWh of renewable energy that is fed into the grid. FINANCIAL INCENTIVES FINANCIAL Nevertheless, Austria was the first EU country to introduce the Guarantees of Origin (“GO”), as required by the RES Directive, and to allow foreign certificates meeting the GO requirements to be imported. TAXATION There is no exemption from tax for energy on electricity generated from RES. The tax amounts to €0.015 per kWh and, generally, is to be paid by the electricity supplier. There is a tax exemption from mineral oil tax for the use of pure biofuels. Generally there is no VAT reduction. OTHER In July 2011, the Green Electricity Act 2012 (Ökostromgesetz) was published. Among other modifications, the promotion volume for renewable energy sources has been increased from €21 million to €50 million each year from 2015. This will, amongst other things, increase investments in national RES projects and thus raise the share of RES in Austria. stria - - stria ... B elarus A u PERCENTAGE OF ENERGY 2010: 5.2% of the electricity generated in Belarus. GENERATION FROM RENEWABLE The latest breakdown is for 2009 only, according to which the structure of electricity generated from SOURCES WITH BREAKDOWN RES is as follows: biofuel – 142GWh (76% of renewable electricity), hydro – 44GWh (13.5%), solar, (WIND-, SOLAR-, HYDRO-, wind and other – 1GWh (0.5%). GEOTHERMAL POWER, BIOFUELS, WASTE TO ENERGY 2020 target: 32-34% (including domestic non-renewable sources); a separate target for energy ETC.) AND 2020 TARGET FOR generated from RES is not available BEL RENEWABLE ENERGY OVERVIEW KEY GENERATORS OF Belenergo, state industrial group a RENEWABLE ENERGY Bellesbumprom Concern (biofuel, mostly biomass) rus Unitary enterprise Minskvodokanal (hydro energy) erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 507 v
B elarus (continued) FEED-IN TARIFFS Article 20 of the Act on Renewable Energy establishes prices for RES energy which equal energy tariffs for manufacturing enterprises (approximately c€10.5/kW) increased by a multiplier. The multiplier is 3.0 for renewable energy plants which use solar energy (for the first ten years after start up) and 0.85 for the following period. For other renewable energy plants the multipliers are 1.3 and 0.85 accordingly GREEN CERTIFICATES (NAME OF Green certificates are issued by the Ministry of Nature and prove the renewable nature of the THE SCHEME) energy. Certificates are required for conclusion of contracts with Belenergo and for the purposes of application of feed-in-tariffs. TAXATION Equipment which is used for generation, receipt, transformation, accumulation or transmission of energy produced from RES is subject to zero customs duties and zero VAT when supplying Belarus. Additionally, land plots occupied by renewable energy plants are exempt from land tax, including for the period of construction. OTHER In order to stimulate generation of energy from RES, Belarus provides also the following privileges for
FINANCIAL INCENTIVES FINANCIAL RES plants: guaranteed connection to state energy networks; guaranteed purchases of generated energy. Tariffs for manufacturing enterprises are stipulated in Belarusian roubles and are subject to indexing according to the BYR:USD exchange rate so that there are no (Belarusian-rouble) inflation risks for renewable energy plants.
BELGIUM
PERCENTAGE OF ENERGY 2012: 5.8% of the Belgian demand for energy was produced from renewable energy sources (14% GENERATION FROM RENEWABLE of total electricity generation or 11,340GWh) of which approximately: SOURCES WITH BREAKDOWN Wind: 24.4%; (WIND-, SOLAR-, HYDRO-, GEOTHERMAL POWER, Solar: 15.6%; BIOFUELS, WASTE TO ENERGY Hydro: 3.4%; ETC.) AND 2020 TARGET FOR RENEWABLE ENERGY Biomass: 56.6%. 2020 target: 13%. rus - rus el ... KEY GENERATORS OF Aspiravi B
OVERVIEW RENEWABLE ENERGY Belpower Belwind a EDF Luminus Electrabel
Electrawinds BELGIUM erview of the renewable energy regime in... in... renewable the erview of regime energy O 508 HERBERT SMITH FREEHILLS v
BELGIUM (continued) FEED-IN TARIFFS N/A (on the contrary injection tariffs are payable by decentralised electricity producers). GREEN CERTIFICATES (NAME OF Federal level: federal GPC for offshore wind parks and hydro installations, awarded in accordance THE SCHEME) with the green electricity generated. Flanders: GPC (groenestroomcertificaten) and CHP (warmtekrachtcertificaten), awarded in accordance with the green electricity generated and corrected by a banding factor. Brussels Capital Region: GPC (groenestroomcertificaten/certificats verts), awarded in accordance with
the CO2 savings.
Wallonia: GPC (certificats verts), awarded in accordance with the CO2 savings. Each licensed supplier has the obligation to purchase a certain number of green certificates from the producers of renewable energy. TAXATION Contribution to the financing of the connection costs of offshore projects (art. 7, §2 Federal Electricity Act and Royal Decree of 8 June 2007). Surcharge on the federal GPC to compensate the net costs between the purchase price and the FINANCIAL INCENTIVES FINANCIAL market sale price (art. 7, §1 Federal Electricity Act and Royal Decree of 16 July 2002). Federal tax reductions for roof top insulation. OTHER Regional energy premium schemes. Contribution to the financing of the connection cost of renewable energy projects in Flanders. Support to investments in energy generation from renewable energy sources in Brussels Capital Region and Wallonia.
BOSNIA AND HERZEGOVINA
PERCENTAGE OF ENERGY 2013: The unofficial information on the share of energy generation from renewable sources is 36%. GENERATION FROM RENEWABLE Information on the breakdown is not available. SOURCES WITH BREAKDOWN 2020 target: A 40% share of renewable energies in the overall consumption of energy. (WIND-, SOLAR-, HYDRO-, GEOTHERMAL POWER, BIOFUELS, WASTE TO ENERGY
...belgium - ...belgium ETC.) AND 2020 TARGET FOR RENEWABLE ENERGY KEY GENERATORS OF The main source of energy from renewables in Bosnia is hydropower. Key generators are enterprises RENEWABLE ENERGY directly or indirectly owned by the state.
OVERVIEW In the Republic of Srpska ("RS"): Mixed Holding Electric Power Company of the Republic of Srpska ("EPC") through its subsidiaries. In the Federation of Bosnia and Herzegovina ("FBH"): Electric Power Company of BH ("EPBH"); BOSNIA and Electric Power Company of Croatian Community of Herceg Bosnia ("EPCUHB"). and herzegovina and erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 509 v
BOSNIA AND HERZEGOVINA (continued) FEED-IN TARIFFS In the RS: Facilities eligible for feed-in tariff: HPPs, installed capacity up to 10MW; Wind power plants, installed capacity up to 10MW or more in exceptional circumstances; Solar power plants, installed capacity up to 1MW; Geothermal power plants, installed capacity up to 10MW; Power plants using biomass, installed capacity up to 1MW; Power plants using biogas, installed capacity up to 1MW; Power plants in efficient cogeneration, installed capacity up to 10MW or up to 30MW in exceptional circumstances.
Mechanism: The mandatory take-off of the entire produced quantities of energy under PPAs concluded with the RES Operator. Closer terms should be established by the NRA’s regulation which has not been adopted yet. Other limitations: The RES Operator will conclude PPAs with eligible generators only whilst the quantities of electricity and installed capacity do not reach prescribed targets. In the FBH: Facilities eligible for feed-in tariff: Feed-in tariffs will be regulated by a decree on incentives for the generation of the electricity from RES, which is to be adopted by the Government of the FBH. Mechanism: FINANCIAL INCENTIVES FINANCIAL Mandatory take-off of the entire produced quantities of energy under PPAs concluded with the RES Operator. Closer terms should be established by the NRA’s regulation which has not been snia ... adopted yet. BO Other limitations: Other limitations will be established in the appropriate rulebooks which are to be adopted. GREEN CERTIFICATES (NAME OF In the RS: THE SCHEME) RES generators may be granted a certificate of origin (“green certificate”) if they have previously obtained the certificate for the generating facility. One of the key requirements is that the facility is herzegovina and certified as “environmentally friendly” in line with regulations. The green certificate is issued by the Regulatory Commission at the request of the generator, for the electricity generated from RES. Additional requirements are that the electricity is sold on the relevant market and that the generator, for the electricity in question, is not entitled to a mandatory take-off. In the FBH: Eligible generators may be granted certificates of origin, confirming that the electrical energy is produced from RES. TAXATION In the RS: An investor may be entitled to tax reliefs, in which case his guaranteed purchase price would be reduced. OTHER erview of the renewable energy regime in... in... renewable the erview of regime energy O 510 HERBERT SMITH FREEHILLS v
BULGARIA PERCENTAGE OF ENERGY 2011: 13.8 % of total electricity consumption. GENERATION FROM RENEWABLE 2020 target: 20% (16% target pursuant to the Renewable Energy Directive). SOURCES WITH BREAKDOWN (WIND-, SOLAR-, HYDRO-, GEOTHERMAL POWER, BIOFUELS, WASTE TO ENERGY ETC.) AND 2020 TARGET FOR RENEWABLE ENERGY OVERVIEW KEY GENERATORS OF NEK EAD (hydropower plants with installed capacity of 2713MW). RENEWABLE ENERGY AES (wind power plant St. Nikola with installed capacity of 156MW). ASTROENERGY, part of CHINT group (solar plant with installed capacity of 50MW near Yambol).
FEED-IN TARIFFS Summary: Feed-in tariffs for electricity from new renewable energy sources (except for hydropower plants with capacity exceeding 10MW) with effect from 1 July 2013. The feed-in tariffs are updated by the State Energy and Water Regulatory Commission either (i) by 30 June every year or (ii) whenever there is a significant change (exceeding 10%) in a component for calculation of the feed-in tariff compared to its rate, considered in calculation of the previous feed-in tariff. Mechanism: The public provider and end suppliers are required to purchase all electricity, certified with guarantee of origin from renewable sources for the statutory term of the power purchase agreement (the term varies for the different types of renewable energy sources and is set in the law). The feed-in tariff is calculated by the State Energy and Water Regulatory Commission on the basis of a number of pricing components, set out in the law and the ordinance on regulation of electricity prices. The applicable price for the specific power plant generating electricity from renewable sources is determined by the date of its commissioning and is fixed for the statutory term of the power purchase agreement (except in case of biomass power plants, where there is an annual FINANCIAL INCENTIVES FINANCIAL indexation pursuant to a decision of the State Energy and Water Regulatory Commission). GREEN CERTIFICATES (NAME OF N/A. THE SCHEME) TAXATION N/A.
... OTHER B
ULGARIA CROATIA
PERCENTAGE OF ENERGY 2013 target: 15.8% of gross final energy consumption. GENERATION FROM RENEWABLE By September 2013 the total operational capacities of RES projects (excluding hydropower plants) in SOURCES WITH BREAKDOWN Croatia reached 294.19MW, of which wind farms were 254.25MW, biomass and biogas power (WIND-, SOLAR-, HYDRO-, plants 14.825MW, cogeneration facilities 11.49MW and solar power plants 9.78MW. GEOTHERMAL POWER,
- BIOFUELS, WASTE TO ENERGY 2014 target: 16.4% of gross final energy consumption.
