Renewable Energy in South East Europe (Renewable Energy Report)

Renewable Energy in South East Europe

Chris Moore and Kevin Smith

Renewable Energy in SEE

Publisher’s note Every possible effort has been made to ensure that the information contained in this publication is accurate at the time of going to press and neither the publishers nor any of the authors, editors, contributors or sponsors can accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editors, authors, the publisher or any of the contributors or sponsors. Users and readers of this publication may copy or download portions of the material herein for personal use, and may include portions of this material in internal reports and/or reports to customers, and on an occasional and infrequent basis individual articles from the material, provided that such articles (or portions of articles) are attributed to this publication by name, the individual contributor of the portion used and GMB Publishing Ltd. Users and readers of this publication shall not reproduce, distribute, display, sell, publish, broadcast, repurpose, or circulate the material to any third party, or create new collective works for resale or for redistribution to servers or lists, or reuse any copyrighted component of this work in other works, without the prior written permission of GMB Publishing Ltd. GMB Publishing Ltd. 120 Pentonville Road London N1 9JN United Kingdom www.globalmarketbriefings.com This edition first published 2007 by GMB Publishing Ltd. © Chris Moore and Kevin Smith Hardcopy ISBN 1-84673-050-3

E-report ISBN 1-84673-051-1

British Library Cataloguing in Publication Data A CIP record for this book is available from the British Library

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Contents About the authors

vii

About the report

ix

List of Acronyms

xi

Introduction

1

„ What is ‘Renewable Energy’?

1

„ Why Renewable Energy?

1

„ How is RE defined?

2

„ Generic definitions

3

„ Financing

5

„ Environment

6

„ Current project developments

6

„ The review markets

7

Albania

9

„ Overview

9

„ RE policy

10

„ Legislation

11

„ Grid access, distribution

11

„ RE resources

11

„ Contacts

13

„ Summary

13

Bosnia & Herzegovina

15

„ Overview

15

„ RE policy

16

„ Legislation

17

„ Grid access, distribution

18

„ RE resources

19

„ Contacts

22

„ Summary

22

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Renewable Energy in SEE

Bulgaria „ Overview

23

„ RE policy

25

„ Legislation

26

„ Grid access, distribution

26

„ RE resources

26

„ Contacts

28

„ Summary

28

Croatia

29

„ Overview

29

„ RE policy

30

„ Legislation

32

„ Grid access, distribution

32

„ RE resources

33

„ Contacts

35

„ Summary

35

Fyr Macedonia

37

„ Overview

37

„ RE policy

38

„ Legislation

38

„ Grid access, distribution

39

„ RE resources

40

„ Contacts

41

„ Summary

42

Romania

iv

23

43

„ Overview

43

„ RE policy

44

„ Legislation

46

„ Grid access, distribution

46

„ RE resources

47

„ Contacts

49

„ Summary

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Renewable Energy in SEE

Serbia & Montenegro

51

„ Overview

51

„ RE policy

52

„ Legislation

53

„ Grid access, distribution

54

„ RE resources

54

„ Contacts

56

„ Summary

56

Turkey

57

„ Overview

57

„ RE policy

57

„ Legislation

58

„ Grid access, distribution

58

„ RE resources

58

„ Contacts

59

„ Summary

59

Appendices

61

„ I. Country Maps – Courtesy of CIA

63

„ II. Electricity System Maps – Courtesy of SEENERGY.org

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„ III. References and links

79

„ IV. Banks

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Also from GMB Publishing

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About the authors Chris Moore A banker by profession, Chris has accumulated over 30 years of experience in structured project finance and international project development, at senior management levels in both industry (Hawker Siddley, BTR, John Wood Group, Rolls Royce Power Ventures) and banking (Raiffeisen Bank, Singer and Friedlander). His sectoral experience covers defence, infrastructure, oil and gas, and power, whilst his geographic exposure ranges from the Middle East, through Southern and South East Asia, Latin America, and Europe. For the past 12 years he has had considerable involvement in project development and finance in Central and Eastern Europe and the Former Soviet Union. Since 2002, Chris has been actively involved in the business development aspect of renewable energy projects, including wind, wave power, and biomass, but with particular focus on EfW (Energy-from-Waste) using advanced conversion technologies and applications. Chris is currently a senior consultant to a Renewable Energy group with both UK and international development interests. Kevin R Smith With a career covering international banking (Standard Chartered Bank, Nordea Bank and Raiffeisen Bank) and financial consultancy, Kevin Smith has broad experience in most aspects of structured finance. He has focused on the countries of CEE (Central and Eastern Europe) and the FSU (Former Soviet Union) for some 14 years. For the last 10 years he has run a firm of international financial consultants, whose main activity is advising on a wide range of finance-related matters in CEE and the FSU. He was also seconded to the British Government for two years, with responsibility for all aspects of finance in Central Europe. Kevin is a regular speaker at seminars on trade and structured finance and is also the author of a book on PPPs (public-private partnerships) in Central Europe and many published articles on a range of subjects for professional publications.

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About the report „ Provides an overview of the RE (Renewable Energy) climate in [South East Europe], with references to current legislative environment and promotion strategy; „ Reviews and assesses each market in terms of existing RE capacity, demand, government incentives support, drivers and economic viability; „ Provides analysis of RE resources in each market; „ Reports on applicable tariff structures for RE projects by market and RE category; „ Gives examples of installed RE capacity by market and category; „ Comments on RE opportunities; „ Provides listings of useful contacts in the fields of government, technology partners, investment partners, banking and legal. Description Recent developments in the European gas markets have brought into sharp focus the need for Russia’s energy clients to give more serious consideration to their energy supply security. Many, if not all, of the markets covered by this publication are dependent upon Russia for their principal basic energy source. This, coupled with increasing emphasis world-wide on GHG (greenhouse gas) emissions reduction and the advent of carbon trading mechanisms, provides both an incentive and an opportunity for these markets to maximize their RE resource development to meet future demand. This publication will provide targeted background information to assist industry professionals, potential investors and prospective developers in their assessment of the opportunities available within the subject markets as they seek to incorporate RE into a balanced energy portfolio for future needs.

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List of Acronyms ANRE BEEF BGN CDM CEE CESE CETEOR CHP CIS CNG DH EAR EBRD EfW ERC ERE ESM EU EU FREE FSU GDP GEF GHG GJ GTZ GW HPP IBRD ICEMENERG IMF JI LFG

The National Electricity and Heat Regulator Bulgarian Energy Efficiency Fund Bulgarian Lev Clean Development Mechanism Central and Eastern Europe Central Eastern and South European Centre for Environmental Technology Development Combined Heat and Power Commonwealth of Independent States Compressed Natural Gas District Heating European Agency for Reconstruction European Bank for Reconstruction and Development Energy from Waste Energy Regulatory Commission Electricity Regulatory Authority Electricity Supply Company European Union ETS European Union Emissions Trading System Romanian Fund for Energy Efficiency Former Soviet Union Gross Domestic Product Global Environmental Facility Greenhouse Gas Giga joule Deutsche Gesselschaft für Technische Zusammenarbeit Gigawatt Hydropower Plant International Bank for Reconstruction and Development Energy Research and Modernizing Institute International Monetary Fund Joint Implementation Landfill Gas

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MAPAM MENR MIR MSW MW NECC NEK NES OG PJ PPP PV RO SEEA SERC SFESD SHPP TEIAS Toe TWh UCTE UNFCCC

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Ministry of Agriculture, Forests, Waters and Environment Ministry of the Environment and Natural Resources Ministry of Industry and Resources Municipal Solid Waste Megawatt National Energy Conservation Centre Natsionalna Elektricheska Kompania National Energy System Official Gazette Petajoule Public-private partnership Photovoltaic Reverse Osmosis Serbian Energy Efficiency Agency State Energy Regulatory Commission Special Fund for Energy System Development Small Hydropower Station Turkish Electricity Transmission Company Ton of oil equivalent TeraWatthours Union Energetic System for Coordinating the Electric Energy Transport United Nations Framework Convention on Climate Change

Renewable Energy in SEE

INTRODUCTION What is ‘Renewable Energy’?

R

enewable Energy (RE) has been defined, somewhat strictly, as ‘energy flows that occur naturally and repeatedly in the environment and can be harnessed for human benefit’. A looser and, arguably, more widely used description might be ‘energy produced from a renewable and/or sustainable fuel source’. The characteristics of what qualify, for each individual country, as ‘renewable’, ‘sustainable’, or ‘alternative’ fuels (that is, alternative to traditional fossil fuels) under such definitions tend to vary, with certain exceptions being made (or legislation being open to interpretation) for sources such as municipal and some industrial wastes. The most widely recognised forms of RE are, undoubtedly, wind power and hydro power (for the purposes of this publication, and in common with general practice, restricted to smallscale, ie <10 MWe – per Renewables 2005 – Global Status Report, REN21 Network) which, despite the major advances achieved in technology and output rating over the past decade, have a history that goes back centuries. There are, however, various other RE technologies both in use and under development which can, as will be explored later, represent solutions that can be both environmentally and economically viable.

Why Renewable Energy? The continuing appetite of the United States of America for fossil fuels, to

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which has now been added the increasing demand from the rapidly growing economies of, notably, India and the People’s Republic of China, means that the energy source status quo requires significant, and urgent, re-assessment. Current and proposed new pipeline construction projects, designed to deliver increased volumes of both oil and gas supplies to the new emerging economic powers in the East, will put increasing strain on the West’s accessibility to traditionally low-cost fossil fuel resources. Lying between a hoped for future within the European Union (EU) and an historic and continuing dependence on fossil fuel supplies from Russian and other CIS territories (Commonwealth of Independent States), the countries of Central, Eastern and Southern Europe have increasingly urgent reason to promote the development and exploitation of their indigenous RE resources. In addition, the continuing security issues in the Middle East, and the Russian Federation’s demonstration of its energy supply ‘muscle’ in the December 2005–January 2006 period have been reminders, if any were still required, of the need to seek the improvement of energy supply security through, inter alia, diversification of sources – both geographic and type. In an interview given by Boris Tarasyuk (Ukrainian Foreign Minister at the time), he touched upon the lessons learnt from the gas conflict with Russia, saying‘…the priority task for our government is the transition to energy saving technologies in order to cut the consumption of gas……to diversify our sources of energy

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supply…’ (Euronews Interview, 31 January 2006). The world’s and, in particular, the industrialised countries of the West’s, reliance upon fossil fuels has been the subject of serious concern and debate for a number of years, as has, more recently, the impact on the environment of increasing consumption of these fuels. According to the United Nations, the industrialized countries of North America and Western Europe, along with a few other states, such as Japan, are responsible for the vast bulk of past and current GHG emissions. As a consequence, the majority of the world’s countries have entered into a variety of undertakings to reduce the rate of climate change – the most important of these being the Kyoto Protocol – by means, inter alia, of energy efficiency improvements and GHG reductions. Some governments (with the notable exception of the world’s leading consumer and producer of emissions, together with a small number of others) have, as a result of membership of the United Nations Framework Convention on Climate Change (UNFCCC), ratification of the Kyoto Protocol and the obligations entered into under other conventions, begun to introduce a number of legislative incentives and penalties designed to increase the use of alternative energy resources. A number of countries, such as the United Kingdom, have imposed taxes or ‘levies’ on carbon emissions. Enhanced, or ‘green’, tariffs have been introduced by many governments to provide a spur to the production and use of RE, and guarantee access to the grid by RE-generating plants. Systems have been, and are being, developed in many countries to require waste management companies and landfill operators to manage the escape of greenhouse gases, such as methane, from landfill sites.

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The EU has introduced an emissions trading system (EU ETS) to create a market for GHG reduction units, whilst the Joint Implementation and Clean Development Mechanism established by the Kyoto Protocol offer potential financial leveraging benefits for qualifying RE projects as an indirect incentive for implementation of emissions-reducing technologies. Some of these generic incentive systems will be summarised later within the section on Financing. An additional, if arguably indirect, driver for a move towards greater RE generation has been the increasing realisation by governments that advances in technology now mean that their indigenous resources can be harvested with much greater efficiency and lower cost than before. Much of Central, Eastern and Northern European countries have significant DH (District Heating) infrastructures, to which cogeneration plants fuelled by biomass or waste feed-stocks can be connected with minimal disruption. EfW plants have the added advantage of being able to address a waste problem at the same time, providing an enhanced benefit.

How is RE defined? This publication will, in respect of each of the markets being reviewed, examine each government’s approach to the definition and support for their exploitable RE resources. A listing of the generally accepted principal RE resources, and their definition, is set out below. Due to the intermittent nature of some of the RE resources (eg wind, most tidal, solar), a balanced RE approach to planning may need to include more than one of the resources and technologies listed. The authors make no statement as to which resource or technology is their preference – from the

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perspective of an RE project developer or investor, it is clear that the ‘best’ or most attractive projects will be those from which the greatest returns can be made over the shortest period. This, however, has tended to be on the back of heavily subsidised tariff structures, which often favour a particular resource – generally, wind. Governments, on the other hand, are driven more by the need to meet their international RE obligations and, increasingly, by the desire to achieve greater balance in their energy supply security positions. It will be seen, however, that the greatest (and, arguably, most easily implemented) RE project development opportunities across the whole region lie principally in the Biomass/ Biofuel/Energy from Waste sectors, with some markets also benefiting from substantial availability of small hydro resources. Whilst in some cases technologically viable, the current status of technology in the solar power sector does not yet appear to be commercially viable within the region, although recent developments in both conversion efficiencies and cost reductions gives some encouragement to the view that solar power generation projects may eventually become economically competitive in the medium term. The development of wind projects may be feasible in some specific instances (eg Croatia) although, due to the intermittent nature of power delivery from such schemes, the authors take the view that wind developments may be better suited as part of an alternative application – for example, the production of water in desalination plants, or in the generation of hydrogen for hydrogen cells – rather than in direct power generation for the grid. EfW projects – in particular if developed on an integrated, holistic basis – have, we believe, a particularly interesting place in the RE mix, as

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they convert what would otherwise be a waste problem into a useful energy source, thereby addressing two issues within a single plant.

Generic definitions Biomass Biomass is, essentially, any matter which is composed of organic, biodegradable material – this can include anything from agricultural crops (some of which are specifically grown as a renewable energy feedstock) to municipal sewage. Wood, generally wood waste (eg sawdust, spoil, etc) from forestry processing industries, but also grown as an energy crop, can be used as a feedstock for RE projects. The most widely used process for conversion to energy is direct combustion in boilers (for heat and/or power generation), but other conversion technologies such as gasification, pyrolysis, and fermentation can also be used, dependent upon the final form of energy requirement. Biomass projects can be run on a ‘base -load’ (ie continuous operation – generally accepted as 8,000 hours per year or approximately 91 per cent availability) generation basis.

Biofuels Biofuels are, in the main, generally accepted as being those liquid fuels derived from biomass sources – these include biodiesel, bioethanol, and biogas. Whilst the principal focus to date within this category has been on the use of biofuels in the transport sector (where biodiesel and bioethanol are already in use as a blended additive for fossil fuel), such biofuels can also be used as a fuel for traditional combustion, with the generation of electricity from such a process generally

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meeting RE ‘qualifying’ criteria. The EU is one of the legislative bodies that has adopted a Biofuels Directive, which establishes a road transport fuel energy content target of 5.75 per cent for renewable source-derived fuel by 2010. Biofuel plants should be capable of continuous operation.

Biogas Biogas is generally produced by a process of organic waste matter, such as animal manure, poultry litter, sewage, etc being decomposed by anaerobic digestion, or in landfill sites. The gas, for RE purposes, is captured and used either directly or blended with other gas for combustion, electricity generation, or upgrading to higher value fuel such as CNG (Compressed Natural Gas) for transport use. Biogas, being high in methane content, is a major GHG contributor, and RE projects which demonstrate high levels of GHG mitigation may benefit substantially from carbon credit trading. Biogas plants should be capable of continuous operation.

Geothermal energy Generically, this is any energy extracted from the earth. At its simplest, this can take the form of gathering heat from shallow-buried pipes by means of a heat pump and, at its most complex, by drilling to depths where water can be injected to return as pressurized steam for use in heating or to drive steam turbines for power generation. Geothermal power is limited to locations where geothermal pressure reserves are found. High-energy sites are suitable for electricity generation, whilst low-energy sites are suitable for direct heating and process heat applications. Geothermal plants can be considered, in respect of largescale projects, as base-load generation sources.

