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Law on renewable energy in Slovakia

Daniel Futej Rudolf Sivak

The target which Slovakia has to reach by 2020 is to produce 14% of energy from renewable resources (currently about 8.7%). The basic legal framework is governed by the Act on Promotion of Renewable Energy and High-Efficiency Cogeneration No 309/2009 Coll. (RES). This is a so-called feed-in tariff law providing for certain support scheme. As of May 1 2010, with respect to requirements for the building of facilities producing energy, an amendment came into effect which requires that a certificate about the compliance of the investment with the long-term energy policy is issued also for facilities producing electricity from solar sources with a capacity of 100KW and more.

According to the RES law, the following energy sources are eligible for support: hydro, solar, wind, geothermal, biomass, biogas and biomethane. Furthermore, the support scheme also covers high efficiency cogeneration.

The production of electricity through eligible energy sources and high-efficiency cogeneration is promoted through the following forms:

(i) priority access to the grid;
(ii) off-take of electricity;
(iii) off-take price;
(iv) premium; and
(v) responsibility for deviation.

Priority access to the grid

This form of support means that an eligible plant will have the right of: (i) priority connection to the regional distribution grid; (ii) access to the grid; and (iii) transmission, distribution and supply of electricity. Consequently, the regional distribution network operators (RDNO) will have to ensure the above support for eligible plants.

This form of support applies to eligible plants regardless of their capacity. The eligible plant may request the RDNO to extend the grid in order to secure connection to the plant.

The costs for connection to the grid and for its extension are to be shared between the RDNO and the eligible plant. The obligation to upgrade the grid is not covered by the legislation.

Off-take of electricity

Under the RAS, the RDNOs are obliged to purchase all electricity produced by eligible plants with an installed capacity of less than 125MW or 200MW in case the electricity is produced through high-efficiency cogeneration and the share of renewable sources in the fuel exceeds 20%.

Off-take price

The price which the RDNOs shall purchase the electricity equals the price of electricity to cover losses which is determined by the national regulatory authority URSO and is addressed to each RDNO.

Fixed purchase price is determined by a decree of URSO and will vary depending on specific energy sources, and in the case of hydro and solar power depends also on the capacity of the plant. The price set up by URSO may be increased by inflation, and also by a coefficient determined by utilised technology (the interpretation of coefficient and how it will be used is unclear so far). URSO sets the prices for electricity for a period of no more than three years in a general applicable decree, whereby the price for a given period cannot be lower than 90% of the price valid in the previous period.

Premium

This form applies to eligible plants as mentioned and equals the difference between the price of electricity and the price of electricity to cover losses. It is paid by the RDNO's to eligible producers of electricity, however the premium is not paid on all electricity produced by an eligible plant.

In other words, an RDNO has to purchase all electricity produced by a plant with installed capacity of less than 125MW, but the premium is not necessarily paid on all produced electricity. For instance, the premium applies to:

(i) all electricity produced from renewable energy sources in a installation with a capacity not exceeding 10MW or 15MW in case of wind power plants;

(ii) all electricity produced through high-efficiency cogeneration in a installation with a capacity not exceeding 10MW;

If the installed capacity exceeds 10 MW or 15 MW in case of wind power plants, the premium is granted only pro-rata which is calculated as a portion of 10MW or 15MW in the case of wind energy to total installed capacity.

Responsibility for deviation

Under this support form, the RDNO assumes responsibility for the difference between the contracted amount of electricity to be supplied and the amount actually supplied. It applies only to plants with a total installed capacity of les than 4MW.

The support regarding priority access to the grid, off-take of electricity and off-take price applies for 15 years from the year in which the plant is put into operation or in which the respective technological part of an existing plant undergo reconstruction or modernisation. For plants with an installed capacity of up to 1MW, the support applies for their lifetime. The price of electricity equals sum of premium and the price of electricity to cover losses.

Despite the unclear wording in the RES , it is generally understood that the price for electricity in the year in which the plant is put into operation or in which the respective technological part of an existing plant undergo reconstruction or modernisation is fixed for 15 years.

In general, RDNOs shall bear the costs of the support scheme whereby their costs will be taken into account by URSO when setting the prices; however, the ultimate burden of the support is to be borne by the consumers.

Due to unpredictability of wind and solar energy, no consents for wind and solar power plants will be granted until the end of 2011, after which the situation on the energy market will be assessed and a new decision will be made.

As regards the types of renewable energy sources, Slovakia has a big potential in the use of biomass. About 300,000 hectares of permanent grassland are available for energetic use.

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