ETC.) AND 2020 TARGET FOR CROATIA 2020 target: 20% of gross final energy consumption. RENEWABLE ENERGY According to the National Action Plan for RES, the aim is to achieve the following share from RES in total electricity production by 2020: 79.6% from large and small hydropower plants, 10.5% from wind farms, 8.3% from biomass plants, 0.9% from geothermal plants and 0.7% from solar power plants. KEY GENERATORS OF Source: Annual Report for 2011 of NEK EAD. RENEWABLE ENERGY Wind farm Trtar-Krtolin (Vjetroelektrana Trtar - Krtolin d.o.o.)
OVERVIEW Wind farm ZD2 (EKO d.o.o.) Wind farm ZD3 (EKO d.o.o.) Wind farm Orlice (Vjetroelektrana Orlice d.o.o.) Wind farm Crno Brdo (Vjetroelektrana Crno Brdo d.o.o.) Wind farm ZD6 (Velika Popina d.o.o.) Wind farm Ravna 1 (Adria Wind Power d.o.o.) Wind farm Pometeno brdo (Končar-Obnovljivi Izvori d.o.o.) Wind farm Vrataruša (Selan d.o.o.) Wind farm Ponikve (Vjetroelektrana Ponikve d.o.o.) erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 511 v
CROATIA (continued) FEED-IN TARIFFS Summary: Croatia has introduced a system based on a mandatory purchase with a feed-in tariff. The Croatian Energy Market Operator ("HROTE") is obligated to purchase RES-electricity generated by eligible generators for an incentive price. Mechanism: The applicable incentive price for each RES or cogeneration plant is calculated by HROTE on the basis of number of pricing components set out in the tariff system applicable by the date of its commissioning. The feed-in tariff rate depends on the type of the RES or cogeneration plant and sources used for electricity production and the installed capacity of the plant. The right to an incentive price is granted for a period of 14 years. As of 6 June 2012 the incentive price is regulated by the tariff system for the electricity production from RES and cogeneration (Tarifni sustav za proizvodnju električne energije iz OIEiK, Official Gazette of the RoC ‘Narodne Novine’ Nos. 63/12, 121/12 and 144/12). As of 1 January 2014 the incentive price is regulated by the tariff system for the electricity production from RES and cogeneration (Tarifni sustav za proizvodnju električne energije iz OIEiK, Official Gazette of the RoC ‘Narodne Novine’ Nos. 133/13). GREEN CERTIFICATES (NAME OF Note: No green certificate schemes have, as yet, been introduced in Croatia. THE SCHEME)
FINANCIAL INCENTIVES FINANCIAL TAXATION N/A. OTHER Under the feed-in tariff for 2014, the maximum quota for solar energy sector has been set at 12MW: 5MW for integrated solar power plants, 2MW for integrated solar power plants located on state-owned facilities, which have a capacity of up to 300kW and 5MW for non-integrated solar power plants. Note: Due to lack of available capacity for the connection of the wind farms to the grid, currently, it is only possible to connect up to 400MW of wind powered energy. According to information available on the website of HOPS, the quota of 400MW has been reached. Thus, new wind farm projects are currently on hold. The grid is to be upgraded in order to integrate new wind farms. However, the National Action Plan for RES sets a target for wind energy of 400MW by 2020.
Cyprus
PERCENTAGE OF ENERGY The European Union RES target (2020) for Cyprus is 13%. ...
GENERATION FROM RENEWABLE CROATIA SOURCES WITH BREAKDOWN (WIND-, SOLAR-, HYDRO-, GEOTHERMAL POWER, BIOFUELS, WASTE TO ENERGY ETC.) AND 2020 TARGET FOR OVERVIEW RENEWABLE ENERGY -
KEY GENERATORS OF Solar energy. RENEWABLE ENERGY CY P
FEED-IN TARIFFS N/A RUS GREEN CERTIFICATES (NAME OF There are no green certificates currently in place. THE SCHEME) TAXATION N/A FINANCIAL INCENTIVES OTHER N/A eve fternwbeeeg eiei.. ... in... renewable the erview of regime energy O 512 HERBERT SMITH FREEHILLS v
C zech Republic PERCENTAGE OF ENERGY 2011: Total is 7,245,651MWh (8.3% of the electricity generated). GENERATION FROM RENEWABLE 2020 target: 13% pursuant to the Renewable Energy Directive. SOURCES WITH BREAKDOWN (WIND-, SOLAR-, HYDRO-, GEOTHERMAL POWER, BIOFUELS, WASTE TO ENERGY ETC.) AND 2020 TARGET FOR OVERVIEW RENEWABLE ENERGY KEY GENERATORS OF ČEZ RENEWABLE ENERGY Ecoenerg Windkraft GmbH & Co. KG
FEED-IN TARIFFS Summary: Promotion of electricity produced from RES is carried out by means of feed-in tariffs or green bonuses. The right to chose the electricity subsidy in the form of feed-in-tariffs is only for producers of electricity from renewable sources using hydro energy, electricity productions plants with an installed capacity of up to 10MW, and other producers of electricity from renewable energy sources in electricity production plants with an installed capacity of up to 100kW inclusive. In other cases, including electricity produced in electricity production plants with an installed capacity up to 100kW from both renewable and non-renewable sources, the producer of electricity from renewable sources only has the right to green bonuses for electricity. Mechanism: Producer is obliged to register, through the purchaser or the compulsory purchaser or directly in the market operator's system, the chosen form of subsidy. Electricity subsidy in the form of feed-in-tariffs cannot be combined within a single electricity production plant with an electricity subsidy in the form of green bonuses for electricity. The terms and procedure for selection of form of electricity subsidy and the procedure during registration in the system of the market operator is stipulated by the implementing legislation.
FINANCIAL INCENTIVES FINANCIAL GREEN CERTIFICATES (NAME OF N/A. THE SCHEME) TAXATION Summary: In December 2010, additional taxation of feed-in tariffs and green bonuses was introduced. The subject of the tax is electrical power produced by power plants between 1 January
C 2011 and 31 December 2013. The tax rate is 26% for feed-in tariffs and 28% for green bonuses. zech In September 2013 the Senate of the Czech Republic approved changes of the solar tax for photovoltaic power plants with an output of 30 kWp installed in 2010. The solar tax as of 1 January 2014 will drop from the current 26% to 10%. OTHER R e D enmark p u PERCENTAGE OF ENERGY 2012: blic - blic GENERATION FROM RENEWABLE Total is 14,221GWh (49.2% of the electricity generated). SOURCES WITH BREAKDOWN (WIND-, SOLAR-, HYDRO-, Wind: 72.2% GEOTHERMAL POWER, Water and solar: 0.1% BIOFUELS, WASTE TO ENERGY DENMARK ETC.) AND 2020 TARGET FOR Wood: 15.9% RENEWABLE ENERGY Straw: 3.6%
OVERVIEW Biogas 2.6% Biodegradable waste: 5.6% 2020 target: 35% (20% target pursuant to the Renewable Energy Directive) KEY GENERATORS OF DONG Energy A/S RENEWABLE ENERGY Vattenfall A/S erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 513 v
D enmark (continued) FEED-IN TARIFFS Summary: Production from RES is subsidised via PSO funds, which all electricity consumers pay via their electricity bill. The subsidy depends on what technology is used to produce the electricity. E.g. for wind turbines, the subsidy varies depending on whether it's offshore or onshore, the size of the wind turbine generator, size of the blades and the date of the connection to the grid. GREEN CERTIFICATES (NAME OF None, but the TSO will issue Guarantees of Origin in accordance with the rules provided in the THE SCHEME) Electricity Supply Act and the Danish Promotion of Renewable Energy Act. TAXATION Electricity is included under the Danish rules of excise duties. The duties are increasing and are as follows: Öre/kWh 2011 2012 2013 2014 2015 Electricity tax 62.4 63.5 64.7 83.3* 84.7 Electricity saving payment 0.6 0.6 0.6 N/A N/A
FINANCIAL INCENTIVES FINANCIAL Electricity distribution tax 4.0 4.0 4.0 N/A N/A Surtax 6.0 6.1 6.2 N/A N/A Energy saving payment 6.3 6.4 6.5 N/A N/A (*Effective 2014: the various types of electricity tax have been replaced with one aggregate tax rate). OTHER
E stonia
PERCENTAGE OF ENERGY The EU target for Estonia’s end consumption of energy from renewable resources is 25%. Estonia GENERATION FROM RENEWABLE achieved the referred target already in 2011. SOURCES WITH BREAKDOWN Waste and biomass account for 64%, wind energy for 26% and hydro energy for 3% (WIND-, SOLAR-, HYDRO-, GEOTHERMAL POWER, BIOFUELS, WASTE TO ENERGY ETC.) AND 2020 TARGET FOR RENEWABLE ENERGY
OVERVIEW KEY GENERATORS OF Eesti Energia RENEWABLE ENERGY
Nelja Energia - ...denmark Fortum Tallinna Elektrijaam
FEED-IN TARIFFS A fixed price for each kWh generated from a renewable source (at the rate of 0.0537€/kWh) or in an efficient co-generation plant (at the rate of 0.032€/kWh) is payable by the TSO in addition to the price received upon sale of the electricity on the market. The relevant cost is passed on in the network charges and thus the support is financed by all consumers in proportion to their volume of consumption of network services. The support is payable for 12 years following commencement
of production. ESTONIA Certain restrictions also apply. For example, wind energy producers may use the subsidy for up to a maximum of 600GWh of electricity produced in a calendar year, plants using biomass will qualify for the subsidy only if they are also qualifying co-generation plants. It is expected that the support payable for electricity generated from renewable resources will be reduced, however, to what extent and as of when remains unclear as the relevant draft act is still being discussed at the Parliament. GREEN CERTIFICATES (NAME OF There is no national scheme of green certificates, however, consumers are offered green electricity THE SCHEME) packages by electricity suppliers. FINANCIAL INCENTIVES FINANCIAL TAXATION Taxation of electricity in general is based on excise levied on the consumption of electricity (at the rate of 0.00447€/kWh). There are no separate tax incentives for electricity generated from renewable resources. However, generation of electricity from renewable resources is not subject to environmental charges which are applied to non-renewable electricity generation (eg,. charges for use of resources, emissions). OTHER N/A. erview of the renewable energy regime in... in... renewable the erview of regime energy O 514 HERBERT SMITH FREEHILLS v
FINLAND PERCENTAGE OF ENERGY 2012: Consumption of energy produced from renewable energy sources was approximately GENERATION FROM RENEWABLE 114TWh which accounts for about 30% of the total energy consumption. SOURCES WITH BREAKDOWN 2020 target: 38% of total energy consumption. (WIND-, SOLAR-, HYDRO-, GEOTHERMAL POWER, BIOFUELS, WASTE TO ENERGY ETC.) AND 2020 TARGET FOR RENEWABLE ENERGY KEY GENERATORS OF Fortum Oyj OVERVIEW RENEWABLE ENERGY Kemijoki Oy Pohjolan Voima Oy EPV Energy Oy Forest industry
FEED-IN TARIFFS Summary: Under the Production Subsidy Act and a Government Decree: wind power: plants with minimum nominal output capacity of 500kW until the total generator output exceeds 2,500MW; forest chips: plants with minimum nominal output capacity of 100kW; wood fuel: plants with minimum output capacity of 100kW and not more than 8 MW until the total generator output exceeds 150MW and the number of power plants exceeds 50; and biogas: plants with minimum output capacity of 100kW until the total generator output exceeds 19MW;
can be accepted in the feed-in tariff scheme. Mechanism: Electricity generators may receive subsidy for up to a period of 12 years in the feed-in tariff scheme. The subsidy is for wind power, wood fuel and biogas, and it is calculated as the difference between a defined guaranteed price and the market price of electricity. Tariff payments are made for a three month period at a time regarding verified and eligible power output. ... GREEN CERTIFICATES (NAME OF Summary: There is no national scheme on green certificates in Finland. However, consumers are F
INLAND THE SCHEME) offered green electricity options by electricity companies. TAXATION Summary: Taxation of electricity is based on excise taxes levied on the consumption of electricity. Fuels consumed in energy generation are tax exempt. The taxes for consumption of fossil fuels and peat were increased in order to make CO neutral
FINANCIAL INCENTIVES FINANCIAL 2 energy sources more competitive. Further, the energy content of and the greenhouse gas emissions from fuels were better taken into account in fuel taxation. OTHER Investment subsidies: The Ministry of Employment and the Economy grants energy subsidies for eg, investments made in: renewable energy; improvements in energy efficiency or in the efficiency of energy generation; and/or reduction of the environmental impact in energy production.