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Hydro As set out above, for the purposes of this publication, this is a small-scale hydroelectric power plant with a capacity of less than 10 MWe. Hydro power is one of the oldest and most widely used forms of RE generation, using the energy from flowing water to drive a turbine. Dependent on climate and location, most mini-hydro plants can be considered as base-load generation sources (though in times of unusually low rainfall, available deliverable capacity can be severely constrained).

Ocean A wide variety of technologies has been, or is being, developed to capture the energy contained in the oceans. In scale, they can vary from arrays of small-scale wave generators to large-scale tidal barrages and in location from shoreline to relatively deep-sea. The tidal barrages capture water at high tide to drive turbines in the outflow phase, tidal stream and ocean current devices, floating devices, etc. In certain locations, it may be possible to generate power from thermal gradients in seawater (Ocean Thermal Energy Conversion). The majority of ocean wave power technologies are, in theory at least, baseload energy sources, whilst tidal power projects are likely to achieve capacity factors of only some 25 per cent. It is unlikely that any of the markets covered by this study, being all either land-locked or Mediterranean/Black Sea coast line, would be able to sustain a viable form of ocean power.

Solar – heat In wide use throughout the world, solar heating technology is well proven and has applications in systems

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ranging from single dwellings to large-scale space heating and process heat. Generically, systems consist of a fluid that circulates to deliver heat elsewhere. Recent technology developments have introduced the possibility of power generation from a closed cycle fluid system, based on the use of the heat to convert fluid to gas, which drives a small turbine, the gas then cooling to re-form as fluid and recycled through the process. By definition, this is an intermittent energy source.

commonly been dealt with by largescale mass burn (incineration) technologies, today such an approach generally meets with substantial public resistance to the permitting of large plants, and increasingly the trend is now to seek to treat at, or near, the point where the waste is being generated (the ‘proximity principle’). A range of small-scale processes, based on established gasification/pyrolysis principles, are now becoming available on a commercial basis to address these requirements.

Solar – power Based on either PV (photovoltaic) systems which convert sunlight to electricity, or thermal (Solar Thermal) systems, this resource is particularly suited to areas of high incident sunshine, de-centralised grid-connected power, and remote ‘off-grid’ locations. Systems that achieve thermal power generation by concentration of sunlight (Solar Thermal) may reach sufficiently high temperatures for steam to drive turbine generator sets. By definition, solar power plants are intermittent generators, although some of the latest Solar Thermal projects are capable of storing their liquid medium to give higher availability.

EfW (Energy from Waste) – industrial and municipal A wide range of industrial, commercial, and agricultural processes generate substantial volumes of organic waste suitable for conversion to energy. MSW (municipal solid waste) also has high levels of organic matter content and, with each European generating between 0.75 kilogrammes and 1.6 kilogrammes of solid waste per day, can with some justification be categorised as ‘sustainable’. Whilst these wastes have in the past

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Wind Wind power has been providing the driving force for water pumps and grain mills all over the world for centuries. Since the 1980s, significant advances have been made in wind turbine design and technology, with larger aerofoil blades giving rise to ever greater output ratings for landbased wind farms. Most recently, projects have been developed at offshore sites, where wind resources tend to be greater than those on land, and which could allow for higher output ratings of up to 10 MWe. Most blade and turbine designs include extremely sophisticated safety features, which prevent excessive rotation during periods of high wind speeds. By its nature, however, wind power is intermittent, with annual capacity factors in the 25–40 per cent range.

Financing In general, RE projects should, in most of the review markets, be capable of being financed under standard ‘Project Finance’ facilities from commercial banks. Under a Project Financing, the project sponsors will be expected to contribute equity within, typically, a range of 15–40 per cent of the project’s overall cost, with the

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balance being funded as debt by the financing bank. The range may vary substantially from market to market and, most significantly, will be heavily influenced by the finance entity’s assessment of the project’s risk profile, in particular in relation to the technology being applied – biomass, LFG (landfill gas), hydro and wind technologies are all now reasonably familiar to banks active within the RE sector, and should attract lower margins and higher debt leverage. A short listing of financing entities active in the RE sector is included herein. A potentially significant contributor to the reduction in project risk profile may be access to funds arising from JI (Joint Implementation) or CDM (Clean Development Mechanism) ‘carbon trading’ mechanisms, which provide a means through which projects may monetise the carbon benefits arising. (Note that, for the purposes of calculation, the GHGs covered by the Kyoto Protocol – Carbon Dioxide, Methane, Nitrous Oxide, and various fluorinated gases – are rated against a CO2 equivalent base). Whether or not a ‘host’ market is, at the time of writing, eligible under the JI/CDM criteria (together with any additional host government requirements) will be indicated within the discrete market survey section. An industrialized country which has not yet set up the necessary approved registries and greenhouse gas inventory systems required under Kyoto may carry out JI projects under a more onerous ‘second track’ process involving independent verification. Such verification, generally contracted out to suitably qualified Western consultancies, will ensure that emissions are actually reduced, and will certify by how much. In essence, the JI programme allows industrialized countries to meet part

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of their required cuts in greenhouse gas emissions by paying for projects in the ‘transition economies’ of Eastern Europe and the CIS that will reduce emissions. The sponsoring governments will receive credits that may be applied to helping them meet their emissions targets, whilst the recipient nations will gain foreign investment and advanced technology. Commitments under the Protocol vary from nation to nation. The overall five per cent target for developed countries is to be met through cuts (from 1990 levels) of between six and eight per cent in the EU, Switzerland, and most Central and East European states; Russia, and Ukraine are to stabilize their emissions.

Environment To a great extent, as illustrated above, we need to recognize that the context within which RE projects need to be developed is inextricably linked to pressures with regard to environmental issues. Indeed, it will be virtually impossible to obtain approval for structured project finance facilities to support such RE projects without having met the increasing strict constraints in respect of the environmental impact such a project will have.

Current project developments The European Bank for Reconstruction and Development website (www.ebrd.com) maintains an up-todate register of renewable energy projects in development or construction. Given the nature of project development generally, and the sensitivities affecting the implementation of such projects – eg tariff changes, protestations against a development, imposition of stricter emissions criteria, etc – such a register

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is liable to considerable variation from month to month. There has been little evidence to date of any of the major RE ‘players’ having been directly involved in the development of currently operational projects within the region. This may be due to uncertainties in respect of some of the fundamental elements in assessing the risk profile of a putative RE project development – host government commitment to RE development, tariff structures, grid access and permitting issues, most of which have yet to be adopted or implemented to the degree that would encourage significant investment in projects. As governments are seen to develop and implement ‘attractive’ RE development environments, then developers will increasingly become involved at a growing rate.

The review markets The markets being reviewed within this publication are those of South East Europe, defined as follows: „ „ „ „ „

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Albania Bosnia & Herzegovina Bulgaria Croatia FYR Macedonia

„ Romania „ Serbia & Montenegro1 „ Turkey Bulgaria and Romania have recently acceded to the EU, whilst Croatia is seeking to be one of the next countries to achieve accession to membership of the EU and, as a consequence, have been enacting and continue to enact environmental and energy market legislation designed to incorporate the provisions of relevant EU directives. The general perception may be, therefore, that the greatest short-term RE development implementation opportunities may lie in these markets, and within sectors which offer the maximum returns in terms of environmental impact. The compilers of this study have addressed this publication with a focus on background information on the markets to provide assistance in the assessment of the market potential for RE development.

Whilst the two countries have now agreed to separation, it is too early at this stage to determine how the respective RE policies might change. Consequently, the report sets out the status quo ante.

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ALBANIA Overview

T

he Albanian Government, within its National Strategy for Energy (Cf. Seenergy website), has set out inter alia the following priorities for action: „ to increase security and reliability of the energy supply; „ to establish an efficient energy sector, sustainable both financially and technically; „ to establish an effective institutional and regulatory framework and restructure energy companies; „ to increase energy efficiency in generation/production and final use of energy sources; „ to optimize the supply system with energy sources based on the least cost planning principle with minimal environmental pollution; „ to increase investments in the energy sector by both International Financial Institutions and private capital; „ to establish a competitive electricity market according to EU requirements and fulfil Albania’s obligations under the Athens Memorandum to support the energy sector integration into the South East Europe Regional Electricity Market. The Strategy foresees implementation of additional measures, such as increasing energy efficiency and introducing alternative energy sources.

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In a recent EU Albania Progress Report, it is acknowledged that Albania has undertaken some bold steps to restructure and liberalise the energy sector. However, more has to be done to overcome the current energy crises, an example of which has been the recent government decision to introduce electricity rationing as a result of power shortages. Since the beginning of 2005, it has stopped subsidising electricity imports, which, in 2001, cost some US $31 million. Several attempts have been made to privatise KESH, the Albanian stateowned Power Corporation – in the years between 2001 and 2005, several repeated tenders were announced. As only one bid was received, and three are required by law, these earlier attempts failed. The government’s plan is to complete the privatisation of the company in 2007. Albania has also played an active role in the establishment of the Energy Community Treaty for South East Europe, especially during its presidency of the Athens Process between January and June 2004, when the treaty negotiations started. The treaty aimed at creating a regionally integrated energy market for electricity and natural gas as part of the wider EU market. Albania ratified the Kyoto Protocol on 1 April 2005 and has Non-Annex 1 status under the UNFCCC (United Nations Framework Convention on Climate Change). Projects are eligible for consideration for CDM support. The National Focal Point is the Ministry of Environment.

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Generating capacity The greatest proportion of generation capacity lies in hydroelectricity from three main hydro plants in the north, which produce some 80 per cent of Albania’s ~1.7 GW installed capacity, with the balance being mainly diesel plant generation. According to the Economist Intelligence Unit, domestic electricity production increased by 4 per cent in the first half of 2005.

Demand For the period from 1992, demand for power has shown an annual growth rate in excess of 8 per cent, against which generation has struggled to keep pace due, in part, to substantial system losses and a deteriorating transmission system, aggravated by electricity theft. Despite this situation, KESH had until recently been a net exporter of power. However, the situation changed in the second half of 2005 after severe droughts lowered the level of the water reserved in Northern Albania. Albania’s import capacity is severely constrained by its poor transmission system.

Financing The EBRD (European Bank for Reconstruction and Development) indicates in its current Country Strategy Overview statement that it will provide financing for new power generation capacity, and that ‘the development of a viable project pipeline in the municipal and environmental infrastructure sector…solid waste management, will be a priority.’ An indicative listing of banks active in the RE sector within the region is set out in the Annexes to this publication.

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RE policy RE policy is primarily the responsibility of the Ministry of Economy, Trade and Energy, supported by a number of other agencies, whose responsibilities are summarized below:

National Energy Agency The Agency is an institution under the auspices of the Minister responsible for energy matters. It advises the government on energy matters and, under the Energy Efficiency Law of 2005, is charged with administering the Energy Efficiency Fund and preparing RE system programmes to encourage the development of small hydro projects, biomass, wind, etc. The Agency prepares and monitors the implementation of the national energy strategy. It presents studies and proposals for the enactment of laws and regulations in the energy field related to problems of particular importance for the national economy and for the country’s energy policy.

Ministry of Environment The Ministry is responsible for the implementation of state policy in the field of nature protection, rational use of natural resources, ecological, nuclear and radioactive safety and the arrangement of ecological preconditions for sustainable development, etc. It oversees the execution of state control over adherence to legislative demands on environmental protection, rational use of natural resources, ecological safety, as well as state supervision of the situation of nuclear and radioactive safety, etc.

Electricity Regulatory Authority (ERE) ERE was set up in September 1999 in charge of the regulation of tariffs. The

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ERE is responsible for approval of tariff and price, licensing of companies in the electrical energy sector and monitoring of their activity. It is financed from the licensing fees. Among present issues are: „ the approval of secondary legislation such as transmission tariffs, code of transmission, market rules etc; „ the unbundling and privatization of KESH; „ the deregulation of the electricity market; „ the commercial and technical losses in the networks; „ the integration into the South East European regional market in accordance with the Thessaloniki Agreement. Major barriers currently exist in respect of the development of viable RE projects - the current economic difficulties experienced in the country, low electricity prices, paucity of wind resource studies, etc.

in the electricity power sector, and establishes the rights and obligations of both consumers and the state administration.

Grid access, distribution The Albanian Power Corporation (KESH) KESH is a state-owned monopoly. It is responsible for the production, transportation and distribution of electricity in most of the country. The company is undergoing restructuring and is implementing a comprehensive programme for the modernization and rehabilitation of the energy sector, financed by international donor institutions as well as through its own funds. The government intends, following privatization, to divide the company into three separate entities responsible for production, transportation and distribution.

Shkoder, Elbasan and Vlora

Legislation The principal relevant legislation in respect of RE is that of the Energy Efficiency Law of 27 April 2005, which created the framework necessary for promoting and improving energy efficiency. The Law established an Energy Efficiency Fund and the funding for it to implement efficiency and renewable energy programmes under the Law ‘On the Power Sector’ of 22 May 2003, and mandated the National Energy Agency as the administrator of the Fund. The Law ‘On Electrical Power’ seeks to enhance economic effectiveness and the quality service in the sphere of generation, transmission and distribution of electricity in the public interest. It regulates the conditions of activity

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The balance of the distribution of electricity in the remainder of Albania is shared by these three private companies.

RE resources Biofuels Reliable and up-to-date figures in respect of utilizable resources in this sector are difficult to obtain. However, it was estimated in a 1995 study that forestry waste feed-stock (which could also be utilized as a biomass feedstock) could have delivered the energy equivalent of some 460 million GJ. Forestry waste, dependent upon distribution and transportation

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infrastructure constraints, has the potential to be processed to bio-ethanol or bio-diesels for transport or other applications.

Biogas The biodegradable fraction of municipal waste, sewage sludge, together with animal slurries, represent opportunities for treatment through anaerobic digestion processes for the generation and capture of significant quantities of methane for utilization as a combustible fuel. The energy value of municipal waste has been predicted to reach some 400,000 TOE per annum by 2010, of which some 40 per cent could typically be available as biodegradable matter. The energy potential of animal waste slurries was, in 1995, calculated as approximately 12,750 GJ. Both these estimates could today represent much higher values.

Geothermal Whilst Albania has numerous thermal springs, some of which could represent potential sources for geothermal energy – principally in the agricultural sector as greenhouse heating sources – it does not appear that any of these are currently being exploited. All of the identified locations have low and medium enthalpy characteristics, unsuitable for electricity generation. The thermal springs and wells in Albania are located in three principal areas of the country, of which only the Kruja area appears to have viable potential for heating applications, with thermal reserve values of some 38–40 GJ/m2.

Hydroelectric Hydroelectricity generation has historically provided the vast majority of Albania’s generation capacity, and continues to represent its main

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generation source even though, through lack of investment funds, only some 35 per cent of potential capacity for development is being exploited. Of a total generation capacity of 1.7 GW (figures from 2003), hydro represented 1.4 GW, or some 82 per cent. Approximately 575 MW of largescale (ie >10 MW) hydro projects are in the planning stage. In addition, however, some rehabilitation of smallscale operational plants is also being undertaken.

Ocean It is unlikely that any significant opportunities exist for the exploitation of viable ocean power.

Solar Studies to date show that Albania has a good solar energy potential, with a country average radiation figure of 4.0 kWh/m2/day, and a total energy potential of some 1,500 kWh/m2 per annum. There are no large-scale PV projects currently in operation, although the installation of some 63 ktoe is planned by the government by 2015. A 48 m2 solar thermal heating system has been installed by the Centre for Energy Efficiency, and appears to be the only operational project of its type.

Biomass As referenced earlier, at approximately 460 million GJ, there appear to be substantial biomass resource generation opportunities based on forestry waste and agricultural residue which, dependent upon location, could be exploited for heat and/ or power generation on both a largescale and de-centralised basis. Opportunities may exist for small-scale, ‘off-grid’ generation plants to provide CHP (combined heat and power)

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solutions to remote or infrastructureimpoverished locations. There may also be opportunities to consider the implementation of an energy crop programme for the production of sustainable feed-stock supplies to such plants. Given a reasonable electricity tariff and low-cost fuel inputs, this sector could represent a comparatively rapid option for Albania to achieve energy source diversification.

