Small hydropower projects in Croatia - approval process and important rules - Center for Monitoring Business Activities in the Energy Sector And ...

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Small hydropower projects in Croatia - approval process and important rules - Center for Monitoring Business Activities in the Energy Sector And ...
Center for Monitoring Business
                   Activities in the Energy Sector
                   And Investments

Small hydropower projects in Croatia -
approval process and important rules
Munich
24 February 2015

Morana Lončar
Small hydropower projects in Croatia - approval process and important rules - Center for Monitoring Business Activities in the Energy Sector And ...
Third Energy Pack-age

  • Croatia became EU member on 1st June 2013 - joined the EU inter-nal
    mar-ket
  • Third Energy Pack-age transposed into the national legal framework
     – elec-tric-ity mar-ket has been fully opened as of 1 July 2008
     – unbundling of network activities from production and supply
     – non-discrimination among participants on the market and strengthening market
       competition
                                    Ministry of Economy
                                                                                    Renewable
           Energy Act                          Elec-tric-ity Mar-ket Act            Energy Act

       Tariff system for the production         Regulation on fee for electricity
         of electricity from RES and              production from RES and
                 cogeneration                            cogeneration
                                                                                    Soon to be in
                                                                                    public debate.
                                                 Regulation on acquiring the
      Regulation on the use of RES
                                                 status of eligible electricity
           and cogeneration
                                                          producer
                                                                                      CEI 24/02/2015   2
Small hydropower projects in Croatia - approval process and important rules - Center for Monitoring Business Activities in the Energy Sector And ...
National utility company (HEP) and the Republic of Croatia significantly
depend on hydrological conditions and the imported electricity

           HPP                                  40%
                                                             • In 2013 Croatia imported 20% of electricity
                                                               and 65% of primary energy.
           TPP                       24%                     • Hydropower makes for almost 40% of the
                                                               electricity balance: low cost but highly
                                                               dependent on hydrological conditions
     Imports                        21%
                                                                  Croatia needs to build additional
                                                                        production capacity
 NPP Krško                    12%

                                                                   Reduce dependence on imports
 Other RES             3%                                        Strenghten and develop electricity
                                                                        generation industry

* The average share of imports in the last 5 years was 26%
                                                                Macroeconomic effects of investing

                                                                                                 CEI 24/02/2015   3
Small hydropower projects in Croatia - approval process and important rules - Center for Monitoring Business Activities in the Energy Sector And ...
Energy Strategy of the Republic of Croatia (2009) predicted 2,7% annual
growth in gross total energy consumption
Total final energy consumption in Croatia
      450

      400
                                                                                             • Instead of growth, there is
                                                                2009.      2013.
                                                                                               decrease in the gross total
      350
                                                                                               energy consumption
      300
                                                                                             • In 2013 the gross total
      250                                                                    x                 energy consumption
 PJ

      200                                                                        243,64 PJ     decreased by 1.6%
      150
                           Predviđanje
                           Strategy totalneposredne
                                          final energypotrošnje prema
                                                       consumption      Strategiji [PJ]
                                                                      predictions  [PJ]      • During the period from
                           Scenarij daljnjeg rasta u skladu s prosječnom inflacijom 2%
      100
                           Scenarij nastavka trenda pada od 1,3% godišnje
                                                                                               2008 till 2013, the total
      50                   Srednji scenarij                                                    primary energy supply
                           Zabilježena
                            Actual totalpotrošnja  energije u RH*
                                         energy consumption        [PJ] [PJ]
                                                               in Croatia
       0
                                                                                               decreased at an average
                                                                                               annual rate of 1.7%
            1988.
            1989.
            1990.
            1991.
            1992.
            1993.
            1994.
            1995.
            1996.
            1997.
            1998.
            1999.
            2000.
            2001.
            2002.
            2003.
            2004.
            2005.
            2006.
            2007.
            2008.
            2009.
            2010.
            2011.
            2012.
            2013.
            2014.
            2015.
            2016.
            2017.
            2018.
            2019.
            2020.
*Source „Energy in Croatia 2011.”, EIHP