In addition, the Ministry of Employment and the Economy has launched a new subsidy program that grants energy subsidies for small and medium sized LNG terminal projects in 2013 and 2014. The Ministry of Agriculture and Forestry grants subsidies for the harvesting and chipping of energy wood. erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 515 v
france PERCENTAGE OF ENERGY 2011: 16.3% of total electricity generation (83.70TWh), which corresponds to 13.1% of gross final GENERATION FROM RENEWABLE electricity consumption. SOURCES WITH BREAKDOWN 2020 target: 23% of electricity consumption. (WIND-, SOLAR-, HYDRO-, GEOTHERMAL POWER, BIOFUELS, WASTE TO ENERGY ETC.) AND 2020 TARGET FOR OVERVIEW RENEWABLE ENERGY KEY GENERATORS OF Various; there are no key generators. RENEWABLE ENERGY
FEED-IN TARIFFS Summary: There are two main systems for promoting the development of renewable energy: (i) power purchase obligations for EDF and certain other power distributors to purchase electricity at feed-in tariffs set out by ministerial orders specific to each source of energy; and (ii) call for tenders (launched from time to time by the minister in charge of energy). Mechanism: (i) Power purchase obligation mechanism: the electricity generators shall obtain a power purchase obligation certificate from the local State's representative confirming the production site complies with the requirements set out by the regulatory framework in order to be entitled to the feed-in tariffs. Then, a power purchase agreement ("PPA") shall be entered into either with EDF or a local distributor of its choice on the basis of the statutory feed-in tariffs which are different from one energy source to another. Ministerial orders set out the feed-in tariff for the different RES. The duration of the guaranteed price depends on the energy source (12 years for combined heat and power, 15 years for onshore wind or biogas or 20 years for solar or offshore wind). (ii) Call for tenders mechanism: The winner of a call for tender is awarded the right to enter into a long term PPA with EDF or another local distributor at a guaranteed price set in accordance with the bid it submitted (ie, the purchase price will be the bid price of the selected bidder) and EDF has the obligation to enter into such PPA.
FINANCIAL INCENTIVES FINANCIAL The purchasers of electricity from RES benefit from a mechanism of compensation of the extra cost rance ... generated by the execution of this purchase obligation. This compensation is financed by the ultimate power consumers, whatever their suppliers are, by the means of the contribution to the F electricity public service, which is due by all electricity consumers (individuals, either professionals or not, and companies), in proportion to their consumed power. GREEN CERTIFICATES (NAME OF In France, the green certificate market is private and unregulated. The association Observ'ER in THE SCHEME) which the major actors of the electricity sector are present, issues the green certificates. TAXATION Tax reduction or exemption from land tax in respect of energy-saving investments or for purchasing
equipment using renewable energy. OTHER Special fund amounting to €1.2 billion for the period 2009 to 2013 dedicated to generation of heat through renewable sources. 0% interest loans for purchasing equipment using renewable energy. erview of the renewable energy regime in... in... renewable the erview of regime energy O 516 HERBERT SMITH FREEHILLS v
GERMANY
PERCENTAGE OF ENERGY 2011: total renewable energy produced: 300.9 TWh GENERATION FROM RENEWABLE 20.3% of total electricity generation SOURCES WITH BREAKDOWN (WIND-, SOLAR-, HYDRO-, water power: 15% GEOTHERMAL POWER, biomass: 30% BIOFUELS, WASTE TO ENERGY ETC.) AND 2020 TARGET FOR wind: 40% RENEWABLE ENERGY photovoltaic: 16%
11.0% of total heat generation: biomass: 91% geothermal: 5% OVERVIEW solar: 4%
5.5% of total fuel generation: biofuels: 100%
2020 target: 35% of electricity consumption (18% target pursuant to the Renewable Energy Directive) KEY GENERATORS OF Various – no key generators RENEWABLE ENERGY
FEED-IN TARIFFS Summary: statutory feed-in-tariffs paid per KWh for a period of 15 to 20 years plus year of commissioning of facility; subject to an annual reduction depending on year of commissioning of facility, energy source and overall installed capacity. Mechanism: facility operator is paid feed-in-tariff by distribution network operator; the latter is compensated by transmission system operator; inter transmission system operator compensation scheme, depending on total feed-in remuneration paid by each transmission system operator; ... purchase obligation for energy supply undertakings; levy on end consumer. G As an alternative, plant operators may claim a market premium for electricity they sell directly, to be e calculated each month. In general, plant operators are free to choose between the regular feed-in rmany tariff and the market premium for direct selling. Operators of biogas plant who sell their electricity directly may claim a flexibility premium on top of the market premium. A plant operator wishing to be eligible for the flexibility premium needs to provide additional installed capacity that may only be used on demand rather than on a regular basis. GREEN CERTIFICATES (NAME OF Green-Power-Trader-Scheme: privilege for “green power traders” - partial exemption from THE SCHEME) purchase obligation for energy supply undertakings if more than 50% of electricity supplied is from renewable sources within the meaning of s. 23-33 of the Federal German Act on Energy from Renewable Sources. Biofuel Obligations: circulators of petrol and diesel fuel must ensure that these fuels contain a certain amount of biofuel. TAXATION Exemptions of 2c€/kWh from the electricity levy are available for RES generated electricity. Heat pump: installations of heat pumps in both old and new buildings receive subsidies. FINANCIAL INCENTIVES FINANCIAL Turnover tax exemption for market premium pursuant to per §33g EEG. OTHER Off-shore wind park connection: obligation of Transmission System Operators to connect off-shore wind parks at their expenses. Loan programme by state owned KfW bank and investment supplement programme by BAFA; combined volume of €366 million in 2012. Plants for the generation of electricity from renewable sources shall be given priority connection to the grid. Furthermore, grid operators are obliged to give priority to electricity from renewable sources when purchasing and transmitting electricity. Moreover, those interested in feeding in electricity may demand that the grid operator expands his grid. Owners of new buildings are required to satisfy a certain proportion of their energy usage via renewable sources (subject to certain exceptions). New buildings are required to have an “energy-ID”, old buildings have been obliged to have such an energy- ID since 2009 when sold or newly let. erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 517 v
G reece PERCENTAGE OF ENERGY 2012: RES production accounts for 15% of the energy generated. The breakdown per RES GENERATION FROM RENEWABLE technology for this 15% is: SOURCES WITH BREAKDOWN Wind: 50%, (WIND-, SOLAR-, HYDRO-, GEOTHERMAL POWER, PV: 41% (including rooftop PVs), BIOFUELS, WASTE TO ENERGY Biofuels: 1.5% ETC.) AND 2020 TARGET FOR RENEWABLE ENERGY Hydro: 7.5% Total RES power produced in MWs: approximately 2930MW 2020 target: 20% KEY GENERATORS OF ROKAS RENEWABLE ENERGY OVERVIEW TERNA EDF ELTECH WIND PPC QUEST ENEL EUNICE
FEED-IN TARIFFS The feed-in-tariff scheme provides electricity producers from RES a guaranteed selling price for their produced electricity, along with a guaranteed buyer for their production. The selling price is differs depending on whether the RES electricity producers are located on a Greek island or not and on the type of RES technology used. GREEN CERTIFICATES (NAME OF N/A THE SCHEME) TAXATION The National Development Law (Law 3908/2011) covering all private investments (with the exemption of PVs) in Greece provides for tax breaks of up to 100% of the maximum allowable
amount of aid. The relevant tax relief comprises exemption from payment of income tax on pre-tax eece ...
profits which result from any and all of the enterprise's activities. G
OTHER Other financial instruments for the promotion of RES in Greece (with the exemption of PVs), r according to the National Development Law (Law 3908/2011) are: Subsidy: Gratis payment by the State of a sum of money to cover part of the subsidised
FINANCIAL INCENTIVES FINANCIAL expenditure of the investment Leasing subsidy: Includes payment by the State of a portion of the instalments paid under a leasing agreement executed to acquire new machinery and/or other equipment Soft loans by ETEAN (National Fund for Entrepreneurship and Development) The amount to be covered by a bank loan may be funded by soft loans from credit institutions that cooperate with ETEAN enterprises. erview of the renewable energy regime in... in... renewable the erview of regime energy O 518 HERBERT SMITH FREEHILLS v
Hungary PERCENTAGE OF ENERGY 2012: 8.9% GENERATION FROM RENEWABLE Breakdown of RES capacities in 2012: biomass: 41%; wind: 42%; water: 7%, biogas: 6%, solar: 2%, SOURCES WITH BREAKDOWN waste: 2%. (WIND-, SOLAR-, HYDRO-, GEOTHERMAL POWER, 2020 target: 14.65% BIOFUELS, WASTE TO ENERGY ETC.) AND 2020 TARGET FOR RENEWABLE ENERGY KEY GENERATORS OF Pannonia Bioethanol Zrt. RENEWABLE ENERGY
OVERVIEW Alerion Hungária Energetikai Kft. Kaptár Szélerőmű Kft. Vento Energetika Kft. Iberdola Magyarország Kft. Pannonpower Holding Zrt.
FEED-IN TARIFFS A feed-in-tariff system (mandatory off-take regime) allows participating generators to sell electricity at a price regulated by legislation, for a term and in an amount determined by the Hungarian Energy and Public Utility Regulatory Authority. Electricity traders, including universal service providers, power generators and electricity importers, must purchase a fixed percentage of their total electricity consumption or turnover from RES. GREEN CERTIFICATES (NAME OF N/A THE SCHEME) TAXATION N/A
FINANCIAL INCENTIVES FINANCIAL OTHER N/A
I celand
P erCENTAGE of energy In 2011, around 76% of final energy consumption was from renewable energy (electricity being ... generation from renewable close to 100%).