EfW As part of an integrated strategy, it would appear that EfW plants could provide a good fit within the Albanian energy portfolio, being able to address a large proportion of the nondegradable fraction of the municipal waste streams, industrial wastes, and various Anaerobic Digestion (AD) residues (where not being used as fertilizer or other applications). The availability of small-scale, modular EfW units makes, as with biomass plants, off-grid developments particularly attractive.

Wind No comprehensive assessment of wind resource appears to have been

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undertaken in Albania, and there are currently no known operational wind farms. It is believed that there may be some opportunity for both large- and small-scale wind projects, and it is understood that the government’s future plans include a detailed feasibility study of this resource sector.

Contacts A listing of some relevant contacts is given within the Annexes at the end of this publication.

Summary In summary, it would appear that the most easily and practically exploitable RE resources which, in light of the transmission issues resulting from the poor grid infrastructure in Albania, are those which are smallscale and can address off-grid or local grid capacity constraints. We therefore consider that the technologies for RE generation by solar, biomass, biogas and EfW processes are the most appropriate for the market at this stage.

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BOSNIA & HERZEGOVINA Overview

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he Dayton Agreement, signed in Paris on 14 December 1995, retained Bosnia & Herzegovina’s exterior border and created a joint multi-ethnic and democratic government. This national government – based on proportional representation similar to that in existence in the former Yugoslavian state – is responsible for the conduct of foreign, economic, and fiscal policy. The Dayton Agreement also established a second tier of government, comprised of two entities – a joint FbiH (Bosnian/Croat Federation of Bosnia and Herzegovina) and the RS (Bosnian Serb Republika Srpska) – each presiding over approximately a half of the territory. The FBiH and RS governments are charged with overseeing internal functions. The Bosnian/Croat Federation is further divided into 10 cantons. Whilst the FBiH and RS governments have initiated programmes for energy sector reform and policies for the encouragement of energy efficiency and alternative sources of energy, much of the country’s infrastructure remains damaged from the conflicts of the 1990s. As a consequence, in practice, most activities have been directed towards rehabilitation rather than new RE projects. On the macro level, the government has actively pursued a policy of privatization and some 50 per cent of small- and medium- to large-scale enterprises have been sold to private entities.

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The Center for Energy at the University of Sarajevo (q.v.) has prepared a document as a basis for a long-term energy strategy for the Federation of Bosnia & Herzegovina. The strategy is designed to help the government to implement EU Energy Law into Bosnian Energy Law and enable acceptance and ratification of international environment protocols such as the Kyoto Protocol. The medium-term strategy for the energy sector of Bosnia & Herzegovina developed by the Bosnian Council of Ministers has outlined the following goals: „ attracting domestic and foreign investments; „ establishing reliable energy supplies that conform with defined standards; „ developing single electricity and gas markets (Bosnia & Herzegovina is a signatory to Directive 2003/54/EC of the European Parliament and of the Council in respect of common rules for the internal market in electricity); „ improving the use of energy resources and energy efficiency; „ improving market liberalization through the introduction of competition and transparency; „ adopting international standards for environmental protection; „ protecting consumer interests; „ increasing the use of renewable energy (Bosnia & Herzegovina is a signatory to Directive 2001/77/EC of the European Parliament on the promotion of electricity produced from RE sources).

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Bosnia & Herzegovina is not yet a signatory to the Kyoto Protocol, but has signed and ratified the UNFCCC, with Non-Annex 1 status. Projects are eligible for CDM support consideration. The National Focal Point in the context of UNFCCC is the Ministry of Urbanism, Housing Communal Services, Civil Engineering and Ecology.

Generating capacity The country’s installed capacity in 2003 was 4.3 GW, of which 53 per cent was thermal and 47 per cent hydro. The current generating capacity of some 11.3 TWh (EPBiH, EPHZHB and EPRS figures) is still provided entirely by hydroelectric and thermal power, of which ~40 per cent is provided by hydro, and ~60 per cent by thermal, supporting the premise that existing capacity refurbishment is still badly needed. From 2000 to 2004, capacity grew from ~9.2 TWh to ~10.3 TWh. The transmission system is connected to Croatia, Montenegro, and Serbia via 220 kV lines – as stated earlier, considerable investment is required to refurbish the system and return it to pre-war status.

Demand The country is still a net exporter of power, according to 2003 figures. Consumption was reported as being 6.47 TWh, of which industrial consumption was 17.5 per cent, and household consumption 44.4 per cent.

Financing EBRD’s Country Strategy Overview makes no specific reference to a focus on RE or RE-related projects. The Government of the Federation of Bosnia & Herzegovina established The Fund for Environmental Protection in 2003, the purpose of which is to finance and support projects

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reducing emissions and improving the state of the environment. One part of this Fund is for renewable energy projects. The Fund is intended to be financed from penalties levied on for polluters (vehicles, industry, energy plants etc). An indicative listing of banks active in the RE sector within the region is set out in the Annexes to this publication.

RE policy RE policy in the FBiH is primarily the responsibility of the Federal Ministry of Energy, Mining and Industry, in which the Department for Energy is responsible for defining the energy strategy of the FbiH. The latter, subject to agreement of the Council of Ministers and Parliament, could be extended to cover the whole country. To date, whilst a number of consultations have been held, no formally agreed strategy appears to have emerged. Within the RS, responsibility lies with the Ministry of Economy, Energy and Development, within which energy-related matters are dealt with by five units. The Departments for Energy and Energy Power Utilities, Energy and Fuels, and Development of Energy and Mining are the most directly relevant to the RE sector. The Ministry of Urbanism, Civil Engineering and Ecology of RS has responsibility both within RS and nationally for ecology and laws in respect of protection of the environment and climate change. The Ministry leads in the Kyoto Protocol negotiations and in UNFCCC discussions. According to the law on liberalization of the electricity market adopted in April 2002 (Law on Electricity Transmission, System Regulator and Operator in BiH) which was

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supplemented in both entities by corresponding law on electricity generation and distribution (Law on Electricity of the FBiH and RS), the State Energy Regulatory Commission (SERC) is to take over the regulatory tasks for the transmission grid, whereas generation, distribution and trading are to be the responsibility of the regulatory commissions of the individual areas (ERCFBiH and ERCRS) separately. The above Ministries and Commission are supported by a number of other non-governmental agencies, including the following:

The Centre for Energy The Centre’s main activities include the analysis of the Bosnian energy sector, input to an energy development strategy, basis and methodology for a Bosnian energy balance, involvement in creating an energy regulation system, energy efficiency and energy technology improvements, etc. The Centre is not a government agency, but operates within the Mechanical Engineering Faculty of the University of Sarajevo.

CETEOR (The Centre for Environmental Technology Development) CETEOR is a private organization established in Sarajevo in 1992, whose activities have a focus on sustainable development, quality management, solid waste management, energy efficiency, and chemical safety. CETEOR works with a network of national and international partners. CETEOR collaborates with the Centre for Energy and Chamber of Economy of FBiH, amongst others.

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Legislation The principal relevant legislation in respect of electricity generation is outlined below: Law on Electricity in FBiH (OG [Official Gazette] of FBiH 41/02), and the Law on Electricity in RS (OG of RS 66/02, 29/03), focus on the development of an electricity market, setting out the goals outlined in the Overview above. Decision about a Methodology for the Determination of Purchase Prices for Electricity from Renewable Sources with Installed Power up to 5 MW (OG of FBiH 32/2002, OG of RS 71/2003) – establishes that the governmentowned utility companies, EPBih (Elektroprivreda BiH), EPHZHB (Elektroprivreda HZ Herceg-Bosna), and EPRS (Elektroprivreda Republika Srpska) have an obligation to buy electricity from renewable sources. The electricity tariff for electricity generated from renewable sources with installed power capacity of up to 5 MW will be determined by application of ‘corrective coefficients’ or premium on the amount of the current tariff for active energy set by the government from time to time – the premium ranges between 80 per cent and 110 per cent of the base tariff of approximately 4.95 euro cents. The following are also relevant to the implementation of generic projects: Law on Waste Managing (OG of FBiH 33/03) Law on Air Protection (OG of FBiH 33/03) Law on Water Protection (OG of FBiH 33/03) Law on Nature Protection (OG of FBiH 33/03, OG of RS 50/02) Law on Fund for Environmental Protection in FBiH (OG of FBiH 33/03)

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Grid access, distribution As set out above, the power sector in Bosnia & Herzegovina now consists of three vertically integrated monopolies: Elektroprivreda Bosne i Herzegovine (EPBiH), Elektroprivreda Hrvatske Zajednice Herceg-Bosna (EPHZHB), and Elektroprivreda of the Republic of Srpska (EPRS). The power companies are synchronized and interconnected but there is no competition among them – they are virtual monopolies within their exclusive ethnically based service territories. The service territories are relatively small, with equally small customer numbers and an absence of major industrial and commercial customers. As identified earlier, the country’s electricity infrastructure is in a poor state, with substantial investment required in the distribution system. The government has drawn up plans to restructure and privatize the power sector under the Power Sector Restructuring Action Plan, which envisages multiple generation and (cross-entity) distribution companies with a single transmission company at state level. The original formulation of the Action Plan made no distinction between FBiH and RS territories – the intention is that the energy markets will be integrated; however there has been difficulty in reaching agreement on implementation.

JP Elektroprivreda BiH (EPBiH) EPBiH is based in Sarajevo, and serves a customer base of approximately 619,000 customers, over 90 per cent of which are household customers. EPBiH operates two coal-fired thermal power plants (Kakanj, 578 MW and Tuzla, 779 MW) and three hydropower plants (Grabovica, Jablanica, Salakovac), with a total

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installed capacity of 1,831 MW. In addition, EPBiH operates six small hydropower plants, with a total installed capacity of 9.6 MW. EPBiH is divided into six departments: generation, transmission and system control, distribution, research and development, economic and financial affairs and human resources.

JP Elektroprivreda Hrvatske Zajednice Herceg-Bosna (EPHZHB) EPHZHB is the vertically integrated electricity company with a service territory in the immediate region around Mostar. It serves around 168,000 customers, approximately 152,000 of which are household customers. EPHZHB operates five hydropower plants with a total installed capacity of 1,086 MW – Rama, Capljina, Jajce I, Jajce II and Mostar. The company is divided into seven departments: generation, transmission, distribution, research and development, system control and operation, finance and legal, personnel and administrative, employing 1,745 people in total.

Elektroprivreda Republike Srpske (EPRS) EPRS serves the Republika Srpska, from its base in Trebinje. EPRS has a customer base of 436,000, over 400,000 of which are household customers. EPRS operates two lignitefired thermal power plants (Gacko and Ugljevik, 300 MW each) and five hydro plants (Bocac, Trebinje and Visegrad) with a total installed capacity of 1,424 MW. EPRS operates as a holding company for 11 legally independent operating companies who are fully responsible for the operation of the company but report to the Directorate of EPRS. Each of the two thermal and three hydropower

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stations is a separate company, as well as the five distribution districts and the transmission business. In total, EPRS employs 2,900 people.

Brcko In addition to the three main companies, there is also a small autonomous distribution grid in the town of Brcko. It has no generation assets, purchasing all the electricity from the three vertically integrated companies. It has approximately 26,000 customers, around 90 per cent of which are household customers.

Joint Power Co-ordination Centre (JPCC) Since 1996, electricity exchanges between the power companies have been limited due to the breakdown of many transmission lines and the creation of three separate power companies. In 1999, the power companies established the Joint Power Co-ordination Centre (JPCC) to co-ordinate the work of the three power transmission systems. The ultimate goal is to establish full operation of the 400 kV grid and synchronize it with the Western European grid and EU systems. The JPCC was established in accordance with the standards of the Union for Co-ordination, the Transmission of Electricity (UCTE) and the EU.

Independent System Operator (ISO) At the higher state level, an ISO has the task of guaranteeing trouble-free operation of the system. In order to achieve this, a national transmission grid operator is to be created. The laws to bring this about (Law on the BiH Company for the Transmission of Electrical Energy; Law on Independent Service Operator for Electrical Energy) were passed in October 2003

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by the Council of Ministries of Bosnia & Herzegovina.

RE resources To date, Bosnia & Herzegovina has relied on two major renewable energy sources – hydropower for electricity production and biomass for heat production, with wood being used as a fire fuel in the traditional form.

Biofuels According to a study conducted by Innotech HT GmbH, Berlin, in 2003 on behalf of the GTZ (Deutsche Gesselschaft für Technische Zusammenarbeit), there is an unexploited potential of approximately 1 million m3/yr of residual wood, wood waste etc, which could be used to provide heat to 130,000 residences or 300,000 inhabitants. Alternatively it could be processed to produce bio-ethanol or bio-diesels for transport or other applications. A significant proportion of this volume could also be directed to biomass power generation projects.

Biogas A small-scale (<1 Mwe) landfill gas has been built near Sarajevo with Austrian support. The electricity is fed into the urban grid. The numbers given for animal populations, in particular those for poultry and pigs, would seem to indicate a potential for Anaerobic Digestion projects.

Geothermal According to available studies, Bosnia & Herzegovina has a geothermal potential of 33 MWth. Due to the low temperatures, however, current activities relating to geothermal energy continue to be limited to exploitation for thermal use. Before the civil war

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there was an initial pilot project for a 1 MW plant near Sarajevo, which was designed with a volume flow of 240 l/s, with water at a temperature of 58 ˚C. The project, however, was not completed due to lack of funding.

Hydroelectric The theoretical potential of hydropower in Bosnia & Herzegovina is stated as being 8,000 MW, the technically feasible potential as 6,800 MW and the economically feasible potential 5,600 MW. With an installed capacity of 2,052 MW, hydropower is highly significant in Bosnia & Herzegovina, although its potential is far from being fully exploited yet (37 per cent of economic potential). The majority of the installations are more than 30 years old. Five existing hydro plants (total 1,060 MW) are part of multi-purpose developments. There are 13 hydro plants with a capacity greater than 10 MW. Bosnia & Herzegovina has an estimated small hydropower potential of 2,500 GWh/yr. There are 10 small, mini or micro hydro plants in operation, with a total capacity of 31 MW. Another two plants are under construction (1.8 MW) and 20 more are planned, totalling another 28 MW. Proposed plans include the installation of 10 small hydro plants every year, with an average capacity of 1.5 MW each. In addition, a study by the Federation of Bosnia & Herzegovina lists a further 42 locations for smallscale hydropower plants, with a total capacity of 51 MW, which could be built at existing weirs. Currently, there are two projects funded by foreign investors, which envisage the construction of one and four small hydropower plants respectively in Central Bosnia, with a total capacity of 5.4 MW. Both investors have concluded contracts with JP ‘Elektroprivreda BiH’ to feed

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electricity into the grid for a period of 20 years. One of the companies has also entered into a BOT agreement with the Central Bosnian canton of Srednjebosanski, according to which the plant is to pass into the ownership of the canton after 20 years. There is presently an ongoing initiative launched by Austria to invest ഐ350 million in up to five hydropower plants in Bosnia & Herzegovina with the intention of using these to achieve part of the Carbon Dioxide reduction targets for the Kyoto Protocol. To that end, however, Bosnia & Herzegovina would first need to ratify the Protocol (Österreichische Energieagentur).

Ocean It is unlikely that any significant opportunities exist for the exploitation of viable ocean power projects.

Solar With regard to solar irradiation, Bosnia & Herzegovina can be counted among the highest in Europe, with solar irradiation figures of 1 240 kWh/ m2/yr in the North of the country and up to 1,600 kWh/m2/yr in the South. In the most favoured areas, actual irradiation achieved ~50 per cent of potential. Despite this, the use of solar energy is minimal. The thermal exploitation of solar energy with flatplate collectors is also practised to only a limited extent, representing less than 1 per cent of energy consumption. One of the first photovoltaic installations is being fitted on the roof of an orphanage in Trebinje with assistance from the GTZ. The installation will be used for training purposes for the local electrical trade. In view of the relatively high cost involved, the introduction of PV on the market beyond very small-scale consumers far from the utility grid is currently

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dependent on promotional programmes and international projects. A Bosnian company, Narodno Grijanje, whose core business is producing eco-heat boilers, accumulation tanks, and solar collectors under Swedish licence, has implemented several ecology-oriented projects, including a biomass-fuelled boiler and 30 solar collectors in one building located in Zenica.

