ALBANIA

http://www.euroqualityfiles.net/AgriPolicy/Report%202.2/Agripolicy%20WP2%20D2%20Albania%20Final.pdf

The share of renewable energy sources (excluding hydro power plants) is negligible. It is well-known the fact that in the majority of country households in rural and even in some urban households, the wood is used for heating and cooking.

The main characteristics of the energy systems including the renewable one in Albania could be summarized as follows:• Almost 97% of the electricity produced in the country is generated by hydropower plants (large and small scale plants)• As a recourse for the households especially in the rural areas and partly in the urban areas for ambient heating and for domestic hot water, mainly it is used the fuel wood• The use of solar energy is a new tendency which is developing very slowly in the last years, mostly by private people who construct new houses. Anyway the share of use of solar energy collectors mainly for water heating in the national energy balance is very small• Lack of policies and or production of energy from the agriculture sector• Lack of using the wind energy.

National policyOnly in early 1990’s, after the political changes in Eastern Europe and in Albania, the Albanian government initiated the preparation activities to develop a strategy taking into consideration the management and the use of renewable energy sources (aiming also to take into considerations as well as the environmental protection aspects). In 1991 was established the National Committee of Energy, which was followed by the establishment in 1996 of the Energy Efficiency Center Albania-EU, another body responsible for the management of the energy sector, established with the support of the EU Commission. Both Institutions are in charge to deal with the renewable energy use, by means of development and adoption of the Albanian legislation in the energy sector, in order to face all new socio-economic and political challenges of Albania in the process of EU approximation.

But the first law on ‘Energy Efficiency’, which deals with the renewable energy issues in a broader perspective compared to the existing legislation on energy sector so far, was adopted by Albanian Parliament only in April 2005 Law. This law on ‘Energy Efficiency’ has provided the regulatory framework for the Albanian Electricity Regulatory Entity (ERE) which was authorized by the law No.9072, dated 22.05.2003 “On power sector” to develop the policies and to take decisions on the implementation of programs on Energy Efficiency and Renewable Energy Systems by different categories of customers of energy sector pursuant to Articles 8(2)(e) and 28(2)(gj).

In the National Strategy of Energy which was approved by the Albanian parliament in 2003 and revised in 2006, there are 3 of 6 most important objectives directly or indirectly connected with the use of renewable energies. These objectives are:

• To promote the efficient use of energy with minimal environmental impact;• To optimize the energy systems based on the principles of least cost and minimal environmental impact;• To promote the use of the renewable energy resources such as solar energy, small HPP, wind and biomass energy, in order to enable the use of the local resources.

According to the National Strategy of Energy, emphasis should be put on the following issues:• The use of solar energy, especially in areas of Fieri, Vlora, Durresi and Saranda, (west of Albania) as these are the regions with higher solar radiation;• At the identification of the regions with favorable wind conditions for the application of wind energy. So far, several zones mainly in the Adriatic Coast have been identified for construction of wind farming, e.g. it was issued the permit for installation of 250 wind mills which will generate 500MW in Karaburun Peninsula (south west Albania) • Biomass use patterns should be changed, as so far it the biomass is being used in an unsustainable way. Of special interest in this regard, is the use of bushes and urban wastes as energy source. The biomass from the agriculture residues can not be considered because they are used as food for the animals during the winter. Also the biomass resulting from the manure of different livestock can not be considered because the number is relatively small and they are not grouped in big farms. The manure of the livestock is being used as fertilizer for agriculture land.

National agricultural policy was not ever linked to direct support to utilization of renewable energy resources. Therefore since higher utilization of renewable energy resources, especially from agriculture, has not yet taken the place in Albania, there were no public discussions on the conflicts in relation to use of food to energy production. Even in the governmental program for 2009-2013 of the new government is set as priority to double the agricultural production for food. The new Minister on Energy mentioned as an important part of the program the support to develop the RE resources especially this from hydro, wind, solar and biomass.

Although there are strong discussions in the international level, dealing with this topic, the use of biomass for energy production in Albania is just observed as a potential for additional income for farmers and nature protection. Agriculture production in Albania is one of the most important sources of income for almost half of the population and agricultural products are already exported in some EU- respectively neighbouring countries. On the other hand there is a large portion of land (about 115000 Ha fallow land in 200710) that is available for agriculture production and this land presents a potential for additional production of agricultural products too.

Obviously the price of the biomass and final agriculture products will play an important role in discussions that will come in the future, and this market instrument will influence the farmer’s choice. At this moment the Government is not influencing the farmer’s decisions on selection of crops and has no mechanisms to push them to redirecting to sowing the energy crops. One of the promotional measures of the Government could be the support mechanisms in subsidy form for energy crops, but because of the still low share of budget for the sector of agriculture in the total budget this measure is still not certain in the coming period.

Due to the lack of proper base line analysis was not recognized the benefit of utilization of

Renewable energy sources (RES) from the agriculture sector as an important factor in the development of agriculture and rural areas. By the other hand therefore couldn’t be prepared plans the for introduction of renewable energy resources, the institutional set up couldn’t be established, as well as other preconditions for preparation of sustainable subsidy measures. Also the market of the available technologies for utilization of biomass in a way to ensure a marketing channel for the farmers is developed neither in Albania nor in the region.

The promotion of the use of RE sources is done in the last years mainly by different international donors rather than the Albanian Government. The most important supporting programs in that regard are:

- The Program on “Promotion of Renewable Energies and Energy Efficiency” in Albania is financed by the German Government, through the KfW (German Bank for Reconstruction). The program’s objective is to contribute to the enhancement of the energy supply and environmental protection by fostering of environmentally sustainable and efficient energy production and consumption. Thus the project contributes to the growth of economy and productivity (top-level aim).

- The Project on “Solar Water Heaters - Training of Solar Experts & Professionals and Improvement of Technology & Production”. This project was financed by ADA – the Austrian Development Agency. The Project on “Market Transformation on Solar Thermal Water Heating”. This project is implemented by the UNDP Albania and the Government of Albania, through the Ministry of Environment, Forestry and Water Administration.

Several small projects regarding the promotion or installation of renewable energy systems have been done by different NGOs, financed by USAID, UNDP-SGP, etc. Although the energy sector is becoming more and more important on the Governmental level, there are no subsidies or other defined support measures developed or implemented in Albania in regard with RE especially those for using the biomass.

ARMENIA

http://www.renewableenergyarmenia.am

The Republic of Armenia practically has no natural fuels. Excluding non-conventional power sources hydro resources is presented as an exclusive local energy resource. Armenia being a typical mountainous country the main energy potential of rivers is their big fall. Available hydro resources are estimated to be approximately 21.8 billion kWh including 18.6 billion kWh for big and medium rivers and 3.2 billion kWh for small rivers. The power system of Armenia before the end of the 1950s consisted of only hydro power plants (HPP). About 90% of electric power was generated at 6 HPP of the Sevan-Hrazdan Cascade. These HPP have a total installed capacity 556 MW and planned power generation 2300 million kWh.

Pure hydropower development of Armenian power sector in 1936-1963 was accompanied by massive anthropogenic impact on the environment, which resulted in the most substantial environmental consequence - the ecological disturbance of Lake Sevan. The price paid for the sharp increase of electricity consumption and inefficient utilization of water for irrigation purposes was the drastic reduction of ancient water reserves of the lake and considerable decrease of its water surface and level.

WindArmenias best wind resource areas are generally located on top of the higher ridges and mountains or in wind corridors such as mountain passes. Wind resources monitoring projects began as early as 1990. But the modern quality projects were carried out started from 1998 with the implementation of Armenian-Dutch and Armenian-USA projects in Northern and North-Western regions of Armenia. The results of the most recent studies done by the National Renewable Energy Laboratory (NREL) of the U.S. indicate that more than 1,000 km2 of Armenia's territory has good to excellent wind resource potential. Should a well-grounded assumption be accepted that it would be possible to derive 5 MW/km2, the total wind resource potential would be estimated at 5,000 MW. The first wind farm in Armenia - the 2.6 MW "Lori 1" wind farm - was put in operation in December 2005. It is located at Bazuin mountains, on Pushkin pass (Lori marz of Armenia).

SolarArmenia possesses significant solar energy potential with 2500 sunny hours per year and an average annual solar radiation on horizontal surface of about 1720 kWh/m2. The average data for Europe, for example is 1000 kWh/m2. The area surrounding Lake Sevan is considered as one of the best regions in Armenia for high solar radiation potential.For more details about solar power potential in Armenia.

GeothermalArmenia is in a vast area of intense young volcanism that had strongest manifestation in the Quaternary. Holocene and historical age activity has been established for some of the volcanoes. This allows suggesting availability of a considerable resource of underground heat in Armenia. In 2005 the development of geothermal power is declared high priority by the Ministry of Energy of the Republic of Armenia as it is the only local renewable power resource, which could contribute to covering the base load.

Hydro1548 MW capacity and 3.92 billion kWh technical and economic hydropower

resources cover 60-65% of demand in the Republic of Armenia. Implementation of new SHPP will lead to savings of imported energy resources (gas, oil).

Utilisation of Lake Sevan hydro potential through the Sevan-Hrazdan cascade served as the energy basis for industrialisation of Armenian Soviet Republic during the 40s, 50s and 60s. This period marked the "pure" hydropower development of the country's power sector. By the end of the 50s about 90% of the republic`s total energy consumption was supplied by HPPs of the Sevan-Hrazdan cascade covering the whole load curve, from base load to peak loads. The price paid was high: a dramatic decrease in the Lake Sevan water level with large environmental consequences. Though, the hydro potential of Lake Sevan was valuable during the energy crisis of the 1990s, when intensive outtakes of water from Lake Sevan resumed. Currently, production of Sevan-Hrazdan cascade is reduced to approximately 500 mln. kWh annually.

BiomassBiomass is a versatile energy source. Organic matter that is used as a source of biomass energy includes trees, timber waste, wood chips, corn, rice hulls, peanut shells, sugar cane, grass cuttings, leaves, manure, sewage, and municipal solid waste. Although, biomass energy sources in the country are limited, the gathering of methane from municipal solid waste disposal sites and large farms could contribute to the renewable energy development in Armenia.

Hydrogen economy in ArmeniaThe hydrogen economy is a newly emerging renewable energy technology, even more – economy, actively developed in recent years mainly in USA as a part of US diversification strategy in power sector. Hydrogen could become a primary form of stored energy for numerous applications and load balancing. In particular it is discussed as a method for replacing the petroleum based hydrocarbon fuels currently used in automobiles, although virtually anything running on electricity can be powered by hydrogen through fuel cells. The concept of hydrogen economy is known for many years, but now the world witnesses the first practical attempts of its implementation. Governor Schwarzenegger’s California Hydrogen Highway Initiative, Iceland’s continuing commitment and actions towards becoming the first hydrogen economy, growing number of hydrogen fuelling stations, fuel cell installations and vehicles around the world are all signs of accelerating pace to wider use of hydrogen as an alternative fuel and power source.

Armenia is the only Caucasian republic where active works on hydrogen economy is currently carried out. The works are mainly bounded with H2ECOnomy, the Closed Joint Stock Company established and operating by investments from the Cafesjian Family Foundation - an American Armenian

Diaspora fund H2ECOnomy possesses the necessary human resources/expertise for implementation of various projects in hydrogen economy. Currently, up to 500 W hydrogen based commercial fuel cells are produced and sold worldwide. Fuel cellsOne of the branches of hydrogen economy is the development and production of hydrogen fuel cells. They are considered power sources of the future. It is expected that they will be used in vehicles, in portable devices and in big power plants. Fuel cells convert hydrogen and oxygen into water simultaneously producing electricity. This is an environmentally sound process, because other than direct electric current, only heat and pure water as waste are produced. The fuel cells considered here are called Proton Exchange Membrane (PEM) fuel cells. They are perhaps the simplest and most practical of the various types of fuel cells available today. There is an obvious need for cost-effective, reliable, quiet and environmentally friendly backup/uninterruptible power supply (UPS) systems for Mission Critical functions in many industries. This area appears to be a prime candidate for early adoption and rapid spread of fuel cells. H2 ECOnomy CJSC has succeeded in developing different prototypes of UPS devices based on PEM fule cell technology. These 1kW systems are designed to function as a backup / uninterruptible power supply or an extender thereof. Currently, works on development and production of 5 kW PEM based UPS are in progress.

Bio-Diesel and Bio-fuelsArmenia currently is under 100% dependency level from import of engine fuels (gasoline, diesel oil, natural liquefied gas, propane). In such circumstances the transport sector of the republic becomes extremely vulnerable from the point of view of any disruptions in import of engine fuels. Thus, reducing this dependency level should become one of the main components of power diversification strategy of the Republic. Unfortunately, till now little progress is recorded in this direction. Even the latest power sector development strategy paper, adopted by the government of Armenia in June 2005 does not tackle this issue. Demand for alternative fuels is growing due to depletion of fossil fuels and environmental concerns related to pollution and greenhouses gases. Among different kinds of fuel alternatives the fuel produced from biomass (or the bio-fuel) draws much attention throughout the world in recent years. Bio-fuel may be in gas, liquid and solid forms. In its turn the liquid bio-fuel can be categorized mainly as bio-diesel and bio-alcohol.

Bio-diesel is a biodegradable, non-toxic, and clean-burning fuel that can be made from any kind of animal fat or vegetable oil (including recycled cooking

oil). Chemically, bio-diesel is comprised of a mix of mono-alkyl (methyl or ethyl) esters of long chain fatty acids. Bio-diesel can be used in all conventional diesel engines, delivers similar performance and engine durability as the regular fossil diesel. It can be used in its pure form or blended in any ratio with petroleum diesel. The latter is particularly advantageous since it means bio-diesel can be stored and dispensed wherever petroleum diesel is, and thus, virtually no changes in fuel handling and delivery systems are required.

Raw materials for bio-diesel are high oil content plants, which are numerous and can grow in a multitude of geographical zones. In production of bio-diesel (transesterification of organically derived oils or fats to obtain methyl or ethyl esters of fatty acids) a second component, alcohol (methanol or ethanol) is needed, in the proportion of 10% to the glycidic oil. Methanol and ethanol also can be produced from various plants, and if it turns out that Armenia has the potential of producing alcohols, then they can be considered as a candidate for alternative liquid bio-fuel. There is a significant track record of successful use of alcohol fuels around the world (e.g. in Brazil, USA, Sweden, France etc.).

Currently in Armenia two private companies and several reseaurch groups are active in this field, mostly in different research areas.

Policy documents- Energy Sector Development Strategies in the Context of Economic

Development in Armenia- National Program on Energy Saving and Renewable Energy of Armenia

Legislation- Energy Law of the Republic of Armenia - The Law of the Republic of Armenia on the Regulation Body for public

Services - The Law of the Republic of Armenia on Energy Saving and Renewable

Energy - Small Hydropower stations built on natural water flow - Small Hydropower stations built on drinking waterpipelines - Small Hydropower stations built on irrigation system

http://www.armenianweekly.com/2011/12/03/report-renewable-energy-potential-in-armenia/

Renewable energy development has been slow in the past, but its application throughout the world is accelerating. Policies to stimulate a faster deployment of clean energy technologies are necessary and will, in turn, create a level playing field by addressing market barriers, creating transparent pricing structures, and facilitating access to infrastructure

financing. Because the renewable energy industry is not yet at the same level of development as the more traditional energy industries, it needs a more favorable regulatory environment in the near term for its development, survival, and transformation to a mainstream energy resource. Some renewable energy technologies—such as hydro, biomass, and wind—are close to becoming commercial and should be the first to be deployed on a massive scale. While other renewable energy technologies exhibit promising potential, they are less mature and require long-term vision, government encouragement, and favorable regulations to flourish. The U.S. and European Union have implemented effective support policies for renewable energy development, which have resulted in the acceleration of renewable energy technology deployments in recent years. Current energy status in ArmeniaArmenia does not have any fossil fuel or coal reserves, and is therefore entirely dependent on imported fuel for transportation, electricity generation, and heat production. While surrounded by countries that possess significant hydrocarbon reserves, Armenia’s fossil fuel reserves are limited to a small number of lignite or brown coal mines located in the vicinity of Gyumri and Spitak. Oil drilling results have shown that while some oil reserves exist, they are located too deep to be economically viable for extraction. Armenia has overcome the energy crisis of the 1990’s and has built a viable energy system. However, compared to the year 1988, which was the peak of economic output for the Soviet Republic of Armenia, energy consumption continues to lag far behind 1988. The generation capacity that year was over 3.5 gigawatts (GW), but the energy use in 2010 was on average below 1.2 GW. This can be explained by the fact that the energy industry in Armenia has yet to recover fully from the economic decline that started with the collapse of the Soviet Union. A number of thermal power plants have been closed and one of the two reactors at the Metsamor Nuclear Power Plant has been shut down. Power generated from the Hrazdan-Yerevan and Vorotan Hydro Power Plant cascades remain as important a power sources. Hydropower is responsible for approximately one-third of the total power generated. The Armenian government is planning to decommission Metsamor Plant between 2017 and 2021. And there are plans to build a replacement nuclear power plant with a 1,000 MW capacity no later than 2021. Thermal energy generation capacity has also changed substantially during the last two decades. During the Soviet era, there were no air-conditioning systems in most of the residential or commercial buildings, except for a very limited number of window units, and the district heating systems, powered by heavy oil (mazut) and natural gas, were the main heating source. After

the collapse of the Soviet Union, most of the urban centralized heating systems were dismantled. Now a large portion of the population, approximately one-third, has installed individual natural gas-powered heating systems and the use of air-conditioning has increased noticeably. The major changes in transportation are related mostly to the slow but steady increase in living standards in Armenia, which in turn has seen an increase in the number of privately owned cars. The greater use of natural gas as an alternative to gasoline has increased the proportion of natural gas-powered vehicles to approximately 50 percent of the total vehicle fleet. Currently Armenia can meet only 35 percent of the total current demand for energy with its domestic resources. Energy independenceRenewable energy resources offer numerous benefits as they can not only reduce pollution, but also add an economically stable source of energy to the mix of electricity-generation sources in Armenia. Depending only on imported fuel for energy production makes the country vulnerable to volatile prices and interruptions to the fuel supply. Since most renewable energy sources do not depend on fuel markets, they are not subject to price fluctuations resulting from increased demand, decreased supply, or manipulation of the market. Because fuel supplies are local, renewable resources are not subject to control or supply interruptions from outside the country or region. The nation’s fossil fuel dependence also has serious implications for national security. Any addition to the energy independence of Armenia has high direct social, industrial, and political value in addition to psychological benefits. Such benefits tend to be rather difficult to assess in a monetary way. However, a potential approach could be based on the results of the analysis that indicate that a 1 percent increase in the use of renewable energy is equivalent to 3.65 days of independent supply in the event of a total energy blackout. Governmental agencies and lawsThe main body for all energy policy matters and issues in Armenia resides with the Ministry of Energy and Natural Resources, which is responsible for overseeing and managing all aspects of the energy sector. The main quasi-governmental organization that is heavily involved in renewable energy research and financing is the Renewable Resources and Energy Efficiency Fund (R2E2) of Armenia. General energy-related issues in Armenia are regulated by the Energy Law, and specific issues related to renewable energy are regulated by the Law on Energy Saving and Renewable Energy. The main purpose of the latter is to define the state policy on the development of energy saving and renewable energy. The idea is to strengthen the economic situation and energy independence of Armenia by

increasing the level of indigenous renewable energy production. Renewable energy optionsAs a country possessing no fossil fuel resources, Armenia could use the different sources of renewable energy available in the country. The findings of a comprehensive review of renewable energy potential in Armenia have ranked small hydropower plants and solar hot-water heaters as the most advanced renewable energy and the most economical for Armenia in the short to medium term, followed by wind farms and the use of heat pumps. Photovoltaics, geothermal power, and bio-fuels, especially bio-ethanol from cellulosic feedstocks, are ranked as more costly and are not expected to be commercially viable in the short to medium term, but may play a more important role in the longer term. Biomass for both heat and electricity production for the short term can be considered, under several conditions, including re-planting of harvested trees and bio-fuels using the fractionation process. In addition, hydrogen could be a possible fuel for transportation in the longer term. Finally, although not strictly a renewable resource, municipal solid waste in landfills is a practical source for generating methane for power production. Funding sources are readily available for the construction of new run-of-the river small hydropower generation systems or for renovating existing systems. The main limitation is the availability of promising sites within reasonable proximity to good roads, and transmission line access where more small hydropower generation systems can be constructed. The cost of installing electric power lines for renewable energy facilities at remote locations to get connected to the grid can be prohibitive from the perspective of overall commercial reliability. It is estimated that in 2020, small hydropower installed capacity will grow to be about 215 MW from the 100 MW level that existed in 2010. According to one study, Armenia theoretically has 5,000 MW of wind energy capacity. However, this does not mean that if there is capacity then it is equal to economically feasible electricity generation. Most of the areas with high wind are not easily accessible for heavy machinery, which is needed for the installation of the wind turbines. Utility-scale wind farms are still not commercially viable under the existing government-established electricity purchasing tariff structure, from the perspective of attracting private capital investment, without either additional fiscal incentives or subsidies. The attractiveness of these investments would grow in all probability as lighter weight turbines exhibit increased efficiencies and the cost of the turbines decreases over time. However, the main technical barrier is the difficulty in transporting large turbines (1.5-3 MW) and composite blades (up to 52 m. in length) from a port of entry to the selected site in a landlocked, mountainous country like Armenia. Therefore,

no more than 300 MW of wind-generated capacity in 2020 would be a realistic number, using turbines that do not exceed 1.5 MW per unit. As of early 2011, only 2.6 MW of wind power was operative in the Lori region. Currently the most cost-effective approach for using photovoltaic solar panels for power production is to import solar cells and to assemble them into modules in Armenia. The second alternative is the development of an industrial base in Armenia to manufacture silicon-based solar cells in the country, using its abundant quartzite deposits. This alternative is expected to require an investment of approximately $300 million. Presently there are only a few, small pilot-type solar panel installations in Armenia. Bio-ethanol production is essential for Armenia in order to move in the direction of greater energy security of supply in the motor transport sector and to offset potential future increases in the cost of imported gasoline and compressed natural gas. One hundred percent of motor transport fuels are imported. Even a 5 percent blend of bio-ethanol with gasoline will replace approximately 14,000 tons of expensive imported fuel per year. However, the cost of production of bio-ethanol using indigenous non-food feedstocks, such as Jerusalem artichoke or animal corn feed, is presently above the wholesale cost of gasoline, which means that voluntary blending of bio-ethanol and gasoline is not feasible unless mandated by the government. Recent explorations and test drilling conducted in Armenia have identified a maximum geothermal resource potential of only 75 MW. The economic viability for geothermal power in Armenia seems marginal, from both the perspective of cost and the total potential power output. Although municipal waste is not strictly a renewable source, it is indigenous to the country, and its disposal is a monumental nuisance and very costly. The average annual generation of municipal solid waste in Armenia today is estimated to be 1,600 metric tons/day. The traditional disposal of municipal waste is in engineered landfills or in mass burn incineration, both of which generate serious environmental problems. Land for disposal is becoming increasingly scarce in urban areas. The more recent and beneficial use has been to generate methane gas through anaerobic digestion, and then to use the biogas to generate electric power. The Lusakert Biogas plant in northern Armenia is the only industrial-sized biogas facility based on organic waste from poultry. Several years ago, USAID financed the construction of approximately 40 small biogas units in the villages throughout Armenia; most of these units, however, are not operational because villagers prefer to use the old-style way of dried manure for heating and cooking, instead of using these units to generate biogas. Environmental benefits and impacts

Renewable energy generation will have mainly positive, long-term environmental effects as it reduces the need for power generation based on fossil fuels, thereby reducing Greenhouse Gas (GHG) emissions. Of course, renewable energy will cause environmental impacts during construction and operation. Impacts during construction are normally temporary and no worse than other industrial projects. Approximately two-thirds of the current power generated in Armenia is based on nuclear and hydropower, which in turn lowers the per capita GHG emissions for Armenia. While the reduction of GHG emissions is still among the targets to pursue, Armenia’s energy independence and its reduction of the cost of energy generation are of higher importance. The main potential problems associated with small hydropower plant projects could be their impact on migrating fish stock if proper fish bypasses are not installed or if proper precautionary measures are not implemented to avoid fish being sucked into the turbines. The main impacts resulting from the operation of wind farms are low-frequency noise and the visual pollution of the landscape. There is also the possibility of birds colliding with turbine blades; avoiding bird migration paths for wind turbine farms would minimize this impact. Bio-fuel production results in virtually no net carbon emissions during a complete life cycle if forests are not destroyed to make land available for planting feedstock. Even though gasoline that is mixed with bio-ethanol has less CO2, the blend produces higher nitrogen oxide than gasoline, which is the main component of air pollution that causes smog. Depending on the feedstock, the leftover by-products could be useful as fertilizer, or fuel for operating processing plants, or become waste. Entities in the field of renewable energyThere are a handful of institutes, laboratories, and centers in Armenia that are involved in renewable energy research and development. Several private companies are also involved in the field of hydro, solar, and wind power generation. The majority of these companies are engineering and consulting firms that mainly provide engineering design and feasibility studies for small hydropower plants. There are a few small companies that assemble stand-alone solar water heaters or hybrid units that work in conjunction with central heating units of apartment buildings or social and educational institutions. Job creationThe use of renewable energy will not only keep hard currency in Armenia, but will also create significant benefits through economic development. The use of renewable energy technologies will create jobs using local resources in the form of a new, “green,” high-tech industry with an important export

potential. Banks and construction firms will also benefit from the development of renewable energy industries. Biomass production is relatively labor intensive, which is one of the reasons it is slightly more expensive than fossil fuels. Growing, harvesting, and transporting biomass fuels all require local labor, as does maintaining the equipment, which contribute to the high cost of bio fuel. However, this means that jobs will be created in areas with a depressed agricultural economy. ConclusionsThe findings of a comprehensive review of renewable energy potential in Armenia have ranked small hydropower plants and solar hot water heaters as the most economical for Armenia in the short to medium term, followed by wind farms and the use of heat pumps. Photovoltaics, geothermal power, and bio-fuels, especially bio-ethanol, are ranked as more costly in today’s prices and are not expected to be commercially viable in the short to medium term, but may play a more important role in the long term. Biomass is also a viable source for heat and electricity production in the short term. Finally, although not strictly a renewable resource, municipal solid waste in landfills is a practical source for generating methane for power production. Renewable energy may not be the major source of energy development in Armenia, but it should be an important component of it. As a result of dropping prices of various renewable energy technologies, in the near future renewable energy production cost could be competitive with more traditional sources. Developing feasible and economically viable renewable energy resources will create stable, domestic power-generation capabilities, which in turn could be a major component of Armenia’s national security.

AZERBAIJAN

http://www.energyboom.com/emerging/azerbaijans-renewable-energy-ambitions

Azerbaijan, the small, oil-rich former Soviet republic on the Caspian Sea, has emerged as a major exporter of crude and natural gas. The nation's abundant petroleum resources are the backbone of its economy, which is one of the fastest-growing in the world—realizing 9.3% growth in 2009. But now the country says it wants to start taking advantage of its alternative energy assets. Energy minister Natig Aliyev told journalists at a recent conference in the capital of Baku that the Central Asian nation plans to generate up to 5% of its electricity from renewable sources within the next couple of years (it is currently almost completely dependent on conventional energy).