H sources with breakdown Target for 2020: 72% (according to the NREAP). The target has already been reached. UNGARY (wind-, solar-, hydro-, geothermal power, biofuels, waste to energy etc.) and 2020 Target for renewable energy Key generators of Landsvirkjun OVERVIEW
- renewable energy Reykjavík Energy (Orkuveita Reykjavíkur)
ICELAND HS Energy (HS Orka) Fallorka RARIK
F neED-i tariffs N/A
Green certificates (name of EECS Scheme certificates issued by Landsnet in accordance with the Renewable Energy Directive. the scheme) taxation Tax incentives in the transport sector such as VAT exemptions and reduction of excise duties. ncentives financial CO tax. i 2 other N/A erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 519 v
I reland P erCENTAGE of energy At the end of Q2, 2013, there was 2,726MW of renewable generation installed across the island of generation from renewable Ireland. This all-island figure is split between 2,143MW in Ireland and 583MW in Northern Ireland. sources with breakdown This figure is comprised of 1,834MW of wind energy, 238MW of Hydro and 71MW of other (wind-, solar-, hydro-, (including CHP RES, tidal and solar). geothermal power, 2020 Target: 16% pursuant to the Renewable Energy Directive. It is projected that in order to meet biofuels, waste to energy the renewable electricity targets, the amount of wind generation across the island of Ireland will etc.) and 2020 Target for need to reach an installed capacity level of between 4,800MW and 5,300MW by 2020. renewable energy
OVERVIEW Key generators of ESB renewable energy BGÉ Viridian Airtricity
F neED-i tariffs Renewable Energy Feed in Tariff Support Scheme: operates similar to a traditional feed-in tariff but with electricity purchased by suppliers who may recover costs from public service obligations. REFIT 1 Scheme is fully contracted. The current schemes open to new projects are REFIT 2 and REFIT 3. Successful generators accepted into the REFIT 2 or 3 Schemes receive a letter of offer and must contract with a supplier licensed by the CER. Aid is granted to suppliers in the form of: (i) payments for every kWh contracted under a REFIT Power Purchase Agreement; and (ii) market price equalisation compensation below a floor price (not indexed). Green certificates (name of N/A. the scheme) taxation Section 486B of the Taxes Consolidation Act 1997, as amended, provides for a deduction from a company’s profits for its direct investment in new ordinary shares in a qualifying renewable energy company which must be in the solar, wind, hydro or biomass technology categories and approved by the Minister. Relief from stamp duty on transfers of greenhouse gas emissions allowances. Employment and Investment Incentive Scheme allows individual investors to obtain income tax incentives relief on investment made into EII-certified qualifying companies, which include renewable energy companies. reland ... I Carbon Tax on the supply of Fossil Fuels with a partial relief available to holders of a greenhouse
financial gas permit. Solid Fuel Carbon Tax is an excise duty which was introduced in May 2013, and which applies to solid fuel (coal and peat) supplied in Ireland. The rate of tax is €10 per tonne of carbon emitted, rising to €20 per tonne in May 2014.The securitisation regime under Section 110 of the Taxes Consolidation Act 1997, as amended, includes greenhouse gas emissions allowances. The regime was extended in 2011 to include carbon credits and in 2012 further extended to include forest carbon offsets. other Research and development grants to support innovative domestic and commercial schemes using biofuels, combined heat and power, large-scale wood hearing systems and domestic renewable heat technologies. Funding programmes offered through the Sustainable Energy Authority of Ireland. Currently, there is a fund to stimulate the development and deployment of Ocean Energy devices and systems. erview of the renewable energy regime in... in... renewable the erview of regime energy O 520 HERBERT SMITH FREEHILLS v
I taly P erCENTAGE of energy 2012 generation from renewable Total is 92.222GWh (27% of the total gross final consumptions in 2012) sources with breakdown (wind-, solar-, hydro-, Electricity production from renewable sources breakdown (GSE 2012 data): geothermal power, Wind: 13,407GWh biofuels, waste to energy etc.) and 2020 Target for Biomasses, bio liquids and biogases: 12,487GWh renewable energy Hydroelectric: 41,875GWh Solar: 18,862GWh Geothermic: 5,592GWh 2020 target OVERVIEW 26.4% of the total consumptions (17% target pursuant to the Renewable Energy Directive) Key generators of ENEL (leader in Hydroelectric and Geothermic) renewable energy A2A (leader in biomass and biogas) C.V.A. Edison Edipower E.On ... I t aly erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 521 v
I ntaly (co tinued) F neED-i tariffs New Feed-in tariff Scheme applicable to renewable plants other than the photovoltaic plants entering into operation after 1 January 2013: Plants up to 5MW: feed-in tariff depending on the type of renewable sources employed and the power capacity bracket to which the relevant plant belongs. The tariff applying on the date of entry of operations of the plant will be maintained throughout the entire incentive period. Amounts of tariffs defined in Annex 1 MED Decree 6 July 2012. Plants over 5MW: feed in tariff the amount of which will be determined on the basis of a system of auctions by reduction held by the GSE as defined in MED Decree 6 July 2012. Feed in tariff: for photovoltaic plants entering into operation after 1 January 2013 the tariffs will include both an incentive component and an electricity output valorisation component. Green certificates (name of The Green Certificate Scheme has been progressively phased out and is not applicable to plants the scheme) which entered into operation after 31 of December 2012. A transitional regime is contemplated until 2015. Starting from 2016, renewable plants for which the GCs-based incentive period is still on-going will switch to the new Feed-in tariff scheme for the remainder of the relevant incentive period, and will not be subject to the auction mechanism. taxation Summary: The production and the sale of electricity arising from renewable source are in principle transactions taxable on the basis of the Italian taxation rules. In general, there are two main kinds of incentives for the producers of electricity: (i) premium Feed-in Tariff, and (ii) the Green Certificates (now replaced): (i) the premium Feed-in Tariff is paid to the producers of electricity arising from a photovoltaic incentives source. It is not relevant for VAT purposes (not falling within the scope of VAT) while it is relevant for income tax purpose being taxable according to the provisions of the business income and subject to an advance provisional withholding tax at 4% rate; and
financial (ii) the Green Certificates were granted by the entity managing the electric system ("GSE") to the big producer of electricity (higher than 1 MW) arising from renewable source. For VAT purposes the sale of such certificates is considered as a supply of services subject to VAT at the ordinary 22% rate. For direct tax purposes, the profits arising from the sale of green certificates is considered business income, taxable as capital gains.
Notwithstanding the above, with regard to the production and sale of electricity from renewable sources it should be also underlined that according to a specific piece of legislation (the so called taly ... “Robin Hood Tax”), the general corporate income tax (“IRES”) rate (currently equal to 27.5%) will be I increased by (i) 10.5% for fiscal years 2011 to 2013 (as a consequence the effective tax rate will be equal to 38%), and by (ii) 6.5% starting from fiscal year 2014 (bringing the IRES tax rate to 34%). The above mentioned Robin Hood Tax regime applies only for companies whose annual turnover exceeds €3 million and whose corporate tax basis exceeds €300,000. -
Furthermore, please note that an ad hoc favourable tax regime is provided for the producers of KAZAKHSTAN electricity that fall within the meaning of “agricultural entrepreneurs”. The sale of electricity may also be subject to the application of the excise duty (accisa), in so far as certain conditions are met. other
kazakhstan
P erCENTAGE of energy In 2012 less than 1% of energy consumption in Kazakhstan stems from renewable sources except generation from renewable hydroelectric energy, but it is expected that RES consumption will surpass 1% by 2015 and will reach sources with breakdown 5% by 2024. It is intended that about 31 renewable energy facilities will become operational with a (wind-, solar-, hydro-, total capacity of 1,040MW by 2020. geothermal power, biofuels, waste to energy etc.) and 2020 Target for renewable energy OVERVIEW Key generators of Bukhtarminsk, Shulbinsk, Ust-Kamenogorsk, Moynak Hydropower Plants. renewable energy Kordai Wind Power Plant. Otar Solar Power Plant. erview of the renewable energy regime in... in... renewable the erview of regime energy O 522 HERBERT SMITH FREEHILLS v
kazakhstan (continued) F neED-i tariffs Mechanism: Under development and was set up in the amendments of 2013 in the Law on On Support of the Use of Renewable Energy Sources. Tariff: The law states that there is a ‘fixed tariff’, which is the rate for the purchase of energy produced by RES by the Centre for settlement and finance on support of RES with validity for 15 years for each type of renewable energy and a ‘tariff to support renewable energy’, which is the tariff for sale of such energy by the Centre. Green certificates (name of There is currently no "green" or "white" certificate trading system in place in Kazakhstan. the scheme) taxation Investment preferences: Entities engaged in the design, construction and operation of renewable energy facilities can apply for investment preferences. They are granted on the basis of a contract incentives
between the company carrying out the investment project and the competent authority, which is the Ministry of Industry and New Technologies of the Republic of Kazakhstan in the form of: 1) exemption from customs duties (for up to five years from the registration of the contract on imported equipment; and 2) government in-kind grants (provision of land, buildings, machinery, etc.
financial in the maximum amount of not more than 30% of the volume of investment in fixed assets). Tax investment preferences: Deduction of the value of the energy production facilities and subsequent cost of their reconstruction and modernisation. The application of privileges are carried out by using one of the following methods: 1) method of deduction after putting a facility into operation; 2) method of deduction prior to putting a facility into operation. other The Law on On Support of the Use of Renewable Energy Sources states certain state support for the purchase and cost reimbursement of green energy.
L atvia
P erCENTAGE of energy 2010: Total was 32.5% (mostly large scale hydro-energy) generation from renewable 2020 target: 40% sources with breakdown (wind-, solar-, hydro-, geothermal power, biofuels, waste to energy etc.) and 2020 Target for OVERVIEW ... renewable energy K Key generators of AS Latvenergo (large scale hydro-energy) AZAKHSTAN renewable energy
F neED-i tariffs The Electricity Market Law requires the public trader (entity having the distribution licence with the largest area of operation and the largest number of users switched to its networks) to purchase a certain amount of electricity generated from renewable energy resources (excluding hydroelectric power plants with capacity in excess of 5MW). The criteria for the electricity generators to become eligible to participate in the scheme, the total quantity of the electricity to be purchased by the public trader and the price at which the public trader must purchase the electricity are determined by the
- Cabinet of Ministers. incentives
Green certificates (name of Entities producing electricity by using renewable energy resources may acquire the right to sell the LATVIA the scheme) produced electricity to the public trader, provided that they have received a special permit from the Ministry of Economy. Such a permit also confirms that the electricity has been produced using
financial renewable energy resources. taxation Certain tax benefits are granted to biofuel producers in the form of reduced tax excise rates. other
erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 523 v
L ithuania P erCENTAGE of energy 2011: 20% of gross final energy consumption. generation from renewable 2020 target: 23% (pursuant to the Renewable Energy Directive). sources with breakdown (wind-, solar-, hydro-, geothermal power, biofuels, waste to energy etc.) and 2020 Target for renewable energy Key generators of Vėjų spektras UAB renewable energy Renerga UAB OVERVIEW Vilniaus energija UAB Lietuvos energijos gamyba AB (includes Lietuvos Elektrinė Power Plant, Kruonis Hydro Pumped Storage Power Plant and Kaunas Hydropower Plant) Vydmantai wind park UAB Naujoji energija UAB
F neED-i tariffs Summary: Feed-in tariff for "small scale" generation of up to 10kW: Mechanism: Public suppliers are required to purchase electricity produced from RES in small scale power station at fixed feed-in tariff defined by Energy Commission. The obligatory purchase is applied for 12 years. Feed-in tariff for "large scale" generation of more than 10kW: Mechanism: Electricity produced from RES in large scale power stations is traded on the basis of bilateral agreements (electricity can be sold to any supplier or the particular company appointed by the Ministry of Energy) or at Nordpool power exchange, at unregulated prices. The producer is entitled to receive the premium equal to the difference between fixed feed-in tariff defined in the auction and the actual selling price of electricity to the consumers, which shall be no less than the average market price defined by the Energy Commission. The premium is applied for 12 years. Green certificates (name of N/A.
the scheme) ithuania ...
taxation Summary: Law on the Environmental Pollution Tax provides for exemption from the obligation to L pay the pollution tax which is applied to the natural and legal persons using biofuel who have proper documentation to substantiate its use. Pursuant to Law on the Excise Duty energy products incentives produced by using biomass are subject to a partial or full exemption (as applicable) from the excise duty in accordance with the specific conditions established in the legislation. The electricity produced by using RES is exempt from the excise duty.