Biomass Apart from the traditional use of firewood and the recycling of wood waste in the wood-processing industry, there is little reliable data on the exploitation of biomass in Bosnia & Herzegovina. It can be assumed, however, that there is considerable potential in the forestry sector for the use of biomass for energy generation (approximately 50 per cent of the land area of Bosnia & Herzegovina is wooded), and in agriculture. One field where wood waste is already used in Bosnia & Herzegovina is where wood waste is converted into electrical energy in steampower plants, such as in the state-owned Krivaja factory in Zavidovici, manufacturing furniture and timber houses. With a maximum thermal output of 15 MW, peak electricity outputs of 4.5 MW are generated for the factory’s on-site power needs. There may also be opportunities to develop, in conjunction with local authorities/DH companies, projects which feed into local DH schemes.

EfW No specific studies appear to have been carried out to assess the potential for the conversion of waste streams to energy. However, it would be reasonable to assume that the larger centres of population will be producing sufficient volumes of Municipal Solid

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Waste and sewage sludge to warrant the consideration of EfW plants based on one or more process technology configurations, such as small- to medium-scale gasification and AD units. Such projects could contribute to the DH network systems in, for example, Sarajevo, Tuzla, Zenica, Bihac or Banja Luka, whilst also contributing to reductions in GHG emissions through diversion from landfill, and increased recycling.

Wind To date, there have been insufficient measurements available to estimate the potential for wind energy in Bosnia & Herzegovina. The infrastructure, however, offers adequate conditions for connecting possible locations to the grid, as the high- and medium-voltage network is well developed and the damage has been largely repaired. In a preliminary study carried out on behalf of the GTZ, it was established that there is an economic potential of approximately 600 MW that could be developed by 2010, on the assumption that an appropriate incentive system to build wind power installations is set up. Sufficiently suitable geographical locations appear to be available. For example, there are promising wind values shown by measurements taken before the war for the region of Trebinje through Mostar to Bugojno, and more up-to-date measurements from meteorological stations and airports which reveal large areas of the country with wind velocities of over 10 m/s at a height of 10 m on 150 days in the year. The first systematic wind measurement project in the region of Mostar was planned for 2002, but due to a lack of funding it was cancelled. There is still interest, however, in seeking to develop wind farm schemes.

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Contacts A listing of some relevant contacts is given within the Annexes at the end of this publication.

Summary There appear to be significant opportunities to explore the potential for biomass CHP (combined heat and power) and EfW projects to address local and regional DH application

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requirements. In addition, the opportunities for wind project developments also merit consideration, as do the opportunities to develop a number of small-scale hydro plants at existing locations. Solar energy, at least for thermal heating purposes if not also in PV applications, offer significant potential, subject to cost constraints. We therefore consider that the technologies for RE generation by solar, biomass, and EfW processes currently seem the most appropriate for the market.

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BULGARIA Overview

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he Bulgarian Government has, as a precursor to the expected accession by Bulgaria to the EU, established a significant set of RE goals, including a target of doubling the share of RE power generation from 6 to 12 per cent by 2010. Other significant policy goals include the fulfilment of Kyoto obligations by achieving an 8 per cent reduction (as measured against 1990 levels) in CO2 between 2008 and 2012; an 18 per cent improvement in energy efficiency by 2010 (as measured against 1995 levels); and increasing security of supply. As a means of meeting the target goals, the government has taken, or is taking, the following steps to ‘create conditions for full compliance with the requirements of the joint energy market of the EU and the implementation of the planned energy sector development’ (Mrs Kostadinka Todorova, Ministry of Economy and Energy – Renewable Energy Workshop presentation on 24.01.2006, Sofia) by proposing amendments to the Energy Act and Energy Efficiency Acts: „ adopted and incorporated into Bulgarian law the EU legislation Directive on the promotion of electricity from renewable energy sources in the internal electricity market and the Directive on Combined Heat and Power (CHP); „ in the process of incorporating the EU Directive on Liquid Biofuels.

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The government is preparing for the liberalization of the energy market (taking into account the provisions of the EU’s Directive 2003/54 and 2003/55 on the internal power market and natural gas market respectively). The measures include the separation of the production, transmission, and distribution services. Bulgaria ratified the Kyoto Protocol in August 2002 and has Annex B status thereunder. Bulgaria is also a signatory to the UNFCCC with Annex 1 status. Projects are eligible for development under the JI mechanism. The National Focal Point in the context of UNFCCC is the Ministry of Environment and Water.

Generating capacity Bulgaria’s installed generation capacity in 2004 was 12,331 MW, of which 53.6 per cent was represented by thermal, 23.4 per cent by nuclear, and 23 per cent by hydro. Total generation in 2004 was 41.5 TWh, with a forecast of 42.8 TWh for 2005 (Bulgarian Energy Sector 2001-2004, Ministry of Energy and Energy Resources). In common with many of the Central and Eastern European countries, Bulgaria’s energy sector includes substantial DH capacity, for which considerable work is being carried out. It is still required to improve both the generation and transmission systems (losses between generation and delivered energy amount to some 30 per cent). Heat energy produced in 2005 was slightly in excess of 8,000 GWh, whilst only some 6,200 GWh was ‘realised’.

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Demand Industrial consumption grew by 11.2 per cent between 2002 and 2004, an indicator of accelerating economic activity. Total consumption for 2004 was 26.3 TWh, with a forecast for 2005 of 27.1 TWh. Bulgaria is currently, and in the medium term continues to expect to be, the largest net exporter of power in the region – expected exports for 2005 are 5.7 TWh (Bulgarian Energy Sector 2001-2004, Ministry of Energy and Energy Resources).

Financing The EBRD indicates that ‘the Bank will…promote improvements in energy efficiency and renewable energy resources.’ (European Bank for Reconstruction and Development Country Strategy Overview). A number of international banking groups have a presence in the country and the region, and a selective listing of these is set out in the Annexes to this publication.

Bulgarian Energy Efficiency Fund (BEEF) The BEEF was established in November 2004 under the auspices of the Energy Efficiency Act and, following the ratification of the necessary treaties, began operation in November 2005. BEEF was established and initially capitalized entirely through grants – the main donors being the IBRD (World Bank), the Government of Austria, the Bulgarian Government and private Bulgarian enterprises. The BEEF will support the identification, development, and financing of viable Energy Efficiency projects predominantly implemented by Bulgarian private enterprises and

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municipalities, and which result in substantial reduction of GHGs. The underlying principle of BEEF’s operations is a PPP. The Fund will pursue an agenda fully supported by the Government of Bulgaria, but it is structured as an independent legal entity, separate from any governmental agency or institution. The Fund is profit-oriented and will pursue financial sustainability of its own operations, and will offer: „ Partial Credit Guarantees of up to US $500,000 per project to commercial banks conceding credits to Energy Efficiency project developers; „ Loan Financing: offer credits to Energy Efficiency projects whose costs vary between BGN 30,000 and BGN 3,000,000 at below market but commerciallyoriented interest rates. The fund will finance: „ investments in improved energy efficiency in industrial processes; „ rehabilitation of buildings in all sectors; „ improvements to the heat source and distribution system; „ rehabilitation of municipal facilities (eg street lighting); „ other energy end-use applications. Projects are eligible on the following conditions: „ at least half of the project’s benefits should come from measurable energy savings; „ the project should involve the application of well-proven energy-saving technology; „ the project cost should range between BGN 30,000 and BGN 3,000,000;

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„ the equity contribution of the Project Developer should be at least 10 per cent; „ the project must have a relatively short payback time (up to five years).

National Programme on Renewable Energy Sources (NPRES) The NPRES draft contains nearly 1,000 investment projects and project proposals from all administrative regions and public sectors in Bulgaria including projects on: „ solar hot water, heating and PV systems; „ wind farms; „ SHPPs (Small Hydro Power Stations); „ geothermal; „ biomass; „ biogas and natural (digestor) gas.

The national policy and regulatory framework for RE is set out in the current Energy Law and Energy Efficiency Acts. RE is considered a priority and is preferentially treated through a premium tariff structure and by the requirement on transmission and/or distribution companies to take all of the output from RE generation plants. The Energy Law and Energy Efficiency Act, and the proposed amendments thereto, set out the following advantages for RE projects: 1. No licence is required for an RE

2.

3. 4.

The NPRES aims to considerably increase the share of RE within the national energy balance, which, at present, is negligible. 5.

RE policy The regulatory framework governing the sector reforms is currently composed of two main documents: the National Energy Strategy, and the Energy and Energy Efficiency Act. The regulatory bodies are the Ministry of Energy and Energy Resources, the Energy Efficiency Agency, and the State Energy Regulatory Commission. The latter has now formally taken over responsibility for developing and implementing a tariff and price-setting methodology for electricity, gas and heating, and for approval of tariff proposals submitted by companies in the energy sector.

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6.

power generation plant with a capacity of up to 5 MW and/or CHP energy production. The energy distribution company is obliged to purchase electric energy generated from RE plants with a capacity up to 10 MW. Preferential prices are set for RE electricity generation. The transmission and distribution companies will be obliged to give priority connection to all RE generation plants with total installed capacities of below 10 MW. The preferential tariff structure for RE plants (<10 MW) will apply for a period of eight years from, in the case of existing plants, the date of the Energy Law coming into effect or, in the case of new plants, the date of entering into operation provided that this is before 31 December 2011. The preferential tariffs will be set annually up to 31/12/2019.

The proposed amendments to the Energy Law – being drafted as the Promotion of Renewable Energy Sources Act – is to be submitted by 31/11/2006, with the intention of promoting biomass and biofuel generation.

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Legislation The legislation pertaining to the energy sector was substantially reformed during the period 2002 to 2004, in order to align more closely with the EU directives and to clarify the definitions of responsibility. The current applicable laws, the Energy Law and the Energy Efficiency law, were adopted on 26 November 2003 and 19 February 2004 respectively. The Energy Law creates the relevant structures under which key regulatory competences are delegated to the State Energy Regulatory Commission (SERC) as a financially independent entity with the authority to issue sub-laws in respect of EU Directives compliance and for encouraging competition in the energy market. The Energy Law encourages the generation of electricity from RE sources, and from efficient cogeneration. The Energy Efficiency Law is primarily focused on the development of improved efficiency measures, the establishment of the Energy Efficiency Fund (q.v.), and vesting of control functions in the Energy Efficiency Agency.

Grid access, distribution The national electric utility, Natsionalna Elektricheska Kompania (NEK), set up in 1992, is responsible for transmission. NEK is an observer in the regional group of four transmission system operator companies, CENTREL. The seven regional distribution companies have been incorporated as joint stock companies in which the State, through the Ministry of Energy, owns 100 per cent of the equity shares. The eighth distribution company, Zlatni piasazi – Service AD, is already

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in private ownership. The government intends to privatize the others. According to the ‘Ordinance on Setting and Applying Prices and Rates of Electric Energy’ within the Energy Law, renewable power enjoys preferential pricing with priority connection to the grid and sale of all quantities of renewable power that RE producers make available.

RE resources Biofuels Some 60 per cent of Bulgaria’s overall land area consists of arable and agricultural lands, and approximately 30 per cent is forest cover, representing a major potential source for the production of biofuels (ethanol and diesel) from biomass. There is also significant potential to utilize gas from landfill and anaerobic digestion processes. The majority of agricultural waste is currently sent to landfill –a study carried out by the Sofia Energy Centre under the EU PHARE programme in 2002 indicates potentials of almost 5 million tonnes/yr of agricultural solid waste, and almost 500 million m3 of biogas from agricultural liquid wastes.

Biogas In addition to the above estimated agricultural waste potential, the country has the possibility to capitalize on the generation of landfill biogas from over 3 million tonnes of municipal solid waste per year being disposed of in some 720 landfill sites.

Geothermal Whilst at present there are no geothermal power-generating sites in operation, Bulgaria appears to have

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substantial geothermal energy potential, and is rich in low enthalpy geothermal waters. Approximately 30 per cent of the country’s potential is being used for space heating, greenhouses, drinking water and for balneology (data from Geothermie, 2000) – representing some 107 MWt. The potential from proven but unexploited resources is estimated at approximately 450 MWt with an overall potential, including probable and possible sources, of some 1800 MWt (International Geothermal Association, 2002).

Hydroelectric Utilization of hydropower as a resource in Bulgaria has a history of over 200 years, and Bulgaria has almost 2,000 Mwe of installed capacity in this sector, the great majority of which is represented by large-scale hydroelectricity plants. Less than 100 MWe of the installed capacity is generated by small-scale HPPs. The government has placed significant emphasis on the maximization of the use of this substantial resource – the potential for new HPP is estimated at an annual output of 10,000 GWh, much of which may be small HPPs, and a number of private companies are actively developing small-scale plants. The Sofia Energy Centre estimates the theoretical potential for sub-2 Mwe HPPs at some 130,000toe/yr, whilst the UNFCCC Climate Change Report for Bulgaria estimates that the total installed capacity of micro-hydros by 2020 could reach 212 MWe.

Ocean It is unlikely that any significant opportunities exist for the exploitation of viable ocean power.

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Solar The exploitation of solar radiation for energy purposes in Bulgaria has, to date, been somewhat patchy, with the total installed capacity for the country as a whole being only some 60,000m2. The bulk of this, at around 40 per cent of the total, in Burgas alone, is concentrated on solar collectors for hot water heating, primarily for government-owned holiday facilities on the Black Sea coast. It is believed, however, that less than 50 per cent of this installed capacity is currently operational. A number of private companies are developing pilot projects in this sector. The annual mean radiation for Bulgaria is approximately 4.2 kWh/ m2/day with, according to the Sofia Energy Centre in work carried out under the FEMOPET programme, a technical potential of some 250,000 toe/yr. Some experimental work has been carried out on photovoltaic projects but, to date, no significant solar power projects have been undertaken. EBRD’s view1 is that the most practical wide-spread opportunities for solar energy in Bulgaria lie in lowtemperature applications within the agricultural and forestry industries, rather than in power generation.

Biomass Currently, biomass is reported to account for some 3.7 per cent of the calculated total energy consumption in Bulgaria, although it is believed that this figure may be substantially underestimated. The majority of biomass energy consumption is in rural areas, where approximately 2 million m3/yr of wood and wood briquettes produced from forest wastes and sawmill biproducts is used. A number of organizations in the private and not-for-profit sector

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are performing power generation feasibility studies in this area. Local universities, such as the Agricultural University of Plovdiv and the Forestry University of Sofia have also spearheaded research and have both curricula and research activities on the use of biomass. In addition to the above volumes, it is estimated that some 2 million tonnes/yr of energy crops could be available, together with 1 million tonnes/yr of wood waste.

EfW Wastes generated from agricultural, farming, and paper industry activities are produced in large quantities. Whilst the bulk of these wastes have historically tended to be dumped or landfilled, the volumes involved indicate that significant opportunities should exist for distributed generation power or CHP projects based on single or integrated processes. In addition, opportunities exist for the conversion of wastes such as MSW and plastics to power and liquid fuels through the application of advanced technologies now becoming commercially available.

Wind A country-wide wind-atlas is available. The wind-atlas identifies three main areas, with annual average wind speeds in excess of 9 m/s, two areas with more than 7 m/s, and several areas with wind speeds between 4.5 to 7 m/s. The data were all measured 10 metres above ground, implying wind speeds of between 5 and 13 m/s at a typical hub height of 50 metres or more. According to the wind-atlas, the most promising regions are the Northern Black Sea coast, the Central mountain range, and the Rhodop mountains in the South West. In a study conducted by Associate Professor Dr Peter Ivanov, National

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Institute of Meteorology and Hydrology at the Bulgarian Academy of Sciences, Sofia in 1982, the wind energy resource potential for Bulgaria was estimated at 2,200 to 3,400 MW. The Ministry of Energy and Energy Resources indicates that there are six implemented wind projects at present, but with an installed capacity of only 1,075 kW. However, there are plans for wind farms to be developed at Burgas, Cape Emine and Kavarna, whilst the US Trade and Development Agency is funding a feasibility study for a pilot wind farm project within the Karlovo municipality.

Contacts A listing of some relevant contacts is given within the Annexes at the end of this publication.