For starters, Azerbaijan plans to develop wind power on its breezy Absheron Peninsula, a

tongue-like expanse jutting out 37 miles into the Caspian, a place government officials say is ideal for setting up wind turbines. Under the State Program of Use of Alternative & Renewable Energy Sources [pdf], the Ministry of Industry & Energy of Azerbaijan is planning a fleet of 20 to 30 wind generators with a total capacity of 250 megawatts of power. Nordwind Handels GmbH & Co. KG, one of Vestas Wind Systems' (PINK: VWDRY) largest customers in Germany, was in 2003 tapped to build six wind power plants in Azerbaijan with overall capacity of 13,200 MW but has encountered problems with inconsistent wind speed and low electricity prices. Nevertheless, officials remain optimistic about the country's wind power potential. The pursuit of solar and geothermal is also on the agenda. Azerbaijan averages between 260 and 280 days of sunshine a year, enough to make for a robust solar power industry. And studies have shown that the steamy waters of the oil-and-gas-filled Guba region has significant potential for geothermal development. While renewable energy is still in the early stages in the country, its green push is being taken seriously. Azerbaijan's President Ilham Aliyev this week met Hermann Scheer, the general chairman of the World Council for Renewable Energy, and a member of the German Bundestag, the national parliament. The German government, which has close economic ties with Azerbaijan, has pledged to invest 40 million euro in renewable energy projects in the country.

http://greenazerbaijan.org/wp-content/uploads/2011/03/Azerbaijan-Alternative-Energy-Sector-Analysis-and-Roadmap-2009.pdf

The Policy FrameworkThere are, already, many policy statements and decrees that, directly or indirectly, touch upon the role of R&AE in Azerbaijan. In effect, these are a statement of “where the country wishes to be,” though, not always, how it will get there. In brief, the main policy statements relative to this study (other than those reproduced in detail in the annex) are:

Law on Energy Utilization; Law on Power Engineering; Law on Energy; Law on Electric and Thermal Power Plants; State Program on Poverty reduction and Economic Development for 2003-2005 approved with Presidential Decree N854 dated February 20, 2003; Measures on Strengthening Financial Discipline in Energy and Water Sectors approved with Ordinance N893 dated March 25, 2002; Presidential Decree N4 on Furtherance of Socio-Economic Development in Azerbaijan Republic dated November 24, 2003; State Program on Socio-Economic Development of Regions of Azerbaijan Republic for 2004-2008 approved with Presidential Decree N24 dated February 11, 2004; Presidential Decree N458 on Establishment of Ministry of Fuel and Energy dated April 18, 2001; and other normative-legal acts.

In summary, it may be said that “The objective of State Program is to promote the power generation from renewable and environmentally sound sources and to more efficiently utilize hydrocarbon energy sources.” The desire of the country’s leadership to focus more attention and

importance on R&AE seems clear and unequivocal. Putting together the various policy statements, the main aims may be summarized as follows:The major tasks of State Program include:- define the potential of alternative (renewable) energy sources for electric power generation (the technical aspects of this are largely completed);- raise the efficiency of utilization of country’s energy sources by developing renewable energy sources;- ensure the opening of additional jobs with creation of new energy production sites;- Given the existing total capacity of traditional energy sources in Azerbaijan, increase the energy capacities at the expense of alternative energy sources and therefore, achieve the country’s energy security.

In addition to setting the domestic agenda, there is an international dimension of obligations, including: The commitment of the Government of Azerbaijan (GOA) to the development of environment-friendly energy sources reflected in the UN Framework Convention on Climate Change, the National Environmental Action Plan, the State Programme on Poverty Reduction and Economic Development (SPPRED) and the State Program on Use of Alternative and Renewable Energy Sources (October 2004).

As part of its report on renewable energy in Azerbaijan in 2007, Entec outlined the basic requirements, as it saw them, for a sound policy framework in this respect. These included:· A tariff regime: that acknowledges that the true social costs of fossil energy generation are not captured by wholesale market prices, and which therefore justifies a higher price to compensate for this market failure.· An effective regulator to oversee the tariff and its annual recalculation· The development of a set of technical and legal documents (power purchase agreement, grid code) that ensure a level playing field by avoiding ad hoc negotiations over tariffs, terms and conditions. This is particularly important where the buyer is a still a vertically integrated monopoly, but which is itself active in renewable energy as a developer (through wholly owned subsidiaries).· An outreach activity to promote renewable energy, and in particular to attract private investors into the sector (e.g. develop a website for renewable energy, prepare prospectuses on potential opportunities targeted expressly at developers) · Working with the Designated National Authority (under UNFCCC) to establish the procedures for developers to obtain carbon finance for renewable energy projects· The setting of renewable energy targets (this is not an immediate priority for Azerbaijan, but if the Government wishes to go beyond the first set of projects funded by ADB, nonetheless an important step).· Such efforts have been agreed in a number of similar renewable energy projects in Asia as a condition for loan support from multilateral agencies (e.g., Sri Lanka, Vietnam). They should be part of the agreed activities in Azerbaijan as well. Many, if not most, of these elements are still absent, though progress is being made. The creation of the State Agency for Alternative and Renewable Energy, in July 2009, provides a locus for bringing these disparate, but essential, elements together. These provisions remain as essential to the successful implementation of R&AE policy as they ever were, and should be addressed.

It seems as though, given the establishment of the State Agency,2 which will be based in the Ministry of Industry and Energy—at least initially—that the role of the Ministry/Agency is the basis for the successful strategic operationalizing of policy—though not necessarily all the implementation, of course. We shall discuss some of the necessary functions of the Ministry/Agency in the recommendations section at the end of this report, but it is reassuring to see a structure in place that has the capacity to move policy, think strategically, and coordinate the many elements of this equation. It is, it seems, the missing link that policy has needed in this area for so long. Without it, much study, research and report-writing has been neutralized, but may now be activated.

The PotentialNumerous studies have been conducted since about 2004 into the potential for R&AE in Azerbaijan. What is evident is that the potential is very considerable, especially for wind, hydro and solar, with some elements of biogas and thermal energy entering the picture as well. Indeed, Azerbaijan is, in many ways, better endowed than many countries that have made remarkable advances in R&AE, such as Denmark and Germany. Realizing this potential is a matter of policy and government incentive, not just leaving the pace to the private sector—almost no government in the Developed World takes this laissez-faire position. Positions, in different consultant reports, vary on the prime contender for R&AE in Azerbaijan, but in this section, we will summarize the technical assessments.

WindWind power is the most preferable energy source compared to solar, hydro, geothermal and biomass for its cost, environmental soundness and unlimited availability. Practice shows that many of regions in Azerbaijan have great perspective for an application of wind power facilities. Calculations suggest that Azerbaijan Republic has about 800 MW annual wind power capacities due to its geographical location, nature and economic infrastructure. This reserve means 2.4 billion kWh of electricity, according to rough calculations. This would imply the saving up 1 million tons of conventional fuel, more importantly, the prevention of emitting a large quantity of wastes, including ozone-cracking carbon dioxide.

Long-term surveys have determined that convenient windy conditions prevail in the Absheron Peninsula, and along the Caspian seashore and islands in the north-west of Caspian basin. It is feasible to use medium capacity wind power facilities in Ganja- Dahskesen zone and Sharur-Julfa area of the Nakhchevan Autonomous Republic because the annual average speed of wind in those regions is 3-5 m/sec. A Japanese company, Tomen, together with Azerbaijan Scientific-Research Energy and Power Design Institute, installed two wind towers of 30 m and 40 m heights and determined that annual average wind speed is 7.9-8.1 m/sec in Absheron. The company had also prepared a Feasibility Study for the installation of a 30 MW wind power plant in the Gorbustan region—this is now under serious consideration as an Azerbaijan-German joint venture.

An Assessment of Azerbaijan’s renewable energy sources was conducted in 2002 and it was determined that Absheron Peninsula has large-scale wind power capacity. The average speed of long-lasting wind is more than 6 m/sec, which shows the technical-economic potential for using wind power. The statistical data on wind power gathered in Shimal DRES area have once again

justified the above indicators. Based on conducted researches, the presented indicators on Gobustan area have been included into 4th class of wind energy potential, which is considered as high potential.

The present involvement in wind-energy power generation is represented by the two wind turbines, run by Caspian Technology at Yani Yashma on the Caspian Coast north of Baku, with a capacity of 1.75 mw. However, plans are already in advanced stage for this to expand, in the form of a German jointventure, with partial funding from a German bank and guarantees from the International Bank of Azerbaijan, to expand this facility to a wind park of 40 mw capacity. This would mainly serve the Sumgait area under a special tariff negotiated with the tariff authority. Eventually, the holding company envisages this park expanding to a possible 250 mw capacity (Sumgait uses about 500 mw daily). There are also plans, mentioned by the Ministry of Industry and Energy, for developing offshore wind generating capacity to serve rigs in the Caspian Sea, and a decision on this is expected in September 2009. Earlier involvement by the Korean company STX, to get into the wind-turbine generation of electricity failed over the low level of the tariff that it was able to offer, and negotiations broke off after two years. Apart from having high and reliable winds, the Caspian coast has little alternative land use because of salt-contamination, so land is available.

SolarThe climate condition of Azerbaijan opens great opportunities for production of electric and heat energy using solar power. The annual number of sunshine hours in USA and Central Asia is 2500-3000 hours, 500-2000 hours in Russia and 2400-3200 hours in Azerbaijan. Development of solar power can partially solve energy problem in many regions of Azerbaijan. Several developed countries have recently started to widely apply Photovoltaic Program (PVP). Involvement of Azerbaijan in this Program can have important role in application of such type of energy systems. It should be noted that the efficiency of solar stations depends on country’s natural climate condition and geographical location. The solar power that comes down to earth totals 1500-2000 kWh/m2 annually in USA, 800-1600 kWh/m2 in Russia, 1200-1400 kWh/m2 in France, 1800-2000 kWh/m2 in China and 1500-2000 kWh/m2 in Azerbaijan. It is obviously clear that the quantity of solar intensity in Azerbaijan stands up very well in comparison with other countries, which might be regarded as one of the efficiency factors for attracting investments in solar power.

The full potential for solar is easier to calculate than the demand. The wind energy prospects are favored in the coastal locations where the breeze is strong and steady. Solar, on the other hand, is better-suited to the central river valleys and the north and northwest. If the Ministry of Ecology and Natural Resources’ water-purification program were to switch to solar energy, then there would be the capacity to generate 100 mw, (or more) in mostly rural areas. What is not clear is how many people (and communities) remain underserved even after Azerenergy’s large recent expansion. There was a substantial reduction in energy use after effective metering was introduced, and it is not clear whether people economized or dropped out of the system. Many were using electricity to compensate for the basic collapse of the rural natural-gas distribution system—even though this is an inefficient way to use electricity. These people could now be using wood. However, if they were priced out of the market, even at today’s low rates for electric power, it is hard to say that they would be any more of a market for a solar-produced alternative.

This remains a major unknown. The Ministry of Industry and Energy informed us that in 1 to 2 years, they would prepare solar stations so that by 2012, some 250 mw would be produced that would help light schools, traffic signals etc., and that they were preparing a project to encourage a joint venture on the domestic production of solar batteries. In addition, a 5 mw pilot project was envisaged in conjunction with the Caspian Technology operation at the Yani Yashma wind farm.

HydroThe weight of generation capacity of hydro power plants within Azerbaijan’s overall power system is presently 17.8 percent. 2.4 billion kWh of total electricity generated in 2003 was produced by hydro power plants, which constituted 11.4 percent of overall electricity generation, making hydro, by far the largest renewable contributor to the country’s energy needs at present. There are some hydropower potentials in the country that are still undeveloped up to date. The researches related to this area showed that overall hydropower potential of rivers in Azerbaijan Republic equals 40 billion kWh. The technically feasible potential totals 16 billion kWh, 5 billion kWh of which is related to small hydro power plants.

Construction of hydro power plants has an important role in the resolution of countrylevel issues such as regulation of flood waters, environmentally sound electricity generation and the creation of new irrigation systems. It is possible to locate dozens of small hydro power plants on rivers and water facilities and these plants can generate up to 3.2 billion kWh annually. In the near-term perspective, it would be expedient to install 61 small HPPs. These HPPs can be located on irrigation canals, rivers with unregulated flow and water reservoirs that are under-construction. Use of micro HPPs in electricity supply of objects and settlements that are remote from transmission lines and substations of countrywide grid system can resolve electricity problems, as well social problems.

Given that power system of Nakhchevan Autonomous Republic has no connection with mainland (countrywide) power system, construction of medium, small and micro hydro power plants would be more expedient primarily for Nakhchevan Autonomous Republic. The picture for hydro, both large and small, is difficult to pin down. EDRB, Norwegian Aid, the UNDP, and the ADB have all had some recent involvement. In the ADB’s case this resulted in the substantial study of hydro-potential by the Entec consulting company. There was a difficulty with the government over the requirement for government guarantees for project development, and the dialog lapsed and the findings of the report remain inert. Plans exist on paper to add more than 500 mw from two new dams in the Talus and Fizuli regions. A three-year project is underway with UNDP support to examine small-hydro development and to produce a guidebook on the legal framework for power generation from this source. There has been minimal private interest in refurbishing the 5 or so small hydro stations that date from the 1050s, but the holding company of the Yani Yashma wind farm project have expressed their interest in developing thirty or so such units in the Sheki area generating about 45 mw.Biomass powerRapid development of industry, agriculture and social service in Azerbaijan Republic opens new opportunities for electricity generation from biomass. The sources of biosubstances in the country include followings:- combustive industrial wastes;

- wastes of forestry and wood-working;- agricultural and organic wastes;- domestic and communal wastes;- wastes processed from areas polluted with oil and petroleum products.

Studies suggest that much of the composition of production wastes in all industrial sites is biomass substances. It is feasible to produce biogas, bio-liquid and solid bio-substance that can be used for electricity generation. More than 2.0 million tons of solid domestic and production wastes are annually thrown into waste treatment sites in the Azerbaijan Republic. Utilization (processing) of solid domestic and production wastes would partially resolve the problems in heating public buildings in Baku and other large industrial cities. Many European countries have already found ways to solve these problems. That is, waste combustion plants are built in densely populated areas and domestic wastes are fired in those plants. The nearby residential settlements are then provided with electricity and heat at the expense of energy produced from waste combustion. The remains of fired wastes are widely used as a manure to increase fertility of soil. Therefore, construction of such plants having complex importance would be significant for Azerbaijan, too. The Norwegian government has provided some assistance in developing prototype biogas projects, mainly in the Ismaili area. Research on site is being conducted by the Academy of Sciences into this field of energy generation, and one local company, Solaris, actually has installed some biogas digesters. But, the industry remains in its infancy in the county.

Geothermal powerThe heat of earth depth is widely used in industry, agriculture, domestic, communal and health sector in many countries. The advantage of using geothermal power in energy production and consumption is that its application doesn’t require large amount of funding. Azerbaijan is rich with thermal waters. They are usually found in the Great and Small Caucasus, the Absheron Peninsula, Talish mountain zone, Kur lowland and Caspian-Guba area. Exploitation of thermal waters in these areas would partially cover the domestic and other heat energy needs. In addition, the potential exists for using thermal energy to heat extensive greenhouses.

There is no doubt of the considerable potential for R&AE in Azerbaijan, but the realization of that potential has little to do with technical considerations—and everything to do with economic, legislative, administrative and confidence issues. In overcoming these, the government of Azerbaijan will have the leading role to play, even if privatization is a main consideration of energy policy in the R&AE sector. This would put Azerbaijan in the same position as the governments of almost all Developed Countries moving toward the alternative option. Most of those, however, do not have to deal with the established structure of a large, and historically dominant, local fuel alternative, which can complicate the picture enormously. However, the key to the realization of R&AE ambitions is (a) to see this as a necessary transition for economic and environmental reasons, (b) to see the present oil/gas wealth as a means to an end, (c) to take account of the full range of benefits of making this transition—which may not show up in the financial books of the companies engaged in conventional energy supply as well as those who may enter the alternative field. The role of the government will be critical in realizing this potential, and enabling the private sector to participate effectively.

BELARUS

http://www.boell.pl/downloads/Renewable_energy_in_Belarus.pdf

IntroductionThe Republic of Belarus belongs to the group of countries without their own considerable energy and fuel resources (EFR). The EFR include: crude oil, natural gas,peat, water resources and biomass. Belarus’ own power resources satisfy 15-17% of its EFR requirement. There are practically no other sources of energy in Belarus other than those of renewable character. Therefore, the share of renewable energy amounts to 80% of the country’s own EFR.

At present, the Republic of Belarus is in the process of implementing the “Target electricity and heat provision program for achieving at least 25% of industrial production with the use of local types of fuel and alternative sources of energy by the year 2012". In order to provide 25% of electricity and heat with the use of local EFR, it is necessary to boost their production up to 5.93 million tons of oil equivalent (Mtoe) per year, and to use the secondary resources such as heat energy, as well as primary resources from wind turbines and biogas in the amount of 0.82 Mtoe per year. In light of the above, the plans assume that by the year 2012 the use of local energy resources, including secondary heat resources, wind, solar and biomass energy, will be increased by 2.8 Mtoe. So far emphasis has been placed on the implementation of the program focused on the use of wood and wood waste. The potential of other renewable sources of energy is not taken advantage of to a significant degree.

Renewable and alternative energy in the energy policy of BelarusThe concept of power safety considers the share that local fuel types have in the EFR balance to be one of the primary indicators. In Belarus, the share of local fuel types (LFT) in the overall balance currently equals 17%. In line with the assumptions, the share of LFT will be increased to 20.5% by 2010, 27.5% by 2015 and 31.6-34.5% by 2020.

The draft Act “On non-traditional and renewable sources of energy” is currently in consultation by the Council of Ministers. It is expected that the Act will set out (1) the directions of state regulations concerning development and the use of non-traditional and renewable sources of energy (NTRSR) and (2) the directions for public support of NTRSR. The draft Act has not been published, but in line with official declarations its major assumptions relate to the following: (1) guaranteeing a power grid connection for all power systems using non-traditional and renewable sources of energy, (2) obligatory purchase of energy from such systems by state enterprises dealing with provision of energy, (3) a preferential energy tariff (it is expected that the preferential rates will be paid throughout the system’s entire useful life).

By introducing such regulations, the Act “On non-traditional and renewable sources of energy" may serve as a guarantee of support for alternative and renewable energy sectors, and will help overcome numerous problems and obstacles on the path to increasing the share of renewable energy sources in the EFR structure to 25% and beyond. It is still too early a stage, however, to speak about the Act’s effectiveness, as its provisions have to become widely known first.

Under the decision of the Council of Ministers of the Republic of Belarus No. 400 “On

development of small and non-traditional power plants” dated 24 April 1997, whose wording was amended by the decision No. 288 “On the development of small and non-traditional power pants” dated 28.02.2002, (1) a concept has been worked out for the development of small and non-traditional power plants in the Republic of Belarus, (2) a guarantee has been given for the connection, to the power grid of the Republic of Belarus, of small and nontraditional power plants owned by business entities, regardless of their form of ownership, and the payment for power provided by such entities has been guaranteed, (3) a system has been worked out for determining tariffs for electricity purchased by the power system from small and non-traditional power plants. At the same time, decision No. 91 by the Ministry of Economy of the Republic of Belarus dated 31.05.2006 sets out an increased tariff for purchasing electricity from renewable energy sources with the factor of 1.3, which equals approximately 10-12 eurocents (and for minim heat plants using natural gas – 0.85). However, the existing mechanisms are insufficient to stimulate the development of the sector based on renewable energy sources.

In line with the "Target program...." and other comprehensive programs for state authority organs (ministries, corporations, local executive committees, etc.) tasks have been defined aimed at improving the use of local power resources, with the level of increasing the use of LFT by 2012 defined, as well as specific actions have been devised with the year of commissioning, as well as the amount and sources of financing also determined. Thus, no stimulation for the implementation of the "Target program..." has been envisaged, and administrative guidelines have been defined instead.

There are three major institutions responsible for shaping and implementing the policy on renewable energy sources: Energy Effectiveness Department of the State Standardization Committee of the Republic of Belarus, the Ministry of Energy and the Ministry of Natural Resources and Environment Protection. There is, however, no single coordinating body. The duties of those institutions include planning, implementing and monitoring activities related to renewable and alternative energy sources. The Belarusian Academy of Sciences is responsible for development of the scientific and technical background for implementation of projects related to renewable and alternative energy sources.

At present, a complex bureaucratic system is in place in the Republic of Belarus that constitutes an obstacle for the growth of the renewable energy sector. Numerous concepts and programs have been drawn up, whose effectiveness is rather doubtful. The existing scientific base is insufficient for the implementation of projects related to renewable and alternative energy sources, and there are no relevant technical standards. It has to be noted, however, that there are also officials and institutions that are interested in putting the projects of this type into operation.

The potential of renewable energy sources in BelarusThe potential of wind energy is estimated to equal 1.9 – 2.0 Mtoe per year. The potential of wind farm energy is estimated at 220 billion kWh. The wind energy sector is growing rather slowly in Belarus, as investors are faced with significant problems in the Republic of Belarus, and the development of wind farms is not too profitable for local power systems. There are only two regular wind turbines existing in Belarus at present. Their power rating equals 270 kW and 660 kW respectively and they are situated in the village of Druzhnaya in the Myadole Region. Architectural designs have been worked out for the construction of Belarus’ largest wind

turbines with the power rating of 1.2 MW, to be situated in the village of Grabniki (Unitary Republican Enterprise "Grodnoenergo"). The government has commenced an analysis of the wind energy sector development program in Belarus for the years 2008–2014.

It is expected that wind farms should be commissioned in 2010 with the total power output of 3.7 MW, by 2012 – 5.2 MW, and by 2014 – 15 MW. The projects are currently in the planning stage, and envisage establishing partnerships with local power systems in order to construct wind farms with the estimated total power output of 20 – 30 MW each. In addition, the relevant standardization and legal base should be prepared by 2010. In order to effectively implement wind energy related projects, it is necessary to carry out actual measurements to determine the size of wind energy resources, launch the production of equipment suitable for Belarus’ climatic conditions, as well as gather experience in designing, implementing and running wind farms.

The potential of solar energy for hot water provision is estimated at 1.25 – 1.75 Mtoe per year, and for production of electricity – at 1.0–1.25 Mtoe per year. The solar power sector has no industrial significance at the moment. Only several experimental systems exist at present. No use of solar energy on a wider scale is planned in Belarus in the nearest future. The major directions in the production of energy with the use of biomass are as follows: (1) crop waste; (2) animal breeding waste gas; (3) wood and wood waste; (4) phytomass (plant biomass) and (5) municipal waste.

The use of crop waste as fuel is a new direction in the production of energy in the Republic of Belarus. The overall energy potential of crop waste is estimated at 1.46 Mtoe per year. The potential amount of biogas that can be obtained from animal breeding facilities amounts to 160,000 tons of oil equivalent per year. The launch of 10 biogas installations is planned in Belarus by 2010. At present, there are 3 biogas installations in operation in the Republic of Belarus (in the towns of Zaslav, Brest and Homel). Introduction of biogas installations requires that numerous obstacles be overcome. One of them is the lack of interest by farms which are still offered electricity at preferential prices. The plans, however, assume that private foreign investors will be acquired to build, every year, 8 – 10 installations for recovering and using biogas produced in the course of the animal breeding process. The potential energy included in municipal waste created in the territory of Belarus equals 470,000 tons of oil equivalent. The effectiveness of processing organic waste to produce gas will equal no more than 20 – 25%, which equals 100 – 120 thousand tons of oils equivalent. The considerable amount of waste collected over the years at landfill sites is also to be taken into consideration. Belarus has some experience in implementing projects concerned with the use of landfill gas – a project of this type was carried out, with the use of private investor funds, at the "Trostynets" landfill site, and the system’s power rating equaled 3.0 MW. The economically effective potential of wood and wood waste used for heat and electricity production equals 2.24 Mtoe in 2010 and 3.10 Mtoe in 2012. Switching to local fuel types is carried out under centralized state scrutiny, which, on the one hand, offers incentives for using wood fuels to provide heat energy, but on the other hand, it has to be borne in mind that enterprises are mainly concerned with the amount of wood they burn, and not the project’s economic feasibility. It is often the case that production of heat at local heat plants with the use of wood is 2 – 2.5 times more expensive than in the case of natural gas. The above is caused mainly by a deficient wood fuel collection and processing system, low level of automatization, and the fact that in many instances unsuitable types of wood are used.

The problem could be solved by replacing the mechanisms used for stimulating the use of wood fuels with those based on the free market principles. The development of and support for small private businesses to boost their share in preparing wood for energy production purposes is considered a prospective solution. The mini heat plants in Osipovichi and Vileyka have been adapted to use wood as part of a few pilot programs. Approximately 50 other boiler plants have been constructed or modernized.

The economic use of energy provided by small rivers equals to 0.11 –0.15 Mtoe per year. The potential power rating of all Belarus’ rivers is 850 MW, with the use of 220 MW out of that amount being economically feasible – this is the target figure that the total power rating of all small water power plants in Belarus is expected to reach by 2020. Currently, the Belarusian power grid uses water plants with the installed power of approximately 20 MW. About 4% of the total water energy potential has so far been used in the Republic of Belarus. Within the next few years the following are to be commissioned: Grodna Power Plant with the power rating of 17 MW on the river of Neman, Poloch Power Plant (23 MW) on the river of Dvina, a Dnieper power plant (5 MW) and mini power plants on the rivers of Moroch, Sluch, Ptich, Servech, Isloch and other small rivers.

According to relevant analyses, it is possible to construct hundreds of water power plants in Belarus. At present, construction of the first geothermal station is planned in the vicinity of Brest, in the "Beriestye" heat plant. The plans assume that water with the temperature of 25- 30 degrees centigrade will be pumped to heat the greenhouses of a state owned agricultural enterprise.

In Belarus there are isolated cases in which renewable energy sources are used to cater for private needs – construction of eco-homes (the "Eco Home" Social Organization, Minsk City Branch of the International Social Ecologist Organization); installation of a rotor wind turbine to provide energy for an office ("Mohylev Technopark" Joint Stock Company). In 2008 the first two biogas-powered plants were commissioned in Belarus – at the "Belorussky" fowl breeding farm in the town of Zaslav (340 kW – stage I) and in the "Zapadny" selection and hybrid center in the Brest Region (520 kW). Construction work at the biogas complex in the "Homel Fowl Farm" Inc. is at its final stage at the moment. Construction of biogas complexes is also under way at animal breeding farms in Lan-Nesvyezh and Snow. In the "Rassvet" kolkhoz in the Kirov Region a biogas production system with the power rating of 3 MW is being prepared.

The problem of renewable energy sources is not taken up in the public debate. Information on projects that have already been implemented is posted only on professional / specialized websites. Information on the existing technologies allowing to harness renewable sources of energy is missing as well. An increased interest in the renewable sources of energy has been recorded lately among social organizations, which focus primarily on implementing projects aimed at utilizing renewable energy sources for private purposes ("Eco Home" Social Organization, Minsk City Branch of the International Social Ecologist Organization, "Eco Project" International Social Organization), as an element of the climate policy and as a means of adapting to climate change.

http://www.vmp.by/en/publications/articles/renewable%20energy%20in%20Belarus.html

What is the nature and importance of the renewable energy in your country?

In the Republic of Belarus imported energy comprises more than 80 % of the energy consumption. Therefore one of the strategic objectives of economic development of Belarus is the decrease of energy imports. The solution to this problem is possible through the enhancement of alternative energy sources and local fuels. Development and effective use of renewable energy sources (hereinafter – the RES) has a fundamental importance since in the short term they represent the real potential of local fuel and energy resources that can be efficiently involved in the economy and favor the rise of the energy security of the country.

This is clearly demonstrated at the legislative level. The main document that confirms the importance of renewable energy sources importance in Belarus is the Law of the Republic of Belarus dated 27.12.2010 No. 204-Z, "On renewable energy sources" (hereinafter the Law "On RES"), which has recently been adopted and come into effect. This law creates a legal base for renewable energy sources development.

There are also such program legislative acts as the Concept of Energy Security of the Republic of Belarus is approved by the Edict of the President of the Republic of Belarus dated 17.09.2007 No. 433. The Concept defines the goals and objectives for energy security, the main directions of strengthening energy security, including at the expense of increasing non-conventional and renewable energy sources.

It is also necessary to mention the five-year National Program of Local and Renewable Energy Sources Development, which was approved by the Council of Ministers of the Republic of Belarus dated 10.05.2011 No. 586. The main purpose of this Program is a growth of value of own energy sources use and development of new tendencies in the sphere of energetic.

However, it should be noted that at present in Belarus the legal regulation of relationships in the field of renewable energy is still in the process of formation. Many aspects of this area have not been yet regulated by the legislation.

How is the renewable energy sector regulated? What are the principal laws and regulations?

Until recently, the legal regulation of RES in the Republic of Belarus has been fragmentary. The situation has changed after the adoption of the Law “On RES”. The Law “On RES” came into force recently - on 05.07.2011.