financial other Summary: The Law on Biofuel, Biofuels for Transport and Bio-Oils stipulates that specific support schemes for promotion of the production and use of biofuel, biofuels for transport and bio-oils shall be established. Production of biofuel, biofuels for transport and bio-oils from the raw material originating in Lithuania shall be promoted through monetary compensation for producers purchasing raw materials needed for production of biofuel. The support scheme is financed from the state budget. Power stations producing energy from RES are connected to the existing networks with a discount of 80% or 60% depending on the installed capacity. Power-stations which use RES are excluded from the duty to pay the fee for power reservation. Lithuanian Environmental investment Fund ("LEIF") supports investment projects in the form of interest subsidies and loans on soft terms. The amount of the subsidy to one beneficiary may not exceed LTL690,000 over three years or 70% of the total amount of environmental investment project. eve fternwbeeeg eiei.. ... in... renewable the erview of regime energy O 524 HERBERT SMITH FREEHILLS v
luxembourg P erCENTAGE of energy 2010: 2.8% generation from renewable 2020 target: 11% sources with breakdown (wind-, solar-, hydro-, geothermal power, biofuels, waste to energy etc.) and 2020 Target for OVERVIEW renewable energy Key generators of SEO (directly and through subsidiaries) renewable energy Enovos (directly and through subsidiaries)
F neED-i tariffs Feed-in tariffs varying according to the technology, the capacity of the plant and the year of commissioning. Mechanism: model contract approved by the regulator between the operator of a plant and the grid operator. Green certificates (name of Luxembourg has joined the AIB EECS standard. incentives
the scheme) taxation Compensation mechanism: contribution levied on consumers to fund public service obligations and renewable energies. Income from certain photovoltaic systems is exempt from income tax based on administrative financial guidelines. other Investment grants
former yugoslav republic of macedonia
P erCENTAGE of energy 2012 generation from renewable In accordance with the Decision for the adoption of energy balance of Macedonia for the period sources with breakdown from 2013 to 2017 the percentage of energy consumption in Macedonia which stems from (wind-, solar-, hydro-, renewable sources in 2012 was approximately 15%. geothermal power, biofuels, waste to energy 2020 target:
L etc.) and 2020 Target for In accordance with both the Strategy for Utilization of Renewable Sources of Energy in the Republic UXEMBOURG renewable energy of Macedonia until 2020 and the Strategy for Energy Development in the Republic of Macedonia until 2030 the target for energy from renewable sources from the total energy consumption in 2020 amounts to 21%. However, in a meeting of the Energy Community Member States in October 2012, Macedonia has committed to a 28% share of renewable energy as part of the overall energy consumption in 2020 (which has recently been revised to 29%). No agreement on the conflicting 2020 RES targets (21%
OVERVIEW in national legislation and 29% within the Energy Community) has been reached thus far. Key generators of The main source of energy produced from renewables in Macedonia is hydropower. Hydropower
- renewable energy potential in Macedonia is utilised primarily through seven large hydropower plants and number of smaller facilities. MACEDONIA The hydropower plants Vrben, Raven and Vrutok form the Mavrovo hydropower complex. The hydropower plants Globocica and Shpilje along with the Ohrid Lake together make up the hydro energy instalment complex of the river Black Drin. The third significant hydropower complex is situated on the river Treska with the hydropower plants Kozjak, Sv. Petka and Matka. Most of the major hydropower plants in Macedonia are operated by the 100% state-owned company Macedonian Power Plants ("ELEM"). erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 525 v
former yugoslav republic of macedonia (continued) F neED-i tariffs There are several feed-in or preferential tariffs applicable in Macedonia. Energy generated from photovoltaic systems has a preferential tariff of 16.00c€/kWh (for plants with installed capacity of up to 50kW) and 12.00c€/kWh (for plants with installed capacity from 51kW up to 1000kW). Electricity generated from small hydropower plants (i.e. hydropower plants with installed capacity of up to 10MW) is subjected to feed-in tariffs ranging from 4,50 to 12,00c€/kWh depending on the installed capacity of the plant. Energy generated from windmills has a fixed preferential tariff of 8.9c€/kWh. Energy generated from electricity plants that use biogas or biomass has a preferential tariff that is dependent on the (i) type of fuel and (ii) percentage share of fossil fuels used in the generation process (ranging from approx. 12.7 to 18c€/kWh). However, that these tariffs are applicable only to the installations which were granted authorisation/ approval for construction after the entry into force of the decisions by which these tariffs were established. Different tariffs apply to the facilities that gained authorisation/approval for construction before the entry into force of the decisions with which these tariffs were established. incentives
Green certificates (name of The Rules on Renewable Energy Sources Macedonia set up a guarantee of origin system in regards the scheme) to the energy generated from renewable sources; guarantees of origin can be obtained by producers of electricity that produce electricity from renewable energy sources. However, such guarantees of
financial origin can be only obtained by the producers which have not obtained a status of preferential producer and consequently which do not sell the generated electricity at preferential tariffs. The guarantee of origin is issued for electricity of 1MWh and as a general rule such guarantees are valid for 12 months. Guarantees of origin can be transferred from the holder of the guarantee to another licence holder for trade or supply of electricity in the Republic of Macedonia. It should be however noted that companies that deal with trade and supply of electricity are not legally required to supply a certain percentage of their electricity from RES, nor are consumers obliged to purchase a certain percentage of their electricity from RES. taxation The only form of taxation incentives with regard to renewable energy sources is the application of the preferential tax rate for value added tax (5% rather than the regular 18%) for the trade and import of thermal solar systems and components. Other than this, energy from renewable sources
is treated in the same manner for taxation purposes as regular energy. ...fyro other
Malta
P erCENTAGE of energy 2013: Malta reached 3.3% (pending audit) of its final energy consumption within the transport generation from renewable sector/ However no data is available on Malta’s renewable energy as a percentage of gross final MACEDONIA sources with breakdown energy consumption; in 2010 this stood at 0.4% (mostly due to solar, PVs & biofuels). (wind-, solar-, hydro-, 2020: Malta’s mandatory renewable energy target for 2020 amounts to 10% of final energy geothermal power, consumption. 10% of energy consumption within the transport sector must emanate from biofuels, waste to energy renewable sources. etc.) and 2020 Target for renewable energy Key generators of Windfarm sites: WasteServ plants and facilities in Hal Far, and Luqa. Two further onshore plants
OVERVIEW renewable energy which are currently being assessed are Hal-Far and Wied Rini. One offshore plant which is still being assessed is that of Sikka l-Bajda. -
MALTA Photovoltaic Plants: WasteServ plants and facilities in Hal Far, Luqa, Maghtab and Mriehel. Biomass through landfill gasses: Ta’ Barkat Sewage Treatment Plant, Maghtab Environment Complex having two engineered landfills known as Ta’ Zwejra & Ghallis, Thermal Treatment Facility in Marsa, Gozo Waste Treatement and Transfer Facility known as Tal-Kus, and St. Antnin MBT. erview of the renewable energy regime in... in... renewable the erview of regime energy O 526 HERBERT SMITH FREEHILLS v
Mc alta ( ontinued) F neED-i tariffs 2013: rates payable by Enemalta to operators for electricity generated from solar photovoltaic installations: (a) Applications for Feed-in Tariff submitted to, and approved by, MRA during the period 01 July 2013 – 30 September 2013 for any type of premises in Malta and Gozo: (i) Roof mounted installation having installation capacity of less than 1000kWp €0.17/kWh for 20 years; (ii) Roof mounted installation having installation capacity of more than 1000kWp €0.16/kWh for 20 years; (iii) Ground mounted installation having installation capacity of less than 1000kWp €0.16/kWh for 20 years; and (iv) Ground mounted installation having installation capacity of more than 1000kWp €0.15.5/kWh for 20 years. All the above having a maximum annual threshold of 1,600,000kWp and provided that the total maximum units of electricity allocated for payment of the feed in tariff shall not exceed 6,400,000kWh p.a.. (b) Feed-in Tariff Schemes for the year 2013 where installation operator benefits from grant of not more than 50% of the initial capital investment: in the case of residential /domestic premises €0.22/kWh for six years up to annual threshold of 1,600,000kWp . (c) Feed-in Tariff Scheme submitted to, and approved by, MRA during the period 01 July 2013 - 31 December 2013 for electricity generated on non-residential premises in Malta and Gozo: (i) if awarded a grant of not more than 50% of the initial capital investment before 01 July 2013 incentives €0.15/kWh for seven years; and (ii) if an awarded a grant of not more than 50% of the initial capital investment before 30 June 2013 €0.11/Kwh for 7 years.
financial All the above having a maximum annual threshold of 1,600,000kWp. Green certificates (name of “Green Certificates” were introduced by the Biofuels (Sustainability Criteria) Regulations, 2010. the scheme) Where installation operators opt to generate electricity from solar PV subject to a paid feed-in tariff
... or for which the net metering arrangement with a spill-off tariff is established then the installation operator will not be entitled to any tradeable green certificates for the electricity generated. MAL So far no such certificates have been issued and the relevant schemes still need to be announced. taxation Under the Deduction (Electric Vehicles) Rules, 2011, a company that carries on a trade or business is TA entitled to a deduction equivalent to 125% of expenditure of a capital nature incurred on the acquisition of electrical vehicles or a maximum of €25,000 in respect of each vehicle against the tax charged for the year of assessment. other 2013: PVs: 50% rebate of expenditure capped at €2,500. Solar water Heaters: 40% rebate of expenditure capped at €400. Roof Thermal/Double Glazing: 15.25% of eligible costs up to a maximum of €1,000 Plug-In Vehicles: 25% rebate of the purchase price of new electric powers vehicles for personal use capped at €4,000. Well restoration: Up to 50% rebate of total expenditure for the restoration works up to a maximum of €1000 (including certification costs capped at €100). erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 527 v
M ontenegro P erCENTAGE of energy 2012: 27% of energy consumption is from RES (biomass and hydropower). generation from renewable 2020 target: 33% target pursuant to the Renewable Energy Directive sources with breakdown (wind-, solar-, hydro-, geothermal power, biofuels, waste to energy etc.) and 2020 Target for OVERVIEW renewable energy Key generators of EPCG renewable energy Zeta Energy d.o.o. Danilovgrad
F neED-i tariffs Decree on the Tariff System for the Establishment of Preferential Prices of Electricity from Renewable Sources of Energy and Efficient Co-generations. The Electricity Market Operator ("EMO") is required to agree terms for the payment of the feed-in tariff with eligible generators. For small hydropower plants tariffs have been set between 5.04 and 10.44c€/kWh, for biomass power plants between 12.31 and 13.71 c€/kWh, for biogas power plants - 15 c€/kWh, for waste incentives fired power plants – 8c€/kWh and for landfill and sewage gas power plants 9 c€/kWh, for solar power plants constructed at the roofs of the buildings 15c€/kWh, and for wind power plants 9.6c€/kWh. Green certificates (name of The Guarantees of Origin ("GO") are issued by the Regulatory Agency for Energy and are valid for a financial the scheme) period of 12 years. taxation No tax incentives other
T he Netherlands
P erCENTAGE of energy 2012: 4.4% (ie, approximately 97PJ) of gross final energy consumption (10.1% of gross electricity generation from renewable consumption)
sources with breakdown ... Wind: 18.4% (wind-, solar-, hydro-, M geothermal power, Solar: 2.1% biofuels, waste to energy ONTENEGRO Hydrothermal: 0.4% etc.) and 2020 Target for renewable energy Geothermal: 3.4% OVERVIEW Biomass: 73%. 2020 target: 14% (2023: 16%) Key generators of No complete/verified information currently available renewable energy - F neED-i tariffs Summary: Feed-in premium Incentive Scheme for Sustainable Energy Production (SDE+) operates
a subsidy scheme for the production of renewable electricity, (bio)gas, heat and CHP. THE Mechanism: SDE+ subsidises the difference between the production costs of 'green' energy and
'grey' energy, resulting in a subsidy per produced kilowatt-hour. Under the SDE+ there is one budget NETHERLANDS for all production technologies. Applicants may apply in phases for an increasing amount of subsidy. Green certificates (name of Summary: The Guarantee of Origin Scheme (Garantie van Oorsprong) creates a system of green the scheme) certificates. A supplier needs these certificates to (i) be eligible for SDE+ subsidy and (ii) guarantee incentives
off-takers that the energy supplied is in fact 'green'. Note: Certiq B.V. (in respect of sustainable electricity) and Vertogas (in respect of renewable gas) are in charge of administrating the Guarantees of Origin Scheme. Certiq and Vertogas are both fully owned subsidiaries of TenneT and Gasunie, respectively. financial taxation Summary: Since 2005 renewable energy is no longer exempted from the regular energy taxes. The SDE+ compensates the competitive disadvantage for renewable energy producers. Since 2013, SDE+ is financed by means of a surcharge (Opslag Duurzame Energie) on energy bills.