Summary It is clear that significant opportunities for the development of RE projects in Bulgaria exist, principally, in the sectors of biomass, biogas, and EfW, either as stand-alone or integrated process projects. Household waste, at levels in excess of 3 million (tonnes per annum), energy crops, wood-processing industry waste and agricultural wastes, both solid and liquid, represent a combined electrical generation potential in excess of 12 TWh/yr, exploitable on a small-scale municipal or regional basis. A substantial proportion of such projects could be developed with a CHP configuration, providing delivery of heat for industrial processing and to DH schemes. Wind, small-scale hydro and low-temperature solar heating also offer opportunities for development, albeit at much smaller capacities.

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CROATIA Overview

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roatia, in common with other members of the former Yugoslav Republic involved in the conflict following the break-up in 1991, suffered badly from infrastructure destruction and damage. Whilst the country has made significant progress in terms of political transition, there has been little investment in power generation facilities. As the existing thermal generation capacity is now old, substantial investment is required to refurbish, upgrade, and replace the extant facilities. Croatia has become a member of the Athens Process and is a supporter of the Energy Community Treaty for South East Europe, as part of the preparations for accession to the EU. In 2001, the government passed a series of new laws designed to establish the foundations for the energy sector’s restructuring. In March 2002, the Croatian Parliament adopted the Energy Sector Development Strategy, which set out the country’s objectives for the next ten years. The principal elements were: „ improvement of energy efficiency from the production, transformation, transmission and transport to distribution and consumption of energy, which includes encouraging the gas pipeline installation and possibilities of gas usage, and generation of energy outside public networks; „ safe energy provision and supply, inclusion in the international energy market, ensuring

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„

„

„

„

interconnection with international networks for the energy network, development of transmission and transport networks, development of distribution networks, observation of safely limitations and state interests; diversification of energy-generating sources to ensure safe supply to consumers, and spatial arrangement of sources which will ensure the safety of supply of each area; utilization of renewable sources of energy which will be in accordance with sources, technological development and economic policy as a whole; realistic and market-related prices of energy and development of energy market and entrepreneurship, the instigation of a privatization process to encourage energy efficiency and good energy management and enable the inclusion of Croatia into the European energy market; enviromental protection, which in the energy sector implies the improvement of energy efficiency, use of renewable resources, application of stateof-the-art protection technologies, and promotion of best practices.

The general privatization process in Croatia has been progressing well, with the private sector now accounting for around 50 per cent of GDP (Gross Domestic Product). Croatia is a signatory to the Kyoto Protocol with Annex B status, but has

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not ratified to date – it would potentially be eligible for JI support subject to ratification. It is a signatory to the UNFCCC, with Non-Annex 1 status. The National Focal Point in the context of UNFCCC is the Ministry of Environmental Protection and Physical Planning.

Generating capacity Croatia’s installed generating capacity is approximately 3.7 GW, of which some 54 per cent is represented by hydropower. Gross production in 2003 was 12.89 TWh, with net production being 12.33 TWh, of which hydro represented 41 per cent, and thermal 59 per cent – the latter being split almost equally between coal (19 per cent), oil (18 per cent), and gas (22 per cent) (Österreichische Energieagentur).

Demand Total electricity demand (2003 figures), at 13.72 TWh, indicate a generation shortfall of some 1.39 TWh.

Financing EBRD’s Country Strategy document makes no specific reference to RE support, although the Bank will provide support to promote investment in environmental infrastructure at the municipal level. A number of international banking groups have a presence in the country and the region, and a selective listing of these is set out in the Annexes to this publication.

RE policy The Ministry of Economy is the competent ministry for the energy sector, suported by a number of other agencies, some of whom are set out below. The Ministry of Economy submits to

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the government’s energy needs and policy proposals, and drafts secondary legislation and/or regulations in collaboration with the Croatian Energy Regulatory Council, in order to establish general principles on the basis of which the Croatian Energy Regulatory Council acts. Local and regional authorities regulate energy services at a local and regional level, including the production and supply of heat, public lighting and gas distribution, and participate in decision making on locations and construction of new power plants, energy networks and other facilities and plants.

Croatian Energy Regulatory Council (CERC) The Croatian Energy Regulatory Council supervises the energy sector and gathers information for the energy policymakers. The role of the Council also includes establishing the tariffs on the basis of proposals of regulated energy subjects, issuing energy licences and ensuring that the licence conditions are observed, monitoring the market operators and networks to ensure proper functioning and operation of the market, consumer protection, settling disputes between energy subjects, approvals of market, plant, system management and distribution rules etc.

Energy Institute Hrvoje Pozar Ltd The Energy Institute Hrvoje Pozar, founded by the Croatian Government, is the central scientific and professional institution in Croatia for global planning in the energy system and its subsystems. One of its main tasks is the elaboration of the strategy of energy development of Croatia through the PROHES Project (Development and Organization of the

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Energy Sector in Croatia) which was accepted by the government in 1994. Some of the fundamental policy decisions taken by the Croatian Parliament under the 2001 legislation include: „ the establishment of a minimum RE generation target; „ the definition of RE generation as an ‘eligible producer’, with priority access to the grid, an obligation on the distribution company to purchase RE output, and the establishment of a feed-in tariff structure for RE output; „ waiver of the requirement for an energy licence in respect of projects of less than 5 MW; „ cost-sharing provisions for grid connection costs. The tariff structure is intended to provide incentives for the development and use of renewable energy resources, whilst cogeneration (CHP) projects based on waste or RE resources qualify as ‘eligible producers’. The Croatian Government defines, within the context of the new legislation, hydro plants with a capacity in excess of 5 MW as ‘large’. The project of a National Energy Programme was initiated within PROHES: Programme of Development and Organisation of the Croatian Energy Sector. It was launched to develop an energy management framework that will promote clean technologies, shift to fuels with lower carbon contents (natural gas), diversification of energy resources, higher energy efficiency, and RE utilization, demand side management, energy savings, development of an energy market and environmental protection. The objectives and the strategy of implementation for each renewable energy source depend on its specific

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characteristics and the programme of utilization, but they all have in common a significant increase in the share of renewable energy sources by 2030, which is in accordance with the general trend in EU countries. Among the various programmes established, the following are of particular relevance to the RE sector: 1. KOGEN

2.

3. 4. 5.

(cogeneration programme). In KOGEN, the main goal is to promote construction and utilization of cogeneration plants in all buildings where they are technologically and economically justified. The realization of this programme includes the establishment of a legislative, financial and technological framework for cogeneration plant construction. KUENcts (centralised thermal systems’ energy efficiency programme). KUENcts is intended to encourage the development and enhancement of centralized thermal systems in areas with a large density of heat consumers or CHP consumers. It is also important to enhance efficiency of the existing systems. TRANCRO (transport energy programme). Being developed. CROTOK (Croatian Islands energy programme). Being developed. BIOEN (biomass and waste energy use programme). According to the National Energy Sector Development Strategy, the project has shown that electric energy generation from biomass and waste could meet up to 15 per cent of the total primary energy consumption until 2020, which is a realistic assumption when compared to Austria, Finland and Denmark. BIOEN programme includes subprogramme BIODIZEL, the

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6.

7.

8.

9.

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goal of which is to develop steady biodiesel production and to spread use of biodiesel within the Croatian transport and energy sector. SUNEN (solar energy use programme). The programme for solar energy use SUNEN has shown that solar energy utilization combined with LPG and/or natural gas is a technologically and ecologically acceptable solution for the Croatian coastline. The hybrid combination of solar energy, wind energy and LPG can help solve the problem of energy infrastructure on islands and also start the development of traditional island activities with the engagement of local resources in accordance with the strategic development of Croatian islands. ENWIND (wind energy use programme). For wind energy utilization by new generation wind turbines, the programme for wind energy use, ENWIND, has been started. The programme includes the assumptions for an economical wind energy use. MAHE (small hydropower plant construction programme). The basic goal of the MAHE programme is planning the construction of small power plants, removing all barriers and obtaining conditions for a rapid construction of small power plants in Croatia. GEOEN (geothermal energy use programme). Geothermal energy use programme, GEOEN, has shown the need for the creation of conditions for increasing geothermal energy utilization in existing installations. Another important matter is the need for carrying out an appropriate and global marketing campaign and making private

entrepreneurs and local communities interested in geothermal energy utilization.

Legislation Based on the Energy Sector Development Strategy, the Government of Croatia has adopted a Programme of Implementation of the Energy Sector Development Strategy. The Programme sets out measures, actors and dynamics of implementation of the energy policy and the national energy programmes, the means of co-operation with local and regional selfgovernment bodies in respect of the energy sector development and co-operation with international organizations. The Programme of Implementation of the Energy Sector Development Strategy is intended to cover a period of at least three years. After the expiry of the period for which the Programme has been determined, the government submits a report on the Strategy implementation, with proposals for any necessary changes, to the Croatian Parliament. In the field of Energy Efficiency, the Strategy sets up a number of National Energy Programmes, including a provision for efficiency centres to be set up within HEP and INA (the nationalized energy companies). The principal applicable legislation provisions are set out in the following laws: „ Energy Law; „ Law on Electricity Market; „ Law on Regulation of Energy Activities.

Grid access, distribution In accordance with the energy legislation, Hrvatska Elektroprivreda d.d.

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was transformed into the HEP Group in July 2002. HEP Group is a holding consisting of the parent company (HEP) and its subsidiary companies, over which HEP exercises prevailing control: HEP Production, HEP Transmission, HEP Distribution, HEP Supply, HEP Gas, HEP DH, Sisak District Heating. The privatization of HEP is scheduled to be carried out in accordance with the HEP Privatisation Act (Official Gazette 32/02). HEP Group owns 21 Hydro Power Plants, 8 Thermal Power Plants, and is co-owner of the Thermal Power Plant Plomin 2 together with RWE Energie, Germany. Further, HEP owns 50 per cent of Krško Nuclear Power Plant in Slovenia, and 650 MW in thermal power plants in Bosnia & Herzegovina and Serbia. The eligibility threshold is currently 40 GWh (ie approximately 5 MW output), and an application to the Regulator (the Croatian Energy Regulatory Council) is required. This provision is expected to lead to a 10 per cent opening of the electricity market to private generators. Currently, only around 1 per cent of electricity is produced by small-size industrial power plants and privately owned renewable electricity sources. Third party access to the network is regulated, but grid access, for ‘eligible producers’, is preferential and established by legislation as set out above. Tender and licence procedures are undertaken by the Regulator. Electricity tariffs are set by the government. Basic decisions are taken by the government, subsequent competence over prices lies with the Regulator. A feed-in tariff structure exists for wind projects with capacities of less than 5 MW – larger projects will need to negotiate a tariff on a case-by-case basis (Ministry of Economy, Republic of Croatia).

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RE resources Biofuels Croatia has substantial resources of forestry biomass, together with wastes from the food processing and agroindustries, MSW and sewage sludges, all of which are suitable for conversion to biofuels, in either gas or liquid form.

Biogas Reliable up-to-date figures are not available for current volumes of sludge, biodegradable, organic and liquid waste arisings. However, it would be reasonable to assume that a number of viable AD process plants should be feasible for development to provide conversion of sludges and biodegradable wastes to methane for energy use, and achieve substantial reductions in GHG emissions.

Geothermal Croatia has geothermal reservoirs in the northern part of the country, which could represent a substantial RE resource. The country appears to have a number of viable power generation possibilities, with expected wellhead temperatures and pressures within acceptable ranges for such applications. Low-temperature reservoirs are currently being exploited for space heating, the heating of swimming pools, and in balneology. According to the GEOEN National Energy Programme, the total geothermal potential is estimated at 839 MWt. The potential of binary GeoPP constitutes approximately 48 MWe.

Hydroelectric Croatia has ample hydro resources, with some 2 GW accounting for some

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54 per cent of the country’s installed generation capacity in two main areas of the country – the area near the Slovenian-Hungarian border, and the area along the Adriatic coast line, all owned and operated by HEP. Only some 380 MW of this is accounted for by run-of-the-river and small hydro plants. According to the MAHE National Energy Programme, the total energy potential for small-scale hydro is 177 MW.

Ocean It is unlikely that any significant opportunities exist for the exploitation of viable ocean power.

Solar Reliable up-to-date data on solar radiation resource in Croatia have not been available. However, based on data in respect of neighbouring countries, the prospects for utilizing solar energy resources, for at least lowtemperature application, should be reasonably good. There is some history, dating back to 1975, of the use of solar collectors for domestic and lowgrade industrial heating, together with the use of a limited number of PV units. According to the SUNEN National Energy Programme, the total energy potential of sun energy in Croatia is 100 PJ.

Biomass Some 44 per cent of the country’s area is covered by forests, whilst agricultural residues in Eastern Croatia and the coastal zone represent further significant biomass generation potential. Wastes from the forestry and woodprocessing industries are capable of being converted to electricity and heat via advanced thermal conversion tech-

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nologies for distributed CHP and/or DH applications. According to the BIOEN National Energy Programme, the total energy potential of biomass in Croatia is 39 PJ.

EfW No reliable figures are available for current volumes of municipal and other waste arisings. However, it is clear that large towns and major conurbations will be generating substantial volumes of both MSW and sewage, a significant proportion of which will be going to landfill. There will, therefore, be opportunities to seek to develop RDF and AD process plants, on either a stand-alone or integrated basis.

Wind A country-wide wind-atlas is not available. To date, there are no operating wind energy farms in Croatia, but several projects are planned. Several studies indicate that the Croatian islands and the Adriatic coast are good locations for wind energy, with highest measured wind speeds of 7.3 m/s at 25 m above ground (~8 m/s at 50 m hub height). Wind projects could be particularly attractive developments in the Croatian Islands, of which some 50+ are inhabited, for the generation of both power and clean water via reverse osmosis desalination processes. Studies indicate that RO (reverse osmosis) water could, in some locations, be produced for less than half the cost of current water production costs (European Bank for Reconstruction and Development). According to the National Energy Program ENWIND, the total energy potential of wind is 209 MW on Croatian islands, while it is 163 MW on the Adriatic coast.

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Contacts A listing of some relevant contacts is given within the Annexes at the end of this publication.

Summary It is clear that significant opportunities exist in Croatia for the development of RE projects in, principally, the sectors of biomass, biogas, and

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EfW, either as stand-alone or integrated process projects. Energy crops, wood-processing industry waste and agricultural wastes, both solid and liquid, represent substantial electrical generation potential, exploitable on a small-scale municipal or regional basis for CHP and/or DH. Wind, small-scale hydro and low-temperature solar heating also offer opportunities for development, with opportunities for exploring the wind/RO desalination prospects of particular interest.

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FYR MACEDONIA Overview

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he Government of Macedonia, like most countries in Eastern Europe and the Balkans aspiring to join the EU in due course, has followed a policy of seeking to adopt legislation in harmony with EU Directives on both energy and the environment. The country has high coal production and substantial hydro capacity and potential. There is significant pressure to develop domestic energy generation, as Macedonia is a major net importer of electricity through its interconnected regional neighbours. The government’s electricity market reforms and National Development Strategy have focused on the objectives established within the EU Electricity Directive and the Athens Process and include, inter alia: „ to speed up privatization, restructure the economy and the energy sector and open up to foreign investment; „ to promote energy conservation and efficiency; „ to encourage a shift from electricity to gas heating, which has seen the adoption of natural gas as a medium of heating for 120,000 households since 2000; „ the elimination of energy subsidies and an introduction of market pricing to reflect costs; „ to establish a Regulatory Agency (the Energy Regulatory Commission, (q.v.) and framework concerning the pricing system of purchases from independent power producers or the prices

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the independent power producers would pay for using the transmission network of the public ESM (Electricity Supply Company). Macedonia is generally regarded as having made significant progress in energy sector reform, most notably through the adoption of an Energy Law and the establishment of an independent energy regulator. Specific goals have been established within the energy strategy: „ to continue the development of feasibility studies for proposed CHP, coal and gas distribution projects, and to implement projects that are shown to be economically beneficial; „ to develop an implementation strategy for reduction of losses in power distribution; „ ongoing collaboration with multilateral agencies to implement a strategy to increase energy efficiency and use of renewable energy; „ to ratify the Kyoto Protocol; „ the ERC (Energy Regulatory Commission) to develop an energy industry regulatory framework; „ to privatize ESM through industry unbundling; „ to establish an Energy Efficiency Agency and an Energy Efficiency Fund. Macedonia is not a signatory to either the UNFCCC or the Kyoto Protocol, however it is inactive negotiations with these bodies, and the

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government has nominated the Ministry of Environment and Physical Planning as the National Focal Point in the context of the UNFCCC.