      Reduction in economic activity has resulted in the reduction of energy consumption,
        which has a direct impact on making our target of 20% RES in gross total energy
                                         consumption.
                                                                                                                 CEI 24/02/2015   4
Small hydropower projects in Croatia - approval process and important rules - Center for Monitoring Business Activities in the Energy Sector And ...
Analysis of RES projects in accordance with the objectives of the National
 Action Plan for renewable energy sources by 2020.
  In 2013 the Government adopted the National Action Plan for renewable energy sources by
  2020 (NAP), taking into account the objective of the Strategy of 20% renewable energy in the
  gross total energy consumption by 2020.
  
  1 Data
       2 from3January
                  4 2015
                      5       6      7     8     9     10   11    12    13    14    15   16
       To be achieved    Projects with PPA contracts    Plants in operation
                                                                                              • Wind and solar
     20%                                                                                        projects are above
                        41%                                 26%               25%
                                                                                                targets

                                          96%
                                                                              33%             • There is 420 MW of
     85%                                                    65%                                 wind PP in „quota”
                        66%                                                                     set by TSO, and
                                                                              42%               additional 314 MW
                                                3%
                                                1%          9%                                  projects with
  400 MW Wind PP
              52 MW Photovoltaic
                              100PP
                                  MW Small hydro85
                                                 PPMW Biomass PP40 MW Biogas PP                 signed PPA

 Share of RES in gross total energy consumption

Year 2006                         12,6%                                         7,4%           20%
                                                                                                          RES
                                                                                                                 20 %
Year 2013                         16,5%                                         3,5%           20%        target

      Realized 49% of the stated objectives set by the National Action Plan for renewable
                                   energy sources by 2020.                         CEI 24/02/2015                    5
Small hydropower projects in Croatia - approval process and important rules - Center for Monitoring Business Activities in the Energy Sector And ...
Tariff system for the production of electricity from RES and cogeneration is
valid until the end of 2015

Target according to National Action Plan: plants that are in operation and those that have a
signed contract on the purchase of electricity with HROTE (Energy Market Operator), but are not
yet in operation.

         Target until 2020                  Plants in operation                Projects with PPA contract
                             100 MW                              1,482 MW                           3,468 MW

 The incentive price for small hydro power plants according to the Tariff System ("Official
 Gazette", No. 133/2013)
                                                                   Plants with installed Plants with installed
                 Plants with installed   Plants with installed
                                                                  capacity exceeding 2 capacity exceeding 5
                 capacity up to 300      capacity exceeding
                                                                      MW up to and          MW up to and
                         kW              300 kW up to 2 MW
                                                                     including 5 MW       including 10 MW
 Small hydro             1,07 kn/kWh            0,93 kn/kWh              0,88 kn/kWh        (RC) 0,53 kn/kWh
 power plants        ~139 EUR / MWh         ~121 EUR / MWh           ~114 EUR / MWh           ~69 EUR / MWh

 Croatia is preparing new State Aid Scheme for RES starting from 2016, based on market
                                     premium prices.
                                                                                                   CEI 24/02/2015   6
Small hydropower projects in Croatia - approval process and important rules - Center for Monitoring Business Activities in the Energy Sector And ...
Project development time for small hydro power plants is 5 to 7 years –
currently only six plants are in operation in feed-in-tariff

   Projects in operation, January 2015                  Projects registered for development,
                                                                   January 2015

     Not shown on the map: existing 16,74 MW of SHPP owned by HEP Proizvodnja (part of HEP Group –
     national electricity company) that are not in the incentive system.