other N/A. erview of the renewable energy regime in... in... renewable the erview of regime energy O 528 HERBERT SMITH FREEHILLS v
N orway P erCENTAGE of energy 2011: Energy generation from renewable energy sources in general approx. 65%, increased from generation from renewable 61% in 2010 (percentage of electricity production from renewable energy sources more specifically sources with breakdown approx. 96%). (wind-, solar-, hydro-, 2020 target: 67.5% geothermal power, biofuels, waste to energy etc.) and 2020 Target for OVERVIEW renewable energy Key generators of Statkraft renewable energy
F neED-i tariffs N/A. Green certificates (name of Summary: A joint Norwegian-Swedish electricity certificate market for investments in electricity the scheme) production from renewable energy sources was introduced in 2012. The certificate scheme provides incentives for eligible investments in electricity production from RES (as defined in the incentives Renewable Energy Directive) in both Sweden and Norway. taxation N/A other Investment support scheme handled by Enova SF. financial
Poland
P erCENTAGE of energy 2012: Total is 12265GWh (approx 7.67% of the electricity generated). generation from renewable 2020 target: 15% pursuant to the Renewable Energy Directive sources with breakdown (wind-, solar-, hydro-, geothermal power, biofuels, waste to energy etc.) and 2020 Target for OVERVIEW renewable energy Key generators of ... renewable energy N
ORWAY F neED-i tariffs Currently a feed-in-tariff scheme is not applied in Poland. However, energy generated in micro-sources and sold by natural persons must be purchased by the seller of last resort at a price which equals 80% of the average sales price of electricity in the prior calendar year. incentives
Green certificates (name of Producers of renewable energy sources, traders which sell electricity to final customers or - P the scheme) commodity brokers are obliged to either obtain “certificates of origin” issued by the Polish Energy Authority and submit them for redemption or else pay a “substitution fee”. O taxation LAND financial other erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 529 v
P Ortugal P erCENTAGE of energy 2011: 48.1% (correction of hydraulicity) / 46.2% (non-correction of hydraulicity) generation from renewable 2020: 60% (correction of hydraulicity) / 55.2% (non-correction of hydraulicity) sources with breakdown (wind-, solar-, hydro-, Source: http://www.apren.pt/ geothermal power, biofuels, waste to energy etc.) and 2020 Target for renewable energy KEY GENERATORS OF Eneop 2*, RENEWABLE ENERGY Iberwind*, EDP Renováveis*, Generg*, EEVMP, OVERVIEW EDF EN PortugalP, Enersis, GDF Suez Energia Portugal*, Portucel*, Acciona*, EDP – GPE*
*Source: comprised in the top ten of Apren – Associação de Energias Renováveis http://www.apren.pt/dadostecnicos/index.php?id=264&cat= ...P O RTUGAL erview of the renewable energy regime in... in... renewable the erview of regime energy O 530 HERBERT SMITH FREEHILLS v
Portugal (continued) FEED-IN TARIFFS Tariff (indicative average) – Renewable Energy (DL nº 225/2007, 31 May as subsequently amended)
T arIFF (iNDICATIVE average) Sources/Technologies (€/MWh) Wind 74–75 Hydro up to 10MW 75–77 Photovoltaic > 5kW 310–317 Photovoltaic <= 5kW 450 Solar thermoelectrical <= 10MW 267–273 PV micro generation <= 5kW 470 PV micro generation > 5kW e <= 150kW 355 Biomass (forest) 107–109 Biomass (animal) 102–104 Biogas digestion anaerobic RSU, ETAR and from effluents and waste of mixed farming and food agriculture 115–117 Gas of landfill 102–104 RSU 53–54 CdR 74–76 Waves (Demonstration up to 4MW) 260 Waves (Pre-commercial up to 20MW) 191 Wave (Commercial) first 100MW 131 following 150MW 101 following MW 76
Tariff (indicative average)- Renewable Energy (Portaria nº 865/2009, 13 August)
...P Triffa S ToURCES/ echnologies (indicative average)
O (€/MWh)
RTUGAL Geothermic (high depth and enthalpy) up to 3MW, per project and per entity and up to a national limit of 6MW 270 FINANCIAL INCENTIVES FINANCIAL Other projects up to 3MW, per project and per entity and up to a national limit of 10MW 170–246
Tariff (indicative average)- Renewable Energy (Portaria nº 1057/2010, 15 October) Triffa S ToURCES/ echnologies (indicative average) (€/MWh) Photovoltaic of Concentration (CPV) <= 1MW, up to a limit of installed power national level of 5MW 380
Tariff (indicative average)- Renewable Energy (Decreto-Lei nº 126/2010, 23 November as amended) Triffa S ToURCES/ echnologies (indicative average) (€/MWh) Hydro up to 10MW 91–95 Tariff (indicative average)- Renewable Energy (Decreto-Lei nº 132-A/2010, 21 December) T arIFF (iNDICATIVE S ToURCES/ echnologies average) (€/MWh) Photovoltaic Solar Plant (PV) 257 Tariff (indicative average)- Renewable Energy (Decreto-Lei nº 5/2011, 10 January as amended) T arIFF (iNDICATIVE S ToURCES/ echnologies average) (€/MWh) Biomass (forest) 119 Source: http://www.dgeg.pt/ (dated 2011.07.15) erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 531 v
P Ortugal (continued) GREEN CERTIFICATES (NAME OF No specific scheme has been approved in Portugal. New legislation is planned. THE SCHEME) TAXATION 1. Pursuant to the memorandum of understanding on specific economic policy conditionality concluded in 17 May 2011 (as subsequently amended and updated) between the Portuguese State, the European Commission, the European Central Bank (the "ECB") and the International Monetary Fund ("IMF") (the "MoU"), there was established for Portugal the following support schemes for production of energy under the special regime (co-generation and renewables): "Review the efficiency of support schemes for co-generation and propose possible options for adjusting downward the feed-in tariff used in co-generation (reduce the implicit subsidy)"; "Review in a report the efficiency of support schemes for renewables, covering their rationale, their levels, and other relevant design elements"; "For existing contracts in renewables, assess in a report the possibility of agreeing a renegotiation of the contracts in view of a lower feed-in tariff"; "For new contracts in renewables, revise downward the feed-in tariffs and ensure that the tariffs do not over-compensate producers for their costs and they continue to provide an incentive to reduce costs further, through digressive tariffs. For more mature technologies develop alternative mechanisms (such as feed-in premiums). Reports on action taken will be provided annually"; "Decisions on future investments in renewables, in particular in less mature technologies, will be based on a rigorous analysis in terms of its costs and consequences for energy prices. International benchmarks should be used for the analysis and an independent evaluation should be carried out. Reports on action taken will be provided annually"; and "Reduce the delays and uncertainty surrounding planning, authorisation and certification procedures and improve the transparency of administrative requirements and charges for renewable energy producers (in line with Article 13 and 14 of EU Directive 2009/28/EC). Provide evidence of the measures taken to this end". 2. In relation to the energy policy instruments and taxation, the MoU set out the following: "Review existing energy related instruments, including taxation and energy efficiency incentives. In particular, evaluate the risk of overlapping or inconsistent instruments"; "Based on the results of the review, modify energy policy instruments to ensure that they provide incentives for rational use, energy savings and emission reductions; and "Increase VAT tax rate in electricity and gas as well as excises for electricity.
Source for 1. and 2.: http://www.bportugal.pt/pt-PT/OBancoeoEurosistema/ ...P ProgramaApoioEconomicoFinanceiro/Documents/MoU_PT.pdf
3. According to the "European Commission: Occasional Paper – The Economic Adjustment O
Programme for Portugal – Fourth Review – Spring 2012" (the "Review") highlighted as measures to RTUGAL
FINANCIAL INCENTIVES FINANCIAL be implemented in a mid-term in relation to the renewables: "the government has announced that it will hold negotiations with the generators to limit the policy costs of renewables, for capacity that is not awarded within tender procedures"; preparation of a "proposal on measures to be used to correct excessive rents in special (co-generation and renewables) and standard regimes (CMECs, PPAs, and power guarantee mechanism). The proposal will consider the merits of a full range of measures and cover all sources of rents"; "ensure that the reduction of the energy dependence and the promotion of renewable energies is made in a way that limits the additional costs associated with the production of electricity under the ordinary and special (co-generation and renewables) regimes"; "Implement the announced measures to limit the policy costs of renewables under the special regime - excluding those granted under tender mechanisms, in particular (i) the compensation to be paid by the generators (yielding a NPV of EUR 75 to 150 million); and (ii) the introduction of a maximum duration for the feed in tariff in small hydro plants (yielding an NPV of EUR 200 to 250 million)"; "For new contracts in renewables, revise downward the feed-in tariffs and ensure that the tariffs do not over-compensate producers for their costs and they continue to provide an incentive to reduce costs further, through digressive tariffs. For more mature technologies develop alternative mechanisms (such as feed-in premiums)"; and "Decisions on future investments in renewables, in particular in less mature technologies, will be based on a rigorous analysis in terms of its costs and consequences for energy prices. International benchmarks will be used for the analysis and an independent evaluation will be carried out". Sources for 3.: http://ec.europa.eu/economy_finance/publications/occasional_paper/2012/pdf/ ocp111_en.pdf 4. Average taxation for the eolic energy is estimated at 35% (above the 19% of the national taxation average). Source: http://www.apren.pt/gca/?id=319 OTHER The MoU, the Review and the approval of the State Annual Budget for 2013 (Orçamento de Estado de 2013) may impact on these aspects of the Renewables energy legal framework which is in process of revision and amendment. eve fternwbeeeg eiei.. ... in... renewable the erview of regime energy O 532 HERBERT SMITH FREEHILLS v
R omania P erCENTAGE of energy 2012: 14.977TWh of electricity from renewable sources generation from renewable 2012: 53.793TWh of electricity generated, out of which: sources with breakdown (wind-, solar-, hydro-, 22.2% hydro geothermal power, 5.3% wind biofuels, waste to energy etc.) and 2020 Target for 0.4% other sources. renewable energy 2020 target: 24% (same as pursuant to the Renewable Energy Directive)
OVERVIEW KEY GENERATORS OF Tomis Team (wind) RENEWABLE ENERGY EdP Renewables (including subisidiaries)(wind) Hidroelectrica (hydro) Enel Green Power Romania (wind and solar)
FEED-IN TARIFFS Feed-in tariff for "small scale" generation of up to 1MW or 2MW for high efficiency cogeneration from biomass: suppliers in the area of the producer are required to acquire electricity generated at regulated tariffs, determined per each technology type. Producers receiving this feed-in-tariff will no longer benefit from green certificates. Applicable as of clearance from CE on state aid. GREEN CERTIFICATES (NAME OF Trading of green certificates combined with the mandatory quota system: Producers of THE SCHEME) renewable electricity receive green certificates for the electricity produced and fed into the system and have the right to sell such green certificates independently from the electricity generated and electricity suppliers (as well as certain producers) are obliged to acquire a definite mandatory quota of green certificates, proportional to the amount of the traded electricity; green certificates are further invoiced by electricity suppliers to end consumers, not at actual cost. Support scheme for high efficiency cogeneration from RES: A tariff granted for each MW of electricity produced from high efficiency cogeneration and fed into the system or at the producer's
FINANCIAL INCENTIVES FINANCIAL discretion, an extra green certificate in addition to those granted for the electricity generated from that specific RES. TAXATION other R
OMANIA RUSSIA
P erCENTAGE of energy 2010: approximately 1% of the electricity generated (excluding major hydro power plants with generation from renewable capacity more than 25 MW). sources with breakdown 2020 target: 2.5 - 4.5% of the electricity generated (excluding major hydro power plants). (wind-, solar-, hydro-, geothermal power, - biofuels, waste to energy
RUSSIA etc.) and 2020 Target for OVERVIEW renewable energy KEY GENERATORS OF OJSC “Rushydro” RENEWABLE ENERGY
FEED-IN TARIFFS List of measures to support renewable energy sources generators includes (i) tenders for sale of capacity which allow successful bidders to receive capacity payments guaranteeing return of their investments within 15 years; (ii) subsidies from the federal budget for the compensation of grid connection costs; (ii) fixed regulated price premiums for produced electricity; and (iv) obligations on transmission and distribution companies to compensate losses in their grids by purchasing electricity produced primarily by certified renewable energy sources generators. However, some of the above measures don't have full effect due to lack of legislation. GREEN CERTIFICATES (NAME OF The procedures and criteria for qualifying as a renewable energy sources generator include the THE SCHEME) requirements that such a generator shall: (i) generate power solely from renewable energy sources or combine generation of such power with traditional power; (ii) be commissioned (not be subject to repair works or decommissioned); (iii) be connected to electricity grids and be equipped with relevant metering devices; and (iv) be included in the scheme of renewable energy sources generation assets, approved by the relevant authority.