Generating capacity At present, Macedonia retains installed capacity of 1,444 MW, 30 per cent of which is hydropower, providing approximately 6.5 TWh of electricity annually. The consumption requirements are met with no more than 15 per cent in auxiliary imports (2002). As much as 600,000 customers are connected through the distribution network, whilst some 17 per cent of the electricity is being delivered to the large industry consumers. The vertically integrated, state owned power utility AD Elektrostopanstvo na Makedonija (ESM) provides for the entire generation, transmission, distribution and supply of electricity, for imports and transits, as well as for maintaining the stability of the system. It holds possession of the mines for both lignite-fired plants, one of which, Bitola, supplies about 70 per cent of the overall production. The third thermal power plant is oilfired and at present used mostly as a last resort in the high season (Ministry of Economy, Macedonia).

Demand Energy consumption grew marginally from 5.23 TWh in 2002 to 5.29 TWH in 2003, domestic consumption accounting for some 52 per cent, and industry approximately 20 per cent (Enerdata, S.A. and EBRD). Electricity is widely used for residential heating in Macedonia, particularly in urban areas, and DH schemes are limited currently to Skopje, Kocani, and Bitola, with the Skopje system having ~450 MW heat and 26 MW steam generation capacity being by far the most important.

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The total consumption of the district network company for the production of hot water and steam for heating is 71,400 toe (2.9 PJ) of fuel (85 per cent fuel oil, 15 per cent natural gas).

Financing EBRD has indicated that it will continue to ‘play a crucial role….in developing transport and energy projects…’ A number of international banking groups have a presence in the region, and a selective listing of these is set out in the Annexes to this publication.

RE policy The regulatory framework governing the energy sector was established when the Macedonian Parliament created the Energy Regulatory Commission in 2003 as an independent body. It had the principal task of structuring and establishing energy and service tariffs within a regulated energy sector, defining and regulating the conditions for access to the country’s energy infrastructure networks, introduction and control of a licensing process, setting of tariffs, et al. Whilst there does not appear to be any specific policy in respect of RE projects, the government’s espousal of the aims established by the relevant EU Directives, together with the restructuring of the energy sector, point towards a favourable legislative environment for RE proposals.

Legislation The Law on Energy (OG No. 47/97, revised in 2000) forms the basis of the legislation regulating the energy sector as a whole. It sets out, inter alia, rules governing the following:

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„ conditions for undertaking energy activities; „ terms and conditions for environmental protection, etc; „ generation, transmission and distribution of electricity, production and processing of coal; „ generation, transport and distribution of heat and geothermal energy; „ transit and trade with energy; „ the establishment of the Energy Regulatory Commission. In accordance with the Law on Energy, the Government of Macedonia is responsible for: „ enacting a strategy for development and promotion of energy sector; „ enacting a long-term programme for energy efficiency; „ establishing an annual energy balance, based upon submissions from the ERC; „ establishing the Fund for Energy Efficiency. For its part, the Energy Regulatory Commission is responsible for: „ ensuring a safe, continual and high quality supply of energy; „ ensuring the advancement of the competitive market of energy; „ prescribing conditions for energy supply, methodologies and tariffs for the fixing of tariffs for various types of energy; „ issuing, changing, monitoring and revoking the enforcement of licences; „ prescribing rules for connecting to the energy supply network; „ protecting the rights of energy consumers; in dispute „ participation resolution.

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The current Law on Energy Sector is being harmonized in accordance with the provisions of Acquis Communautaire and the Athens Memorandum. In addition, the Law on the Energy Sector (for which the Ministry of Economy has responsibility) regulates public service obligations and consumer protection, the unbundling of energy companies, cross-subsidization, third party access, market liberalization, transmission and distribution system operators, construction of new energy facilities and the maintenance of security of supplies, etc. Other relevant legislation includes the Law on Environment and Nature Protection and Promotion (OG No. 51/00), the Law on Air Protection against Pollution (OG No. 20/74, 6/81, 10/90, 62/93), and the Law on Waste (OG No. 37/98).

Grid access, distribution Elektrostopanstvo na Makedonija (ESM) ESM is the national power utility, which has been split into separate companies for generation and distribution: „ AD ESM – the distribution company which also owns 11 miniand small hydropower plants with a total capacity of 35 MW; „ ELEM – the largest generation company; „ TEC Negotino – a one-plant generation company. In December 2005, a tender for the sale of 90 per cent of the capital share of AD ESM was issued – EVN of Austria has emerged as the buyer, adding to its portfolio of Bulgarian assets.

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TEC Negotino has also been offered publicly. ELEM is to be privatized after the parliamentary elections in the autumn of 2006. Macedonia has 28 distribution districts, with a distribution network of 35 kV, 10 kV and 0.4 kV lines. Electricity coverage is extended to almost all populated Macedonian regions. Skopje's consumption dwarfs that of the other distribution districts, accounting for 37 per cent of the total household consumption in Macedonia. Only four other distribution districts account for more than 5 per cent of consumption: Tetovo (8.1 per cent), Bitola (6.7 per cent) and Kumanovo (5.9 per cent). On average, electricity consumption in each of the 24 other distribution regions is around 2 per cent of the total electricity consumption. Peak demand is met by hydropower. ESM has about 0.5 GW of hydrocapacity, which includes pumped storage, run of river and small hydroelectric plants. The biggest hydropower plant is HPP Spilje, which generates a third of the total energy production (380 GWh) generated by hydro resources in the country. The main transmission network consists of 400 kV, 220 kV and 110 kV lines. The 400 kV system is the backbone of the transmission network. It connects the Bitola thermal plant to the main load centre at Skopje, and connects Macedonia to the European UCTE system. Access to the grid is established by the Law on the Energy Sector, under the rules laid down by the ERC.

RE resources Biofuels Macedonia’s potential in this generic sector is likely to best be exploited in

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the areas of distributed biomass plants for the generation of power, and AD systems for the production of gas and liquid fuels, as set out in the following sections. High animal populations under intensive farming processes should give rise to opportunities for the use of the waste arisings from such operations.

Biogas As set out above, waste arisings from the intensive farming sector, sewage sludge, and the biodegradable element of MSW are all suitable for conversion to biogas through, principally, AD processes, and should be available in volumes sufficient for the development of viable projects at both a regional and central level.

Geothermal Whilst Macedonia currently produces no power from its geothermal resources, it nevertheless does make use of these for the heating of greenhouses, domestic, commercial and industrial buildings, and in balneology. The principal good quality resources are in the East and North East of the country, within the Macedonian-Serbian massif. The proven thermal potential is estimated to be 220 MWt, and the Macedonian Geothermal Association has identified a number of expansion and rehabilitation projects for space heating which appear to be financially viable. Its exploitation to the full could make a useful contribution to the environmental and renewable energy targets of Macedonia.

Hydroelectric The existing six main hydropower plants are estimated to account for less than half of the total potential production, leaving more than 60 per cent of

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the hydro potential available for current and future projects. In 2003, electricity generation from hydropower was 1483 GWh (approximately 4 per cent of primary total energy production). However, studies indicate that the total viable hydro potential could be in the region of 6,000 GWh, which would imply the development of some 1,500 MW of installed capacity. Some 400 MW of additional capacity is currently planned for construction. The GEF Mini Hydro project has demonstrated that financially viable opportunities exist for the tapping of small hydropower resources, eg by adding small turbine plants to existing water supply pipelines. For the purpose of following up on this project, the Ministry of Economy has developed a ‘pipeline’ of four similar projects (each in the range of 0.5 to 5 MW) proposed by public sector entities and 11 mini-hydro projects (each in the range of 0.1 to 1 MW) proposed by private investors. These projects have all been screened for technical and financial viability, but they mostly still face institutional constraints (eg the solving of water rights issues) and all suffer from limited access to finance.

Ocean Macedonia is land-locked.

Solar Solar irradiation in Macedonia is reportedly among the highest in Europe, with an actual to possible irradiation level of some 45 per cent. Due to the comparatively high cost of PV systems, however, it is likely that utilization of solar resources will, for the time being, be limited to collectors for domestic and commercial low-temperature heating.

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Biomass Whilst at some 30 per cent Macedonia has a relatively low (when compared to many other CESE [Central Eastern and South European] countries) level of forestation, the country has a high (>65 per cent) level of land area. This comprises cropland and natural vegetation, giving rise to substantial opportunities to explore the potential for small- and medium-scale distributed generation projects for power or CHP applications.

EfW Given the fossil-fuel-based energy consumption figures in respect of the Skopje DH system, the potential for development of one or more MSWbased CHP/DH plants merits some consideration as part of an integrated environmental/energy solution scenario. There is apparent interest in the development of projects based on the utilization of vineyard waste, which can be converted into energy via advanced thermal processes.

Wind A countrywide wind-atlas is not available, however EBRD estimates that the areas in the South East of the country and the Greek border may provide the best potential for wind projects (EBRD Renewable Energy Country Profile). The ESM is reported to be interested in developing a wind resource study.

Contacts A listing of some relevant contacts is given within the Annexes at the end of this publication.

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Summary The situation in Macedonia appears to indicate that there are numerous opportunities to explore the development of a variety of small- and medium-scale RE generation projects, principally in the areas of biomass, EfW, and hydro, with some potential

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perhaps in wind. It is clear, however, that there is a paucity of domestic investment availability to fund such developments, and it will therefore be necessary for any RE project opportunities to be undertaken primarily with the support of foreign finance facilities.

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ROMANIA Overview

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n anticipation of EU accession, the Romanian Government established a medium-term national energy strategy in 2001, taking into consideration the energy developments in the EU as well as the recent developments in the NES (National Energy System). The National Energy Strategy on Medium Term aims to create an efficient energy market which meets EU energy efficiency and environment protection standards. The Strategy establishes three main goals: „ the financial unblocking of the energy sector; „ starting the privatization process in the distribution and then the electricity production sector; „ ensuring functional and sustainable development in the medium term by stimulating new investments for the energy sector. An essential objective of the National Strategy for Energy Development is the increase of energy efficiency on the whole chain of natural resources, production, transport, distribution, consumption, by an optimum use of market economy mechanisms. An energy intensity reduction target of 3 per cent per year was set. Romania is a signatory to, and has ratified the Kyoto Protocol with Annex B status. It is also a signatory to the UNFCCC with Annex 1 status. A significant number of JI projects are being developed within the RE sector.

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The government has nominated the Ministry of the Environment and Water Management as the National Focal Point in the context of the UNFCCC.

Generating capacity Romania’s total installed generation capacity is some 22.5 GW, of which 67 per cent is thermal, 9 per cent nuclear, and 24 per cent renewable in the form of hydroelectricity (IEA, 2003 figures). Actual generation is ~52 TWh, with a number of new generation projects being planned and in construction. There is also a substantial existing heat generation capacity.

Demand Electricity demand is ~50 TWh, and is expected to continue to increase as the economy improves and expands. Romania has an extensive DH system. DH accounts for approximately 2/3 of all heating in Romania’s urban areas and covers around 2 million households. Bucharest accounts for approximately 1/3 of the total DH service. A total of 36 cities (Bucharest included) account for over 90 per cent of the total DH service. The continued provision of heating is an essential service. The deteriorating quality and increasing cost of service has made DH a major national issue. DH tariffs have been adjusted, but they have generally not kept up with the increasing costs in inefficient systems. Currently almost a half of the population living in cities receives heating subsidies and most consumers benefit from production subsidies. The producer subsidies will have

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to be eliminated over three years, being state aid (EU requirement) and as part of fiscal adjustment (IMF [International Monetary Fund] requirement) – IBRD (International Bank for Reconstruction and Development In June 2004, the government approved a national strategy for restructuring the DH sector, which will offer substantial opportunities for RE generation. The strategy covers pricing, subsidies, and restructuring and rehabilitation at heat production, heat distribution and heat consumption.

Financing EBRD Country Strategy Overview document restates the Bank’s willingness to finance the necessary infrastructure and explore energy efficiency opportunities, and that it ‘…will consider extending credit lines for sustainable energy projects (energy efficiency and renewable energy)…’

The Romanian Energy Efficiency Fund (FREE) The FREE was established under Law Number 287/2002 as a public institution with independence and financial autonomy and headquartered in Bucharest. The Fund's purpose is the management of financial resources received by Romania from the GEF (Global Environmental Facility) through the IBRD.

SFESD (Special Fund for Energy System Development) The SFESD was established by Government Decision no. 29/1994. This fund can be used development of energy conservation projects. The manager of SFESD is the MIR (Ministry of Industry and Resources) through the

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Romanian Agency for Energy Conservation (ARCE).

The Environmental State Fund The Environmental State Fund aims to support the development of projects comprised within the National Environmental Action Plan in conformity with the environmental norms and standards in force and envisages, as a main objective, the necessary investments for the adoption of the Aquis Communautaire. The institutional framework for the Environmental State Fund is established by the Environmental Fund Administration, a legal public utility body, under the authority of the MAPAM (Ministry of Agriculture, Forests, Waters and Environment).

RE policy The competent authority for establishing and regulating RE policy is the ANRE (National Electricity and Heat Regulator). In the 2002 regular report on Romania's progress towards accession to the EU, the EU commission came to the conclusion that Romania does not devote the necessary resources to improving energy efficiency and promoting renewable energy. The government subsequently implemented the Law on the Efficient Use of Energy, which entered into force in 2002. The main directions of the national policy in the field of energy efficiency are: „ increasing the energy efficiency in all sectors of the economy; „ promoting new financing mechanisms in order to stimulate investments in the field of energy conservation;

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„ promoting private initiative and development of energy services, promoting new technologies with high-energy efficiency and international co-operation in the field of energy efficiency. The Romanian Government has encouraged foreign investment in hydropower through Hydroelectrica, the state-owned hydropower producer, and is planning to implement a new programme for increasing the use of RE that includes photovoltaics, wind energy, biomass, and geothermal energy. The promotion of electricity produced from RE sources in the internal electricity market was established in the provisions of GO 63/1998 regarding the generation of electricity and heat, and also in the provisions of the Electricity Law Number 318/2003. In Chapter V of Law 318/2003 Renewable energy sources definitions, technical utilization and marketing conditions and facilities were set out: 1. Art. 51: Based on this Law, the

competent authority (ANRE) will regulate the technical conditions for access to the electrical network and the technical conditions for marketing the electricity and heat produced in cogeneration from renewable sources. 2. Art. 52: Based on technical and economical studies, the development and utilization of renewable energy sources are stimulated, the facilities being granted by Government decision as a result of a proposal made by the competent authority (ANRE). The promotion of renewable energy resources it is also provided by the Energy Efficiency Law Number 199/2000.

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Therefore, the Order no. 92/2002 regarding the application of Competition Council regulations, issued on the base of Law Number 143/1999, adopted the Regulation regarding the state support for environmental protection. In Chapter III of this Law the general conditions for authorization of state support for investments in environmental protection were set out as follows: 1. Investments for promoting the

renewable energy sources are assimilated to the environmental protection investments achieved as a result of lacking compulsory national standards. The measures aimed to support the renewable energy sources represent one of the long-term targets that have to be especially encouraged. The base rate of support for investments made for this energy form represents 40 per cent from the eligible costs. In the case of production capacities of energy from renewable sources that cover entirely the energy consumption of a community, the investments made can get a bonus of 10 per cent over the base rate of 40 per cent from the eligible costs. When the needful character of the investments is proved, the supplying authority can support the investments for producing energy from renewable sources to up to 100 per cent from the eligible costs. The respective installations will no longer benefit from other type of support.” 2. “In the case of renewable energy sources the eligible costs of investment are usually the additional costs taken by the economic body in comparison with a conventional energy

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installation with the same energy production capacity.” The state support for renewable energy sources can be granted according to the following options: „ when the investments costs are very high and, generally, the state support represents a significant percentage from the economic bodies costs that cannot allow obtaining competitive prices on the market for the produced energy; „ support for renewable energy can be granted by using the market mechanisms as ecological certificates; „ support for operation can be granted for new installation for producing energy from renewable sources, its value being calculated based on external costs that are avoided.