The Law “On RES” contains basic definitions in the sphere of RES use, a list of the state authorities responsible for RES use control. The Law also defines rights and responsibilities of producers of this type of energy. It establishes the order for setting prices and rates for renewable energy sources and rates for power produced from such sources. The issues of scientific, technological and innovation support are adjusted. A number of economic incentives for producers of the energy are provided. In particular, in the area of pricing it is stipulated the use of multiplying ratios to the tariffs for energy acquired by the government supplying organizations.

Regulation of the Council of Ministers dated 30.12.2008 No.2044 and Regulation of the State Committee for Standardization dated 27.02.2009 No.10 regulate the question of the labelling imported goods as equipment used for producing energy from non-conventional and renewable energy sources, as well as the procedure for issuing such an conclusion.

Certain provisions of the renewable energy regulation are contained in the Law of the Republic of Belarus dated 15.07.1998 No. 190-З "On Energy Saving", in particular the definition of the non-traditional and renewable energy sources, the use of renewable energy as one of the principles of public administration in the field of energy efficiency.

There are also numerous state and republican programs, including energy saving programs, which determine the need for use of energy produced from renewable energy sources.

BOSNIA AND HERZEGOVINA

http://www.euroqualityfiles.net/AgriPolicy/Report%202.2/Agripolicy%20WP2D2%20Bosnia-Herzegovina%20Final.pdf

The major part of electricity is produced by big hydro-energy power plants, which together with small dams use only 35% of BH hydro-potential. According to Šehović (2007), it is the lowest level of hydro-potential utilisation in Europe. So, there is a lot of space for improvement and increase of RE production. Potentials for exploitation of geo-thermal, wind, solar and bio-mass energy have not been sufficiently explored. Anyhow, share of these energy sources in the overall consumption will certainly remain modest, as is the case in the world.

As it was outlined, the main sources of RE are hydro-energy and firewood. Other sources of RE are not still put in everyday use. So, RE production from agricultural waste, different annual crops, solar, wind and geothermal energy are not important for BH. There are many reasons for such situation. The farms structure and availability of arable land per capita are main limitation factors to RE production from different crops and agricultural waste. To see other sources of RE promoted, significant investment funds have to be insured. These funds are not visible in short term. Anyhow, the share of hydro-energy and firewood in total energy demand are significant.

The National Energy Strategy for BH has not been developed yet. So, it means that National policy for RE is not defined and prepared. Anyhow, BH will get its Energy Strategy blueprint through the EC CARDS Programme “Technical Assistance to Support the Energy Department of Ministry of Foreign Trade and Economic Relations in BH”. Preparation of a comprehensive background energy sectors study is the first step towards the national energy strategy and is in preparation phase financed by the World Bank.

As it was explained above, due to availability of natural resources, the focus of energy policy will be on hydro-energy utilization (only 35% of total hydro-energy capacities are in use). Another focus of energy policy will be directed towards improvement of BH energy efficiency, which is currently very low. Also, the reduction of greenhouse gases emission from the energy

sector will be in focus of future energy policy.

Investments needed to intensify RE promotion could be ensured from the CDM mechanism and through GEF. To be able to do so, it is necessary to establish different institutions and to monitor quality of environment and level of emission. So, it is necessary to put together efforts of different administrative units and Ministries to fulfil obligations faster and to become eligible to participate in mentioned international mechanisms. Therefore, future national policy will provide mechanism of inter-sector cooperation and coordination. Also, the national fund for environment will be established, so some programs of RE promotions will be financed for these sources.

National concepts and programmesAs it was explained before, there is no National energy strategy, so there is no written policy or program promoting RE in BH. But, it has to be outlined that in the scope of Entity energy strategies (FBH and in RS Energy sector base line) development of big and small HPP and set of wind mills are planned and time-lines for its building are defined (it is planned to invest 6 billion € during next 12 years). It is true that objective of HPP development is not RE promotion, but increase of energy sector capacity (possibilities) utilization. The quite high investment will be provided from three planned sources: (i) foreign investment – chosen companies, (ii) state credits (EBRD, WB, EU), (iii) state electro-distribution. Also, within those strategies some investment in windmill and small HPP are defined. So, it is obvious that there are some plans and programs regarding RE.

The responsible state ministry is focused on development of regulatory – institutional framework to ensure: (i) integration to EU (transposition of Directives); (ii) easy and fast accesses to international funds (GEF, CDM etc); (iii) Development of National Strategy of energy sector; (iv) strengthening of capacities and institutions; (v) inter sector and vertical and horizontal cooperation and communication within the BH administration.

The main focus of current programs is the reform of the whole sector in order to enable establishment of a common energy market, then to enable all producers to have stable and guaranteed access to the energy market (private producers), as well as to enable transport and energy trade and private foreign and domestic investments into the sector. So, till now fundaments of the new sector structure are established by the Law on Electric Power Transmission, System Regulator and Operator of B&H (Of. Gazette of B&H, No.7/02, 13/03). This law is supported by two Entity laws on energy (Law on electricity in FB&H – Of. Gazette of FB&H 41/02,24/05,38/05, as well as Law on Electricity of RS- Of. Gazette of RS 66/02, 29/03, 86/03,111/04 and Law on Electricity of Brčko District-Of. Gazette of BD, No.36/04). Currently, the new following institutions are defined and established: • State Electricity Regulatory Commission (Državna regulatorna komisija za električnu energiju - DERK), has jurisdiction over and is responsible for power transmission, transmission system operations and international trading in electric power. DERK is to be an independent and non-profit institution, which will operate on the basis of principles of objectivity, transparency and equality.• Independent System Operator -ISO (Nezavisni operator sistema - NOS), is responsible for the management of the transmission network operating and dispatching in Bosnia and Herzegovina and for the governing, maintenance planning and coordination, network construction and

expansion in cooperation with the Elektroprivredas. NOS will be a nonprofit agency, independent from any individual market participant and from electricity production, distribution and supply activities. ISO shall not venture into trading with electricity, keeping its independence and authority, and the owners of the Electricity Transmission Company will devolve all relevant responsibilities for the management of the system to ISO. ISO will operate in line with objectivity, transparency and equality principles and will have full authority to coordinate the electric power transmission system.• Single Power Transmission Company is responsible for the transmission, maintenance, construction, expansions and the management of the electricity transmission network. With the new Law on establishment of Power Transmission Company in B&H (Of. gazette B&H No. 35/04), the conditions were created from 1. February, 2006. for the entire asset of high-voltage transmission power network to be transferred to the single newly established Power Transmission Company (Transco) with the head office in Banja Luka. However, the production and distribution stayed in the competency of electric power enterprises (three state companies organised on regional level).

Aside these activities, some basic initiatives to promote RE generation (small HPP and wind mills) has been done by adopting two entities laws: Decision on methodology of determination of level of purchase prices of electric power from RES with installed power up to 5 MW (Of. Gazette FB&H 32/2002, Of. Gazette RS 71/2003). According to these new rules, the two power utility companies in FBH and one in RS are obliged to take over the electricity produced from RES and to pay agreed guaranteed prices. New tariff systems for RES electricity were adopted. According to this rule the RES generated electricity buyoff price is higher for about 46%.

The state is working on sector regional and international promotion. It supports or organizes different meetings, workshops and conferences about RES. Currently together with EBRD they will be host of Regional energy forum in Sarajevo. The meeting will be held under the title “Investment in electricity production and RE”. In the same time there are some programs (EBRD credits) focusing to private sector. For the next two years 10 million € (EBRD) will be realised as a credit line for improvement of energy efficiency and RE. There are signs that, in the future, this will be main type/direction of RE promotion programs. The major part of IPA funds will be realised like this. Currently, major role in RE promotion is given to the NGO sector (including developmental organizations and research institutes and Universities).

According to the expert view (see Energy study of BH) as well as the ministry view, the RE can be competitive to fossil fuels only if it is supported with public funds. The support can be focused to ensure suitable credit lines for investment and technology transfer. Also, it is important to make easier for the individuals to access technology necessary to utilise RES (import licences, transport etc).

http://www.reeep.org/index.php?id=9353&special=viewitem&cid=103

There are two major renewable energy sources in Bosnia and Herzegovina: hydropower for electricity production and biomass for heat production. According to the CETEOR study, the estimated potential for the renewables is as follows: Total

hydro potential: 7,477 MW versus the actual 2,085 MW, wind potential: 600 MW, biomass potential: 14% of the total energy supply versus the actual 6.5% of the total energy consumption, geothermal potential: 33 MW. In the same study, the solar potential is classified as moderate. During the war, more than 60% of the electricity grid was damaged or otherwise prevented from functioning. In 2003, it was estimated that 91% of the grid had been restored to pre-1991 levels. Transmission breaks and distribution losses are still a problem, however, with 17.6% of the gross electricity production in 2007 estimated to have been lost. The electricity system losses are approximately 20%, with the electric companies EPHZHB and EPRS averaging about 27%. In the EU the comparable loss is around 12%. The district heating systems also generate high losses. Waste of energy at the consumer level is another problem. Billing by square meter, without individual metering does not give any incentive to consumers to save energy or reduce losses.

BULGARIA

http://www.energy.eu/

To meet this common target, each Member State needs to increase its production and use of renewable energy in electricity, heating and cooling and transpot. Although renewable energies are an integral part of our fight against climate change, they also contribute to growth, job creation and increase our energy security.

Country targetsThe renewables targets are calculated as the share of renewable consumption to gross final energy consumption. Renewables consumption comprises the direct use of renewables (e.g. biofuels) plus the part of electricity and heat that is produced from renewables (e.g. wind, hydro), while final energy consumption is the energy that households, industry, services, agriculture and the transport sector use. The denominator for the RES share includes also distribution losses for electricity and heat and the consumption of these fuels in the process of producing electricity and heat.

Bulgarian target: 16% (2005 = 9.4%)

Key issuesBulgaria is approaching its RES-E target for 2010. Large-scale hydro power is currently the main source of RES-E, but its technical and economic potential is already fully exploited. Good opportunities exist for biomass, since 60% of land is agricultural, and about 30% is forest cover. Total wind energy capacity of around 2,200 – 3,400 MW could be installed. Solar potential exists in the East and South of Bulgaria, and 200 MW could be generated from geothermal sources.

Main supporting policies

A new act on RES was adopted in June 2007 for diversifying energy supply, environmental protection, to set the terms for sustainable local and regional development, and to increase the capacity of SMEs and RES producers etc. Suppliers are required to purchase all renewable electricity that has a certificate of origin. The public utility company and the end suppliers, respectively, shall purchase the entire quantity of energy generated from renewable and alternative energy sources, except for the power generated by hydroelectric power plants with installed capacity of over 10 MW, at preferential prices.

A bill is foreseen for 2011 on the market mechanisms for encouraging production of electricity andheating power from renewable energy sources. In order to promote RES, Bulgaria is currently implementing the Bulgarian Energy Efficiency and Renewable Energy Credit Line (BEERECL). RES projects are eligible for a 20% grant. Loans worth more than EUR 12.8 million have already been granted. Biofuels, if not blended with other fuels, have been exempt from excise tax since 2005 (note: not all types of bioethanol are included).http://www.novinite.com/view_news.php?id=127931

Bulgaria's newly adopted Renewable Energy Act contradicts the Constitution and EU law, and will shatter the country's energy future, according to the Bulgarian Wind Energy Association. The Bulgarian Wind Energy Association issued Wednesday a devastatingly critical statement on the highly controversial law, whose adoption had been anticipated eagerly by hundreds of local and foreign investors only to see their hopes for facilitated investments dampened. "We are highly disappointed with the new Renewable Energy Act and we believe that it will have severe consequences for the Bulgarian economy. We want to draw attention to its three major flaws: 1) it places Bulgaria at huge financial risk in the event of a failure to reach the EU 2020 renewable energy target; 2) it is in direct violation of the Constitution of the Republic of Bulgaria and EU directives; 3) it will sacrifice the entire renewable energy sector with thousands of jobs, investment and income for underdeveloped regions, and, most importantly, will sacrifice Bulgaria's security and energy independence," the Bulgarian Wind Energy Association stated. The wind energy investors argue that Bulgaria's meeting of the EU 2020 renewable energy goal must be the cornerstone of the country's sustainable and independent future, and a major factor in EU policies for combating climate change. "Instead of encouraging the development of renewable energy in Bulgaria the new law is practically creating conditions for the complete freeze of the industry, and will have very severe consequences in the near future," the statement says. The investors point out that every percent below Bulgaria's EU 2020 target will cost the country BGN 200 M per year, which means BGN 13 more for the annual electricity bill of each Bulgarian household. At the same time, the total cost of wind energy at the moment adds BGN 0.28 to the bill of every household. The Association says that even if all of the planned wind energy projects with a combined capacity of 2 500 MW start working right away, this sum will rise only to BGN 0.92 because of the preferential prices for renewable energy abolished with the

new law. The wind energy investors argue the law violates the Constitution and EU regulations by introducing post-dated measures regarding investment projects under development, which "undermines the trust in Bulgaria as an investment destination." "What is more, while EU directives stipulate that RE projects must get a priority access to the power grid, the law places RE behind all other kinds of energy. For example, it places limits on renewable energy sources that do not exist for any other conventional energy source," the investors complain. According to their statement, however, the worst flaw of the Bulgarian Renewable Energy Act is that the investors will be finding out the price at which they will be selling their energy only after the construction of their power generating facilities is completed. "For each investor this means that they will have to work for years on their project, to create dozens of jobs, and invest big in equipment and construction while in the meantime the state regulator will be able to change the electricity purchasing price without any restrictions and without any predictability for the investor. This lack of clarity is an insane risk that no sane investor, a bank or a serious person, could assume. The result will be that not a single well-founded wind energy project will be realized until this law is changed. The Bulgarian Wind Energy Association will use all of its resources to dispute this law. We will not stand idly by watching how this law destroys investment and jobs, and is ruining the trust in Bulgaria," the declaration concludes.

http://www.setimes.com/cocoon/setimes/xhtml/en_GB/features/setimes/features/2011/01/17/feature-03

It's a task of herculean proportions. To meet EU specifications, Bulgaria must ensure that the share of energy generated from wind, solar and other green sources will reach 16% of the country's gross final energy consumption by 2020.

The technical potential is sufficient, the country insists in its National Renewable Energy Action Plan (NREAP), finalised in late June 2010.

"It is absolutely certain that Bulgaria will meet its targets," Energy Minister Traicho Traikov said, adding that the government is working to ensure this happens at an affordable price.

The authorities have introduced various incentives, including preferential prices, priority connection of producers of electricity from RES to the power grid and obligatory purchase of electricity from such sources, to attract green energy investments.

Under amendments to the law on renewable energy in late 2008, the duration of agreements with producers of electricity from geothermal and solar energy was extended from 12 to 25 years. The duration of agreements with producers of electricity from other renewable sources was extended from 12 to 15 years.

Numerous foreign companies have since rushed to build wind and solar power plants in Bulgaria. While the government voices confidence, some analysts are less bullish. They say the country's green capacity falls short of what's needed.

"Bulgaria is definitely not going to meet its 2011 target -- and unless it boosts wind and solar power capacity, it will miss its 2020 target too," Momchil Merkulov of the Association of Producers of Ecological Energy told Reuters.

Meanwhile, the country's aging power grid poses a challenge. Energy officials acknowledge that if more than 2,000 MW in new solar, wind and hydro power is installed by 2020, the country's electricity grid could collapse, jeopardising supply.

"We encourage RES growth, but the sector should develop in a way that does not create environmental problems and risks," Deputy Environment Minister Evdokiya Maneva said.

According to the NREAP paper, in 2010 the overall share of renewable energy sources (RES) used in heating and cooling, electricity and transport stood at 10% of total consumption, up from 9.2% in 2005, which is used as a base year.

It is projected to reach 10.7% this year, when the share of RES in electricity production alone is expected to hit the 11% target set by the EU.

EU statistics showed that a total of 120MW of wind power capacity was installed from 2007 to 2009, bringing the total to 177MW, which grew to 336MW in 2010, and is expected to reach 1,250MW by 2020.

Meanwhile, solar energy capacity grew from 1.4MW in 2008 to 15MW in 2010. Industry representatives believe installed photovoltaic capacity, which is used for electricity generation, as well as for heating and cooling, could reach 100MW this year.

According to the NREAP, solar capacity in Bulgaria is to reach 330 MW by 2020.

Wind and solar power have a much smaller share in the production of energy from RES in Bulgaria as compared with hydro power and biomass, which account for about 31% and 36%, respectively.

Biomass and and geothermal energy are both used used for electricity generation, as well as for heating and cooling.

By 2008, Bulgaria was already utilising in full its existing hydro power potential, while only a portion of its solid biomass potential was being used, primarily for heating in households and in public buildings, according to the NREAP.

CROATIA

http://www.boell.hr/downloads/Cavazzini_Renewable_Energies_Croatia_Short_Report.pdf

Regulatory frameworkCroatia has a 10% RES share in final energy consumption which seems quite high but is dominated by energy from large hydropower plants (Eurostat 2007: 32). The share of “new” RES (i.e. solar, wind and geothermal heat) is marginal: there are only two wind farms and five photovoltaic (PV) installations in the country. This is striking because the potential for RES is very high, first and foremost regarding solar energy. The reasons for this discrepancy will be discussed below.

Croatia approved a package of energy legislation in 2001 (amended in 2004) that aimed at restructuring the energy market. It declared RES as being a “national interest”. However, it lasted until 2007, when Croatia started to adopt the necessary secondary legislation. In this regard, the EU may be seen as the main trigger for reform because the screening of the energy chapter was to come soon.

Croatia has set a national target of having 5.8% of the electricity produced from RES until 2010 (excluding large hydropower) and set up a FiT system. As to biofuel, the target is 5.75% of total fuel consumption until 2010. A law on biofuels was adopted in early 2009. There is no regulation concerning RES for heating and cooling, but provisions from the EU have recently been integrated in the new RES directive. The energy chapter is not closed yet, but the existent framework seems to be accepted by the EU.

Regarding the FiT, the incentive price is judged to be relatively high, for some technologies even higher than in other European countries. There is an annual adjustment of the price based on the consumer price index and thus also taking into account inflation, which is particularly important in the initial phase of RES development. In order to promote domestic develop ment, the highest tariff is only paid when more than 60 percent of the value was created in Croatia.

In 2004, the Fund for Environmental Protection and Energy Efficiency (FZOEU) was established to finance investment by private persons and local authorities – primarily through long-term “soft” loans and grants – in environmental protection, EE and RES. Its main sources are coming from eco charges and international donations.

The CARDS programme financed the project Approximation of EU Renewable Energy Legislation and Energy Efficiency Labelling (RELEEL) (2007-09) with 0.5 million Euro. It aimed at improving administrative capacity and conducted advising in order to support the alignment with EU RES and EE provisions. The programme organized workshops and trainings as well as public awareness raising campaigns. It was very visible in Croatia and the promotional material was exhausted quickly. Project participants claimed the high level of bureaucracy and stated that they spent more time with administrative activities than with the expert work.

http://www.setimes.com/cocoon/setimes/xhtml/en_GB/features/setimes/features/2011/03/16/feature-04

Croatia's potential for the development of renewable resources is vast, but still underused, at least when it comes to solar, wind or geothermal sources. The situation, however, has been changing in recent years.

"We currently produce 40% of our energy from renewable sources, thanks to the hydroelectric power stations. We are much worse off with consumption because we must buy around 30% of our power," explained Nikola Ruzinski, state secretary at the Ministry of Environmental Protection.

The "new renewables" are increasingly stirring interest among private, mainly foreign, investors, especially when it comes to wind energy exploitation.

The first windmill power plant in Croatia was built on the island of Pag in 2004. The company, Adria Wind Power, installed windmills with the capacity of 5.9550kW on the island at Ravna.

The greatest strides in the development of wind power have been made in the coastal region, particularly in the Sibenik area, where the German company Enersys has invested in two new plants.

The first was built in 2006 in the Trtar-Krtolin hills; the second was constructed last year on the hill of Orlice.

One hundred zones across Croatia have been designated for the same purpose, though most are in the coastal Dalmatia region.

Solar energy presents a different picture, having been underutilised despite its extensive potential.

According to data provided by Zdeslav Matic, of the Energy Institute Hrvoje Pozar, Croatia is home to about 15,000 square meters of solar collectors. It is estimated that the total generating capacity of these solar cells is about 52 kilowatts.

"Exploitation of solar energy in Croatia doesn't have systematic support and is left to the enthusiasts," the president of the Eko Kvarner Association, Vjeran Pirsic, told SETimes.

Various energy lobbies, including wind power proponents, are blocking further development of the solar alternative, he said.

"Practically, the whole quota for renewable energy was given to wind power, which simply makes no sense," says Pirsic. "Wind energy itself is a much worse choice for our country than solar energy, especially in the south."

The economy ministry currently has almost 700 applications for development of renewable energy source projects. Completion of these would result in the production of nearly 6500 MW of power, but the existing distribution system can cope with only part of that capacity.

An outdated energy infrastructure and a sluggish bureaucracy are just some of the obstacles to developing renewable energy sources in Croatia.

"Over 60 different certificates and permits are necessary if someone wants to set solar devices on his own roof. Among them is even a certificate for a good conduct," Pirsic told SETimes.

Despite these difficulties, Economy Minister Djuro Popijac is optimistic.

"Croatia currently spends 18 Terrawat hours of electricity annually. More than 3.5 Terrawat hours will be included in Croatia from renewable energy sources by 2020," said Popijac.

Investing in renewable energy is important to Croatia's EU future. To meet the bloc's stringent energy requirements, the country has pledged to meet at least 20% of its energy needs, in production and consumption, from renewable sources by 2020.

http://www.euroqualityfiles.net/AgriPolicy/Report%202.2/AgriPolicy%20WP2D2%20Croatia%20Final.pdf

Croatia has a very big potential in RES, especially regarding biomass, wind and solar energy. Respecting their competitiveness and potential contribution to the national energy balance biomass and solar plants could significantly contribute to heat energy production and wind parks and biomass cogenerations in electricity generation. However, the systematic use of RES started only in 2004. Until 2004, the only renewable energy source Croatia had were large scale hydro power plants, and several small hydro plants (below 10 MWe), which did not contribute significantly to the energy generation. Besides that, fuel wood as a traditional way of heating was still widely used. The share of hydro power (including large and small power plants) in the total energy production between 2002 and 2005 varied between 25% and 34% and in 2005 its share was 31.6%. In the same period, the share of fuel wood decreased slightly from 8.5 per cent to 7.5 per cent. Other renewable energy sources (wind energy, solar energy, geothermal energy and landfill gas) had a share of only 0.5 % in total energy generation in 2005. The share of renewable energy sources in total energy consumption in 2006 was around 3.8 percent. RES made for 7.57 percent of total primary energy production in 2006 with biomass contributing with 7.08 percent. In 2007 the share of renewable energy sources in total energy supply and total energy consumption was about 7.4 percent and 3.5 percent respectively. The share of biomass and hydro energy decreased, while the share of wind and solar energy increased compared to the previous year.

National policyIn the context of Croatia’s EU accession processes Croatia has harmonised the overall concept of energy sector reforms with the legal and institutional EU requirements, however within the limits of the specific national solutions. The main legal source for the Croatian energy sector is the Energy Act (Official Gazette 68/01, 177/04, 76/07, 152/08), which stipulates positive attitude towards renewable energy sources. The legal framework for the field of renewable energy resources, energy efficiency and cogeneration in Croatia is contained also in the Electricity Market Act, the Act on Regulation of Energy Activities, the Act on Environmental Protection

and Energy Efficiency Fund as well as accompanying implementation regulations. The following secondary legislation relevant for renewable energy sources and cogeneration in Croatia were issued, adopted and enforced:- Regulation on incentive fees for promoting electricity production from renewable energy sources and cogeneration (all electricity buyers; tariff buyers and eligible buyers shall pay an incentive fee to the market operator)- Regulation on a minimum share of electricity produced from renewable energy sources and cogeneration whose production is incentivised (until 31 December 2010, the minimum share of electricity produced from plants using renewable sources whose production is incentivised shall amount to 5.8 % of the total electricity consumption – excluding hydro power plants exceeding 10 MW of capacity)- Tariff system for the production of electricity from renewable energy sources and cogeneration (Until year 2010 the incentive fee will be: for year 2008: 0.0198 kn6/kWh + VAT, for year 2009: 0.0271 kn/kWh + VAT, for year 2010: 0.0350 kn/kWh + VAT)- Ordinance on the use of renewable energy sources and cogeneration- Ordinance on attaining the status of eligible electricity producer.

In order to implement the Directive 2003/30/EC on the promotion of the use of biofuels the Act on Biofuels for transport has been enacted in May 2009. According to this Act, all secondary regulations and documents (including national and local plans of promotion of bio fuel production and consumption, national action plan, regulations of subsidies etc.) have to be enacted within one year from the entry into force of this Act. The regulations to encourage the application of renewable resources for production of heat and cooling energy are expected to be passed by the end of the year. Croatia has set the following strategic goals related to the use of renewable energy sources (Green paper draft, 2008): 6 1 € is approx. 7,33 HRK (as of May. 30th 2009, according to Croatian National bank).- Mandatory target of 20% share of renewable sources in the final energy consumption by 2020 according to the Directive on the promotion of the use of energy from renewable sources published in January 2008 in the framework of the EU objectives defined in the Climate Action and Renewable Energy Package (CAREP) for 2020)- Mandatory target of 10% share of biofuels by 2020 in the consumption of gasoline and diesel fuel according to the Directive on the Promotion of the use of biofuels and other renewable fuels for transport- 35% share of electricity generation from renewable sources, including large hydropower plants by 2020, in the overall electricity generation.

The most common aspect of RES implementation promotion are the guaranteed purchasing prices for electricity produced from such sources (feed-in tariffs), subventions for the manufacturing of equipment for use in RES, as well as the commitment to purchase the electricity produced from RES. The use of RES in the context of the electricity market is for the time being the most developed in a legal- institutional sense. In March and July 2007, Croatia has introduced the feed-in tariff system for support of renewable electricity generation. Tariffs are determined by technology, are valid for 12 years and are adjusted every year according to average small goods’ price coefficient, as well as dependant of the share of domestic component within the project. The feed-in tariffs are set according to the energy source it is generated from. Green electricity producers which have signed a contract with the market regulator are eligible

for these tariffs. Croatia has a specific clause in energy policy, which states that renewable electricity will be supported only until the share of 5.8% in total electricity consumption in 2010 (which would be around 1100 GWh) is reached.

National concepts and programmesIn 1997, the Croatian government started five national energy programs dealing with renewable energy sources: BIOEN (biomass and waste), SUNEN (solar energy), ENWIND (wind energy), MAHE (small hydro) and GEOEN (geothermal energy). Those programs include all significant matters connected to a more frequent use of renewable energy resources.

The program for biomass and waste energy use BIOEN has shown that electricity generation from biomass and waste could meet up to 15 percent of the total primary energy consumption until 2020. Biodiesel project, as a part of the BIOEN program, which started in 2000, had a goal of introduction of biodiesel production in the Republic of Croatia. Within this project the following achievements were reached:- the duty rate for biodiesel was set up at 4%- the Regulation on Biofuel Quality was adopted, establishing the national target of a 5,75 % biofuel share in the total quantity of fuels in 2010- defined incentives for rapeseed production intended for biodiesel production of 2,550 kn /ha (300 kn extra compared to the production intended for human/livestock consumption)

The program for solar energy use SUNEN has shown that solar energy utilisation 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.

Wind energy, as an ecologically acceptable and available domestic energy resource is a relatively unused resource which can contribute to covering a part of energy needs in Croatia. For wind energy utilisation by new generation wind turbines, the program for wind energy use, ENWIND, has been started. The program includes the assumptions for an economical wind energy use.

Geothermal energy use program, GEOEN, has shown the need for the creation of conditions which would increase geothermal energy utilisation 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 utilisation.

The basic goal of the MAHE program is planning the construction of small power plants, removing all barriers and obtaining conditions for a rapid construction of small power plants in Croatia.

Apart from feed-in tariffs, there are also complementary instruments used for the promotion of the utilisation of RES such as direct subsidies (the Ministry of Economy, Labour and Entrepreneurship supports development of the equipment for RE production), and different forms of financing (Environmental Protection and Energy Efficiency Fund, Croatian bank for

reconstruction and development, European bank for reconstruction and development, local authorities, etc.).