                                                                                          CEI 24/02/2015   7
Procedure 1/2
                       Ministry of           The Ministry of          Transmission           Transmission /
       Investor    Environmental and        Construction and       /Distribution system    Distribution system
                   Nature Protection        Physical Planning            operator                operator
 • Measurement     • Decision on the       • Location permit       • Preliminary          • Connection
   [Mjerenje]        acceptability of        [Lokacijska             electric power         agreement
                     the project for the     dozvola]                agreement              [Ugovor o
                     ecological network                              [Prethodna             priključenju]
                     / and the                                       elektroenergetska
                     environment                                     suglasnost]
                     [Ishođenje
                     rješenja o
                     prihvatljivosti
                     zahvata za
                     ekološku mrežu/ i
                     okoliš]

                                             State Office for        The Ministry of
     Ministry of       Ministry of                                                         Croatian Energy
                                             State Property         Construction and
     Economy           Agriculture                                                        Regulatory Agency
                                              Management            Physical Planning
 • Energy          • Water concession      • Obtaining the right   • Building permit      • Preliminary
   permission        [Koncesija za           to build on state       [Građevinska           decision on
   [Energetsko       vodu]                   land                    dozvola]               acquiring the
   odobrenje]                                [Ishođenje prava                               status of eligible
                                             služnosti /                                    producer
                                             građenja na                                    [Prethodno
                                             državnom                                       rješenje o
                                             zemljištu]                                     stjecanju statusa
                                                                                            PP]

                                                                                                  CEI 24/02/2015   8
Procedure 2/2
                          Transmission           Transmission           Transmission          The Ministry of
   Croatian Energy
                       /Distribution system   /Distribution system   /Distribution system    Construction and
   Market Operator
                             operator               operator               operator          Physical Planning
 • Power purchase      • Electric power       • Grid use contract    • Trial period of      • Use permit
   agreement             agreement              [Ugovor o              operation              [Uporabna
   [Ugovor o otkupu      [Elektroenergetsk      korištenju mreže]      [Pokusni rad]          dozvola]
   električne            a suglasnost]
   energije]

   Croatian Energy       Croatian Energy        Croatian Energy
  Regulatory Agency     Regulatory Agency       Market Operator

 • Permit for          • Decision on          • Power purchase
   performing energy     acquiring the          agreement
   activities            status of eligible     activation
   [Dozvola za           producer)              [Aktiviranje
   obavljanje            [Rješenje o            ugovora o otkupu]
   energetske            stjecanju statusa
   djelatnosti]          povlaštenog
                         proizvođača]

Due to Natura 2000 and other requirements, obtaining the „Decision on the acceptability
  of the project for the ecological network / and the environment” can last between 1
                                month to more than 1 year.
                                                                                                   CEI 24/02/2015   9
New rules in procedure

New Renewable Energy Act:
• Projects developed on state owned land – 1st step: TENDER

                                                         State Administrative Office
            Investor             Ministry of Economy                                        Ministry of
                                                              for State Property
                    Expression
     Expression of interest        Tender for project            Management
                                                                                       Agriculture/ Croatian
                    of interest development on desired
    for project development                                                                   waters
                                                             Awarding the right to
      for desired location
                    for project         location                                         Water concession
                                                                   use/build
                 development
                 for desired
                 location
•   Incentive system based on premium prices, electricity sold to electricity suppliers/traders
•   Upgrading Registry of renewable energy sources

Elec-tric-ity Mar-ket Act
• Regulation on grid connection – in the process of development
• Electricity balancing rules – in the process of development

Changes in Water Act:
• Power plants up to 1 MW – facilitating the obtaining of water concession
• Use of water flow from pipelines – regulating the licensing and use

                                                                                                 CEI 24/02/2015   10
Role of CEI

Facilitating procedure:
• Providing information and support to investors during permitting procedure
• Organizing coordination meetings between investors and other relevant bodies
• Providing support to the Ministry of Economy
            Expression
CEI webpage of
             oninterest
                 renewables legislation
            for project
            development               http://cei.hr/obnovljivi-izvori-energije/
            for desired
            location

                                 ………………….                                         CEI 24/02/2015   11
Questions?

             Thank you for listening!

              Feel free to contact us!
                                 Contact information

                                Morana.Loncar@cei.hr

                                             CEI 24/02/2015   12
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