Legislation The principal applicable legislation in the context of RE development is the Law on the Efficient Use of Energy, which entered into force in 2002. The Law stipulates that the national policy for the efficient use of energy will be developed by the ARCE, on behalf of the Ministry of Economy and Commerce. The GO no. 78/2001 amendment strengthens ARCE’s responsibility in the field of energy efficiency and in accordance with the priorities of the National Strategy for Energy Development. GD 941/2002 establishes the new statute of ARCE, regarding its organization and operation rules. The Law includes provisions enabling the application of the Aquis Communautaire referring to:

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„ the main principles of the national policy of efficient energy use (in connection with Article 3.2 of the Energy Charter Protocol regarding the energy efficiency and related environment issues); „ the scope of the national policy (in connection with Article 3.3 of the Energy Charter Protocol); „ ensuring the legal framework for defining the strategy, the objectives and the programmes of energy efficiency (in connection with Article 5 of the Energy Charter Protocol); „ the preparation of technical regulations aiming to increase energy efficiency; „ fiscal and financial incentives for investment and companies providing management and energy services (in connection with Article 6 of the Energy Charter Protocol). Currently, the provisions of a number of energy efficiency directives are transposed in the Romanian legislation. The top priority for the Ministry and ARCE is to provide the renewable sector with the appropriate legal framework. Emergency Ordinance no. 124/2001, approved by Law Number 287/2002, established the Romanian Fund for Energy Efficiency (FREE). Electricity Law Number 318/2003 sets, among others, provisions for the promotion of electricity production from RE sources.

Grid access, distribution In the year 2000, the former national electricity company CONEL was restructured and then dissolved. The following commercial companies were established.

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Renewable Energy in SEE

1. Transelectrica, SA: the National

Power Grid Company for electricity transmission, electricity market management, and foreign electricity system interconnection. Transelectrica SA fulfills through its branches the following functions:

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transport and system operator of the national grid system, in conformity with the ‘unbundling’ requirement of the Acquis; commercial operator in the electricity market through OPCOM SA; operator for the measuring of the electric energy traded on the gross electric market, through OMEPA; telecommunications and information technology operator through TELETRANS SA. Inter-connection of the National Power Grid to the UCTE (Union Energetic System for Coordinating the Electric Energy Transport) in May 2003, offering the premises for increasing the quantity of exported energy.

2. Termoelectrica SA: the Com-

mercial Company for Electricity and Heat Generation for the production of electrical and thermal energy, electricity generation from thermal power plants, DH, and related fuel supplies.

The reorganization process at SC Termoelectrica SA resulted in 18 thermal power stations being transferred from Termoelectrica to the local public administration, as well as the transfer of the hydro electrical power stations from Termoelectrica, Nuclearelectrica and Electrica to Hidroelectrica. At the end of 2002, Termoelectrica had four subsidiaries

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organized as commercial activities and six branches. During 2003, 12 trading companies were established for repair and services through the separation of some support activities in Termoelectrica. 3. Hidroelectrica SA: the Commer-

cial Company for Electricity Generation for the production and delivery of hydroelectric power. 4. Electrica SA: the Commercial Company for Electricity Distribution and Supply. SC Electrica SA was reorganized in 2002, and became a group of companies which includes eight branches for the supply and distribution of electric energy and eight branches for maintenance and energy services. This new structure allows the new branches to be prepared for the privatization process. ANRE has established that a Regulated Third Party Access system will be used. The likely model for tariff regulation is a combined price cap and rate-of-return system. ANRE has chosen a nodal transmission tariff system. ANRE also issues authorizations for new generation capacity and for the rehabilitation of existing plants for companies with headquarters or secondary head offices in Romania. Licences are awarded subject to the accomplishment of a feasibility study, an environmental impact assessment and a financial assessment.

RE resources Biofuels Romania has vast agricultural resources from which significant RE generation could be developed. The

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potential availability of large volumes of energy crops has prompted a number of international companies to undertake feasibility studies in respect of the development of bio-diesel and bioethanol projects.

(<30 MW) plants. Around 5,000 locations in Romania are favourable for small HPPs. However, there appear to be no special incentives for the implementation of hydro projects at present.

Biogas Large animal populations indicate that there should be considerable potential for the development of ADbased projects utilizing animal waste and slurries for conversion and GHG mitigation. Romania also has several large conurbation areas, whose sewage wastes would also lend themselves to AD processes.

Geothermal Geothermal resources have been used in Romania since the 1960s. Romania has one of the highest geothermal potentials in Europe, with ~6,000 TJ/yr potential energy production. At present, 137 MWt are used from 61 active wells producing hot water in the temperature range of 55–115˚C. The geothermal water resources are public property according to the Romanian Constitution, and are currently used for space heating and domestic hot water (approximately 38 per cent), greenhouse heating (34 per cent), balneology (30 per cent), and lowtemperature industrial processes (13 per cent). EBRD in its Renewable Energy Resource Assessment considers that cities located near geothermal resources could benefit from looking at connecting this resource to existing, or new, DH schemes.

Hydroelectric The hydroelectric potential is estimated at 40 TWh, of which only 12 TWh/a are developed, with only ~100 MW of this being from small

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Ocean Due to extremely small tidal variations in the Black Sea, it is unlikely that any potential exists for the development of viable ocean RE projects in Romania.

Solar Romania’s solar resource potential is very good. The average solar radiation in Romania ranges from 1,100 to 1,300 kWh/m2 per year, taking in over half of the country’s surface. A solar radiation map has been issued by the National Institute of Meteorology and Hydrology. There are good opportunities for solar energy development, and experiences from the past can be used – large-scale solar collection systems were undertaken in the 1980s to provide low-temperature hot water for hotels and apartment blocks, drying and cooling for agricultural processes, but the systems proved to be of poor quality. Since 1990, due to poor maintenance and a halt in new developments, the existing operational equipment is now less than 10 per cent of the original 1 million m2 installed.

Biomass Romania has some 40 per cent of agricultural land and 27 per cent of forest. Currently, biomass is used only for heating purposes, direct burning for cooking and hot water preparation, making up some 95 per cent of biomass use through small-scale, inefficient equipment. Only some 5 per cent of biomass usage currently has industrial application, primarily in the wood-processing industry. The

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Carpathians and SubCarpathian regions represent approximately 90 per cent of fuel wood and 55 per cent of wood waste resource, whilst some 52 per cent of agricultural waste is available in the South Plain and Moldavia. There are significant opportunities for the increased utilization of biomass for the generation of RE through fossil fuel substitution, small-scale CHP and /or DH schemes, in particular in areas where biomass production is high and where the centres of population are ‘off-grid’. A number of international companies have expressed interest in conversion of thermal power plants to biomass RE plant.

EfW As outlined above, there appears to be significant potential for the development of RE projects using waste from the wood-processing industries, and from the agricultural industry activities. Opportunities should also exist for the conversion of MSW into energy through the development of integrated AD and advanced conversion technologies such as gasification to help address both the energy and environmental issues arising in major population centres.

Wind Romania has one of the best wind resource potentials in the region, with good wind-atlas data available from the ICEMENERG (Energy Research and Modernizing Institute) in 1993. It indicates wind speeds of 4.5–11.5 m/s at 50m height in various areas, notably off shore. The government has set a

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target of 200 MW by 2010 for wind – there are plans to develop a 12turbine farm at Constanta, and there is interest in the development of turbine production capacity. Small-scale farms may qualify for preferential feed-in tariffs.

Contacts A listing of some relevant contacts is given within the Annexes at the end of this publication.

Summary Romania clearly offers significant opportunities for the development of both large-scale and small-scale distributed RE generation. The largest potential and most straightforward, easily implemented resources on which to base initial projects would appear to be biomass and EfW, the output of which can easily feed into existing CHP and DH schemes, replacing the use of fossil fuels. Wind resources may offer some opportunities in certain areas, principally on the coast, whilst geothermal resources can continue to play a part in meeting the heat demands of those areas of population near such sources. Hydro will continue to be a significant element of the RE scenario, with opportunities for small-scale projects. All of the above, however, will undoubtedly need to be driven by an appropriate tariff structure which encourages investors to undertake the necessary development of RE projects.

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SERBIA & MONTENEGRO Overview

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he constituent elements of Serbia & Montenegro voted in May 2006 to dissolve the loose union formed in February 2003 of two member states, the state of Montenegro and the state of Serbia that includes the Autonomous Province of Vojvodina and the Autonomous Province of Kosovo and Metohija, currently under an international administration in accordance with United Nations Security Council resolution 1244. Whilst it may be expected that each country will, in the course of time, establish its own discrete approaches to RE, it seems reasonable to assume that the statements set out below in respect of the RE position will follow the status quo ante and continue to be valid for the time being. The Council of Ministers does not include the Ministry of Energy nor the Ministry for Environmental Protection. In general, the energy sector remains severely damaged following the Kosovo conflict, with frequent blackout periods due to the poor state of repair of both the system and generating capacity. Investment in the reconstruction of the infrastructure will, therefore, take priority over the development of RE projects, notwithstanding the need (in common with other countries in the region) to develop alternatives to fossil fuels and energy supply balance. Privatization within the energy sector is, therefore, still very much a pending issue – a factor which will delay any major financing initiatives un-

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til the restructuring has significantly advanced. Serbia & Montenegro is a signatory to the Kyoto Protocol and the UNFCCC with Non-Annex 1 status. The country is able to host CDM projects, and the government has nominated the Ministry of Science and Environmental Protection of the Republic of Serbia as the National Focal Point within the context of the UNFCCC.

Generating Capacity The country’s installed capacity has been deteriorating over the years, and now stands at ~8.3 GW, of which 66 per cent is thermal and 34 per cent hydro. Plans have been announced for the construction of some 300 MW of additional, large-scale, hydro capacity. Transmission and distribution losses are comparatively high, at some 20 per cent of the ~31.5 TWh generated.

Demand Demand, principally in the form of increasing domestic consumption, has been increasing steadily and outstrips generation output. In Serbia, 43 towns and different industry sectors have their own heating systems, with a total installed capacity of 6,600 MW. The main heat energy sources are heating plants (47per cent), industrial cogeneration plants (16 per cent) and industrial heating plants (10 per cent). In total, the primary energy consumption in these plants is met 56 per cent by gas, 24 per cent by oil and 20 per cent by coal.

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Financing EBRD’s Country Strategy Review document highlights the need for the development of the energy and infrastructure sectors. A number of programmes have been prepared by the SEEA (Serbian Energy Efficiency Agency) and will be financed by Special EAR Fund Programme and approved by the Ministry of Mining and Energy. The Law on Energy of the Republic of Serbia provides for the establishment of a Fund for Environmental Protection. The fund's finances are to be used to finance, among others, incentives for use of RE sources and increased energy efficiency.

RE policy The basis of the energy policy is included in the proposed Serbian and Montenegrin Energy Laws. The strategy for the development of the energy sector up to 2015 has been drafted submission to the Serbian Government/Parliament according to the Serbian Law on Energy. This document addresses six principal issues: „ the present situation of Serbian energy sector, energy consumption and production, national resources; „ the elements of a strategy for the development of the energy sector up to 2015 with targets and priorities described in detail; „ the survey of two scenarios of economical and industrial development developed on the basis of macroeconomic presumptions and methodologies of energy demand determinations; „ the survey of programmes, measures and potential investments developed on the basis of five

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priorities with an assessment of positive effects regarding energy increasing of production/energy decreasing of consumption; „ the survey of the economic situation in the energy sector including the harmonization between the electricity and heat prices and the costs of electricity and heat production, the costs of maintenance and new capital investments; „ the proposal for a monitoring and evaluation system for strategic targets. This strategy does not include Kosovo and Metohija. SEEA has prepared the Strategic Programme 'Energy Efficiency in Industry', which is expected to contribute to the improvement of energy efficiency in Serbian industry. SEEA has also developed the Strategic Programmes 'Energy Efficiency in the Municipal Sector' and ‘Energy Efficiency in the Building Stock’, which should contribute to the increase of energy efficiency in the buildings and systems which are within the responsibility of the local (municipal) administrations. SEEA will promote wider use of RE through its programme ‘Renewable energy sources’. The programme will be implemented through various activities: analysis of energy potential of RE, improvement of statistics and database regarding the potential and use of RE, improvement of energy management, alignment of legislation to the European practice, awareness campaigns and co-financing of demonstration projects aimed at the introduction of new technologies for efficient use of RE.

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Legislation Within Serbia, the Ministry of Mining and Energy is responsible for the electricity power sector, geology and mining sector, oil and gas sector, general energy sector (communal utilities), energy balance of the Republic of Serbia, and the establishing of conditions for the operation of public enterprises under its jurisdiction. The Ministry is in charge of the governmental energy policy making, preparation and adoption of energy legislation, secondary legislation and regulation. The applicable basic law is the Law on electric power industry (OG, nr. 45/91). The Ministry was also responsible for the proposition of an energy law (30 May 2003). The Ministry of Science and Environment Protection is responsible for environmental protection on global level, to decrease GHG emissions, to accept its part of the responsibility for global climate change, provide management of chemicals, and decrease the emission of polluting substances into air, water and soil, as well as to provide the conditions of treatment of hazardous waste, protected plant and animal species, and other goods according to international regulations. The Ministry of Science and Environment Protection has prepared two relevant pieces of legislation – the Law on Environmental Protection System, and the Law on Reduction of Emissions. The Energy Law was adopted by Serbian Parliament on 22 July 2004 and entered into the force on 1 August 2004. This law comprises the following activities: „ electricity production, transmission, distribution, selling and trading, managing withelectricity market;

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„ oil derivates production, transportation, distribution, selling and trading; „ natural gas transportation, storage, distribution, selling and trading; „ heat energy production, distribution, delivering to tariff costumers, managing with district heat network. The principal elements of this law are the establishment of: „ quality of energy supply for consumers with consideration for environmental protection; „ stable and sustainable development of energy activities; „ energy efficiency; „ liberalization of the energy market; non-discriminatory „ ensuring approach to all subjects on the liberalizing energy market; „ open access to all energy systems and energy supply networks; „ priority for RE sources; „ environmental protection. New institutions founded due to this law are the Energy Agency of Republic of Serbia, the Energy Efficiency Agency of Republic of Serbia, and the Transmission System Operator. The law stipulates that ‘privileged’ power producers include those generating from RE sources or waste, and CHP plants if they meet efficiency criteria. Within the Republic of Montenegro, the Ministry of Economics’ Energy Department is responsible for monitoring the states, production trends and business results of Montenegro’s energy sector. The Department develops plans for creating the strategy for energy development in Montenegro. Montenegro’s New Energy Law was adopted by Parliament on 25 June

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2003 and comprises the following activities: „ electricity production, transmission, distribution and supply on market; „ organization and function of electricity market’ „ oil derivates and gas transportation, distribution, storage and trading. The principal elements of this Law address: „ efficient and economic use of natural resources; „ environmental protection; „ energy efficiency; „ tariff consumers protection; „ integration of Montenegrin energy sector activities with other European countries’ energy sector activities, etc. A new institution with responsibility for the implementation of this law is the Regulatory Agency for Energy. According to this Agency, eligible customers are defined by the law depending on the level of annual energy consumption. The threshold is set at 25 GWh in electricity, 50 million m3 of natural gas, and 5,000 GJ of heat.

Grid access, distribution The Union State of Serbia & Montenegro has two electric utilities: Serbian ‘Elektroprivreda Srbije’ and Montenegrin ‘Elektroprivreda Crne Gore’. Today, both utilities in Serbia & Montenegro are preparing themselves with a reconstructed electricity system for restructuring and privatization. ‘ Elektroprivreda Srbije’ (Electric Power Industry of Serbia, EPS) is the

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largest electricity utility in the Union State of Serbia & Montenegro. It is a state-owned company with main business activities in electricity production, transmission and distribution, managing of electricity system and the export-import of electricity. Elektroprivreda Srbije runs its business in accordance with Serbian Law on Electric Power Industry. ‘ Elektroprivreda Crne Gore’ is a state-owned company with main business activities in electricity production, transmission and distribution, managing of electricity system and the export-import of electricity. Elektroprivreda Crne Gore runs its business in accordance with Montenegrin Energy Law.

RE resources Biofuels Forest and cropland account for 98 per cent of the land area, indicating significant opportunities for exploiting the development of biofuels from biomass resources. It has been estimated by Enconet that 200 ktoe of conventional transport fuel could be saved each year through methanol production from crops grown only on 3 per cent of the total arable land. Another 260 ktoe/yr is considered available from agricultural wastes.