Throughout the development of the Republic of Croatia, investments strengthening the competitiveness through energy savings and investments into ecologically sustainable market of renewable energy resources become increasingly important. These investments have multiple effects, e.g. the share of imported energy is reduced, independence on the energy market is strengthened and the environmental protection enhanced. For the purpose of financing environmental protection projects, HBOR (Croatian bank for reconstruction and development) extends loans through the Loan programme for the Preparation of Renewable Energy Resources and Loan Programme for the Financing of Projects of Environmental protection, Energy Efficiency and Renewable Energy Resources.

The Government of the Republic of Croatia has received a grant from the Global Environmental Facility Trust Fund (GEF), i.e. from the International Bank for Reconstruction and Development (IBRD) as the Implementing Agency of the GEF, in the total amount of USD 5.5 million for financing the implementation of the Renewable Energy Resources Project. The main aim of the Project is to support the development of economically and ecologically sustainable market of renewable energy resources.

CYPRUS

http://www.energy.eu/

Country targets - Cypriot target: 13% (2005 = 2.9%)

Key issuesIn Cyprus, an issue regarding policy integration has been observed as there is investment at present in a new fossil fuel power plant creating excess capacity. Until 2005, measures that proactively supported renewable energy production, such as the New Grant Scheme, were not very ambitious. Targets are not being met. In 2006, a New Enhanced Grant Scheme was agreed upon. The leading RES in Cyprus is PV, and wind power offers high potential.

Main supporting policiesRES-E policy in Cyprus consists of the following components:o The New Grant Scheme, valid from 2004 until 2006, meant a tax of 0.22 €ct/kWh on every category of electricity consumption. The income generated by this tax was used for the promotion of RES.o The New Enhanced Grant Scheme was implemented in January 2006. Financial incentives (30-55% of investments) in the form of government grants and feed-in tariffs are part of this scheme.o Operation state aid for supporting electricity produced by biomass has been suggested, and forwarded to the Commission for approval. In order to promote the use of biofuels, a measure was taken to exempt the biomass percentage of biodiesel from excise duty (as of 2005).

The New Enhanced Grant Scheme for Energy Conservation and Promotion of the Use of RES

(2006) also provides financial incentives for RES heating and cooling activities. 30-45% of investment in solar systems for central water heating systems and 40-55% of investment in space heating and cooling can be recovered in this way.

http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/CYPRUS_RES_Policy_Review_09_Final.pdf

The energy consumption in Cyprus is predominantly oil-based and amounts to 96% of the total energy consumption. Other forms of commercial energy used are Solid Fuels (coal and pet coke) for the production of cement, amounting to 2.0% of the total energy consumption. The remaining 2.0% is mainly solar energy and at the moment is the only substantial contribution of renewable energy sources, in the country’s final energy consumption. The high costs of imported energy are a burden on the economy of the country. Renewable energy sources (RES) constitute the only indigenous source of energy in Cyprus capable of making a significant contribution to the island’s energy balance. However, until 2005, the contribution of RES was low. This started to change with the introduction of the New Support Scheme in 2006. In addition to this, in 2007 feed in tariffs for RES were set and the public interest for RES investment increased dramatically.

Cyprus is one of the leading countries in the use and construction of solar water heating systems. 92% of households are equipped with solar water heaters and 53% of hotels have installed large solar water heating systems. According to ESTIF (European Solar Industry Federation), in 2007 Cyprus had the larger number of solar collector installations per capita, with a 57 kWth per 1000 capita.

KEY FIGURES- The share of RES in total primary energy consumption was of 2.4% in 2007 (with

important contribution of solar thermal).- The share of RES in the gross final energy consumption was 3.4 % in 2007.- The share of RES electricity generation was 0.07 % in 2007 (from PV and biomass).- The share of biofuels in the transport sector in 2007 was 0.1%.- Cyprus energy dependence on imports amounts to 96 % in 2005

RES POLICY In order to promote the uptake of RES, the Cyprus government adopted a framework for support measures which included the first Action Plan for the Promotion of Renewable Energy Sources, 2002-2010. Based on the experience gained during the first 5 years of operation of the Action Plan, a New Support Scheme was approved by the Council of Ministers and will be in operation as soon as it is approved by DG Competition of the European Union. The New Support Scheme (2009-2013) provides more generous incentives than the previous Scheme and sets more ambitious targets for the increase of renewable energy sources, to the total electricity consumption and overall to the total energy balance. It also includes a financial mechanism to encourage renewable energy sources and proposes strategies to eliminate administrative obstacles.

RES TARGETS

Mandatory targets set by the Directive on the Promotion of the use of energy from renewable sources

- 13% share of RES on the final consumption of energy in 2020.- At least 10% share of renewable energy of final consumption of energy in transport by

2020.

Progress towards the Targets At present, there is a 6% target for RES electricity contribution, by the year 2010, which is considered to be attainable. It is expected that if the first wind farms (total capacity of 110 MW) are installed by the end of 2010 the target will be achieved. The use of biofuels in Cyprus was 0.1% in 2007.

Support for RES electricityIn 2009, Cyprus will introduce a New Support Scheme4, The Support Scheme covers investments regarding utilization of RES, and electricity-heating/cooling cogeneration. The percentage of subsidy and the funding per category as well as the form of public aid per category are shown in detail in Table 1. For the calculation of operating supports, the respective investments supports as well as the estimated Electricity Authority of Cyprus (EAC) costs were taken into account.

Desalination using RES For Small, Medium and Large size enterprises, the grant will be 35%, 25% and 15% respectively of eligible costs or 40% de minimis. The maximum amount of grant is €175000

Co-generation of heat and electricity For enterprises Subsidy plus 30% de minimis aid or 15-30% of eligible costs, Maximum amount of grant in any case €171000.For charity institutions, municipalities, and other non-profit organizations subsidy plus 45% of eligible costs, Maximum amount of grant €85500.

Geothermal heat-pumps for space heating/cooling For Small, Medium and Large size enterprises, the grant will be 35%, 25% and 15% respectively of eligible costs. Maximum amount of grant €850,000 or 40% de minimis with maximum amount of money €200,000.

Support for biofuels An exemption of excise duty for Biofuels imports exist.

Support for all RES A levy of 0.22 Euro cents/KWh is imposed on all electricity consumers. The income is used to finance activities aimed to promote the use of RES and Energy Saving.

CZECH REPUBLIC

http://www.energy.eu/

Country targets - Czech target: 13% (2005 = 6.1%)

Key issuesThe Czech Republic’s legislative framework in relation to renewable energy sources has been strengthened by a new RES Act adopted in 2005 and a Government Order regulating the minimum amount of biofuels or other RES fuels that must be available for motor fuel purposes. Targets for increasing RES in total primary energy consumption have been set at national level. The use of biomass in particular is likely to increase as a result of the new legislation.

Main supporting policiesIn order to stimulate the growth of RES-E, the Czech Republic has decided on the following measures:o A feed-in system for RES-E and cogeneration, which was established in 2000.o A new RES Act, adopted in 2005, extending this system by offering a choice between a feed-in tariff (a guaranteed price) or a “green bonus” (an amount paid on top of the market price).

Premiums to the electricity price are foreseen for producers of electricity from combined heat and power plants. Besides this, investment support (from 30-80%) is available whenever the applicants are non-profit enterprises. The use of biofuels is being encouraged through an air protection Act (2002), which requires that a minimum amount of biofuel (or other fuels produced from RES) is made available to the market for example, as of 1 September 2007, 2% of the total amount of motor-vehicle diesel fuel. Between 2007 and 2012, this should amount to 4.2m tons. Government Resolution No 1080 of 20 September 2006 provides for a minimum quantity of biofuels in the range of motor-vehicle fuels without any subsidies or state support. The Ministry of Industry and Trade was set to begin its most ambitious subsidy programme for RES in the second half of 2007.

http://www.kj-legal.com/en/dispute-resolution-news/321-renewable-energy-investment-protection-czech-republic.html

The Czech Republic is the third largest electricity exporter in the European Union and has one of the lowest energy import dependencies. Traditionally electricity is produced from coal, with the second largest source of energy being nuclear power.

When preparing to enter the European Union, the Czech legislative body developed a comprehensive framework to change the local energy industry. Particular attention was given to the promotion of electricity produced from renewable sources. In March 2005, eleven months after the Czech Republic entered the European Union, the Czech Parliament passed an act to support such production from renewable energy sources. This law promised significant benefits for investors and created a stable framework for investment decisions in this field. As a result, the investments in the sector, in particular into photovoltaic energy, increased substantially.

In the last months however, the Czech Republic suddenly changed its approach and passed a series of acts that have restricted and limited the promotion of renewable energy. On 1 January the last change entered into force. The outcome of this is a significant impairment for renewable

energy sector investors. Foreign investors, who, as a result of the law changes, are now experiencing a negative impact on their legitimate expectations, are evaluating their position against the Czech state.

2005 – Act on the promotion of electricity production from renewable energy sources

The act on the promotion of electricity production from renewable energy sources entered into force on 1 August 2005. It was celebrated by many as the dawn of a new energy industry era. The available incentives were significant and the act promised that there would be a fifteen year period for returns on investments for renewable energy power plants. This was to be achieved through regulations in two areas. First, connection to the Czech grid was to be guaranteed to investors in the renewable energy field. Second, the regulated feed-in tariff was set at a very favorable rate. Producers without connection to the grid (mainly non-commercial energy production for households) were guaranteed financial support in the form of a ‘green bonus’.

2006 until 2010 – The incentives’ results on the renewable energy sector

The promised incentives were enthusiastically adopted by investors – particularly in the photovoltaic sector. Between 2005 and 2009 growth of installed solar power stations connected to the grid system increased from under one MW to more than 460 MW. In 2010 the photovoltaic capacity reached 1.400 MW. This compares to roughly three quarters of the capacity of the Czech nuclear power plant Temelín. At the end of this year, there were over 12,000 operators of solar energy plants in the Czech Republic (versus nine in 2005). Most of these operators are small and medium sized enterprises.

Year 2010 – The Czech Republic’s u-turn

As a result of the significant level of local and foreign investment in the sector, the Czech Republic started to suffer from higher than planned expenditures to cover for the regulated incentives. Moreover, the autonomous renewable energy producers increasingly became ‘real’ competitors to traditional energy producers. After a massive media campaign against the increase of renewable energy, the Czech Republic now also tries to break the trend via legislative changes. The number of recipients for state funding was significantly restricted and both the feed-in tariffs and the green bonus were reduced. Tax incentives were cancelled. These changes do not only affect new investors in the field, but also photovoltaic investors who started operation in 2009 and 2010. They are now obliged to pay a special levy of 26-28% between 2011 and 2013.

The future – The potential liability of the Czech state

As a result of these unpredictable legislative measures, many investors feel deceived and are evaluating options to take direct actions against the Czech state. For foreign investors the more than 80 available bilateral investment treaties between the Czech Republic and other states provide a possible legal foundation for claims. Austria, for example, concluded a bilateral investment treaty with the former Czechoslovakia in 1993 which provides for the enforcement of investors’ rights through an international arbitral tribunal. Other possibilities for legal action are

to be found in multilateral state contracts in the energy industry (e.g. the Energy Charter Treaty). The EU directive for the promotion of energy production from renewable sources specifically targets the advancement of investors’ confidence in this field (in particular to protect the interest of small and medium sized enterprises and independent power producers). The new legislative measures in the Czech Republic can hardly be seen as compatible with these guidelines.

http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/CZECH_REPUBLIC_RES_Policy_Review_09_Final.pdf

The share of renewable energy sources has also been increasing, although still below EU average. Coal is the main energy source for electricity production. The second most important source is nuclear power.

KEY FIGURES- The share of RES in total primary energy sources was 4.77 % in 2007.- The share of RES in the gross final energy consumption in 2006 amounted to 6.2 %.- In 2007, renewable electricity accounted for 4.7 % of gross inland electricity

consumption, and 3.9 % in gross inland electricity production.- In September of 2007 was initiated the mandatory addition biofuels (RME) to diesel fuel

to a minimum of 2% of the volume of the quantity put on the market in the Czech Republic. For motor fuel the obligation to add biofuels is valid until 1. 1. 2008.

- Dependence on external energy supplies was of about 27.44 % in 20062.

Technology Specific Figures: - The highest share of renewable electricity production in 2007 came from hydropower

followed by biomass- Gross electricity production from hydro amounted to 2 090GWh while the total installed

capacity amounted to 1 031MW.- Gross electricity production from biomass amounted to 968GWh in 2007 (with an annual

increment of 237GWh).- The exploitation of biogas (215GWh) can also be viewed as a significant source of

renewable electricity.- Wind plants produced 125.11GWh in 2007. By the end of 2007, 113.8 MW of wind

power had been installed in the Czech Republic. In 2007, 10 projects with a total capacity of 70.3 MW were put into operation.

- Gross electricity production from photovoltaics was 1.8GWh. The total installed capacity in 2007 amounted to 3.4MWp (only systems with licence).

- Energy production from solar thermal was circa 152 TJ. The total area of glazed collectors in 2006 was 130 000 m².

- Heat production from biomass amounted to 16 041 TJ (without households).- Heat production from biogas amounted to 1 009 220.5 GJ (including municipal and

industrial waste treatments plants, biogas stations, landfill gas).- In 2007, approximately six million tonnes of fuels for transport were placed on the

market in the Czech Republic, of which 36 900 tonnes were made up of biofuels.

RES TARGETS

Mandatory targets set by the Directive on the Promotion of the use of energy from renewable sources:

- 13 % share of RES on the final consumption of energy in 2020.- At least 10% share of renewable energy in final consumption of energy in transport by

2020.

Support for RES electricity

The Act No 180/2005 on the promotion of electricity produced from renewable energy sources, which implemented the EU Directive 2001/77/EC in Czech legislation, entered into effect on 1 August 2005. Its key features are:

- Preferential connection to the grid. There is an obligation for operators of the regional grid systems and the transmission system operator to purchase all electricity from renewable sources

- the guarantee of revenue per unit of electricity produced over a 15-year period as of the date a plant is put into operation

- the possibility of choosing between two support systems - minimum feed-in tariffs – all the electricity produced can be sold to the relevant distribution system operator green bonuses (premium on the market price of electricity) – electricity produced from renewable sources can be placed on the single electricity market

- the support of electricity used for internal consumption (not supplied to the grid)

Feed in tariff and Green BonusesA feed-in system for RES-E and cogeneration came into force in 2002. This scheme only led to a few new renewables installations. The RES Act adopted in 2005, extended this system by offering a choice between a feed-in tariff (a guaranteed price) or a “green bonus” (an amount paid on top of the market price). Feed-in tariffs apply to electricity supplied and metered at the delivery point between the generating plant and the respective distribution system operators.

Green bonuses apply to electricity supplied and metered at the delivery point between the generating plant and the regional system operators and supplied by the generator to an electricity trader or eligible customer. Producers can choose if they sell electricity for purchase prices or offer it to trader for „market-price“ and simultaneously get extra green bonuses – paid by the operator of Transmission System)

The “Energy Regulatory Office” determines the feed-in tariffs and the green bona each year in advance. The prices may not be lower than 95% of the value of the year before. Prices are set on the following assumptions:o Return on investment of 15 yearso Prices are differentiated according to the renewable energy sourceo Prices are differentiated by the year of commissioningState programme for energy saving and the use of renewable energy sourcesInvestors in renewable electricity can receive aid from the State programme for energy saving and the use of renewable energy sources. Subsidies from Part A of the programme (coordinated by the Ministry of Industry and Trade) involve: Investment projects - they may cover a maximum of 40 % of capital costs, but no more than CZK 2.8 million and Non-investment

projects – they may cover a maximum of 100 % of capital costs, but no more than CZK2.8 million.

Subsidies from Part B of the programme (coordinated by the Ministry of the Environment) may be a maximum of 90% of the basis for the calculation of the aid in the case of local government units (municipalities) and non-profit organizations. In 2007, subsidies for the support of renewable electricity production totalling CZK 33.9 million were granted from the Ministry of Environment resources and the Ministry of Industry and trade. Subsidies under Part B of the State Programme may, in the case of businesses, amount to 40% of the capital costs.

Tax exemptionNo income tax is foreseen neither in the year of putting in operation renewable electricity plants nor for the following 5 years.

Reduced interest rates

EU Structural FundsFrom 2007, investors in renewable electricity production had the opportunity to obtain aid from the EU’s Structural Funds via the Operational Programmes. The Operational Programme (OP) for 2007-2013 focused – amongst other - on the construction and restoration of plants using RES.

- OP Enterprise and Innovation (2007 – 2013) Program Eco-energy - support is focused in addition to the utilization of renewable and secondary energy sources to increase efficiency in the production, transmission and energy consumption. Subsidies maybe a maximum of 50 % of capital costs, but no more than CZK 100 million.

- OP Environment (2007 – 2013) It is the second largest program in the Czech Republic. In 2007-2013 it offered 5.2 billion euros from the Cohesion Fund and the European Regional Development Fund. In 2007, 1 288 applications for grants were registered for a total amount in excess of 21 billion CZK.

Support for HeatEuropean Regional Development Fund- State Environmental Fund (SFŽP)The Operational Programme for 2007-2013 includes the subsidy scheme “Exploitation of Renewable Energy Sources”.

- OP Environment: Construction of new facilities and renovation of existing facilities in order to increase the use of RES for heat production, electricity generation and cogeneration.

- OP Enterprise and Innovation: As part of the Operational Program Enterprise and Innovation occurred on the 25th April 2007 on the publication of the 1st Challenges Eco-energy program, which was intended only for small and medium-sized businesses. The financial allocation from EU funds for the programme Eco-energy is 121.6 million Euro.

Increasing efficiency in the production, transmission and energy consumption:- Modernization of existing energy production facilities to improve their efficiency- Introduction and modernization of systems of measurement and control- Modernization, restructuring and reduction of losses in electricity and heat- Improvement of the technical characteristics of heat buildings, with the exception of family and

apartment buildings- Use of waste energy industrial processes- Improvement of energy efficiency by introducing the combined production of electricity and heat.

Support for BiofuelsAddition of biomaterial is obligatory for producers, distributors, importers.Government Resolution No 1080 of 20 September 2006 provides for a minimum quantity of biofuels in the range of motor-vehicle fuels without any subsidies or support from the state. On the basis of this resolution, amendments were made to Act No 86/2002 Coll. on clean air protection. The amendment to this act concerns the setting of a minimum amount of biofuels. Any person bringing motor-vehicle petrol or diesel fuels into free tax circulation in the Czech Republic must ensure that they contain at least a minimum proportion of biofuels. The amendment introduces the following minimum values of biofuels blended with fuel:as of 1 January 2008, 2% of the total amount of motor-vehicle petrol fuel; as of 1 January 2009, 3.5% of the total amount of motor-vehicle petrol fuel; as of 1 January 2009, 4% of the total amount of motor-vehicle diesel fuel.

Support for all RESPromoting energy crops in agricultureThe Programme “Promoting the cultivation of crops for energy use in 2007“was incorporated into the national support programme, specifying the conditions for granting subsidies in 2007. The objective is to promote the establishment and maintenance of standing crops for energy use with an aid of CZK 3,000 per hectare. In this programme, stated energy crops must be grown specifically for energy use. In 2007, 1,771 hectares were sown with energy crops and approximately CZK 5,314,000 were allocated.

Aid for the cultivation of energy crops is provided in all EU countries at EUR 45 per hectare for any crop to be used for energy purposes. The conditions are governed by Governmental Order No 80 of 11 April 2007 laying down certain conditions for the provision of a payment for the cultivation of energy crops. An uninterrupted plot of arable land with an area of at least 1 hectare must be used for the cultivation of energy crops. Energy crops must be grown on the land as the main crop in the year concerned. As from August 2007, applications for aid for the cultivation of energy crops on approximately 59,920 ha had been registered.o Support for cultivation of plants for energy purposesIn 2007, a total of CZK 3 000/ha was paid out to support the planting of plant crops for use in energy generation (combustion). Support totalling CZK 5 123 250 was granted for 1 800 ha.o - Support for the planting of production and reproduction crops of fast-growing wood species for use in energy generation.

EGYPT

http://www.english.globalarabnetwork.com/200906191305/Energy/renewable-energy-in-egypt.html

Since the 1970s, Egypt has had a policy on use of renewable energy resources. In early 1980s, a renewable energy strategy was formulated by the country’s Ministry of Electricity & Energy as an integral part of national energy planning. The strategy has been revised in the light of the projections for possible new renewable energy technologies and application options, the available financing sources and investment opportunities in the field.

Currently, Egypt’s strategy has adopted a target to meet 20% of electrical energy demand from renewable energy resources by the year 2020, including about 12% from wind power, hydro power with additional contributions from other renewable applications.

While Egypt’s greenhouse gas emissions have been among the fastest growing in the world, the country is acting to reverse the trend with the help of the recently established Clean Technology Fund aimed at scaling up low-carbon technologies and energy efficiency.

Egypt is among the first countries to tap the $5.2 billion fund currently supported by eight governments, managed by the World Bank, and administered through the World Bank Group and other multilateral development banks.

Egypt plans to use $300 million in concessional financing from the fund, blended with financing from the World Bank Group, the African Development Bank, bilateral development agencies, private sector and other sources to spur wind power development and introduce clean transport options—enabling the country to meet its target of 20 percent of energy from renewable sources by 2020.

Under business-as-usual conditions, Egypt could face a 50 percent increase in greenhouse gas emissions from 2007 levels in the electricity sector alone. Electricity and transport contribute over 70 percent of the greenhouse gas emissions in the country.

But Egypt— considered a leader in the region on renewable energy and energy efficiency—hopes to change that scenario by realizing a 7200 MW wind power capacity by 2020, cutting vehicle emissions in heavily populated regions through improved public transportation systems and making industry more energy efficient.Egypt is also a participant in a proposed CTF co-financed regional programme to scale up concentrating solar power plants in the Middle East and North Africa (MENA).

From a global perspective, it is critical that the best solar resources are used for solar scale-up and MENA region offers this opportunity, says Jonathan Walters, transport and energy manager for the World Bank’s Middle East and North Africa region. Egypt is piloting a small scale concentrating power plant with support from the Global Environment Facility and Japan Bank for International Cooperation.

Wind PowerOn wind energy, “high and persistent” winds in the Gulf of Suez suggest Egypt has “excellent potential for wind power – among the best in the world,” says Walters.The government and partners such as IFC of the World Bank Group have already financed 400 megawatts of wind-energy capacity. Another 600 megawatts of projects are in the pipeline and

expect to start in the next two to four years.

But further development has so far been constrained by lack of infrastructure. For that reason, the government plans to use $100-$120 million in Clean Technology Fund money to co-finance a high-capacity transmission system from the wind farms in the Gulf of Suez to serve heavily populated areas such as Cairo.

Without CTF financing, such infrastructure development could be delayed three to five years, according to the CTF Investment Plan for Egypt.The funding “is quite game-changing for them,” says Walters. “It comes with co-financing from the Multilateral Development Banks (MDBs) that include World Bank, the African Development Bank and the IFC. Putting $300 million of concessional financing into the mix overall is quite a significant subsidy for investments that have a substantial impact on reducing greenhouse gas emissions.”Eng. Abdel Rahman, Chairman of Egypt’s National Renewable Energy Agency (NREA), says the CTF will alleviate some of the financial burden of higher renewable energy prices, especially in light of current low prices of oil.

“The CTF is a strong support tool for developing countries with a serious plan to expand renewable energy, and it is even more effective in these times of financial crisis,” says Rahman.“The CTF supports those countries that are still backing the renewable energy plans they set forth. It also supports availing infrastructures, such as transmission lines that make scaling up of RE possible, and gives confidence to investors to invest in RE in the region.”

Urban TransportLikewise, CTF funds, combined with World Bank financing, will accelerate Egypt’s urban transport plans, including light rail and bus rapid transit development expected to accommodate 5 million passengers daily in Greater Cairo.Half of Egypt’s vehicles operate in the area and account for 20 million motorized person trips a day and about 13 million tons of CO2 a year. The economic and environmental costs of the megacity’s pollution and traffic congestion have been considerable, says Walters.

To alleviate traffic and reduce CO2 emissions by about 1.5 million tons a year, the government is planning six new bus rapid transit corridors in Cairo, and light rail transit to connect Cairo with fast-growing suburbs.The plan also calls for replacing 613 old and polluting public minibuses with 1,310 large clean technology buses.

In 1986, Egypt established the New & Renewable Energy Authority (NREA) to act as the national focal point for expanding efforts to develop and introduce renewable energy technologies on a commercial scale together with implementation of related energy conservation programmes.http://www.renewableenergyworld.com/rea/news/article/2010/12/quick-look-renewable-energy-development-in-egypt

Policy

In February 2008, the Government announced its ambitious goal to generate 20% of the country’s energy production from renewable resources by 2020, equivalent to around 7GW of electricity. Wind will represent 12% and hydro/solar PV will contribute 8%. The Ministry of Electricity and Energy holds a monopoly over the distribution, transmission and generation of electricity in the country. Currently, the Government subsidizes electricity for its population of almost 80m, 40% of which live below the poverty line. However, this introduces a risk that energy generated by renewable sources could be considered much too costly to compete with oil and gas given the significant upfront investment required to develop an RE infrastructure. The Government, however, appears committed to achieving its target and has proposed a New Electricity Act, which is currently under consideration. It is hoped the law would encourage private sector participation in the energy market via a FIT system similar to Germany’s. It is likely any boost in energy from renewable sources will be well accommodated by the Egyptian national grid, which is extensive and provides over 99% of the population with modern electricity services. Furthermore, grid-connected RE projects currently enjoy priority in dispatching and Egypt’s central bank guarantees all financial obligations of the Egyptian Electricity Transmission Co. under the PPA. WindAccording to the World Bank, Egypt has some of the world’s best wind power resources, especially in the Gulf of Suez area where an estimated 7.2GW could be developed by 2022, with additional significant potential on the east and west banks of the River Nile. It is estimated that average wind speeds in the Gulf of Suez reach 10m/s. Egypt had an installed wind capacity of 430MW at the end of 2009. The country’s largest wind project to date is a US$490m (€352m) development in the Gulf of el Zayt, commissioned in 2009 with a generating capacity of 200MW. Egypt has also received some financial support from the Japanese Government toward the expansion of its wind sector, specifically a JPY38.9b (€344m) loan to help finance a 220MW wind farm, also in the Gulf of el Zayt area. Another 250MW wind farm in the Gulf of Suez is expected to come on line by the end of 2013, with 10 local and foreign companies already shortlisted for the scheme. The Government has earmarked 7,600km2 of desert land for implementing future wind energy projects, for which all land allocation permits have already been obtained by the New and Renewable Energy Authority (NREA). SolarEgypt is located in the “Sunbelt” area and is endowed with high intensity solar radiation ranging between 2000-2600 kwh/m2 per annum, with a daily sunshine duration of 9-11 hours. The potential for solar increases is improved further given the country’s vast desert land, making it suitable for CSP development. It is estimated that at least 1GW of solar capacity will be required

by 2020, if the country is to meet its RE target while satisfying the growing demand for power. To date, uptake of solar projects has been slow due to high capital costs, with only 6MW of solar PV currently installed and CSP of 30MW as part of a 150MW hybrid power plant. While the cost of solar technology is expected to decline in the next five to seven years, Egypt has no clear strategy to exploit its abundant solar resources, although the Egyptian Government is attempting to stimulate investment in solar by offering free land to potential investors. In October 2010, the World Bank announced a US$270m (€194m) loan to the Egyptian Electricity Ministry to build a 100MW solar plant in the south of the country, to be constructed between 2012-17 and costing an estimated US$700m (€503m). Hydro Egypt has substantial hydropower resource, which is exploited by both large- and small-scale developments. The country has a strong portfolio of small-scale hydro facilities and an impressive pipeline of projects planned or already under construction.

http://www.planbleu.org/publications/atelier_energie/EG_Summary.pdf

Egypt depends currently to a great extent on fossil fuel, oil and natural gas, to meet the increasing demand on primary energy, where fossil fuel satisfied about 94% of primary demand in 2004/2005 including 50.4% as oil share and 43.6% as natural gas (NG) share. The rest is mainly met through hydropower at 4.75% and coal at 1.25% for the same year. The primary energy demand has grown at an average annual rate of 4.64% during the last 25 years 1981/1982 – 2004/2005. During the same period, the oil demand has grown at an average annual rate of 3.34% while the increase in NG demand was much faster at 13% annual rate.

