Legal Aspects of SolarInvestments in CEE-SEE

Bryan Jardine, Partner, Wolf Theiss Bucharest

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TOPI

CS

1. Renewable Energy in CEE-SEE2. Main legal aspects of Solar PV

projects in CEE-SEE3. Wolf Theiss RES-Electricity Guide

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CEE-SEE: European Union and Energy Community

• Countries in CEE-SEE• Two main communities regarding Energy:

–European Union–Energy Community

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European Union

• RES-Electricity Directive 2001–2010 Target: 21% for RES-Electricity in total EU

electricity consumption–National indicative target: Member State must take

appropriate steps to encourage greater consumption of RES-Electricity (usually through support schemes)

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European Union (Continued)

• Renewable Energy Directive (in force from June 2009)• Climate-Energy Package: 20-20 in 2020

–Mandatory national targets for overall share of renewable energy in gross final consumption of energy, and for share of renewable energy in transport

–Rules for statistical transfers, joint projects, and access to the electricity grid for renewable energy

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Energy Community

• Athens Treaty of October 2005• Implementation of acquis communautaire for renewables• Contracting Parties: European Union, Albania, Bosnia and

Herzegovina, Croatia, Macedonia, Montenegro, Serbia and Kosovo

• Each member has now adopted targets for implementation of acquis communautaire for renewables (mainly RES-Electricity and Transport)

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Solar Photovoltaic Energy

• Fastest growing renewable energy technology• Cost is a major factor limiting growth BUT costs

decreasing with current rapid technological advancements and volume installations

• Paradigm Shift Scenario: PV electricity could provide up to 12% of EU electricity demand by 2020

Source: European Photovoltaic Industry Association

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Attractive Feed-In Tariffs

• Czech Republic: 20 year tariff of 465 €/MWh (installed capacity above 30 kW) or 469 €/MWh (installed capacity below 30 kW)

• Slovak Republic: 15 year tariff of 425.12 €/MWh (installed capacity above 100kW) or 430.72 €/MWh (installed capacity below 100kW)

• Bulgaria: 25 year tariff of 386 €/MWh (installed capacity above 5 kW) or 421 €/MWh (installed capacity below 5 kW)

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Attractive Feed-In Tariffs (Continued)

• Slovenia: - On-ground: 15 year tariff of 290 €/MWh (installed

capacity above 1MW but below 5MW), 359 €/MWh (installed capacity below 1MW) or 390 €/MWh (installed capacity below 50 kW)

- Building-Integrated: 15 year tariff of 362 €/MWh (installed capacity above 1MW but below 5MW), 437 €/MWh (installed capacity below 1MW) or 478 €/MWh (installed capacity below 50 kW)

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Legal/Regulatory Uncertainties • Czech Republic

- Parliamentary Bill to remove 5% protection in some cases- Regulator: feed-in tariffs for solar PV will drop by 30% in

2011 - Distribution System Operators: suspension of all new

applications to reserve grid capacity for solar PV and wind• Slovak Republic

- Transmission System Operator: 120 MW aggregate cap for solar PV projects above 1MW reached in Dec 2009

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Legal/Regulatory Uncertainties (Continued)

• Bulgaria- No year-on-year guarantee of amount of tariff- Conflicting Ministerial declaration regarding the future of

renewables- Indications that tariff will be reduced, but year-on-year guarantee

will be introduced

• Slovenia- Fixed and variable parts in feed-in tariff, although currently for

solar PV variable part is not significant

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Important Land-Related FactorsRough example: To generate 5000 MWh from a 5MWp solar PV installation, 15-20 hectares of land will be required

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Land-Related Legal Issues

• Large plots in State ownership- Lack of overall planning regarding use of State-owned

land- Uncertainty regarding competent authority- Uncertainty regarding whether secure rights can be

granted over State-owned land

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Land-Related Legal Issues (Continued)

• Privately-owned land- Land registry either inexistent or out-of-date- Heritage from communist era: large plots parcelled- Unclaimed plots: cumbersome appropriation process

• Effect on landscape and wildlife: Strong objections from environmentalists during permitting process

• Hope: Increase in module efficiency will bring savings in land-related factors (less hectares for similar MWp)

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For other regulatory aspects, ask:

Horst Ebhardt Andreas Schmid

Jacques IsabelleRon Given

Bryan Jardine Zoltán Faludi

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Or refer to:

14 jurisdictions covered:

European Union: Austria, Bulgaria, Czech Republic, Hungary, Romania, Slovak Republic, and Slovenia

Energy Community: Albania, Bosnia & Herzegovina, Croatia, Kosovo, Macedonia, Serbia and Ukraine

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Wolf Theiss RES-Electricity Guide

• Building Permits, Environmental Permits and Environmental Impact Assessments

• Energy Permits, Concessions, and Tender Proceedings• RES-Electricity Promotion Schemes• Financial Incentives Guarantees of Origin, Grid

Connection Issues, and Carbon Credits

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Bryan Jardine bryan.jardine@wolftheiss.com

Thank you for your attention!