Biogas Animal wastes are used in AD processes to produce biogas, with an estimated potential for some 0.4 million toe. There are additional opportunities to explore the conversion of sewage slurries via AD to generate methane for use as fuel.

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Geothermal An assessment of the geothermal resource for the whole of Serbia has been undertaken, and indications are that geothermal reserves may be sufficient to substitute some 400 million toe. There are currently more than 80 operational geothermal systems in the country, principally used for agriculture, space heating, and balneology. Subject to geographical constraints, some resources may be capable of connection to local DH schemes.

Hydroelectric It is estimated that the total potential for hydro in Serbia could be ~25 TWh/yr, of which 17.5 TWh could technically be usable commercially. Hydropower accounts for some 34 per cent of generation. Given that hydro represents a significant element of the country’s potential, it can be expected that opportunities will arise for the development of new hydro projects. The government of Serbia estimates a potential of some 490 MW of small-scale hydro for future development.

Ocean It is not expected that viable opportunities for development of ocean RE projects will arise.

Solar Solar resources in the country are good, with a ratio of actual to possible irradiation being almost 50 per cent. Solar thermal units were used in the past to provide water and space heating in the domestic and tourist sectors, however, there is no reliable up-todate information available to determine the current status of these systems.

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Biomass As indicated earlier, the potential for RE generation from biomass in the country is also very good. Indications are that savings of some 2.5 million toe could be achieved by the exploitation of biomass-fuelled systems in both heating and agricultural production applications.

EfW High animal populations and high levels of agricultural waste indicate that there is substantial opportunity to explore development of integrated distributed CHP generation. The installation of MSW-feedstock conversion plants based on gasification processes are also possibilities, providing solutions to both energy and environmental issues within centres of larger populations.

Wind There are no operational wind turbines in Serbia & Montenegro. A countrywide wind-atlas is not available, but according to studies carried out by the Agricultural Faculty and Faculty of Electronics from the city of Belgrade in 2003, there is potential to produce electricity from wind in Serbia & Montenegro as follows: „ average speed of wind: 4–6 m/s; „ potential (on-shore) wind capacity: 11 000 MW; „ potential (on-shore and offshore) wind capacity: 15,000 MW; „ electricity produced from (onshore and off-shore) wind: 26,3 TWh/yr. The government indicates that it estimates a potential for 50 MW of wind energy development in future.

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Contacts A listing of some relevant contacts is given within the Annexes at the end of this publication.

Summary Due to the effects on Serbia & Montenegro of the Kosovo conflict and its aftermath, up-to-date relevant data have been difficult to obtain. It is therefore difficult to draw any definitive conclusions as to the levels of op-

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portunity which may exist in the country for developing RE projects. Nevertheless, it is possible to make an intuitive assessment and, on that basis, it seems logical that the biomass/biofuels and EfW sectors should offer the most significant opportunities. They address both energy and environmental issues and are able to connect into an existing CHP/DH infrastructure at levels that should impose little strain on the distribution grid. As always, tariff structures will be crucial in terms of establishing the viability of such project opportunities.

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TURKEY Overview

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urkey is heavily dependent upon energy imports, with the percentage of import reliance reaching 78 per cent by 2020, and demand expected to grow from a 2002 base of 133 TWh to 566 TWh in 2020 (Ministry of Energy and Natural Resources). As Turkey’s only major indigenous resources are hydro and lignite, it is expected that the increased demand will be met by gas fired generation. In light of recent disquiet over security of gas supplies, the government has established the following priorities for meeting the forecast energy demand in a secure, timely, economic and environmentally acceptable form: „ upgrading of energy supply security; of energy „ diversification sources; „ optimising the use of indigenous energy sources; „ promotion of energy efficiency; „ harmonisation under the EU Acquis. The government is in favour of environmentally friendly energy policies, and has enacted an RE law which sets out incentive mechanisms, including the favouring of licences to RE generators. It has set a target of 2 per cent of generation from wind resources. There are, however, no direct special incentives for RE generation other than a reduction in licence fees, and in special circumstances for some wind and small hydro. The government is, however, looking at various

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EU support schemes with a view to adoption of one of these. Turkey has not ratified either the Kyoto Protocol or the UNFCCC, although it is believed that it will soon ratify the latter.

Generating capacity Total installed generation capacity in 2000 was 24.7 GWe, of which hydro and RE represented 11.18 GWe (figures for 2003 show that 99 per cent of this was made up by hydro alone). Government forecasts for 2010 are for 58.65 GWe and 20.96 GWe respectively.

Demand Demand in 2002 was 133 TWh. The government forecasts this to increase to 286 TWh by 2010, and 566 TWh by 2020.

Financing The government has to date attempted, with only limited success, to encourage the development of energy projects under BOT (BuildOwn-Transfer) and BOO (BuildOwn-Operate-Transfer) non-recourse structures.

RE policy The Ministry of Energy and Natural Resources has overall responsibility for the establishment of RE policy, with the responsibility for its promotion being delegated to the

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NECC (National Energy Conservation Centre).

Legislation The Electricity Market Licensing Regulation of the Electricity Market Law (Law Number 4628) contains two regulations pertaining to the promotion of the use of renewable energy: 1. The legal entities applying for

licences for construction of renewable energy facilities are required to pay only 1 per cent of the total licence fee. Also, renewables-based generation facilities are exempt from paying the annual licence fees for the first eight years following the facility completion date as specified in the licence. 2. The TEIAS (Turkish Electricity Transmission Company) and/or distribution companies are required to give priority status for systems connection of generating facilities based on renewables.

Grid access, distribution The Turkish Electricity Transmission Company TEIAS is the authority that manages the national transmission system. The distribution grid is managed by TEDAS, whilst the Turkish Electricity Trade Company, TETAS purchases electricity from licensed producers and then on-sells to the distribution company. There are provisions within the current legislation for preferential access to the grid by RE generators.

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RE resources Biofuels It is likely that the greatest opportunities in this sector lie in the conversion of liquid wastes from, for example, sewage to methane via AD processes.

Biogas Opportunities exist for the development of a number of projects for capturing gases from landfill sites in and around the country’s major towns and cities. The potential for utilizing animal waste has not been studied in any depth to date.

Geothermal Turkey has major geothermal generation potential, with 95 per cent of known geothermal fields being suitable for space heating and low temperature industrial applications. At least ten fields surveyed are suitable for power generation There is a current installed capacity of approximately 820 MWth, with an estimated total potential capacity of 35 GW.

Hydroelectric Hydro currently represents approximately 35 per cent of generation capacity, with an installed capacity of some 12.2 GWe in 2002, expected to increase to 35 GWe by 2020. There are opportunities for the development of small-scale hydro benefiting from direct government support.

Ocean There are unlikely to be any viable opportunities for the development of ocean RE projects.

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Solar Turkey has an excellent solar energy resource, with approximately 8.2 million m2 of solar collector systems installed at present for domestic hot water and heating applications. PV applications have so far been limited to use by government agencies in remote areas for power supplies in respect of telecommunication posts, emergency signing, etc.

Biomass Please see Biofuels above.

EfW

present. However, Turkey has good wind resources, with an estimated technical potential of 88 GWe, of which the economically viable potential is estimated as 10 GWe. Approximately 3,400 MWe of applications have been submitted to the Ministry of the Environment and Natural Resources (MENR) for consideration.

Contacts A listing of some relevant contacts is given within the Annexes at the end of this publication.

Summary A number of opportunities exist in the area of MSW processing and conversion in and around the country’s major towns and cities, with particular needs arising in Istanbul and some of the tourist regions where municipal waste and sewage issues are becoming a major problem. Integrated gasification and AD system projects could offer a dual energy and environmental solution to these areas.

The government has indicated that its priorities are in the sectors of hydro, geothermal, and wind. Consideration should, however, also be given to the opportunities represented by the biogas and EfW sectors, which offer the facility for scalable implementation within a short time-frame and address both the energy and environmental aspects of the government’s strategy.

Wind There is only some 20 MWe of wind generation capacity installed at

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APPENDICES I. II. III. IV.

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Country Maps Electricity System Maps (where available) References and links Banks

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I. COUNTRY MAPS – COURTESY OF CIA

Albania

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Bosnia-Herzegovina

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Bulgaria

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Croatia

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Macedonia

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Romania

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Serbia & Montenegro

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Turkey

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II. ELECTRICITY SYSTEM MAPS – COURTESY OF SEENERGY.ORG

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Albania

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Bosnia-Herzegovina

Bulgaria

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Croatia

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Macedonia

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Romania

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Serbia

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Montenegro

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III. REFERENCES AND LINKS

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n addition to the specific references made in the texts, and the various government websites, the authors are grateful for having had access to supporting background data and information from, inter alia, the following sources: Austrian Energy Council websites CIA – The World Factbook: www.cia.gov Climate Change Projects Office, Department of Trade and Industry, United Kingdom: www.dti.gov.uk Embassy of the Republic of Turkey, London Enerdata, s.a: www.enerdata.fr Energy Community of South East Europe: www.seenergy.org European Bank for Reconstruction and Development: www.ebrd.com GTZ – Deutsche Gesselschaft für Technische Zussamenarbeit: www.gtz.de International Energy Agency: www.iea.org World Energy Council: www.worldenergy.org ManagEnergy http://www.managenergy.net/ Albania „ Albanian National Strategy of Energy: www.seenergy.org „ Albanian National Environment Homepage: http://www.grida.no/ enrin/htmls/albania/soe/htmls/ „ Government of Albania, official website „ Institute of Statistics of the Republic of Albania: http://www.instat.gov.al/ „ Website of the Government of Albania

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„ KESH – Albanian Power Corporation: www.kesh.com.al „ EIU – Economist Intelligence Unit Bosnia & Herzegovina „ State Electricity Regulatory Commission in Bosnia and Herzegovina: www.derk.ba „ System Operator – ZEKC-JPCC: www.zekc.t-ba.net „ Ministry of Foreign Trade and Economic Relations: www.mvteo.gov.ba „ Chamber of Economy of Bosnia and Herzegovina: www.komorabih.com/ „ Office of the High Representative: www.ohr.int/ „ Government of Federation of Bosnia and Herzegovina: www.fbihvlada.gov.ba/ „ Republic of Srpska Government: www.vladars.net/ „ Energoinvest: www.energoinvest.com/ „ CETEOR – Center for Enviromental Technological Development: http://www.pksa.com.ba „ Foreign Investment Promotion of Bosnia and Herzegovina: www.fipa.gov.ba/ „ Bosnia and Herzegovina – Council of Ministers, Unit for Economic Policy Planning and Implementation of Bosnia and Herzegovina Medium Term Development Strategy: www.eppu.ba/ „ Chamber of Economy of Federation of B&H: www.kfbih.com/

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„ Chamber of Economy of Republic of Srpska: www.pkrs.inecco.net/ „ EkoMreza B&H: www.ekomrezabih.net/ EkoMrezaBiH is a portal for NGOs from Bosnia and Herzegovina, which are primarily engaged in protection of environment. „ Power utility JP ‘Elektroprivreda BiH’: www.elektroprivreda.ba/ „ Power utility JP ‘Elektroprivreda HZ HercegBosna’: www.ephzhb.ba/ „ Power utility ‘Elektroprivreda Republike Srpske’: www.elektroprivreda-rs.com/ Bulgaria „ Ministry of Energy and Energy Resources of the Republic of Bulgaria: www.doe.bg „ National Energy Strategy „ National energy efficiency Plan „ State Energy Regulatory Commission: www.dker.bg „ NEK - Natsionalna Elektricheska Kompania: www.nek.bg Croatia „ Ministry of Economy, Labour and Entrepreneurship: www.mingo.hr „ Strategic Planning Office of the Republic of Croatia „ Croatian Energy Regulatory Council: www.vred.hr „ HEP – Hrvatska Elektroprivreda: www.hep.hr Macedonia „ DHN Company TOPLIFIKACIJA-SKOPJE: www.toplif.com.mk/

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„ Economic Chamber of Economy: http://www.mchamber.org.mk/ „ Ministry of Economy: www.economy.gov.mk/ „ Ministry of Environmental and Physical Planning: www.moepp.gov.mk/ „ Ministry of Finance: www.finance.gov.mk/ „ ESM - Electric Power Company of Macedonia: www.esmak.com.mk Romania „ Ministry of Economy and Trade: www.minind.ro „ Romanian Energy Regulatory Authority: www.anre.ro „ Transelectrica S.A: www.transelectrica.ro Serbia & Montenegro „ Ministry of Economy: www.gom.cg.yu/eng/minekon „ Federal Statistical Office: www.szs.sv.gov.yu/ „ Government of Republic of Serbia: http://www.srbija.sr.gov.yu „ Serbian Ministry of Mining and Energy: www.mem.sr.gov.yu/ „ Serbian Ministry of Science and Environmental Protection: www.ekoserb.sr.gov.yu/ „ Government of Republic of Montenegro: www.gom.cg.yu/ „ The Ministry of Environmental Protection and Physical Planning of Republic of Montenegro: www.mepp.vlada.cg.yu/ „ Serbian Energy Efficiency Agency: www.seea.sr.gov.yu/ „ Power Utility ‘Elektroprivreda Srbije’: www.eps.co.yu/ „ Power Utility ‘Elektroprivreda Crne Gore’: http://www.epcg.cg.yu/

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„ Energy Regulatory Agency of Montenegro: www.regagen.cg.yu Turkey

„ TEIAS Electricity Transmission Co: www.teias.gov.tr „ Energy Market Regulatory Authority: www.emra.org.tr

„ Ministry of Energy and Natural Resources: www.enerji.gov.tr

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IV. BANKS

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he UNEP FI – United Nations Environment Programme Finance Initiative’s survey (www.unepfi.org) of 26 financial institutions in 14 Central and Eastern European countries concluded that, whilst respondent institutions were increasingly aware of the necessity for adopting sustainable finance practices in CEE, not all were actually implementing them. The following major international banking groups are active in the region, have an interest in project financing and have associated specialist financial structuring facilities for the support of RE projects. Most produce regional and market-specific investment guides:

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Raiffeisen International (www.ri.co.at) has a presence in Albania, Bosnia, Bulgaria, Croatia, Romania, and Serbia & Montenegro. Unicredit Group, which includes both the HVB and Bank Austria Creditanstaldt (www.ba-ca.com) banking groups, is present in Bosnia, Bulgaria, Croatia, Macedonia, Romania, Serbia & Montenegro, and Turkey. Citigroup (www.citigroup.com) are active in Bulgaria, Romania, and Turkey. Garanti Bank, (www.garanti.com) in whom GE have a 25 per cent stake, are present in Romania and Turkey.

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ALSO FROM GMB PUBLISHING Russian Energy Policy During President Putin’s Tenure: Trends and Strategies Author: Danila Bochkarev This important report looks at the policies and strategies President Putin has developed in the field of energy and at the current climate for foreign investors in the sector. Russian energy policy is at an important watershed. A substantial increase in the output of oil & gas, has led some analysts to view Russia as a reliable, alternative to global dependence on energy supplies from the Gulf. On the other hand, there are concerns that current Russian energy strategy comes closer to the Venezuelan ‘energy state-capitalism’ model where foreign energy companies are welcome to invest, but only on Moscow’s terms and in partnership with a state-controlled national energy company. How are these strategies unfolding and what are the lessons for private sector investors? ISBN 1-846730-26-0 70 pages Published 2006

Renewable Energy in Russia and the CIS Kevin Smith and Chris Moore From the authors of Renewable Energy in SEE, this second report looks in the same detail at the RE markets in Russia and the states of the former Soviet Union. ISBN 184673052X 70 pages Publication March 2007

Russian Foreign Energy Policy: An Analytical Compendium (Volume 1) Series editor: Dr Kevin Rosner This important publication brings together a series of authoritative reports, which establish for the first time the confluence of Russian foreign policy with the acquisition of foreign energy assets by Russian entities. Nine specific country profiles focus on the oil, gas, electricity and nuclear power industries. Each report, written by an author of international standing, explains how Russian foreign energy downstream mergers and acquisitions are transpiring to consolidate the new Russian empire.

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These unique studies address many questions of substance for energy industry professionals, investors, policy experts, and decision makers who seek to make sense of the dynamic changes that have overcome the Russian energy complex and altered. ISBN 1846730597 476 pages Publication March 2007

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