Renewable Energy (RE) has only contributed to primary energy demand by about 0.2% at 2004/2005. Energy (RUE) accumulating effect is estimated to avoid a demand on primary energy evaluated at 0.5% to 1% during the same year. The electric energy demand has increased during the period 1981/1982 – 2005/2006 at an average annual rate of 6.64% causing a consequent increasing demand on primary energy mainly fossil fuel where hydropower contributed only by 4.72% from primary energy demand. However, the contribution of hydropower in meeting primary energy demand has decrease from 13.18% in 1981/1982 to 4.72% in 2004/2005. During the last 10 years (1995/96 to 2004/05) the average annual growth rate of final energy demand reached 4.2%. During 2004/05 the shares of different sectors demand in final energy consumption were: 40.7% for industrial, 31.2% for transport and 22% for residential and commercial.

As for primary energy production, it has grown at average annual rate of 2.26% (almost one half of the primary energy demand growth rate), during 1981/1982 – 2004/2005. Oil production has increased during this period at only 0.13% annual average while natural gas has increased rapidly at an annual average of 11.4% reflecting the new discoveries of NG resources. The notice that primary energy consumption average annual growth rates exceeded that of primary production reflecting the challenge Egypt is facing in the next years. Oil resources has not changed in the last 10 years and become almost constant at 3.7 Billion Barrel of oil (bbl) without

any significant increase. However, this issue is somewhat balanced by the coming on line of natural gas for meeting increasing demand with reserves estimated at 67 trillion cubic feet on January 2006.

RUE and RE policies and progress achieved

Egypt is on the way to develop its own "National Sustainable Development Strategy". Efforts are being coordinated through the Ministry of State for Environmental Affairs with all concerned stakeholders to draft the strategy. A ministerial committee has been established for this purpose headed by the Minister of State for Environmental Affaires and assisted by a technical group constituted of representatives of all concerned ministries. Energy is a major component of this national sustainable development strategy. The sustainability of energy calls for a sustainable long term vision for the energy supply/demand balance scenarios including maximizing the use of all available renewable resources, as well as setting quantitative targets and necessary mechanisms to insure the rational use of available resources. Also, minimizing the negative impact on the environment represents an integral part of energy sustainability.

The creation in late 2006 of the Supreme Council of Energy as well as the undergoing formulation of the National Sustainable Development Strategy which in energy represents one of its major components, will facilitate the coordination of all existing policies and orientations into a well defined integrated energy strategy that defines quantitative measurable targets for the enhancement of the wide spread use of both RE and RUE. As a matter of fact, RE has received more attention and growth due to the existence of a national organization (NREA) taking the responsibility of developing its activities. However, RUE is not adopted by one entity, is very much less developed.

The RE potential in Egypt is very high. In the estern Bank of Gulf of Suez the estimated potential is20000 MW, which is almost equal to the overall installed capacity in 2004/2005. The present grid connected wind power plants installed capacity reached 230 MW, while the short term plan targets to reach 850 MW by year 2010 or about 3% of electricity demand; the long term target is to reach 3000 MW by 2021/2022 or about 7% of electric demand all on the Gulf of Suez, saving about 3 Mtoe annually. For the Integrated Solar – Combined Cycle System Power Plants, a 150 MW installed capacity power plant including 30 MW solar thermal part is planned for 2010 and long term plans target two similar plants each 300 MW installed capacity by 2020. There are also about 200 thousand Domestic Solar Water Heating units now installed in Egypt where the typical unit contains 2 meters squared of flat plate collector's area and 150 liters storage saving about 0.085 mtoe annually. Photovoltaic systems capacity for different applications has reached about 5.2 MW peak in 2005/2006 with largest share for telecommunication applications and small remote isolated roads far from the national grid.

To assess RUE and RE development status and based on the availability of data, different indicators have been presented and analyzed in the study report. Also, the report discusses the decoupling between energy efficiency evolution and economy. This analysis is based on the ratio between the primary energy consumption and GDP based on PPP annual growth rates. This ratio which fluctuates by about ±10% around the value of one reflects that energy and economy are

still strongly coupled together. The evolution of total energy intensity since 1981/82 till 2004/05 reveals that its value is quasi-constant at 0.19 Kgoe/ $ PPP 2000 with a variation of ±10% with a minimum of 0.17 in 1981/82 and a maximum of 0.21 in 1990/91 and 2004/05. There is no clear trend of improvement in Energy intensity on the national level.

ESTONIA

http://www.energy.eu/

Country targets - Estonian target: 25% (2005 = 18%)

Key issuesEstonia's potential lies mainly in biomass, biogas, wind and cogeneration from biofuels. Small-scalehydro-electric is being developed as only about half the potential is currently exploited. By end-2005, 36.2MW were produced from hydro-electric and wind; this figure was forecast to almost double in 2006. The use of renewable fuels did not change significantly between 1999 and 2005, and in 2006 the percentage of biofuels in the transport fuel mix was just 0.12%.

Main supporting policiesFor electricity, feed-in tariffs will be paid for 7-12 years, but not beyond 2015. There is a single feedin tariff level for all RES-E technologies. Relatively low feed-in tariffs make new renewable investments very difficult. A voluntary mechanism involving green energy certificates was also created by the grid operator (the state-owned Eesti Energia Ltd) in 2001. District heating law promotes the use of indigenous sources and RES for heat production. Biofuels used for transport or heating have been exempt from excise tax since 2005, following issuance of six-year permits. In 2006 a development plan to promote the use of biomass and bioenergy for 2007-2013 was drawn up, and direct aid is available to expand the energy crop area. New RES-E regulation in force since 1/5/07 includes three support options (feed-in tariff, premium and certificate of origin) and is valid for RES-E production from facilities with capacity less than 100MW.

http://www.investinestonia.com/en/news/estonias-output-of-renewable-energy-triples-in-2009

BNS - The production of electricity from renewable sources in Estonia in 2009 increased nearly threefold compared to the preceding year, Statistics Estonia said on Monday.

The main factor behind the rise was the launch of new wood chip powered combined heat and power plants. If until 2007 the share of renewable energy in overall output was around 1 percent, then in 2008 it climbed to 2.1 percent and in 2009 to 6.1 percent. Although the proportion of wind and hydro energy is still relatively small in electricity generation, making up less than 3 percent of total output, a significant development took place in 2009. As a result of the installation of new wind turbines, wind energy production increased by about a half, or 47 percent, compared to 2008, while the production of hydro electricity increased by more than 14 percent.

Total output of electricity in 2009 came to 8,779 gigawatt-hours, which is nearly 17 percent less than in 2008. The decline in electricity production was caused by decreasing demand by the local business sector and a considerable increase in electricity imports compared to exports. Imports more than doubled compared to 2008. At the same time, combined heat and power (CHP) generation increased due to the launch of new plants using local fuel. The share of CHP in total electricity generation increased from 8.6 percent in 2008 to 9.2 percent in 2009. In total heat generation, the share of CHP grew from 27 percent in 2008 to 35 percent in 2009.

Compared to 2008, the production of oil shale declined by about 8 percent due to the decreased needs of power stations. At the same time, due to stable external demand and good weather conditions, the production of other domestic fuels, such as wood and peat, increased. The production of wood pellets was 45 percent bigger than in 2008. Ninety-five percent of the total output of wood pellets was exported, of which 70 percent went to Denmark.

During the last ten years, shale oil has become an important export commodity in the energy market. Shale oil production increased by about 10 percent year-on-year in 2009 and exports of shale oil increased by more than a third, or 35 percent. More than half of the shale oil produced in Estonia was exported, mainly to Sweden, Denmark, Netherlands and Belgium.

Estonia's total imports of energy products decreased 5 percent compared to 2008. Import of natural gas decreased the most, by more than 30 percent, as a result of chemical industry's lower demand for natural gas as raw material.

Imports of liquid fuels decreased due to the decrease in demand, which arose from declined activity by the business sector and the population's decreasing purchasing power. In addition, the new excise duty rates established for liquid fuels in the middle of the year had a negative on the volumes of import of liquid fuels. At the same time, imports of electricity from Lithuania about doubled compared to 2008.

http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/ESTONIA_RES_Policy_Review_09_Final.pdf

Estonian economy is highly dependent on fossil fuels. Approximately 90% of Estonia’s energy is produced through the combustion of fossil fuels. The remaining 10% comes from renewables, such as biomass, hydropower and wind. The main domestic energy source is the combustion of oil shale, which puts high pressure on the environment -approximately 70% of atmospheric pollution, 80% of effluents and 80% of generation of solid waste are connected with the oil shale power industry.

Estonia is less dependent on energy imports than most EU Member States. Imports are mainly oil and gas (the latter exclusively from Russia). Security of energy supply is seen as an important issue and increased energy links with other Baltic and EU states are seen as key to enhancing security of supply. Estonia’s largest RES potential is to be found in the biomass sector, but possibilities also exist in the areas of wind power, biogas electricity and small hydro power.

KEY FIGURES

- The share of RES in total primary energy production was 12.46 % in 2005.- The share of RES in the gross final energy consumption was 1.91% in 2006.- The share of RES in the gross electricity consumption was 1.75% in 2007.- The share of all biofuels in the transport sector in 2006 was 0.12%.- Dependence on external energy supplies was of about 33.9% in 2005.

Technology specific figures - In 2007, electricity production from RES amounted to 149GWh: with wind accounting

for 91GWh and hydro for 22GWh.- Biofuel production in Estonia registered a little decrease in 2007, passing from 633toe in

2006 to 511 toe the following year. Nevertheless, while no bioethanol was produced until 2006, as of 2007 a tiny production of 13toe was started1.

- District heating covers ca 70% of total heat need in buildings.

RES TARGETS Mandatory targets set by the Directive on the Promotion of the use of energy from renewable sources

- 25% share of RES on the final consumption of energy in 2020.- At least 10% share of renewable energy in final consumption of energy in transport by

2020.

Progress towards the target The production of electricity from renewable sources increased in the period 2005 -2006. At the same time consumption also increased (6 022GWh in 2005 and 7 904GWh in 2006), and therefore the share of renewable energy sources in total consumption even fell, from 1.8% in 2005 to 1.6% in 2006.

Support for RES Electricity

Feed-in tariffThe Feed-In Tariffs are regulated by the Electricity Market Act which entered into force on July 1st, 2003. The Electricity Market Act was last amended in 2007. The version of the Act applying until 30 April 2007, required network operators to purchase in a trading period (at a price of EEK 0.81/kWh) all the electricity generated by a producer of renewable energy to the extent of the operator’s network losses. The main problem with this scheme was that a network operator who did not have a license to sell electricity could not buy more electricity than the amount equivalent to his network losses in the trading period. This support scheme was above all a source of uncertainty for wind farms connected to the grid, since at times of low electricity consumption (for example summer nights) network losses are small and so the purchase obligation was also small.

For this reason, in 2005 amendments were made to the Energy Market Act to introduce a new aid scheme, and this process was concluded on 15 February 2007, when Parliament passed the Act that came into force on 1 May 2007.

- The new aid scheme for producers of renewable energy allows them to use the purchase obligation as before, but adds the possibility for a producer to sell the electricity produced

itself and be given aid for the electricity sent to the grid and sold.- The mandatory purchase price for electricity produced from renewable energy sources

has been raised by 42% (to EEK 1.15/kWh), and the possibility of using the purchase obligation is no longer restricted to the network losses.

- In addition to making use of the purchase obligation, producers of renewable energy can now receive aid of EEK 0.84/kWh for electricity sent to the grid and sold, which offers the possibility if sales are good of earning considerably more than from the purchase obligation.

- The duration of the aid scheme has also been extended: 12 years from the start of production (the previous Act allowed the aid scheme to be used for between 7 and 12 years, but no longer than until the end of 2015).

- The general aid scheme also includes one restriction on producers using wind as a source of energy from 2009, in that aid will be paid to them or they will be able to use the purchase obligation until such time as the production in Estonia in a calendar year reaches limits of 400GWh and 200GWh respectively (producers must sell electricity produced above these limits at market price without using the purchase obligation or aid). Separate records will be kept for each calendar year. The linking of the obligation to purchase electricity generated from wind power or the payment of aid to the annual production quantity is a result of the technical particularities of the Estonian grid — there are no power stations in the grid that can be rapidly regulated. Most of the generating capacity in the electricity grid (more than 90 %) has been developed in the Narva area (North-Eastern Estonia), but the centres of consumption have evolved in other parts of the country (the main load centres are in Tallinn, Tartu and Pärnu and the surrounding areas).

In order to cover peak loads and extend the use of wind power, it will be necessary to construct reserve capacity that can be rapidly regulated (mainly gas turbines) and modernise the grid along the west coast of Estonia and in the islands. The investment requirement for new power generation units up to 2015 is estimated at a total of EEK 10–15 billion, of which EEK 2–3 billion for generation from renewable energy sources.

Support for RES electricity in high efficiency cogeneration processBiomass used for heating is the main source of Renewable energy: 90% of the production of firewood is used in households. Woodchips are also widely used in households.

Support for biofuelsBiofuel is exempt from excise duty without any conditions since July 2005. If biofuel is added to fossil fuels, the portion of biofuel contained in such fuel is exempt from excise duty until the permit expires. A biofuel permit granted for six years by the Tax and Customs Board gives the right to produce biofuel, import it into Estonia and release it for consumption free of excise duty. It obliges the beneficiary together with the application to present specifications and a yearly report.

Under the Alcohol, Tobacco and Fuel Excise Duty Act, biofuel is exempt from excise duty once the European Commission has authorised it and until that authorisation expires. Biofuel, for which the first four digits of the CN code are 4401 or 4402, is unconditionally exempt from

excise duty. Authorisation to exempt biofuel from excise duty was received from the European Commission in a letter dated 27 July 2005.

Support for all RES

Tax reliefTo promote the utilization and development of RES, some tax relieves from the usual 18% VAT have been stated.

Project fundingSome funding is available at the Estonian Fund for Nature (ELF), which grants subsidies to several environmental projects, among others, projects concerning sustainable development.

Development plan to promote Bioenergy (2007-2013)The government of the Republic drew up the Development plan to promote the use of biomass and bio energy 2007-2013. The main objective of this plan is to create suitable conditions for the development of domestic biofuel and bio energy production, reduce Estonia's dependence on imported resources and fossil fuel.

The intention is to implement the development plan in two phases:Phase I (2007-2008) will begin with studies to analyse the market, resources, and technologies. In phase II (2009-2013) all the sound, well-justified market organisation measures to promote the use of biomass (subsidies, taxes, standards, knowledge acquisition, etc.) will be applied on the basis of the analyses and studies carried out in phase I.

On 8 February 2007 the Government approved the Estonian Rural Development Plan 2007-2013 which provides support to:- investments aimed at the production of biomass and biofuels in agricultural holdings.- micro-companies producing forestry products to invest in tangible and intangible assets in order to procure and introduce new products, production methods and technologies,- the production of biofuels from non-wood agricultural products and from the production waste from the manufacture of agricultural and non-wood forestry products.- to applied research and product innovation with regard to bio energy crops and biofuels.In 2007 around EEK 700/ha were paid in subsidies for energy crops, EEK 863.9/ha for growing agricultural crops and EEK 945/ha.

FYRO MACEDONIA

http://www.analyticamk.org/files/ReportNo20.pdf

The share of the RES in the total energy supply and consumption in Macedonia is very low. Main renewable energy sources that can be exploited in the country are hydropower, wind, solar power, biomass and geothermal energy. Some of them, like the geothermal energy and the biomass, have been traditionally used in the energy consumption in Macedonia for heating purposes, yet with very low energy efficiency in their exploitation. For the rest of the renewable

energy sources in Macedonia, for example the wind energy or the geothermal energy, there is still a lack of systematic mapping of the capacity of the energy sources, and that is one of the reasons why they remain none or under explored.

According to the 2007 data the share of the renewable energy sources (RES) in the total primary energy supply (TPES) in Macedonia is 10 percents.15 If comparing this number with the EU average of 8-10 percents, the situation with the RES in Macedonia doesn’t look so appalling. However, by analyzing of the structure of the renewable energies in the country we can see that the share of the renewable sources in the energy supply in Macedonia and in other EU countries is not on the same level. The major part of the renewable energy in Macedonia goes to firewood, which is largely used as a heating source in the country, in a very inefficient and unsustainable way; while the second largest part goes to hydropower for electricity generation from large hydro power plants.

RES in numbersSo far the experience of Macedonia with the electricity production of renewable energy is very poor. The most exploited renewable energy for electricity generation is the hydro power.16 The hydropower is regarded as renewable energy source when used for electricity production from Small Hydro power plants (SHPP) with installed capacity up to 10MW. According to a study from 1980’s, about 400 potential sites were identified for projects as small as 45 kW and up to 5.000 kW. According to this extensive list, the overall identified potential is in the order of 255 MW in capacity and 1 100 GWh in terms of annual possible energy production or 10 percent of the country’s current electricity needs.17 Until now two tenders for concession of small hydro power plants, 60 in 2007 with installed power up to 5 MW on the rivers Vardar, Strumica and Crni Drim and 28 in 2008 have been published by the government. Last month the government started the project “Vardarska Dolina” publishing a call for construction of SHPP on the valley of the river Vardar. The realization and implementation of these projects hasn’t started yet.

The electricity generation from the other renewable energy sources in Macedonia is still on a study level. The wind is seen as the second best energy source for electricity production in Macedonia. According to some measurements the average speed of the wind in Macedonia is between 5 -7 m/s and is characterized as a low ranking according to the standards for the speed of the wind for electricity production.18 Only in the mountainous areas the wind can reach speeds of over 8 m/s, but usually the exploitation of the wind power in these areas is hard because of their inaccessibility. In Macedonia from the power of the wind we can generate from 12 000 to 15 000MWh electricity, however, currently there are no wind mills in Macedonia. One of the main reasons for this is technical issue, since there is no Atlas for the wind in Macedonia, thus the potential investors can not find the necessary data for the wind capacity in Macedonia. There is a Monitoring programme of the Wind potential in progress, implemented by the Energy Agency, which consists of measurement and data collection of the wind parameters in Macedonia.

The other renewable energy sources in Macedonia (geothermal, solar and biomass) have found their use for heat production in the private and less in the industrial sector of the country, but are still not considered for electricity production.

The geothermal energy as a renewable energy source has a long tradition in the energy sector in Macedonia. The country was one of the leading countries in geothermal energy during the second half of the last century. However, nowadays with the lack of new investments in this sector, the usage of the geothermal energy for energy production is limited, mostly concentrated on heating in the agriculture, for greenhouses and heating of spas. The share of the geothermal energy in the TPES in Macedonia is less than half percent. Its share in heat production is 2.4 percents, while the present energy production is 139 000 MWh/y.19 There are seven main geothermal fields and 18 localities with thermal waters.

The huge solar energy potential with 2000 - 2400 sunny hours during the year and generation potential of around 10GWh per year can satisfy at least 75-80 percent of the annual needs for heating and for hot water. Currently its usage is limited to water heating. In Macedonia there are only 7.5m² solar panels on every 1000 people, or 15 000m² installed solar panels. At the end of 2006 the total collector area in operation in Macedonia was 17,118m².20 From 500 000 households in Macedonia only 2500 – 3000 are using solar systems for water heating. This represents only 0.5 percents of the total market for solar panels.

In Macedonia the share of the biomass (wood, agriculture and residual waste, solid municipal waste) in the TEPS is around 6,5 percents and is used primarily for heating. The largest part in this amount has the firewood. In 1999 – 2001 the quantity of residual wood was around 787 000 m³, while the firewood production in 2007 was 65.0000m³.The firewood and charcoal of nowadays are used mostly in domestic sector. The firewood is used for heating of the households, while the waste as an energy source participates with insignificant percent. The largest beneficiary of the biomass energy is the private sector, while the share of the biomass in the industry is only one percent. There is no electricity generation from biogas from biomass, even though it is estimated that an amount of around 200 000m³ is sufficient for production of 86,46GWh electricity per year.

Institutional and legislative frameThe development of the market of renewable energy requires a functional framework that consist of 1) rights and obligations for all the subjects in the energy sector (guaranteed under the Law on energy); 2) Regulatory Commission that will regulate the prices of the electricity produced by the RES, which will be profit oriented and regulated in a way profitable for the producer; 3) construction of equipment for energy production from RES and modernization of the technology for energy production in order to be competitive on the market and to create space for economic operation; 4) education; and 5) media presentation in form of public campaigns for attraction of investments.

In absence of a National energy strategy and Renewable energy strategy, the electricity production by renewable energy sources in Macedonia is regulated by the Law on Energy, as the highest legal document in the energy sector in the country. The Energy Law from 2006, with the amendments from 2008, encourages electricity production by renewable energy sources, closely regulating the work of the Ministry of Economy and the Energy Agency in the field of electricity generation by RES, and stipulates the way of the development of the energy market. The law perceives the prerequisite for national targets for electricity produced by RES as a responsibility of the government.

Besides the Energy Law, under the political pressure of the EU in the last two years the government has drafted most of the secondary legislation needed to ensure implementation of the EU legislation on electricity production by RES. They include: Rulebook for Renewable energy sources for production of electricity (October 2008); Rulebook on the guarantee of origin of the electricity produced from RES (October 2008); Rulebook for acquiring of status of preferential/privileged producer of electricity from RES (2006); Regulations for connection to the national grid; Manual for construction and operation of wind mills (April 2008); and Rulebooks on the method and procedure for establishing and approving the use of feed-in tariffs for electricity produced from biomass, small hydro power plants, wind power plants and photovoltaic systems.

Because of the specificity of the renewable energy, the modern technology and the high capital costs, in order to develop the market of renewable energies there is the need of economic incentives in form of governmental subsidizes. In Macedonia they are in the form of guaranteed feed-in tariffs for electricity production from renewable energy sources. The market operator of electricity is obliged to purchase the total quantity of electricity delivered by the privileged producer under the approved feed-in tariffs.

http://macedonia.usaid.gov/Documents/USAID%20Macedonia%20Energy%20Efficiency%20and%20Renewable%20Energy%20Assessment%20%20June%202009.pdf

Macedonia has promising indigenous renewable energy resources. These include hydropower, geothermal energy, biomass energy, solar and wind energy. At present, the potential for use of renewable energy sources in Macedonia is underutilized. Even though various project developers have identified a pipeline of financially viable renewable energy projects, these have not yet been implemented because of financial and institutional constraints. Existing use of renewable resources in Macedonia includes large hydro power for production of electricity, biomass in the form of firewood and briquettes for heating of households, geothermal energy for heating greenhouses, and solar energy for heating sanitary hot water for households. In the Energy Balance these forms of energy represent about 10% of the total annual primary energy consumption.

Another untapped source of renewable energy is the wind potential. According to recent investigations and measurements there are several potential areas that prove to have sufficient wind power for electricity production, particularly in the area around the town of Stip and several mountain ridges in Southern Macedonia.

A positive initiative in Macedonia has been the recent decision by the Government to subsidize the households that install solar collectors by participating with up to Euro 300 for each collector installed. Still, more needs to be done in order to illustrate the possibilities of renewable energy sources and energy efficiency. One way is for the Government to initiate and support subsidized programs for EE and RES equipment on a continuous and sustainable scale. The Ministry of Economy, which is in charge of the legislation for the energy sector has started the development of the Strategy for use of renewable energy sources. This strategy is expected for adoption in late 2009.

Utilization of renewable energy sources is regulated by the Law on Energy and Law on Construction. Secondary legislation for RES that is adopted in the country is as follows:• Rule book on renewable energy sources for electricity generation• Rule book on the method for issuing guarantees of origin of the electricity generated from renewable energy sources and the content, form and method for maintaining the registry of issued guarantees of origin of the electricity generated from renewable energy sources• Rule book on the methods and the conditions for regulation of the electricity price• Rule book on the conditions, methods and procedure for issuing, changing and revoking licenses for performing energy activities• Transmission system Grid Code• Power distribution system Grid Code

Small HydroIn 1982 the University in Skopje produced a Study that confirmed there is a potential for construction of 406 mini and small hydro power plants with total installed capacity of about 250 MW. According to the Hydrology base of Macedonia, 1088 GWh of electricity could be generated by SHPPs, representing 17.5 % of the technically available hydropower potential in Macedonia. The units range from 50 to 5,000 kW of installed capacity. Since 2007 there were three international tenders for SHPPs launched for award of 20-year concessions (DBOT model) of water for production of electricity. In total about 85 locations were awarded. However, no concession agreements are signed with selected contractors yet. Meetings with local FIs and project developers identified legal issues (land ownership, power purchase agreements, etc) for project financing as a main bottleneck that prevents signing of concession agreements with the Ministry of Economy. In addition, there is a long procedure once the concession agreement is signed, which involves dealing with a number of agencies, institutions and ministries to start plant construction. Signing of concession agreements was announced by the Ministry of Economy for mid June but it is still uncertain if this event will occur.

BiomassAccording to the energy balance of 2007, biomass contributed about 6% in the primary energy supply while 9.5% of the total final energy consumption in Macedonia. The annual production of firewood use for local supply is about 600,000 m3. The total area under forests in Macedonia is 955,300 ha, that is 37% of the territory of the country. The estimate of the annual woodcutting mass is about 1,3 million m³, and the share of firewood is 80-85% of it. Biomass, in the form of wood and charcoal is almost exclusively used in the domestic sector. Industrial or other uses are very small and represent less than 1% of the total biomass final energy consumption. In addition, there is relatively high potential in the country for utilizing biogas from animal manure for energy generation purposes, as well as growing crops for production of biofuel.

From meetings with relevant institutions the assessment team concluded there is a potential to use wood pellets to replace firewood for heating in the residental sector. The estimated annual wood waste in Macedonia is about 180,000 m3. The wood waste is not being utilized. With proper assessment and clear strategy the wood waste could be used for production of pellets. The initial assessment is that the price for pellets produced locally would be competitive to the ongoing price of firewood while pellets have higher efficiency for heating and are much cleaner,

environmental friedly and convenient to use compared to firewood. In order to create the market, sustainable supply of pellets from the local market will need to be developed. The local manufacturers of firewood furnances confirm that the switch to production of pellet furnances is possible to be made if there is a demand from the local market. However, detailed assessment and strategy need to be prepared that will address transition to using technology of pellets. Moreover, better forest practices, reforestation, planting of deserted or marginal land could make a contribution, be it relatively small, to the further development of this sector.

As far as exploitation of the residues of field crops, fruit tree plantations and livestock activities are concerned, there ought to be a significant potential for their collection and utilization, along with waste (including manures from intensive farms). This could be done through incineration or anaerobic digestion technologies. But special studies and surveys will have to be carried out to determine location, logistics, and size of units, economics and viability, likewise with the municipal solid waste and the waste of sewage.

WindAt present, wind energy is not utilised at all in Macedonia. Over the past three years there have been several activities for measuring wind power at several locations and there are undergoing feasibility studies. With grant support by the Norwegian Government, the Norwegian company (NTE) in cooperation with ELEM has undertaken wind measurements in four sites but no further details have been published yet. In 2005 the preliminary wind atlas was developed by the American company AWS Truewind which estimated the wind potential in Macedonia and determined attractive regions for use of wind power. According to the preliminary atlas the most favourable regions are hills and mountains nearby the Vardar River and between Kavadarci and Gevgelija where the wind speed averages 7.0-7.5 m/s. Several areas have been identified to have potential for wind farms development: Kozhuf, Bogdanci, Shashavarlija, Bogoslovec, Venec, Erdjelija, and Demir Kapija. However, data from measurements are not public which hinders the process of attraction of investors interested in wind development.

In order to facilitate investment in wind energy development in Macedonia, the World Bank is assisting in preparation of wind integration study in order to understand implication of integrating wind farms in the mix and to assist the transmission system operator to deal with issues relating to absorption capacity and connection requirements.