FINANCIAL INCENTIVES FINANCIAL After having qualified as a renewable energy sources generator, the generator shall be put in a special register and becomes able to obtain a "green" certificate valid for 3 years which confirms that the generator produces a certain volume of power from renewable energy sources. TAXATION The price of the electrical capacity shall be increased for the renewable energy generators to cover certain proportion of the property tax and the allowable capital and operation (current) expenses other N/A eve fternwbeeeg eiei.. ... in... renewable the erview of regime energy O T he European Energy Handbook 2014 533 v
SERBIA P erCENTAGE of energy 2013: approx. 21% of energy consumption is from RES (biomass and hydropower). generation from renewable 2020 target: 27% target pursuant to the Renewable Energy Directive. sources with breakdown (wind-, solar-, hydro-, geothermal power, biofuels, waste to energy etc.) and 2020 Target for OVERVIEW renewable energy KEY GENERATORS OF EPS RENEWABLE ENERGY
FEED-IN TARIFFS Summary: new Feed-in tariffs have been determined by the Government of Serbia. Mechanism: Execution of a long term power purchase agreement with the public supplier (Serbian national electric utility – EPS). For hydropower plants, tariffs have been set between 5.9 and 12.40c€/kWh, for biomass power plants between 8.22 and 13.26c€/kWh, for biogas power plants between 12.31 and 15.66c€/kWh, for natural gas and fossil fuel fired CHP plants 8.89 and 8.04c€/ kWh, for solar power plants between 16.25 and 20.66c€/kWh, for geothermal power plants between 6.92 and 9.67c€/kWh (depending on their installed capacity) and for waste fired power plants, landfill and sewage gas power plants and wind power plants, 8.57, 6.91, and 9.20c€/kWh respectively (regardless of their installed capacity). Feed-in tariffs will be adjusted pursuant to the inflation in euro zone in the previous year. Please note that certain limitations have been placed on the applicability of feed-in tariffs with respect to renewable energy sources.
FINANCIAL INCENTIVES FINANCIAL GREEN CERTIFICATES (NAME OF Summary: The Guarantees of Origin ("GO") are instruments issued by the TSO issued upon a THE SCHEME) request from the RES electricity producer. The GOs allow producers to export green energy from Serbia. TAXATION Summary: Although the new Serbian Energy Act envisages the possibility of introducing tax incentives for electricity produced from RES, currently there are no tax incentives for the generation of electricity from RES. other S
SLOVAK republic ERBIA
P erCENTAGE of energy 2010: energy generation from renewable energy sources was 9.4% of total generation of energy generation from renewable 2020 target: 14% sources with breakdown - (wind-, solar-, hydro-, geothermal power, SLOVAK biofuels, waste to energy etc.) and 2020 Target for OVERVIEW renewable energy KEY GENERATORS OF Slovenské elektrárne, a.s. RENEWABLE ENERGY re FEED-IN TARIFFS Summary: The feed-in tariff scheme applies to electricity generation from renewable energy
sources and high-efficiency cogeneration with total installed capacity up to 10MW. p
Mechanism: The feed-in tariff scheme is based on an additional payment included in the basic u electricity price set for a certain type of renewable energy, e.g. for solar energy. The additional blic payment is equal to the difference between the basic price and the price of electricity set for the electricity to cover losses or imbalances in the distribution grid.
GREEN CERTIFICATES (NAME OF Summary: A green certificate (pursuant to the Slovak law – a guarantee of origin of electricity from THE SCHEME) renewable sources of energy) is issued in electronic form for each 1MW of electricity generated from a renewable energy source or by cogeneration upon the request of the electricity producer. A
FINANCIAL INCENTIVES FINANCIAL certificate is issued for 12 months and is also tradable in other EU Member States. TAXATION Summary: Electricity generated from renewable energy sources is generally exempted from the consumption tax generally levied on electricity. other erview of the renewable energy regime in... in... renewable the erview of regime energy O 534 HERBERT SMITH FREEHILLS v
SLOVENIA P erCENTAGE of energy 2010: The share of energy generation from renewable sources in the gross final consumption of generation from renewable energy in 2011 was almost 20% sources with breakdown 2020 target: 25% pursuant to Slovenian Action Plan for Renewable Energy and to the Renewable (wind-, solar-, hydro-, Energy Directive geothermal power, biofuels, waste to energy etc.) and 2020 Target for renewable energy KEY GENERATORS OF Elektro Ljubljana OVE d.o.o. OVERVIEW RENEWABLE ENERGY GEN energija d.o.o. Biomasa d.o.o. Etc.
FEED-IN TARIFFS Feed-in tariffs are managed by the Centre for Support within Borzen d.o.o. The centre promotes supporting schemes for electricity production from renewable energy sources ("RES") and high efficiency cogeneration. There are two basic forms of feed-in tariffs, namely the operation support (financial aid business) and guaranteed purchase. Under the guaranteed purchase price scheme, a generator (with a production capacity of a maximum of 5MW) is entitled to sell all of the electricity to Borzen for a guaranteed price for 15 years. Under the financial support scheme, the generator receives a contribution covering the difference between production costs and the expected market price.
GREEN CERTIFICATES (NAME OF If a certain amount of electricity is generated from renewable sources the Energy Agency (Javna THE SCHEME) agencija Republike Slovenije za energijo) issues guarantees of the origin of electricity and RECS green certificates (one for every 1MWh of energy). The Excise Duty Act (Zakon o trošarinah) provides an exemption from payment of excise tributes for ... all biofuels which are used as engine fuels. However, if such biofuels are mixed with other
S energy-producing sources, a dispensation of payment up to 5% is possible. Such conditions are
LOVENIA regulated in the Regulation on payment of excise duty for energy products to which biofuels are
FINANCIAL INCENTIVES FINANCIAL added (Pravilnik o plačilu trošarine za energente, ki so jim dodana biogoriva). Motor Vehicle Tax Act (Zakon o davku na motorna vozila) provides an incentive to purchase motor
vehicles with lower CO2 emissions. TAXATION The Energy Efficiency and Renewable Energy Sources Division (Sektor za učinkovito rabo in obnovljive vire energije) of the Ministry of Infrastructure and Spatial Planningpromotes the use of renewable
energy sources by providing funds for investment projects in a public tender procedure. Moreover, Eco Fund (Eko sklad) encourages the development of environmental protection by providing loans or guarantees for environmental investments.
other erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 535 v
SPAIN P erCENTAGE of energy 2013: total energy generation from renewable sources represented 15.6% of the total primary generation from renewable energy production. sources with breakdown The forecast of energy generation from renewable sources for 2020 is expected to be 22.7% of the (wind-, solar-, hydro-, total energy production). geothermal power, biofuels, waste to energy Breakdown for the different renewable sources are (according to the former National Energy etc.) and 2020 Target for Commission ("CNE") sources): renewable energy Hydroelectric: 2012 : 17,761MW 2020: 22,672MW Onshore wind energy: 2012: 22,684MW 2020: 35,000MW Offshore wind energy 2012: 0MW 2020: 750MW Solar thermoelectric 2012: 1,551MW OVERVIEW 2020: 4,800MW Solar photovoltaic 2012: 4,296MW 2020: 7,250MW Biomass 2012: 779MW ... 2020: 1,950MW S
Geothermal P A
2012: 0.3MW IN 2020: 50MW KEY GENERATORS OF Abengoa, S.A. RENEWABLE ENERGY Acciona Energía, S.A. Endesa Cogeneración y Renovables, S.A. – ECYR Iberdrola, S.A. eve fternwbeeeg eiei.. ... in... renewable the erview of regime energy O 536 HERBERT SMITH FREEHILLS v
ScPAIN ( ontinued) FEED-IN TARIFFS On 12 July 2013 the Spanish Council of Ministers approved a reform of the Spanish energy sector through Royal Decree-Law 9/2013, of 13 July ("RDL 9/2013"), which implements a series of urgent measures to guarantee the financial stability of the energy system, although further legislation is pending. In any case, by amending the Electricity Sector Act, RDL 9/2013 replaces the system of tariffs with a system offering (i) income from the sale of electricity generated valued at market prices; and (ii) income composed of a) an installed power component that covers the investment costs of a standard installation that cannot be recovered through energy sales, if any, and b) an operation component covering the shortfall between operating costs and income obtained by the standard installation from the market, if any. Likewise, RDL 9/2013 expressly derogates, among others, Royal Decree 661/2007, of 25 May ("RD 661/2007"), regulating the production of electricity subject to the special regime. However, RDL 9/2013 establishes a transitional regime to phase in the new provisions. Accordingly, the remuneration regime foreseen in RD 661/2007 will continue to apply on an interim basis until new provisions have been approved to fully implement a royal decree that regulates the legal and remunerative regime applicable to power plants that generate electricity from renewable energy sources, cogeneration and waste currently entitled to premium-based remuneration. GREEN CERTIFICATES (NAME OF N/A.