SolarThere is no complete data for the solar energy potential in Macedonia; however, initial indications show promising possibilities. Use of solar energy is limited to a small number of solar water heaters. According to the energy balance in 2006, the share of solar energy in the final energy consumption was 7.4 GWh (0.6 ktoe), or 0.04%. Macedonian factor of 8 m2 solar collector footprint per 1000 inhabitants shows low utilization of solar energy. There are about 16,000 m2 total area of installed flat panel solar collectors for heating domestic water. The solar collectors are used in residential sector, hotels, camps, and dormitories. A residential house uses about 2-6 m2 of flat solar collectors which is sufficient to meet the demand for domestic water heating. There are pilot projects where solar systems are used for space heating but their space heating capacity is limited to about 30%. Industrial solar heating water systems are currently not used in Macedonia.

There are local manufacturers of solar collectors in the country. Based on the current production and the level of development there are promising possibilities for the market of solar collectors. The annual rate of growth of the local market is about 10-15%, but much larger for export. The average domestic payback time is 6-7 years. However, several issues need to be resolved as indicated by manufacturers, such as testing/certification/labeling of solar collectors (solar key mark) in order to protect the market from low quality solar collectors, and to provide training to installers for their proper installation. The Government has lowered the VAT rate for solar collectors from 18% to 5%. However, the VAT reduction applies only to the solar collector, which represents about 20% of the cost for the entire system, and therefore does not provide sufficient incentive for their purchase.

PV solar energy is still 300-500% more expensive than alternative fossil fuel derived sources for production of electricity. However, given the high preferential feed-in tariff of 46 €cents/kWh for installed capacity of up to 50 kW, PVs are considered a sound investment. In June 2009 the first PV plant with capacity of 10.2 kW has been commissioned by private investor nearby Skopje.

GeothermalIn general, geothermal waters in Macedonia are of insufficient temperature to be used for electricity production. At present, there are 18 known geothermal fields with more than 50 geothermal sources and wells. The total outflow is about 1,000 l/s with temperatures from 20 ºС to 78 ºС. However, geothermal resources are used for heat production as illustrated by investments in the Kocani geothermal district heating system and the development of agricultural related geothermal projects in Gevgelija and Vinica. According to the “Assessment of Geothermal Resources in Macedonia,” from 2001 the produced geothermal energy in Macedonia is about 210 GWh while potential for geothermal energy is estimated at about 500-600 GWh annualy. Currently there is a substantial exploitation of geothermal energy for individual space heating (2.5 MWth and 25.8 TJ/year), greenhouse heating (58.8 MWth and 557.5 TJ/year), and for balneology and hot water heating (1.0 MWth and 15.3 TJ/year), and there are plans for further development of geothermal projects in Kocani, Bansko and Gevgelija. Geothermal experts indicated that a feed-in tariff needs to be defined for geothermal energy as well as develop an in-depth feasibility study to investigate the potential areas of geothermal energy.

GEORGIA

http://europeandcis.undp.org/home/show/0FD6952A-F203-1EE9-BBB55B1EDF297336

With support from UNDP the German Development Bank (KfW) has launched a 5 million euro Georgia Renewable Energy Fund for the development of small hydro power plants. The renewable energy fund is the first of its kind in Georgia and currently the only source of low interest loans for developers of small hydro projects in the country. Georgia has 26,000 rivers and a potential for 15,000 megawatts of hydroelectricity.

An estimated 68 terawatt-hours (TwH) is technically feasible – 32 TwH of which is estimated to be economically feasible – but currently only 11 percent has been developed. A 2.2 million euro loan from KfW is going towards rehabilitating the Khadori-2 hydropower plant in Pankisi Gorge, one of the poorest regions in Georgia, tripling its design capacity from 1.6 megawatts to 5.4 megawatts. "With this initiative we are kick-starting even more construction works that will benefit different regions of Georgia," said Minister of Regional Development and Infrastructure of Georgia Ramaz Nikolaishvili.

Khadori-2 is the second hydro power plant that will be built or rehabilitated with the KfW funding. Last year, with a loan of 2.1 million euros, the rehabilitation works were launched at the Ritseula small hydro power plant in the mountainous region of Racha, in western Georgia. "For national economies, even a small economy like Georgia, renewable energy can play an important role in promoting sustainable economic growth and in reducing greenhouse gas emissions," said Sophie Kemkhadze, Assistant Resident Representative of UNDP in Georgia. "Renewable energy and in particular small hydro also creates more jobs than the other sources of energy especially in local communities where the dam sites are located, and opens up new opportunities for developing new industries and technologies." "We are very pleased that this loan has been made and that the Khadori-2 project is proceeding now with construction," said UNDP’s John O'Brien. "By supporting this initiative we believe that barriers to the further development of small hydro in Georgia are being removed and that this will help stimulate further development of the small hydro power market." The initiative is an effort to remove barriers to renewable energy, promote renewable energy resources, and assist the country with a secure energy supply, with a particular focus on small hydro.

http://www.investmentguide.ge/files/160_158_588479_Report7PotentialforRenewablesENG.pdf

WindDue to the observation and research, 10 main areas favorable for the development of the wind energy have been identified. However, important parameters for planning the development of wind energy, such as security, environmental protection, and civil expediency, are not analyzed in the framework of the conducted research.

Security: windmills have a negative effect on aerodynamics. Accordingly, locating them near airports and military bases (where helicopters take off and land) can be done only at a safe distance and secure height. Georgian researchers of the potential of wind energy have not taken this aspect into consideration.

Environmental protection: windmills have a negative influence on migrating bird populations. This is especially so if turbines are located on migration routes. Not only can birds crash into the turbines, but they can also lose orientation with respect to their migration route and thus endanger their own survival. It is unlikely that investors will support the development of wind

energy without the existence of a positive environmental impact assessment; Georgian researchers of wind energy potential have not taken this aspect into account.

Civil expediency: in many developed countries, windmills are not located near historic or religious monuments or near traditional (centuries-old) settlements that have particular architectural value. Furthermore, European citizens object to placing wind turbines near their dwellings, given that they make the landscape unattractive and potentially depreciate the value of their houses. If Georgia chooses international tourism as a strategic course, this aspect needs to be considered.

Taking into account these issues, it is difficult to predetermine how many of the established 10 areas of wind energy will satisfy the three parameters analyzed above and all of the other parameters. Substantial research has shown recently that wind energy is the least expensive renewable fuel. Tapping into this source would be particularly beneficial for Georgia, since wind energy potential is especially high during the winter months and early spring, when there is the greatest deficit in the current Georgian energy system.

Solar EnergyIn the report of the organization World Experience for Georgia, which was prepared with data from the Sustainable Energy Center, the Sun House, there exist two maps of the solar radiation intensity in Georgia and there is a significant divergence between them. The experts of the Sun House think that the solar potential of Georgia has not been adequately explored and the research requires financial support and time.

Previously, this organization worked with the financial support of the Scientific Institute of Moscow. Nowadays the main source of its financing is the Georgian Foundation for Supporting the Development of Science. In the context of the small financial aid received from this foundation, the organization has set solar panels in the sparsely populated villages of the mountainous regions of Georgia. The total output of the panels is 25 kilowatt/hr annually, which is, obviously, not a high figure; however, the panels are located in villages situated far from the central transmission lines, where the construction of new transmission lines would be much more expensive than setting up individual solar panels. In addition, these panels enable the families to light up their lodgings, watch TV, and listen to the radio and not feel isolated from the rest of the world.

According to the assessment of the Sun House, in order to satisfy the minimal demand for electricity for the population in these regions, the capacity of the solar panels should be increased to 45 kilowatt/hr annually. For this capacity, financial support of the project would need to be increased to 1-1.5 million USD.

In the opinion of the same experts, there is a good potential in the sector of solar water heaters (mostly in families with medium- and high-income). They have already received several orders from individual home-owners on setting up the solar water heaters. Provided that in Georgia the solar radiation atlas is not yet finally compiled, the experts at the Sun House have not examined the potential of concentrated solar power systems11 in Georgia.

Geothermal ResourcesGeorgia has a potential for geothermal resources. This includes the 250 medium and high-temperature (30°C – 180°C) springs and bores, which are located in the areas of Tbilisi and Zugdidi/Tsaishi and the performance of which is 160,000 cubic meters a day. The potential of the annual production is 350-400 thousand cubic meters.

The temperature of the existing geothermal waters does not allow for the generation of electricity. Utilization of these waters is more convenient in the population for sanitary purposes and for green-houses. The utilization of the potential of geothermal resources in Georgia started in 1951.

BiomassBiomass includes all kinds of animal and plant remains – remains after reprocessing the forest and wood, agricultural, animal and plant remains, waste of food industry, and domestic, municipal, and canalization waste. Animal waste in the process of decomposition produces methane, which is 21 times more harmful than CO2. Old and sick trees and their remains also produce CO2, if they are not reprocessed and isolated.

After Georgia’s declaration of independence, production in energy intensive factories, which constitute the main source of the greenhouse gasses, was reduced. As indicated above, in 1990 Georgia emitted 46 million tons (equivalent to CO2 into the atmosphere). In 2005 this figure amounted to 12 million tons. According to the inventory conducted by the Climate Change Office of Georgia in 2005, in this period the main source of emissions in Georgia had been energy, agriculture, industry, transport, and waste.

Along with the development of agriculture and cattle breeding, the amount of the waste from agriculture and cattle breeding increased abruptly. USAID subcontractor Winrock International helps the population to establish small bio-digesters in order to support Georgia’s rural development. The bio-digesters enable the population to produce individual free sources of biogas and to participate in the process of cleaning up waste. The UN Development Program also supports the village populations of high mountainous regions of Georgia by supplying bio-digesters and energy efficient ovens.

Bio-fuelTransport is one of the largest sources of greenhouse gas emissions in the world. For the purpose of reducing transport emissions, many developed countries actively endeavor to increase the production of vegetable fuel and to reduce consumption of fuel produced through hydrocarbons. However, recently, the large increase in food prices has raised many questions concerning the production of bio-fuel. Is it possible that the increased production of bio-fuel will result in more price increases on food products and in further aggravating the living standards of socially vulnerable segments of the population in poor and transitional countries?13Moreover, it is well known that the production of bio-fuel in the world is subsidized. Agriculture is also subsidized. The question is what is more necessary to subsidize: agricultural food products or products producing biodiesel? For a mountainous country like Georgia, the prospect of producing bio-fuel should be closely investigated in order to understand how to use land more efficiently and its relation to the competition with food products. Which is better, should the

government subsidize agricultural production or biodiesel and bioethanol production?In its research concerning bio-fuel potential World Experience for Georgia relies on the research of the Center of High Technologies with regard to the potential for producing bioethanol on the basis of topinambur and for biodiesel - rape. According to this research, for the production of 10,000 tons of biodiesel on the basis of rape 12,000 hectares of land area is necessary. After reprocessing fodder and technical glycerin are obtained. For obtaining 10,000 tons of bioethanol from topinambur three hectares of land area is necessary. Sugar, pharmaceutical products, and other additions are produced through reprocessing. According to the research, these bio-fuels can be competitive with traditional hydrocarbon fuels in Georgia.During the meeting with the team leader of the project it was ascertained that they have not taken the cost of capital and the existing tax regime into account14 in calculating expenses, since they believe that the state has to encourage the production of bio-fuel in the country through a favorable tax regime and other measures.15 Therefore they found bio-fuel production competitive with hydrocarbon fuels in Georgia.

Legislative BasisIn the introductory part of this report it was outlined how much attention developed countries pay to the development of renewables. Without a comprehensive state policy, the political will to finance the technologies, and a favorable tax regime, the development of renewable energies would be impossible.

At this stage, the conditions for supporting the development of renewable energies do not exist in Georgia (except for small hydroelectric stations; according to the new laws on oil and gas, the independent commercial operator is obliged to purchase electricity produced by them).

The resolution of parliament of June 2006 called the Main Directions of Georgia’s State Energy Policy recognizes the necessity of maximal utilization of renewables (hydro, wind). However, it also points out that the development of renewables should take place in a competitive environment.

Nowadays, the development of renewables in a competitive environment is impossible; therefore, this part of the resolution opposes itself and, in fact, rules out the possibility of the development of renewables in Georgia.

In 1998, one year after the adoption of the resolution a state concept on the development of renewable energies was elaborated and subsequently approved by presidential edict. The concept considered subsidization, guaranteed purchase of energy with favorable prices, and tax privileges. The edict has not been followed up with the establishment of an action plan or any type of implementation document.

The tax code operating until January 2005 allowed for the liberation of the production of renewable energies from value-added tax, taxes on land, ownership, and profit, and from tariffs on importing, producing, and utilizing the equipments necessary for the development of renewable energies. The new tax code and rules on tariffs do not consider such privileges. The experts of the Sun House, which use imported solar panels and heaters, pointed out that after the adoption of the new tax code this equipment has risen in price by app. 30-40% (because of value-

added and profit taxes).

GREECE

http://www.energy.eu/

Greek target: 18% (2005 = 6.9%)

Key issuesHydro power has traditionally been important in Greece, and the markets for wind energy and active solar thermal systems have grown in recent years. Geothermal heat is also a popular source of energy. The Greek parliament has recently revised the RES policy framework partly to reduce administrative burdens on the renewable energy sector.

Main supporting policiesGeneral policies relevant to RES include a measure related to investment support, a 20% reduction of taxable income on expenses for domestic appliances or systems using RES, and a concrete bidding procedure to ensure the rational use of geothermal energy. In addition, an inter-ministerial decision was taken in order to reduce the administrative burden associated with RES installations.

Greece has introduced the following mechanisms to stimulate the growth of RES-E:o Feed-in tariffs were introduced in 1994 and amended by the recently approved Feed-In Law. Tariffs are now technology-specific, instead of uniform, and a guarantee of 12 years is given, with a possibility of extension of up to 20 years.o Liberalisation of RES-E development is the subject of Law 2773/1999.

Fuel taxes are not applied to biofuels. Tax incentives were in place to promote RES-H, but these have been suspended for budgetary reasons.

http://www.investingreece.gov.gr/default.asp?pid=36&sectorID=38&la=1

Increasingly, renewable energy sources play an important role in Greece’s energy production profile. Current production is based on large-scale hydropower stations operated by PPC. Renewables account for approximately 5% of electricity production, not including the 5% contribution of hydropower stations.

The present investment framework calls for a striking increase in production from Wind, Solar, Geothermal, and Biomass/Biofuels, which are expected to contribute increasingly as a transport fuel.

In the first semester of 2011, the total installed capacity of RES stood at 2022.2 MW, 75% of which came from wind energy production, 11.5% from solar, and the remaining 13.5% from biomass and hydro-electric production units.

Greece’s target is to produce electrical energy from RES at a 40% share of the total electrical power by 2020.

WindWind, or aeolic, power is driving growth in the renewables sector and represents a huge investment potential in Greece. The superb wind resources in Greece are among the most attractive in Europe, with a profile of more than 8 metres/second and/or 2,500 wind hours in many parts of the country. Capacity increased by an average of 30% annually between 1990 and 2003 and almost 30% of total capacity was installed in the period of 2003-2004.

It is estimated that today, 1400 MW of wind farms are operating, while the target is 7,500 MW to be installed by 2020, from which 300 MW are attributed to offshore wind farms.

Greece’s favourable, long-term legislative framework ensures RES investment and has gained the confidence of major investors. Among the global giants active in Greece are Spain’s Endesa, in cooperation with the Mytelineos Group, Iberdola in cooperation with Rokas, Acciona and Gamesa. In addition, France’s EDF and Veolia, Italy’s Enel, and Germany’s WPD and WRE are present in this market and look forward to continued success and growth.

Wind energy has the advantage of being a priority sector of the Greek government. Renewables can be developed in Greece at very competitive costs and the target is for renewables to have 40% share of electricity production by 2020. Because these targets are legally binding, due to EU regulations and Kyoto Protocol agreements, investors can be assured of stable, long-term market objectives in the Greek Res market.

SolarOne of the core components of Greece’s energy profile will be solar, or photovoltaic, energy. Greece has a superb sun radiation capacity and it is estimated that one third of Greece’s energy requirements could be met with solar. Experts believe that the market will grow impressively and have a value of more than 4 billion Euro in just a few years.

Greece is encouraging the development of solar thermal energy and a number of small- and mid-size companies have invested in this sector. As a result, today’s capacity in installed PVs has reached 340 MW and is expected to reach 2.200 MW by 2020.

The largest of these companies install between 20-250 kWp per year while the total annual addition during the last 3-4 years has been on the order of 900kWp.

Among the many companies that have invested in Greece’s solar sector are Conergy and WPD from Germany, EDF-EEN from France, Babcok and Brown from Australia, Greece’s PPC, and the Greek-Spanish alliance of Rokas-Iberdrola. Next Solar from the United States is in the process of initiating a manufacturing facility.

Investors are discovering the high potential that solar has in the Greek market. During the summer months, when radiation is at its peak, Greece has a huge increase in demand due to the influx of millions of tourists. In addition, there is a growing energy need in rural areas and

islands as these areas develop. And state agencies, industry, and many hotels have shown a strong willingness to use photovoltaic energy.

GeothermalGreece lies in a geographic position that is favorable to geothermal resources, both high temperature and low temperature. High temperature resources, suitable for power generation coupled with heating and cooling, are found at depths of 1-2 kilometres on the Aegean islands of Milos, Santorini, and Nisyros. Other locations that are promising at depths of 2-3 kilomteres are on the islands of Lesvos, Chios, and Samothraki as well as the basins of Central-Eastern Macedonia and Thrace.

Low temperature geothermal resources are found at the plains of Macedonia-Thrace and in the vicinity of each of the 56 hot springs found in Greece. These areas include Loutra-Samothrakis, Lesvos, Chios, Alexandroupolis, Serres, Thermopyles, Chalkidiki, and many others.

Low temperature geothermal applications include space heating and in agricultural uses (greenhouse heating, the drying of fruits and vegetables, aquaculture and seawater desalination, and in spas), providing an ideal synergy with other widespread commercial ventures in Greece.

As technological advances allow for the exploitation of lower temperature geothermal resources, found at just a few metres below the ground surface, the heating and cooling of water for domestic use, for instance, becomes highly viable and attractive. Such applications lessen reliance of non-RES resources, are highly reliable and cost effective, and emit far less carbon dioxide.

BiomassBiomass refers to energy originating from organic materials such as trees and forest plants, agricultural products, and waste streams from a variety of sources. Through heat, these products are transformed into biofuels, bioheat, or bioelectricity. Wood is the oldest form of biomass known to man.

Current installed capacity is 43 MW. Local authorities, in an effort to manage resources in a cost effective manner, are targeting biomass systems as the focus of investment, promising this to be a growth sector with significant potential.

Due to the increased interest in green energy, financial support from the EU and the Greek government, the biomass market is expected to grow considerably. Reforms to the EU’s Common Agricultural Policy (CAP) favour the cultivation of certain crops for the production of biofuels.

Biofuels Biofuels, identified as having an important role to play in transportation, will substantially reduce CO2 emissions and reduce dependence on imported energy sources.

The most common biofuel is biodiesel, or methyl ester, that is primarily produced from oil seeds (sunflower, rapseed) and may be used independently or in combination with diesel in diesel

engines. Bioethanol is produced from plant sugars, cellulose and starches (wheat, corn, sorghum, sugar beets) and is used alone or in combination with gasoline in specially adapted engines. It may also be converted to ETBE, a gasoline additive that is more environmentally friendly than current alternatives.

EU regulations stipulate that Member States must replace 10% of transport fuels with sustainable biofuels by 2020. Greece is bound to comply with these stipulations.

Investors will find a wide range of opportunities in both the biomass and biofuels markets. Currently, more than 10 companies operate in the Greek biofuel market, including ELIN, EL-VI, Pettas, and Agroinvest. Other companies preparing to participate in this market include Hellenic Sugar Industry, PPC, and Biodiesel.

http://www.cafebabel.co.uk/article/34457/renewable-energy-greece-pefki-success-story.html

In a nation apparently lacking a green conscience, it is surprising to learn that 99% of private construction utilises solar energy to generate domestic hot water (for bathrooms, kitchen and appliances). In per capita utilisation of solar for such functions and in an avant-gardiste Europe in the field, Greece is second in the world only to Cyprus, where this type of application has commendably raised to 100%. In 2000, the European union (EU) asked its member states to achieve 12% of electricity production from renewable sources by 2010: Greece has already exceeded 15%. More than 320 sunny days a year in the service of science and energy savings.

Before the EU ever took fiscal measures on the issue, private Greek initiatives had already advanced what is now the law concerning solar panel installations in properties with new construction. In the 1980s, pioneering companies in the sector, such as Sole S.A., decided to join forces to promote this emerging ecological consciousness, and even dared to produce their own commercials. Vangelis Lamaris, Sole’s marketing director, explains that using the only two television stations that existed twenty years ago, the association of companies took the opportunity to raise awareness of their new product through a fifty second advertisement that ran for six consecutive months. ‘It was so successful that today it is rare to see a house without panels,’ he underlines. Unlike Spain or Italy, where city laws make it obligatory to use solar panels for generating thermal water and include a substantial incentive structure, the Greek state does not intervene at all in this facet of solar energy. This laissez-faire approach has led to an appreciable reduction in installation and operation costs. Lamaris maintains that the maximum investment of a family of four (around 1, 000 euros or £834), can be recovered in four years by most estimations. The town of Pefki is a clear example of Greece’s progress. Located on the outskirts of Athens, in 1989 it allocated a ‘solar kit’ to various social housing units; today the area of Pefki is nicknamed shine floor (a reference to the reflective solar panels). Electricity at a bureaucratic paceIn solar photovoltaic energy, however, bureaucracy does slow progress. Here the government invests in the establishment of this innovative means of generating electricity. Applied on a grand scale, the Greek programme provides financing for 40% of these types of electricity

generation projects at the rate of 40 euro cents (30p) for every kWh (kilowatt-hour). Despite their efforts, sources at the environment ministry confirm that financing requests are piled up in the building’s hallways due to the lack of technical training for a survey and study of the various cases that arise. ‘Occasionally, permits expire and it is necessary to start again,’ affirms the officer-in-charge of this function. Kostas Tigas, representative of CRES (centre for renewable energy sources and saving), corroborates this assessment. With certain reservations, Tigas chastises the country’s mismanagement in squandering the funds received from Europe and Greece’s own government. In 2010, one billion euros were allocated for the stimulation of renewable energy use. ‘More than half remains only on paper,’ he says, ‘which explains our technical deficiency when attempting to take advantage of the resources this country enjoys, like sun and wind.’ Since political survival does not depend on development of green programmes, as it does in northern Europe, such waste is not yet punished electorally. Currently the great technological commitment is to obtain air conditioning and refrigeration from solar energy, which is called ‘illiakós klimatismós’. Until the start of the economic crisis, the EU subsidised 50% of this type of installation. Today, as a technician of Sole S.A. acknowledges, ‘where twenty-six operators worked, now there are four’. The demand has more than halved from two years ago. Sole S.A. was the pioneering firm which took the first giant step to make use of the Mediterranean sun. Twelve years ago, it risked developing a 1, 500 square metre facility to supply air conditioning and electricity to a perfume factory, located fifty km from the Greek capital. The cost then was 240, 000 euros (£199, 972) plus 2, 200 (£1, 833) in monthly maintenance fees. According to the accounts of the factory’s chemists, these expenditures have been ‘emancipated’, because they now save 600 kWh per year, 15% of their total energy need. To date, the outlay required for a cooling unit with this system does not pay off for private domestic use, because for an area of 200 square metres the costs would exceed 20, 000 euros (£16, 664). Faced with growing demand in Crete, Budapest and Spain, among many other countries, where there are currently many large companies and institutions that require service, Lamaris verifies that these requests are a ‘strong point’ in the exports of Greece and will eventually help lower the still exorbitant prices of the units. Therefore, one can infer that as interest in the private sector is awakened as units become affordable, the government currently frozen by the crisis would also support the use of illiakós klimatismós.

HUNGARY

http://www.energy.eu/

Hungarian target: 13% (2005 = 4.3%)

Key issuesAfter a few years of little progress, major developments in 2004 brought the Hungarian RES-E target within reach. Geographical conditions in Hungary are favourable for RES development, especially biomass. Between 1997 and 2004, the average annual growth of biomass was 116%. Whilst environmental conditions are the main barriers to further hydro power development, other

RES such as solar, geothermal and wind energy are hampered by administrative constraints (eg the permit process). As regards the policy framework, promotional schemes are being used and refined, and subsidies are available under certain conditions for the development of RES. RES-E 2010 target was achieved in 2006 (5%), with the main contribution being from biomass. However, domestic production was at 4.4%.

Main supporting policiesThe following measures exist for the promotion of RES-E:o A feed-in system is in place. It has used technology-specific tariffs since 2005, when Decree 78/2005 was adopted. These tariffs are guaranteed for the lifetime of the installation.o A green certificate scheme was introduced with the Electricity Act (2001, as amended in 2005). This act gives the Government the right to define the start date of implementation. At that time, the feed-in tariffs will cease to exist.o In July 2007, two advantageous tax levels were introduced for bioethanol, and bioethanol for E85 has been completely exempt since January 2007. A similar procedure will be introduced in January 2008 for biodiesel.

Amendments of the Act on Excise Tax in 2005 determine that the previously compulsory blending standards will be removed (from June 2007 for bioethanol and from January 2008 for biodiesel). A new Renewable Energy Strategy and an Energy Efficiency Strategy and Action Plan were drafted in July 2007.

http://www.itdh.com/engine.aspx?page=Itdh_Priority_Sectors_Renewable_Energy

After joining the European Union (EU) renewable energy utilization started to grow intensively in Hungary. While before 2004 green electricity production amounted to only 0.5% of the total electricity production, by Q1 2009 it reached 4.3%, and renewables (RES) around 5.1% in total primary energy supply (TPES). This growth represents a fivefold increase in electricity production compared to 2001. At present biomass represents almost 90% and geothermal 8.2% of renewable energy use. Hungary is rich in renewable energy sources. Pellets and other solid biomass are the most widely used resources in line with present renewable generation ratio.

In 2008, the government approved the Renewable Energy Strategy for 2007-2020. The policy targets the increase of RES production to 15% by 2020. The strategy will favour decentralized energy production, the cogeneration of heat and power and the establishment of small power stations utilizing renewable sources locally. The strategy forecasts a substantial amount of new investments by 2020, in the field of biomass, wind, solar and geothermal energy. Electricity generation from RES will grow faster than heat generation.

http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/HUNGARY_RES_Policy_Review__09_Final.pdf

Hungarian Renewable Energy (RES) electricity target for 2010 has been already achieved in 2005 especially due to the biomass contribution. For solar, geothermal the feed-in tariff is too low, for wind because of system security reasons a 330 MW capacity limit was set until 2010. According the new legislation new wind capacities (over 330 MW) can only be established by a

tender. As regards the policy framework, promotional schemes are being used and refined, and subsidies are available under certain conditions for the development of RES. Until 2020, Hungary aims at covering 13% to 15% of its energy demand from renewables. Most of the excess capacity will be provided for by new biomass power plants.

KEY FIGURES - The share of RES in total primary energy consumption was of 4.87% in 2007. Biomass in

the main RES source representing more than 89% of RES primary consumption, follow by geothermal (8.2%) and Hydropower (1.7%)

- The share of RES in the gross final energy consumption was 4.3% in 2005.- The share of RES in the gross electricity production was 3.7 % in 2006, in 2007 4.3%.- The share of biofuels in the transport sector in 2006 was 0.28%.- Hungary energy dependence on imports amounts to 63 % in 2005

RES TARGETS Mandatory targets set by the Directive on the Promotion of the use of energy from renewable sources

- 13% share of RES on the final consumption of energy in 2020.- At least 10% share of renewable energy in final consumption of energy in transport by

2020.

Support for RES Electricity

Feed in tariff OLD REGULATION: The Hungarian RES-e Support mechanism is based on investment subsidy and on a feed-in-tariff. The old feed-in-tariff regulation was adopted by the Electricity Act in 2001 and by the ministerial decree (GKM 56/2002). The law did not define a time limit for the feed in tariff, the tariff being in principle guaranteed for the life time of the installation. However, the electricity Act gave the Government the right to define a start date for a green certificate system. At that time the feed in tariff would have ceased to exist.

NEW REGULATION (2008 onwards): A new legal framework was approved in 2007. Some of the issues that the new legal framework contains are:

- Feed-in-tariffs for Renewables and Waste (only for the licensed period and amount).- Certificates of origin for RES-electricity.- Hungarian Energy Office sets the amount of RES-electricity that can be sold with a feed

in tariff. Period and amount depend on the return period of the investment.- Possibility of introducing green certificates in the future. The electricity Act gives the

Government the right to define a start date for a green certificate system. At that time the feed in tariff will cease to exist.

Support for RES Heating and Cooling

The Environment Protection and Infrastructure Operative Programme (EPIO) of Hungary's National Development Plan specified measures to promote renewable energy sources. In 2006, the EPIO provided 280 million HUF in subsidies to three types of energy efficiency project: the

modernisation of buildings and institutions, the development of district heating systems, and the promotion of cogeneration. Since its beginning the program focused on:

- Installation of systems producing wood chips and pellets, baling equipment, and vegetable oil presses

- Promotion of investments in renewable energy (biomass, geothermal energy, solar collector, PV, wind power, hydro power)

- District heating systems using biomass or geothermal energy or waste deposit gases modernisation of buildings, district heating systems, application of cogeneration.

Support for Biofuels Tax exemption for Biofuels

From July 1, 2007, there has been a tax allowance of 8.3 HUF/l for 4.4% biofuel blended into petrol. From January 1, 2008, the same allowance will apply to diesel oil. From July 1, 2007, and January 1, 2008, respectively, fuels sold by MOL Rt3, will contain 4.4% bio-ethanol and biodiesel.• Sales of biofuels in Hungary receive a tax benefit. To avoid a tax gap, sales of petroleum fuel that doesn’t contain biofuel will carry a tax penalty.• For producers: the quantity produced is free from excise tax until 2010 if the whole quantity is blended in Hungary, transported from a Hungarian tax depot to a foreign tax depot, or sold to a registered distributor.• For distributors: excise tax can be reclaimed if biodiesel is blended up to 5%

Support to all RES The Operative Programme for Environment and Energy (KEOP) for the period 2007-2013, and financed by EU Funds, will promote incentives to RES technologies - 2 main fields for Energy: Energy savings and Renewables

- For Renewable Energies (RES-E and heat generation): 305 million USD: Supported projects: biomass, biogas, geothermal, small scale wind turbines

- For Biofuels: 53 million USD : Supported projects: biofuel factories middle- and large scale capacities

The National Energy-Saving Programme (NEP) also promotes the use of renewable energy sources through subsidies, which may be combined with soft loans allocated by the Energy Saving Credit Programme 2008. The maximum subsidy possibly granted amounts to 25% of the investment costs or 1,000,000 forint per flat. The Energy Saving Credit Programme 2008 subsidises the use of renewable energy sources through low-interest loans and may also grant loans on top of subsidies allocated under the NEP-2008.

The subsidies awarded by the NEP programme and the low-interest loans may be used jointly or independently. Applicants may decide which option to take; however, they need to comply with the respective application conditions. Contracts on loans granted under the programme may be concluded until 31st December 2010.

http://www.euroqualityfiles.net/AgriPolicy/Report%202.2/AgriPolicy%20WP2D2%20Hungary%20Final%20Rev.pdf

The RE supply in Hungary was determined mainly by the wood and wood wastes till 2006/2007, which was used as firewood and wood wastes for biomass; even the trend of increase was determined by that. Since then other sources are strongly influencing the trend, while the significant increase of wood and wood waste has tampered. The share of wood and wood wastes had a speed increase in RE supply till 85% in 2005, and then a moderate decreasing started.

The most important source after wood is geothermic energy, which provides nearly constant 3.6 PJ annually (capacities are little used in Hungary), which makes a sinking share in RE contribution. Liquid biofuels are the most dynamic RE since 2005/2006; however, its share is only a little higher than 2%. The slightly fluctuating hydro energy supply is stable but its share is falling. Wind energy is not much utilised in Hungary, and quite late was introduced. The solar energy is even less utilised, however in 2008 it has increased significantly.

In the energy balance the RE share is approaching 6%, which is almost the half of the commitment for 2020.

The most entire description of strategy by the government is “The Strategy for Increasing the Use of Hungarian Renewable Resources, 2008-2020”, which was made by the co-ordination of the Ministry of Economy and Transport in July 2008, which was accepted by the Government.

In Hungary, there is no law on RE. Several laws, decrees and state agency bylaws are in function; without co-ordination and harmonisation. The most promising RE source is biomass in Hungary. Its share was the highest in 2004 (85%) and it is slightly declining. The Strategy expects a 63-70% share for 2020; however its absolute energy supply is dynamically expanding.

Biomass in a great extent is dendromass, and utilised by burning. That way, electricity is produced. RE commitments in electricity was achieved easily as three power stations changed some blocks to wood heating, and two others to mix with wood heating. Electricity producers are sponsored by compulsory purchase and preferential green electricity price, which is fixed by the government but at end paid by the consumers. The higher demand for wood resulted in an increased price. To ease that problem, the government excluded those quantities from the preferential price, which were produced by logs or higher class forestry products. These details are regulated in the LXXXVIth Law of 2007 on Electric Energy. A great problem for the RE market that decrees based on this Law are often changed. RE electricity providers in return of a compulsory purchases, a prescribed timetable should be accepted based on their capacities and production conditions. Deviations from that timetable (volatility) are chastened by penalties. However, some deviations are allowed: biogas plants may vary the output by ±20%, wind parks by ±50% and hydro powers by only ±5%. The penalty is € 0.02 per kWh over the previous ceilings. The highest possible fixed price of the green electricity is € 0.10 per kWh.9

Herbaceous plants and agricultural by-products as straw compose another biomass source. Important varieties of them are energy grass and reed. The latter has much better return but needs wet areas but worse lands than average are sufficient. It is a benefit of both of them that they do not attract filches and muggers; as such rural crimes have been multiplied in recent years.

The management of manures in agriculture is strictly regulated in Hungary. Animal plants must

have storage space for manures at least 8 months. This restriction supports establishing biogas plants, but tenders on Environment and Energy Operational Programme target so big projects that only exceptional animal producers may have access.

ISRAEL

http://newsblaze.com/story/20100615142831zzzz.nb/topstory.html

Solar Power Energy Systems and Plants

In 2009 SolarPower Ltd., an Israeli solar power system integrator and project developer built a 50-kilowatt rooftop solar power system for HP's Indigo division facility in Kiryat Gat, Israel. SolarPower, along with U.S.-based SunPower Corp., a manufacturer of high-efficiency solar cells, solar panels and solar systems, dedicated the new system on Dec. 21. Construction of this project began in October 2009 based on SolarPower's design and SunPower's high-efficiency solar panel technology. Said SolarPower Co-CEO Alon Tamari, "We are very pleased to have completed the first solar power installation for the high-technology industry in Israel."

Solel Solar Systems Ltd., formerly an Israeli company, designed the key components for a new solar energy plant in Nevada that produces 64 megawatts of electricity, enough to power 48,000 homes in the Las Vegas Valley. The plant uses 190,000 curved parabolic mirrors, concentrating desert sunlight to 750 degrees Fahrenheit, in order to heat synthetic oil inside tubes that, in turn, create steam and drive a turbine to produce electricity. These liquid tubes or "solar receivers" are specially coated glass and steel vacuum tubes designed and produced by Solel Solar Systems Ltd. with Schott North America Inc. of Elmsford, N.Y. The new plant uses about 19,300 of these 13-foot (four-meter) receivers.

Solel was acquired by Siemens in late 2009 for around $418 million. In November 2009 Siemens introduced the UVAC 2010 (Universal Vacuum Air Collector), which increases thermal heat production beyond currently available levels by absorbing optimal amounts of solar energy and converting it into heat. This new technology is expected to increase cost-effectiveness for those involved in solar field development. Solel and Pacific Gas and Electric together acquired a $2 billion contract in July 2007 to build the world's largest solar energy park in California by 2011 that will provide enough electricity for 400,000 homes and stretch over 6,000 acres (23 sq. km.). It will use 1.2 million mirrors and 317 miles of vacuum tubing to harness the power of the desert sun, delivering 553 megawatts of clean energy.

Since 1992, Solel's technology has been powering nine solar power stations in California that generate 350 megawatts of electricity.

Israel is likewise increasing its domestic solar power operations. In February 2008, the Israeli government issued a tender for the construction of two solar energy plants in the southern Negev desert. The two plants will supply 250 megawatts of electricity, equivalent to three percent of Israel's electricity consumption. These new plants, along with 300 megawatts from wind power, will permit Israel to produce 600 megawatts of renewable energy by 2011-2012.

Affordable Solar Power Curved Parabolic Mirrors

Bar-Ilan University nanotechnology expert Professor Arie Zaban has invented a photovoltaic cell that could dramatically reduce the cost of producing electricity from solar power. Zaban, who heads The Nanotechnology Institute at Bar-Ilan, says that the cells, which are composed of metallic wires mounted on conductive glass, can form the basis of solar cells that produce electricity with efficiency similar to that of conventional, silicon-based cells while being much cheaper to make. 3GSolar (formerly Orionsolar), a Jerusalem-based company that has entered into a partnership with Bar-Ilan University, is developing commercial applications for inexpensive, dye-based photovoltaic cells based on Zaban's work.

International Council for Local Environmental Initiatives

In February 2008, mayors from 15 Israeli cities joined the International Council for Local Environmental Initiatives' Cities for Climate Protection Campaign, committing to reduce 20 percent of greenhouse emissions in their cities by 2020. Goals for these cities, consisting of 3 million citizens (40 percent of Israel's total population), include reducing gas emissions from factories, encouraging recycling and developing more environmentally friendly public transport.

Wind Turbines

Israeli executives Shlomo Shmeltzer and Dr. Eli Ben-Dov, along with Epcon Industries, aim to build a wind-turbine farm that will generate 50 megawatts of power in Israel's southern Arava region. Together, the two men also installed 100 megawatts of turbines in northern Israel.

Geothermal Energy

Israel's Ormat group is doing pioneering work in another alternative field of energy, geothermal energy. The geothermal plants harness steam, heat or hot water from geysers or hot springs on the earth's surface to produce electricity. Ormat operates 11 geothermal power plants in five countries, providing 360 megawatts of power to 500,000 people.

Despite the absence of formal diplomatic ties between Indonesia and Israel, Indonesia's state electric company awarded Ormat, along with two other companies, a tender in July 2006 to construct a new 340-megawatt geothermal power project on the island of Sumatra. It will be the largest such facility in history. Years-long negotiations between the government and the local developer over electricity price revisions have delayed work on the project, and in 2010 the Indonesian government slashed by 18 percent its anticipated energy from geothermal sources.http://www.renewableenergyworld.com/rea/news/article/2012/01/renewable-energy-recap-israel

Israel currently obtains around 43% of its energy needs from coal and 37% from gas. Renewable energy sources represents only 0.1% of total capacity. Israel has been looking to diversify away from coal and oil for some time. Its efforts were given a boost by the recent discovery of substantial offshore reserves of natural gas. Furthermore, the

Government has set a goal of generating 5% of the country's electricity needs from renewable energy by 2014, increasing to 10% by 2020. The Government believes this target will result in US$5b (€4b) of investment in the sector and deliver 2.76GW of renewable electricity capacity by 2020. Policy The electricity sector in Israel is regulated by Electricity Law 5756-1996. Its main mandate is to ensure the reliability, availability, quality and efficiency of electricity distribution in the country. It also promotes the conditions for competition and cost minimization. The Israel Public Utility Authority (PUA) approved a FIT policy in June 2008 coveringg small domestic and commercial plants for both solar and wind. The tariff levels were circa €0.30/kWh for wind turbines up to 50 kW (with a 30-MW aggregate cap), and circa €0.31/kWh for solar installations above 50 kW and below 5 MW (with a 300-MW aggregate cap). Tariffs have subsequently been decreased from their original levels for both solar and wind; however, the size of plants and caps which are acceptable for the subsidies has been increased, such that solar plants above 12 MW will now receive the subsidies. The rates as of 2011 are circa €0.20/kWh for solar (which will be applied retroactively to 200 MW of approved projects), while wind receives circa €0.08/kWh. The new aggregate caps are 460 MW for large solar fields, 100 MW for rooftop PV arrays and 800 MW for wind farms. In October 2011, the mid-sized solar FIT was again cut, by a further 25%, for projects not reaching financial close within 90 days of the announcement. There are further supporting mechanisms for renewable energy which include tax cuts, tax exemptions, facilitation of land availability and investment grants. For example, there are lower corporate tax rates for companies with foreign investment, where the greater the level of foreign investment, the lower the tax rate (as low as 10% for foreign investments of over 90%). The Renewable Energy Association of Israel (REAI) was also established in 2009 to promote the implementation of renewable energy. Its main activities are lobbying and promoting implementation of renewable energy by the various authorities and ministries of Israel. Internationally, Israel is engaged in joint research efforts under a number of bilateral agreements, including the BIRD Energy program for joint US-Israeli renewable energy development. Grid Israel Electric Corporation (IEC) is the supplier of virtually all electrical power in Israel. IEC builds, maintains and operates themajority of power stations, substations and the transmission and distribution networks. The State of Israel owns around 99.85% of the company. At present, the grid can only absorb between 5%-20% of its energy from renewable sources due its inability to tolerate fluctuations. In the near term, this doesn’t appear to present an issue; however, investment will be required should Israel substantially increase its level of renewable

energy generation in line with its targets. Israel also lacks interconnections with neighboring countries (with the exception of Gaza and the West Bank), which in the future could prevent large-scale exports of electricity within the region and further afield to the EU. Solar In 2009, Israel was the top-performing country in the world with respect to the relative growth of its solar PV market, experiencing a near 20 fold increase over the previous year and an additional 21.5 MW of installed capacity. Cumulative installed capacity now stands at 61 MW, of which around 88% represents grid-connected systems. This rapid growth is in part due to the country’s excellent natural solar resources, with some regions boasting 350 days of direct sunlight each year. Solar CSP is also expected to experience significant growth in the near future, with over 300 MW of plants currently inplanning. For example, a 240-MW thermal plant is due to be constructed at Ashalim in the western Negev desert, at a cost of US$750 million (€552 million), becoming operational in 2014. Wind Israel also boasts relatively good natural resources for onshore wind, with an estimated 2.5 GW of potential. Current installed capacity stands at only 6 MW, though the Government has set atarget of 800 MW by 2020. This figure coincides with the totalquota of wind projects available for FIT subsidies. In September 2010, Israel’s Prime Minister gave “national infrastructure project” status to a US$400 million (€294 million) wind farm on Israel’s Golan Heights, clearing it for fast-track approval by regulators. The new farm will comprise 70 turbines totaling 155 MW, and is expected to be completed by mid 2012. Other Israel has made less progress in the way of other technologies besides solar and wind. There are minimal amounts of other technologies such as small-scale hydro, biomass and geothermal, though small-scale pilot plants are being undertaken. There are no indications that the FIT subsidies are due to be extended to these technologies in the short term.

http://www.planbleu.org/publications/atelier_energie/IL_National_Study_Final.pdf

While Israel has over 1.3 million solar water heaters producing the equivalent of over 4% of Israel’s electricity consumption as a result of mandatory solar water heating installations, it has only 886 kW of photovoltaic installations. In fact, the Ministry of National Infrastructures (MNI) estimates that, without significant government involvement, solar penetration will continue to lag behind most European countries through 2025. However, without the initial government incentives, it is unlikely that solar PV and thermal systems, with facilities costs exceeding $4,000

per peak kW and few suppliers, will reach the necessary scale to be competitive with fossil fuels.

Besides solar, Israel’s renewables potential is limited. Biomass potential is about 8.6 Mtoe, primarily from municipal waste. Israel’s wind potential is also rather low, with maximum capacity around 600 MW (or about 1.75 billion kWh), and faces the additional difficulties of location and grid interconnection.

In 2004, the MNI published a set of policies and procedures to promote renewable development. The Israel Public Utilities Authority – Electricity (PUA) has since developed tariffs, licensing procedures, and codes of conduct for renewable electricity generators. Renewable electricity includes solar, wind, biomass, and all hydroelectric facilities except for pumped storage). To date, renewable developers’ response to these government initiatives has been slow, and less than 100 MW of renewable generators have received conditional licenses. In addition a 100-MW solar thermal generating station in the Negev (to be profiled below in greater detail) may receive a license in the near future.

Nevertheless, the lack of renewables in Israel’s energy portfolio is noteworthy; Israel’s entire electricity generation mix in 2005 consisted of coal (75%), natural gas (11%), with the remainder consisting of oil, gasoil, and jet fuel (14%). Moreover, Israel’s statistics on primary energy supply include no mention of renewables, indicating that renewables’ share of primary energy supply is less than 0.1%, far less than the 2% to which the Government has committed since 2003.

In 2002, the Government of Israel set a target of at least 2% of all electricity to be supplied by renewable energy by 2007; this target rises to 5% by 2016. Reaching this target requires the construction of large solar and wind plants, as well as a mixture of small hydro, biomass, and PV systems). Currently, although there are individual programs aimed at promoting RE, there is no overarching national strategy to achieve the Government-set RE targets.

The Energy Master Plan commissioned by the MNI analyzes alternatives for RE, and makes recommendations for strategies to achieve specific RE objectives. However, rather than developing strategies, the Government has initiated individual programs with a few goals in mind. Some examples of programs include: incentive mechanisms for renewable electricity generation and co-generation, and stricter appliance efficiency standards, which are consistent with broadly defined goals such as improving Israel’s balance of payments, improving public health, and promoting domestic achievements in renewables development.

The Government’s RE priority is solar energy, and the MNI has set an initial goal for solar thermal energy of 100 MW at an estimated cost of $225-$250 million, as a pilot project that should grow over time. Despite this emphasis on solar development as a policy matter, however, the Government has budgeted little for solar R&D; PV-related R&D spending was only NIS 688,000 in 2004 with an additional NIS 200,000 from non-governmental public funding.27 In addition, the Israel Ministry for Environmental Protection has recently become involved in promoting promising Israel-based renewables technologies.

In 2004, Israel, through the Environment Ministry established a Designated National Authority

(DNA) for the Clean Development Mechanism. In May 2006, the Government and companies specializing in CDM projects sponsored a conference on the CDM and emissions trading as means of financing greenhouse gas reduction projects. Since Israel is classified as a non-Annex I developing country under the Kyoto Protocol, entrepreneurs who implement emissions reduction projects in Israel will be able to sell their carbon emissions credits to developed countries. Greenhouse gas emissions in Israel currently exceed 80 million tons per year, with 60% of the emissions generated by the energy sector. The electricity sector alone is responsible for over 35 million tons of GHG emissions.

The Ministry of Environmental Protection has promoted Israel’s unique advantages of being a developing country with the expertise in clean technologies and professional investment community of a developed country; this expertise is essential for developing and identifying projects to offset emissions in Kyoto-classified developed countries.

The PUA has developed initiatives for incentivizing RE, through ratemaking and licensing procedures. Tariffs during the next decade are expected to cover over $1.5 billion in environmental investments by IEC alone, comprised of $1.4 billion in pollution reduction, and $0.1 billion in addressing hazardous waste cleanup at generator sites. The PUA is seeking to work with the Environment Ministry to set principles for long-term reduction of generator-caused pollution, including developing incentives for oil-fired generators that take steps to reduce pollution. The PUA has also tried to promote net metering for renewables, but has received objections to this initiative for a variety of tax-related and operations-related reasons.

In January 2007, the PUA issued draft licenses for small renewable generators selling directly to the IEC grid, which will comprise most of the generation licenses to be issued through mid-2007. These licenses set forth in broad terms the mutual obligations of the generator and IEC, but do not address the specific effects of intermittent, non-dispatchable generation on IEC’s system operations. Such issues will be addressed in the broader context of electricity industry restructuring which is currently taking place.

KAZAKHSTAN

http://www.developmentandtransition.net/Article.35+M55cf997d025.0.html

Kazakhstan has one of the highest ratios of GHG emitted to GDP produced in the world.1 Coal–which dominates Kazakhstan’s energy balance–is at the heart of the problem: coal-fired plants generate some 45 percent of Kazakhstan’s total GHG emissions. By 2012 Kazakhstan’s GHG emissions from the energy sector are projected to reach their 1990 level (100 million tons of CO2 equivalent). Although Kazakhstan possesses substantial renewable energy potential, it is almost completely untapped; renewables only represent about 1 percent of Kazakhstan’s energy balance. Efforts to promote renewables are therefore featuring prominently in discussions about reducing energy intensity and pollution. The national programme for transition to sustainable development calls for increasing renewables’ share in Kazakhstan’s energy balance up to 5 percent by 2024. Wind

power could play a particularly important role: in a number of Kazakhstan’s regions, average annual wind speeds exceed 5 metres per second (quite high by international standards). Expert assessments indicate that Kazakhstan’s wind power potential exceeds 1.8 trillion kilowatt hours (kWh) per year. However, Kazakhstan’s inexperience in harnessing wind power, and the absence of appropriate legal and regulatory frameworks for wind power, continue to stand in the way. Feed-in tariffs and renewable energy certificates Other countries employ various legal frameworks and mechanisms to support electricity generation from wind power and other renewable energy sources. Under ‘feed-in tariffs’, electricity distribution companies are legally obligated to buy energy from power producers that use renewables at fixed (typically higher) prices that ensure renewables’ commercial viability.2 This type of regulation is simple, transparent, and provides guarantees to investors. Such systems are today used in Germany, Denmark, Spain, and some 40 other countries. Under renewable energy certificates, electricity distributors or users are obligated to ensure that a certain share of the electricity they purchase is generated from renewable sources. These purchases are documented via renewable energy certificates that register the production, consumption, and source of the “clean” electricity. Market prices for these certificates change depending on the demand for electricity generated from renewables (which is a policy variable) and their supply (which is determined primarily by the commercial viability of renewable energy technologies). Certificate mechanisms can be more complicated to administer than feed-in tariffs; and companies that generate or sell electricity produced from renewables are vulnerable to fluctuating certificate prices. Still, such systems are in place in Poland, Sweden, the United Kingdom, and the United States. Which system for Kazakhstan? The introduction of a feed-in tariff mechanism in Kazakhstan would mean large increases in electricity prices for consumers in those regions where relatively large amounts of electricity are generated from renewable technologies. Kazakhstan’s large size and low population density, as well as the current regulatory framework, makes it impractical to spread the higher costs of wind energy across users in areas in which the windmills are not located. The use of renewable energy certificates therefore seems more desirable, as this would spread the additional costs of renewables across all users and make the increase in electricity tariffs for any given user negligible. The regulatory framework for such a system has been developed by UNDP and the government of Kazakhstan, in cooperation with the Renewable Energy and Energy Efficiency Partnership and the Global Opportunities Fund. The government approved the relevant legislation for this framework in 2007; this draft legislation is now undergoing discussions with interested public bodies and organizations. Its submission to Parliament is expected in 2008. Under this framework, electricity producers would be obliged to possess renewable energy certificates for a certain share of their annual output. These certificates would be issued and

initially sold by producers of ‘green energy’. However, since the market on which these certificates would be bought and sold does not exist in Kazakhstan, the certificates would be purchased from green energy providers by the Agency for Renewable Energy (ARE) for resale to electricity distributors. ARE would also conclude long-term contracts with energy companies for the purchase of certificates for the duration of the project recoupment period. Because this system is relatively complex, ARE would face large administrative and other costs in making it work. However, as renewable energy markets develop, ARE’s functions related to purchasing and distributing the certificates could pass to the market itself, thereby reducing administrative costs. If introduced as proposed, this system will allow the state to:• align the expansion of the certificates (and the underlying renewable energy technologies) with the expansion of the renewables sector;• attract private investments into renewable energy production, by concluding long-term contracts at favourable prices;• competitively select those renewables projects with the best technical and performance indicators; • evenly distribute the extra costs of renewable energy generation across large numbers of users. Expert assessments suggest that the market could today absorb some 3 billion kWh of electricity generated from renewable sources. By 2024, this figure could rise to 10 billion kWh, covering some 6 percent of Kazakhstan’s total electricity needs. The resulting reductions in GHG emissions during 2010-2024 are estimated at 70 million tons of CO2 equivalent. Should this mechanism work in Kazakhstan, it could easily be replicated elsewhere–particularly in neighbouring CIS countries, where climatic conditions are similar.

http://centralasiaonline.com/en_GB/articles/caii/features/main/2011/03/31/feature-01

Wind- and water-based solutions are considered the most viable, but Igor Kharchenko, an analyst at the Moscow-based Centre for Study of World Energy Markets, warned that building new plants might turn out inordinately expensive for Kazakhstan.

Cost-benefit analysis needs to be weighed

“The most promising alternative energy sector structure, considering Kazakhstan’s natural conditions, would be wind-power generation, and the country has already made a few steps in that direction,” he said. “But that would be 5 to 6 times more costly than conventional power generation, or even still more expensive, and wind-power facilities in this budding sector would take billions to build and maintain.”

However, Gennady Doroshin of the UN Development Programme (UNDP)’s Wind Energy Development Project in Kazakhstan rejected the idea of comparing wind-power and electric engineering costs, saying wind-power investment is bound to pay off with time.

“The larger a wind-power generation project, the less costly it will be, and the sooner it will be repaid,” Kharchenko said, adding that “Kazakhstan will nevertheless require big investments for

the purpose.”

Hydro-electric power is another option

Other alternative projects have been implemented, too. EnergoAlem Co. and a bank combined to build a small hydro-electric station on the Issyk River two years ago. It has since produced power 5 to 6 times more cheaply than a conventional generating plant, and it requires 10% of the manpower.

“Just 150 such hydro-electric stations would cover 90% of the country’s energy needs, since this kind of water-generated power would be equivalent to that produced by burning hundreds of thousands of tonnes of coal,” station director Kenzhemurat Mukenbayev said.

“The Issyk hydro-electric station requires only three operators, and it’s environmentally safe,” Mukenbayev said, adding that it was designed to simplify life and work. “The land, air and water of the Ile-Alatau national park remain intact, while the station powers the entire city of Yesik (with a population of 33,000).”

Kazakhstan has to turn to alternative energy sources because traditional sources are being exhausted and their prices are rising, Zhakyp Bokenbayev, director of the Department for Development of Electrical Energy and the Coal Industry at Kazakhstan’s Ministry of Industry and New Technologies, said. He, too, objected to comparing wind-power generation rates to those of conventional power generation.

Wind power has future prospects

While wind-power generation is not profitable for Kazakhstan at this point, it has long-term prospects, Ainur Sospanova, country manager of the Kazakhstan – Wind Power Market Development Initiative co-sponsored by the UNDP, Kazakh government and Global Environment Facility, noted.

“Finland’s VTT (Technical Research Centre) and Kazakhstan’s Institute of Energy have drawn up ‘Kazakhstan’s Wind Atlas’ at UNDP request,” she said. “A study of 15 sites in several Kazakh regions as part of the programme showed Kazakh wind-power generation has great potential.”

Kazakhstan will have to replace part of the energy that comes from burning hydrocarbons with alternative energy sources by 2030, Hannele Holttinen noted. It could eventually depend on wind to provide 2,000MW of its annual energy requirement of 30GW, Holttinen said.

The government recognises the need to reduce the country’s dependence on carbon fuels, Environmental Protection Deputy Minister Eldana Sadvakasova said last year.

Meanwhile, the Samruk Kazyna sovereign wealth fund signed a co-operation agreement with China’s power giant, the Guangdong Nuclear Power Corporation (GNPC), in 2010. The pact calls for GNPC and Kazakhstan’s Nuclear Power Ministry to construct wind-power stations to

produce wind and solar energy in the future and to build mini-hydropower stations.

More: http://www.energici.com/energy-profiles/by-country/eurasia/kazakhstan

KOSOVO

http://www.euroqualityfiles.net/AgriPolicy/Report%202.2/AgriPolicy%20WP2D2%20Kosovo%20Final%20Rev.pdf

The share of electrical energy produced from renewable energy resources in the national gross electricity consumption was about 2 % (average) in years 2005-2008 (Statistical office of Kosovo). This is including electrical energy generated in small hydro-energy power plants.

According to the data from MEM share of renewable energy sources in total energy production is as follows:• Firewood – 8.46 %• Hydro-energy- 0.54 %• Solar energy - 0.04 %

MEM has initiated an assessment study of renewable energy resources in Kosovo. This study which is financed through the European Commission Liaison Office assisted the Ministry to identify and quantify renewable energy resources in Kosovo. One of activities of the study was also to promote the use of renewable resources, reduce the harmful impact of use of fossil fuels, and assess the technical and economic potential of renewable energy.