FINANCIAL INCENTIVES FINANCIAL THE SCHEME) TAXATION Act 15/2012, of 27 December, of tax measures for energy sustainability, establishes the following measures: Tax on the radioactive waste produced as a result of the generation of nuclear power and on the storage of nuclear waste in centralised plants. Duty on hydroelectric water. Creation of the so called "green cents" on natural gas, fuel-oil, coal and diesel. Electricity production tax over the total income received from the power produced by each of the tax payer's installations. other
S SWEDEN P
A P erCENTAGE of energy 2010: 34.5% of the energy produced comes from renewable sources, of which 22% are biofuels, generation from renewable peat and waste, 11 % is hydropower, 0,8% is geothermal power and 0.3% is wind power. IN sources with breakdown 47.8% of the energy consumed comes from renewable sources. - (wind-, solar-, hydro-,
SWEDEN geothermal power, 2020 target: 50% of the total energy consumption. biofuels, waste to energy etc.) and 2020 Target for renewable energy OVERVIEW KEY GENERATORS OF Vattenfall RENEWABLE ENERGY Fortum
E.ON
FEED-IN TARIFFS N/A. GREEN CERTIFICATES (NAME OF The Electricity Certificate system: Green certificates issued to generators of electricity produced THE SCHEME) from renewable energy. TAXATION The main legal framework for energy taxation is laid down in the Swedish Act on Excise Duties on Energy (SFS 1994:1776), which contains provisions on energy tax, carbon dioxide tax, sulphur tax on fuels and energy tax on electricity. The framework works as a means for Sweden to reach its energy policy goals. If the requirements in the Act Concerning Sustainability Criteria for Biofuels and Bioliquids
FINANCIAL INCENTIVES FINANCIAL (SFS 1994:1776) are met, a tax exemption is awarded. other erview of the renewable energy regime in... in... renewable the erview of regime energy O T he European Energy Handbook 2014 537 v
SWITZERLAND P erCENTAGE of energy 2012: 60.1% of energy generation out which hydro 57.2%, waste 1.65%, wind 0.13%, generation from renewable solar 0.49%,biomass 0.48%, sewage gas 0.20% sources with breakdown Target 2030: 10% increase (5400GWh) of energy generation from RES (excluding large (wind-, solar-, hydro-, hydropower plants) geothermal power, biofuels, waste to energy etc.) and 2020 Target for renewable energy KEY GENERATORS OF Alpiq Group (ex Atel and EOS) OVERVIEW RENEWABLE ENERGY Axpo Group (NOK, EGL and CKW) BKW FMB Energie AG Group Elektrizitätswerke der Stadt Zürich ("EWZ") Repower AG
FEED-IN TARIFFS Mechanism: Cost-covering remuneration for the input into the network of electricity produced from RES financed through a surcharge on electricity transmission price paid by all consumers. This form of remuneration has been made available since 2008 to hydropower (up to 10MW), photovoltaics, wind energy, geothermal energy, biomass and waste material from biomass. The tariffs for remuneration for electricity from renewable energy sources have been specified and updated on the basis of reference facilities for each technology and output category. Remuneration will be applicable for a period of between 20 and 25 years, depending on the technology. GREEN CERTIFICATES (NAME OF Certified green electricity is sold by power companies to consumers that are willing to receive green THE SCHEME) power. Producers of RES have to choose between this model and the cost-covering remuneration. The green-certificates model is not compulsory for electricity generators in Switzerland. However, the Stiftung Klimarappen (founded by principal members of the petroleum industry) has committed
itself to reduce CO2 emission by the purchase of green certificates. FINANCIAL INCENTIVES FINANCIAL
TAXATION A CO2-fee has been introduced in 2008. It amounts CHF 36 per 1 ton of exhausted CO2. From
January 1, 2014, it will amount to CHF 60 per 1 ton of CO2.
The feed-in tariffs are to be considered as a tax. ... other S WITZERLAND TURKEY
P erCENTAGE of energy According to the data obtained from the website of the Energy Market Regulatory Authority: generation from renewable Natural gas: 45% (in 2011) sources with breakdown (wind-, solar-, hydro-, Wind: 2% (in 2011) geothermal power, Geothermal: 0.2% (in 2008) biofuels, waste to energy etc.) and 2020 Target for Hydro: 23% (in 2011)
renewable energy - Solar: 0 (in 2011)
TURKEY Official targets for 2023 (pursuant to Supply Security Strategy Paper prepared under coordination of the MENR and issued by the approval of the High Planning Council on 18 May 2009: Hydro: Use of all technically and economically possible hydro potential OVERVIEW Wind: Increase established capacity to 20,000MW Geothermal: Use of 600MW potential that has been determined suitable for electricity generation Solar: Popularise the use of solar sources for electricity generation. KEY GENERATORS OF Borusan Enerji Yatırımları ve Üretim A.Ş. RENEWABLE ENERGY Enerjisa Enerji Üretim A.Ş. Zorlu Energy Group eve fternwbeeeg eiei.. ... in... renewable the erview of regime energy O 538 HERBERT SMITH FREEHILLS v
TURKEYc ( ontinued) FEED-IN TARIFFS Additional incentive Fneed-i if a component Teyp of Renewable T oTAL Tariff manufactured in Source Used in the (US cent/ (US cent/ Turkey is used in the Generation Facility kWh) kWh) facility (US cent/ kWh)
Hydro 7.3 2.3 9.6 Wind 7.3 3.7 11 Geothermal 10.5 2.7 13.2 Biomass (including land fill gas) 13.3 5.6 18.9 Solar (Photovoltaic) 13.3 6.7 20 Solar (Condensed) 13.3 9.2 22.5 Other Incentives
FINANCIAL INCENTIVES FINANCIAL The additional incentive to be applied in the event a component manufactured in Turkey is used in the facility as per the type of the component used. The legislation provides a breakdown of applicable incentives based on the different components. Please see Annex 2 in the framework article in the Turkish chapter for the complete list. GREEN CERTIFICATES (NAME OF Renewable Energy Support Scheme (Yenilenebilir Enerji Destek Mekanizması) THE SCHEME) TAXATION Transactions contemplated under the RES Law (including establishment of generation facilities and R&D related incentives) may benefit from tax related incentives upon a decision to be adopted by the Council of Ministers. other Please see the Turkish chapter for more information in relation to the Turkish energy sector.
UKRAINE
P erCENTAGE of energy 2012: Total is 833,282MWh (0.46% of the electricity generated). generation from renewable
T 2020: 1.6% (target pursuant to the Energy Strategy of Ukraine) sources with breakdown URKEY (wind-, solar-, hydro-, geothermal power, biofuels, waste to energy etc.) and 2020 Target for renewable energy - OVERVIEW KEY GENERATORS OF Active Solar GmbH UKRAINE RENEWABLE ENERGY Wind Parks of Ukraine, LLC Wind Power LLC Fuhrlander AG Franko Solar eve fternwbeeeg eiei.. ... in... renewable the erview of regime energy O T he European Energy Handbook 2014 539 v
UKRAINE (continued) FEED-IN TARIFFS Summary: The "green" tariff for generated electricity depends on the source of renewable energy. It is effective until 1 January 2030. For the power generating facilities, construction of which started after 1 January 2012 the "green" tariff is granted with a condition of including a fixed percentage of "Ukrainian components" (i.e. an amount of materials and services of Ukrainian origin) in the total cost of the construction of power generating facilities. Currenly the percentage of "Ukrainian component" amounts to 30% for the wind, solar and biomass power generating facilities, for which construction started after 1 January 2012 and which were commissioned after 1 July 2013. For those to be commissioned after 1 July 2014, the percentage of "Ukrainian components" is set to increase to 50 %. For the facilities generating power from biogas, construction of which started after 1 January 2012 and which are commissioned after 1 January 2014, the "green" tariff is with a condition of 30% of "Ukrainian component". However for those commissioned after 1 January 2015 the percentage of "Ukrainian components" is set to increase to 50%. Mechanism: The NERC establishes "green" tariffs for each producer monthly by multiplying a coefficient (which value of which depends on the source of energy) to the January 2009 general retail tariff for low-voltage electricity consumers (in euros). Product is converted to UAH in accordance with effective exchange rate. GREEN CERTIFICATES (NAME OF No
FINANCIAL INCENTIVES FINANCIAL THE SCHEME) TAXATION Summary: Income received from the business activities of energy companies producing electricity from renewable sources, is released from income tax for 10 years starting from 1 January 2011. Up to 1 January 2020 the CPT is also cancelled for producers of biofuels in relation to income derived from the sales of biofuels. Mechanism: A promotional taxation scheme is applied only if the exempt costs are used for upgrade of equipment or repayment of loans within three years of the end of tax period in which such at exemption took place. other Summary: All electricity produced from RES, which has not been sold to consumers is bought by the state entreprise Energorynok for monetary funds.
UNITED KINGDOM
P erCENTAGE of energy 2012: generation from renewable Total is 41.3TWh (11.3% of the electricity generated), of which: sources with breakdown U (wind-, solar-, hydro-, Bioenergy 73.7% KRAINE geothermal power, Wind 18.0% biofuels, waste to energy etc.) and 2020 Target for Hydro (Large Scale) 4.3% renewable energy Other 3.9% - (Source: Digest of UK Energy Statistics 2013) UNITED 2020 target: 20% (15% target pursuant to the Renewable Energy Directive) OVERVIEW KEY GENERATORS OF SSE RENEWABLE ENERGY Infinis
KINGDOM EDF Renewable Energy RWE AG Drax E.ON erview of the renewable energy regime in... in... renewable the erview of regime energy O 540 HERBERT SMITH FREEHILLS v
UNITED KINGDOM (continued) FEED-IN TARIFFS Summary: Feed-in tariff for "small scale" generation of up to 5MW with effect from 1 April 2010 by means of amendments to the licence conditions of electricity suppliers in Great Britain, raised to 10MW for ground mounted solar under the Energy Act 2013. Mechanism: Under the terms of the licence, the larger suppliers are required to agree terms for the payment of the feed-in tariff with eligible generators, including households. The tariff comprises a payment for each unit generated and an additional payment for export, calculated by reference to tariff tables set out in each supplier's licence. Generators can elect to sell their export independently. Feed-in tariff based on Contract for Difference (CfD): The UK Government has enacted powers to introduce feed-in tariffs for "large scale" renewable and other low carbon generation which will take the form of long-term contracts for difference, entered into with a central Government owned counterparty. GREEN CERTIFICATES (NAME OF Summary: The Renewables Obligation ("RO") is an obligation placed on licensed suppliers to THE SCHEME) supply a certain amount of the electricity they supply from renewable sources in each year. The RO is due to close to new applications in April 2017 due to the proposed introduction of the feed-in tariffs based on contracts for difference. Note: The Non-Fossil Fuel Obligation continues to operate alongside the Renewables Obligation FINANCIAL INCENTIVES FINANCIAL until all fixed-price contracts entered into under that scheme expire (2018); there is an equivalent regime applicable in Scotland. TAXATION Summary: The Climate Change Levy ("CCL") is a tax chargeable on non-domestic supplies of various commodities including electricity. By removing certain exemptions on the levy for fossil fuels used for power generation, a floor price for carbon was introduced on 1 April 2013. Mechanism: Renewables Levy Exemption Certificates issued by Ofgem can be used by energy suppliers to claim exemption from the CCL as evidence that a generator has produced "renewable source electricity" from an eligible generating station. other ... U NITED
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