For the time being hydropower and biomass in the form of wood are the only renewable energy sources used, and which contribute substantially to the energy supply in Kosovo. The use of solar energy is still in very early beginning (few pilot projects for water heating situated in some public buildings, financed from MEM). This means that there are no purposely grown field agricultural crops for production of bio-fuels (bio-ethanol, bio-diesel) and there are no facilities and equipments for production biogas.

Wind energyUntil now there are no wind parks in Kosovo. Currently a foreign private investor jointly with a local company started discussions for possible investment in wind energy, which will take place in place Golesh in Lipjan municipality. For now this is first project about generation of energy from wind in Kosovo.

Solar energyRegarding solar energy, in 2008 Ministry of Energy and Mining completed investments in pilot projects in Prishtina hospital and Student Centre in Prishtina. Although the total installed capacity is small, the effect will be more on demonstrating how this system works in practice. What worries is that still in private households this is not present.

Hydro-energy

One of the strategic objectives of the Government of Kosovo, according to MEM energy strategy is utilization of renewable energy sources. Based on pre-feasibility study undertaken by MEM in order to assess the hydro-energy potentials in Kosovo, one of findings was that there are technical and economic opportunities for developing at least 18 small hydro-power plants in Kosovo. According to this study, the total load of new hydro-power plants shall be around 64 MW, with an estimated annual generation of electrical energy of around 294 GWh.

In this direction, MEM in close co-operation with other stakeholders of energy sector, such as the REO, Ministry of Environment and Spatial Planning, municipalities, and other interested parties, shall soon design the tendering process. This document shall contain all legal requirements related to technical studies, a list of existing data on each river and cascades, algorithms and packages of documents and requirements on different offers.

In parallel with this, the Regulatory Energy Office (REO) is expected to obtain technical assistance from the World Bank in establishing RES regulatory framework, with a view of creating legal and regulatory environment on RES utilization for electricity generation. A part of this support is related to drafting feed-in tariffs on utilization of all energy sources, including water. In the meantime, the REO is expected to approve the Rule on authorization procedures, which is thought to support the process of using RES in Kosovo.

National concepts and programmesMinistry of Energy and Mining in January 2009 has designed and approved Kosovo Plan for Energy Efficiency for the period 2009-16. This paper among others includes plans about the development and promotion of renewable in the next years. According to the policy papers of MEM energy efficiency and renewable energy sources production will contribute to accomplish to the three major goals of the national energy policy of Kosovo: Overall economic growth; Security of supply; Environmental protection.

The further plans are that Government based on proposal from MEM will proceed with the adoption of an Energy Efficiency Law including also the use of renewable energy sources. Through the secondary legislation, administrative instructions and other regulations, in the implementation of the Law for Energy Efficiency, the needed measures will be undertaken for the preparation and implementation of the corresponding technical regulations and standards of the EU. After that based on this law the National Plan for Energy Efficiency and Renewable Energy Sources will be drafted, and an Energy Efficiency and Renewable Sources Fund should be established.

National policyThe main strategic document is “Energy Strategy for Kosovo 2005-15”. This document was drafted from the Ministry of Energy and Mining, and it was approved in the end of 2005. This document now is being reviewed by Ministry of Energy and Mining, with the aim to prepare Programme for its implementation particularly during next three years. However, the Government it is expected to approve soon the reviewed energy strategy of Kosovo.

Other important document is Law on Energy (approved in late 2004), which stipulates (in article 12), that the MEM shall each year establish indicative targets for the consumption and also for

the production of electricity or heat generated from renewable energy sources or cogeneration for the whole of Kosovo for the following ten years.

Law 2004/9 “On Energy Regulator” established fully independent Regulator (Energy Regulator office-ERO), completely autonomous from any Governmental Department to exercise economic regulation in the energy sector including electricity, district heating and natural gas.Kosovo Government on May 2007 approved Decision No 05/250 named “Incentive measures for generation of electricity from renewable energy sources and co-generation in Kosovo for the period 2007-13”.

Another document is Report of the Implementation of the “Plan for Implementation of the Acquis on Renewables”, which was prepared from MEM in May 2008. The report provides information on the status of the Plan, and prepared to comply with the requirements of the Treaty for the Energy Community in South East Europe.

Currently, there are no policy measures to support directly and to promote renewable energy, even though a renewable energy policy has been formulated. The document of MEM “Energy Strategy of Kosovo” describes all priorities of the sector until the year 2015. The paper emphasis that energy efficiency and renewable energy sources production contribute to the three major goals of the national energy policy of Kosovo: overall economic growth, security of supply and environmental protection.

Renewable energy is foreseen to substitute electrical energy, and/or to be used for heating. Due to these reasons, the strategy aims at creating of an appropriate and supportive legislative framework and favourable market for the promotion and development of renewable energy sources in Kosovo. The main goal is to create a friendly environment for private investment in this sector.

An important activity of MEM and other stakeholders of this sector is that a cadastre of water and hydropower plants will be drafted in order to develop small scale hydropower plants. Another priority will be the gasification in urban waste landfills, as well bio-mass and solar systems for water heating. A “National Plan on Energy Efficiency”, consists of separate sector action plan in order contribute to achieve the objectives of the Plan.

http://www.setimes.com/cocoon/setimes/xhtml/en_GB/features/setimes/features/2011/02/24/feature-04

To meet EU standards, Kosovo will have to boost significantly its use of renewable energy. With several projects under way, the country is taking steps, but the challenge is formidable.

The criteria call for producing 20% of energy from renewable sources, boosting wind energy production by 20%, and reducing carbon dioxide emissions by the same percentage.

"It'll be hard for Kosovo," acknowledged Kaqusha Jashari, a former member of the parliamentary commission on energy. "We currently derive almost all our energy [around 95%] from coal."

Nevertheless, progress is being made. A German company is building wind energy generators on Goles, a mountain near Pristina's airport, and they are expected to be functional within a few months.

"For the first time in Kosovo we are building a wind farm, underwritten by a Kosovo-German company, Wind Power, which invested more than 1m euros in wind energy in Kosovo," Deputy Minister of Energy Blerim Rexha told SETimes.

He added that the ministry does not know yet what the actual wind energy capacity [of the new plant] will be, and how far energy production will go towards meeting the EU's quota.

"Energy can be sold to the Kosovo Energy Co-operation or in a free market in Southeast Europe, but the management has yet to decide what will be the best investment," Rexha said.

Meanwhile, the existing Zhur hydro power plant is being expanded with an eye to the EU's criteria. According to officials, it is accumulating plant derivatives southwest of Prizren and in the municipality of Dragas in preparation for switching to renewable sources.

Water for [the new] Zhur will come from the Sharr Mountain, the water basin in the Plava River and its branches, especially the Brod and Res.

"Kosovo has no other hydro potential as important as Zhur where we can build any plant with a similar capacity," Rexha said. "The hydropower potential of Zhur represents about 43% of Kosovo's total capacity, but it will not be the only one. We are planning on more than ten other hydropower plants in Kosovo, albeit with smaller capacity."

Residents of the Dragas municipality are happy about the plans, but the villages of Opoje, Qollopek and Breznes worry that their homes and properties might be flooded by lake water accumulation. According to Dragas mayor Selim Jenuzi, 200 properties will need to be expropriated for the new plant.

The project also has raised concerns in neighbouring Albania, which is constructing a hydropower plant on the same river. The Albanians worry that the amount of water available for their plant may be reduced, causing a low return on investment.

Kosovo officials say experts on both sides of the border are looking into the issue. They insist, however, that their project is compliant with a 1962 agreement signed by Albania and the former Yugoslavia on use of the Plava waters.

LATVIA

http://www.energy.eu/

Latvian target: 42% (2005 = 34.9%)

Key issuesIn Latvia, almost half of the electricity consumption is provided by RES (47.1% in 2004), with hydro power being the key resource. The growth observed between 1996 and 2002 can be ascribed to the so-called double tariff, which was phased out in 2003. This scheme was replaced by quotas that are adjusted annually. A body of RES-E legislation is currently under development in Latvia. Wind and biomass would benefit from clear support since the potential in these areas is considerable.

Main supporting policiesThe two main RES-E policies which have been followed in Latvia are:o Fixed feed-in tariffs, which were phased out in 2003.o A quota system which has been in force since 2002, with authorised capacity levels of installations determined by the Cabinet of Ministers on an annual basis.

In addition, biofuels are subject to a reduced excise tax rate. Rapeseed oil is subject to 0% excise tax, regardless of its end use.http://www.euroqualityfiles.net/AgriPolicy/Report%202.2/AgriPolicy%20WP2D2%20Latvia%20Final%20Rev.pdf

Renewable resources as wood and hydroenergy have been traditional sources for production of heat and electricity in Latvia. Utilization of other renewables is rather new; the production of biogas from biomass of agricultural origin has just started in Latvia. The interest in biogas production has been unexpectedly large and has been publicly the most discussed topic regarding renewable energies this year. It has stolen the attention from the biofuel production that has been experiencing hard times due to the overall crisis in European biofuel industry.

At the same time, this year has been marked by two important events in Latvian biofuel industry – the largest biodiesel production complex in the Baltic States has been fully opened (production capacity 100 thsd.tonnes of biodiesel) and the first integrated value-added chain has also been established by the largest cereal and rape producers’ cooperative in Latvia. This promises that rape previously mostly exported to other EU countries will obtain value-added in Latvia. Although the importance of promotion of biofuels has been recognized at political level, there has been lack of interest from petrol stations and the general public is also rather ignorant about the use of biofuels.

The previously experienced rise in fossil fuel prices and also cut off of Russian gas supplies have intensified discussion on the importance of renewable energies and energy security of the country, though the implementation of the policy on renewable energies has been mainly facilitated by the overall EU policy on renewable energies.

The role of renewable energy has traditionally been comparatively high in Latvian primary energy balance. Production of renewables accounted for 35.6% of the total energy demand in Latvia in 2007. The most important renewable energy source is wood – production of wood for energy needsconstituted 30.4% of the total energy necessary for consumption in Latvia. Another notable

renewable energy source is hydroenergy (4.7%). The role of other renewables in the primary energy balance is currently comparatively insignificant in Latvia. The share of renewables in the total primary energy consumption due to the considerable amount of wood for energy exports is 28%.

Wind energyThe production of electricity from wind energy has been started in Latvia in 1996, when the largest electricity producer in Latvia Latvenergo, State SC established the first largest wind power station in the Baltic States, with the capacity of 1.2 MW. The total number of wind electricity producers and the total production volume has significantly increased since then. There were 15 wind power stations in Latvia in 2007, with the total electricity capacity of 25.2 MW and electricity generation of 53 GWh. Eleven power stations are located in the south-west part of Latvia and they form a wind power station park with the total capacity of 19.8 MW. The park was opened in 2002.

According to the information on licences issued for generation of electricity (the licence is compulsory if the capacity exceeds 1 MW) during 2008 and also at the beginning of 2009, the total capacity of wind power stations is going to increase significantly - by some 210.75 MW, with electricity production to be started mostly no later than from the beginning of 2011. The distribution of wind is very uneven in Latvia. The most suitable territory for the use of wind energy is the seacoast; there are few places suitable for utilization of wind energy inlands. The potential of wind energy use has been studied in a couple of projects each of which have come with different results. The estimated theoretical annual potential of wind power is 250-1250 GWh of electricity (Ministry of Environment, 2006). According to the estimation made by Latvian wind power association, the total capacity of wind turbines that can be established in Latvia is 600 MW. Some territories with the highest estimated wind energy potential are defined as particularly protected nature areas. Establishing of wind parks is also allowed only on lands with appropriate aim of usage foreseen in the territory plans. There are few rural areas that can be used to set up wind parks, and the transformation of land usage aim can take time. Other problems associated by utilization of wind energy include instability of wind, changes to landscape, sound, and harm to birds. There is also potential for setting up wind generators in the sea, however, these technologies are associated with much higher investments. According to the available information, utilization of wind energy is not related to farms.

Solar energySolar energy is used on very small scale in pilot projects in Latvia. During implementation of the projects it was found that presently solar energy can not compete with other sources of energy due to its high costs. It is considered that solar energy as well geothermal energy will not give considerable contribution to Latvian energy balance in the near future. There is comparatively low intensity of sun in Latvia. Solar energy can be used by collectors only some 1,800 hours a year.

Hydro-energyHydroenergy is the second most important renewable energy source in Latvia. There are 3 large hydro power plants in Latvia with the total electricity generation capacity of 1,510.6 MW. Since 2001, the capacity of the plants has not changed. It is considered that the potential of the largest

river Daugava (where the plants are established) has largely been utilized. The plants are owned the by the state company Latvenergo, State SC, the largest energy producer and supplier in Latvia. Latvenergo also provides electricity imports, transmission, distribution and supply to users, and it has a public energy buyer function as well (the company buys electricity as part of obligatory renewable energy purchase).

There are about 150 small hydro power stations in Latvia with the total capacity of 25 MW (Public Utilities Commission, 2008). Surge of construction of hydro power plants could be observed from 1998 till 2002 (old mills and dams were reconstructed and new dams built) that was connected with very favourable state policy according to which purchase of electricity surplus was guaranteed at double price. Since 2003, the development has stopped.

National policyAccording to the nation Guidelines on renewable energies, the main objectives of the national policy on renewable energy is to increase the share of renewables in Latvian energy balance; to promote Latvian energy security; and to ensure contribution of renewables in reduction of GHG emission in long-term.

Besides principles of sustainability, including environmental protection and climate change, the role of renewable energy in Latvian energy policy is underlined in relation to the national energy security. The dependency on primary energy imports is comparatively high in Latvia (65.7% in 2006) and the primary energy imports are dominated by few suppliers. National Guidelines on energy envisages that energy security can be achieved through diversity that includes different energy sources and many suppliers. It has been highlighted that renewable energies and decentralized energy production systems can contribute to the decrease in energy import dependency in long-term. Consequently the policy on renewable energy is aiming to increase the production of heat and electricity from renewable sources and biofuels in the regions; to achieve the increase in the share of decentralised energy production; and to ensure increased replacement of energy imports by renewable energy. The policy intends to increase the production of renewable energy by efficient use of local resources.

The policy targets are set in conformity with EU Directives (2001/77/EC and 2003/30/EC) establishing indicative targets on electricity and biofuels. The targets on renewable energy in Latvia are:• Electricity from renewables – 54.57% of the total electricity consumption in 2010;• Biofuels – 5.75% of the total consumption of fuels for transport needs in 2010;• Renewable energy – at least 35% in the total energy balance in 2010.

The main tool for achieving the targets for renewable energy is support for the produced electricity and biofuels corresponding to the volumes necessary to reach the targets. There are no indicative targets for heat and production of heat is not directly supported in Latvia. It has been noted in policy guidelines that in order to reach the general target for the share of renewables in the total energy consumption, the stimulation has to address both electricity and transport, as well as heat consumption. Though in practice, the stimulation of heat consumption is rather limited.

Although policy on renewable energy is aiming to increase the production of renewable energies, the current quotas for the amounts that are supported by the state money are relatively restrictive. That was marked by the recent events in biogas production – the quota was not sufficient to be allocated to all producers who were planning to start electricity production from biogas. After long and hard debate the total quota for renewable electricity was increase to make possible enlargement of quota for biogas producers. The Guidelines on renewable energies state that in production of electricity and heat the priority is for the use of biomass that is also shown by the % distribution of the quota for electricity among other energy sources except large hydro power plants. The % distribution among different renewable energy sources has also been subject of discussion and generally the setting of it is rather intransparent.

National concepts and programmes• biofuelsThe subsidy system on biofuels introduced by the Law on Biofuels started to work at the end of 2005 in Latvia. The support was set to be available till 2010 for the amounts necessary to reach the binding targets. Despite the financial problems of the state, the aid is continued, but with agreed delays in payments to the producers. he support has been provided to producers of biofuels as the compensation between production costs of biofuels and the price of fossil fuel. It was forecasted that wholesale prices of fossil fuels and biofuels will equal by 2010, till then the state support was thought to be necessary.

The support rates have, however, constantly grown over the period 2005-2008 indicating that production of biofuels has become less competitive (see Table 3-3). According to the biofuel production costs used in calculation of compensation level, the production costs of biodiesel have increased more rapidly than prices of fossil fuel (66% and 44%), the increase of production costs of bioethanol and petrol prices has been almost the same (39% and 42%) in Latvia. The significant rise in production costs was due to higher prices of rape and cereals. More than half of the biodiesel and bioethanol price has been subsidized in Latvia.

The support system is aiming at increasing competitiveness of biofuels, but it is generally not stimulating increase in competitiveness that could be achieved through higher production efficiency as the support has been provided as compensation.

The support has facilitated an increase in the number of operators, capacities and production volumes. But despite increasing production volumes and amount of support paid to producers of biofuels, the share of biofuels in the total consumption has decreased. Almost all biofuels produced in Latvia were exported to countries where the prices of fossil fuels with excise tax were higher and which had already introduced mandatory blending requirements. Until lately, there was no legislative rule present saying that biofuels produced in Latvia should be consumed domestically or other binding requirements promoting consumption of biofuels. Consequently the money of Latvian tax-payers was used to subsidize fulfilment of targets of other countries.

To solve the crisis in local biofuel industry and to stimulate local consumption of biofuels, the government has introduced the mandatory 5% blending regulation from the October, 2009. But so far, the local sellers were lacking stimulus and there was almost no market of biofuels in Latvia. It has also to be mentioned that currently the difference between price of diesel and

biodiesel (B100) is just LVL 0.04-0.05 and that is not motivating consumers to buy biodiesel as it is generally associated by more risk and some technical inconveniences (also lower energy value) and it is not easy to find places where to buy it as well. It is also reported that only 14 cars in Latvia can use E85.

In Latvia, indirect support in the form of reduced excise tax rates for biofuels is also provided. For pure biodiesel and rape oil there is no excise tax, for blends of fossil fuel with biofuels the basic rates for fossil fuel are in general proportionally reduced.

Agricultural producers can also receive excise tax compensation for diesel (including biodiesel and rape oil) that has been bought and used for activities on agricultural land. For every ha of agricultural land farmers can receive compensation for 1000 litres of diesel. Having regard of the small difference in diesel and biodiesel prices, the compensation rates are preventing from use of biodiesel or pure rape oil right now.

• electricityUp to 2005, the support for development of production of electricity from renewable resources was implemented by setting annual quotas for establishing new electrical capacities. The state guaranteed purchase of electricity from these capacities at fixed price. There were many changes in support terms resulting in different tariffs – double tariff, the average sales tariff, tariff set by the Regulator and contract price. The Law on electricity market introduced new support system from 2006 – obligatory purchase of renewable electricity.

The share of each kind of electricity form renewable sources to be purchased as part of the obligatory purchase was set for every year in a way that the indicative target regarding the share of electricity is reached by 2010. The public buyer calculates and publishes the obligatory amount of renewable electricity to be purchased every year.

In a short period of time, the rules regarding obligatory purchase have also changed. It has been noted that instability of legislation is one of the main problems and obstacles to planning of future development. Generally the tariffs are calculated by different formulas for each kind of renewable energy depending on capacity, with inclusion of variable components (exchange rate, year of establishment of capacities, price set for natural gas). Hydro power plants exceeding 5MW are excluded from receiving a guaranteed price.

The rules introduced at the beginning of 2009 provided very good prices, for example, 1kWh of electricity produced from biogas (with capacity 1MW) equalled to about LVL 0.19 (~ EUR 0.27), and the support is provided for 8000 hours a year (if the utilization time exceeds 8000, there is guaranteed payment for established capacities instead). The interest was so large that the quota had to be increased for electricity from biogas. The total quota was also increased, but the tariffs for all kind of electricity were reduced by about 1/3 on average to ensure that the total public costs for purchase of electricity from renewable sources remain as previously planned. It has been reported that if the target for 2010 is met; the renewable energy will contribute to the increase of electricity prices by about 30%.

At the same time, it is considered that as soon as Europe overcomes the economic crisis, the

prices of natural gas will rise again, and the costs of renewable energy will not be high any more. Nevertheless the current support system is not promoting competitiveness that can be improved through more efficient production. And the most support is planned to the renewable electricity that is the most expensive (based on the guaranteed prices for biogas). The support for production of electricity from renewable sources is not regulating the use of heat. It can be released if not necessary for the producing unit. There is a support system present that promotes cogeneration of electricity and heat, though the producers of renewable energy are applying for the support scheme designed specially for renewables.

As regards production of electricity form biogas, one of the opinions is that production should be more focused on utilization of agricultural, food processing and other waste, not silage or cereals. In the first case, the prices paid for electricity could be smaller because the economic gain would be also from utilization of waste that otherwise require additional costs. There is also investment support available for setting up production of electricity from renewable resources, with special support programme for production of energy from biomass of agricultural and forestry origin (as part of the Rural development programme). The support programme has facilitated the sudden surge in interest in biogas production as is it offers the possibility to receive 40% public contribution to investments made.

Except support in a form of guaranteed price for electricity produced in cogeneration process, the use of heat whether produced from fossil fuels or renewable sources is not promoted directly in any way in Latvia. Though, the support can be received for investments, mainly as investment subsidies.

LITHUANIA

http://www.energy.eu/

Lithuanian target: 23% (2005 = 15%)

Key issuesLithuania depends to a large extent on the Ignalina nuclear power plant which currently generates up to 70% of total electricity. The National Energy Strategy includes plans related to the start of operation of a new nuclear power plant which will result in a major rise of electricity generation output in 2016. In order to provide alternative sources of energy and electricity in particular Lithuania has set a national target of 12% RES by 2010 (8% in 2003). The implementation of a green certificate scheme was however postponed for 11 years. The biggest renewables potential in Lithuania can be found in the field of biomass, with an expected nine fold rise in electricity generation between 2006 and 2017. Furthermore, electricity from wind is expected to rise by 54 times between 2006 and 2017.

Main supporting policiesThe core mechanisms used in Lithuania to support RES-E are the following:o Feed-in tariffs: in 2002, the National Control Commission for Prices and Energy approved the average purchase prices of green electricity. The tariff levels will remain unchanged until

December 2020.o In September 2006, the procedure for promoting generation and purchasing of RES-E was updated to include wind, biomass, solar and hydropower plants with a capacity of less than 10 MW.The National Energy Strategy provides for the improvement of the procedures for the promotion and purchase of electricity from RES to encourage competition among the producers and to introduce the system of green certificates or other systems beyond 2020.

In order to promote biofuels, the Law on Excise Taxes (2001) provides for excise tax relief. Besides this, the Law on Pollution Tax (2002, 2005) further stimulates the uptake of biofuels. Through the Law on Heat (2003), municipalities encourage the purchase of heat fed into heat supply systems produced from RES. Investment subsidies and loans on favourable terms are also made available by the Lithuanian Environmental Investment Fund.

http://www.euroqualityfiles.net/AgriPolicy/Report%202.2/AgriPolicy%20WP2D2%20Lithuania%20Final.pdf

In Lithuania renewable energy resources are a priority area of the energetic development. An effective utilisation of indigenous and renewable energy resources, the promotion of producers and consumers are the main objectives of energy policy that are defined in the Lithuanian National Energy Strategy and National Energy Efficiency Programme for 2006– 2010 and its implementation measures that are in compliance with the provisions of EU Standard documents, Energy Charter Treaty, United Nations Framework Convention on Climate Change, Kyoto Protocol and other legal acts.

In December 2008 the European Parliament and the Council adopted a Directive on the Promotion of the Use of Energy from Renewable Sources. Under this Directive the mandatory (legally obligatory) targets for the overall share of energy from renewable resources in final energy consumption are established. For Lithuania mandatory targets for an overall 23 per cent share of energy of renewable sources in final consumption of energy and a 10 per cent share of biofuel in transport in 2020 are established.

In Lithuania more intensive utilisation of renewable energy sources is especially important from the point of energy security. The country has very limited primary renewable energy resources of its own (with exception insignificant amount of indigenous crude oil and peat, which resources rapidly decrease). Lithuania imports more than 90 per cent of primary renewable energy resources, therefore, the country’s economy depends on the import of these resources. The situation might become greatly vulnerable in case of the supply disruption or sudden dramatic jump of prices. The role of renewable energy resources becomes more important aiming to solve the problem of global climate change. Besides, the utilisation of renewable energy resources creates additional working places and, thus, increases the employment, accelerates scientific development and contributes to the economic growth of the country. Renewable energy resources are important and for the development of Lithuania’s agriculture, since the cultivation of energetic plants enables to use arable land areas. Thus, the value-added in agriculture and additional working places are created. Up to 2004 in Lithuania the main kinds of renewable energy resources were wood and hydro power while the utilisation of other resources was just at

the beginning. In these latter years the generation of wind energy and production of biofuel have been rapidly developing. In Lithuania the utilisation of biomass (wood, forest cutting residues, straw, energetic plants, etc.) as well as hydro power resources is being developed. There are constructed demonstrational geothermal and solar power plants, started the production of gas emitted from municipal waste dumps, expanded the amounts of biogas production.

The aim of this report is to describe and estimate the state of renewable energy and its impact on rural development in Lithuania. The report covers the period of 2000-2008. The data are presented in national currency (Litas) and euros. Since 2 January 2002 the Litas (LTL) is pegged to the euro at the fixed rate of 3,4528 LTL to 1 EUR.

In 2007, as compared to 2000, the amount of energy made from renewable energy resources in Lithuania increased from 27151 to 33983 TJ, or by 25 per cent. In 2000 the energy produced from renewable energy resources made up 9,2 per cent in the total energy used in the national economy, in 2007 this share accounted for 8,9 per cent. During the last few years a number of projects that assisted increasing the utilisation of renewable energy resources in Lithuania have been implemented but the relevance of the energy made from renewable energy resources to the total amount of energy used in the national economy has not increased. In 2000 the started growth of Lithuanian economy was accompanied by the increase of the total energy consumption in the country.

Up to 2004 the main kinds of renewable energy resources used in Lithuania were wood and hydro energy, while the utilisation of other resources was still at the beginning. In these latter years the consumption of biofuel for transport and wind power has been rapidly developing. In 2004 the share of energy produced from biofuel accounted only for 1,1 per cent of the total energy produced from renewable energy resources, but in 2007 it reached 6,4 per cent. As relates wind energy, its share made up respectively 0,01 per cent and 1,1 per cent.

Wind energyIndustrial wind energy in Lithuania was started to develop in 2002 after the first wind power station was built in Skuodas. It was Danish second hand wind turbine of the capacity 160 kW. In 2005 only 4 small wind power generators with total capacity of 1,095 MW were operating in Lithuania. In 2005 these wind power generators produced 1,8 GWh of electricity. Lately the growth of wind energy utilisation has become much rapid. At the end of 2006/beginning of 2007 in the coastal region 2 wind parks were equipped with total capacity of 30 MW and connected to the power grid. At the end of 2008 in Lithuania operated 47 wind power generators with total capacity of 54,4 MW (Table 10). In 2008 these wind power plants generated 131,4 GWh of electricity.

In the National Energetic Strategy adopted on 18 January 2007 by the Seimas of the Republic of Lithuania is laid down that by 2010 in Lithuania the total power of installed wind power generators will make 200 MW. In Lithuania there are identified 6 areas for wind power generators. The most promising places for the development of wind energy in Lithuania are situated in a coastal area of a few tens of kilometres. The development of wind power faces some environmental and urban problems, lack of free land areas. Also there are concerns from some people who are worried about wind power plants being positioned in their area. The main

worries are that they ruin the landscape – because they generally have to be positioned on hills to get the maximum benefits of the wind as well as people are convinced that wind power-stations will emit noise that can be disturbing to nearby residents, disseminate animalscaring vibration and people will be forced to live in the shadow of these facilities and suffer psychological discomfort. For example, in 2004 the joint Lithuanian-Denmark company BNE in Kretingale surroundings installed the first wind park of 6 wind power-generators with the total capacity of 5,4 kW. The Danish into this wind power park in Lithuania invested nearly 25 mill. Lt; the Government of the Republic of Lithuania and the Ministry of Economy of the Republic of Lithuania accepted the park. Unfortunately, the Company faced protests of neighbour land owners. As a result, the idea failed, wind power stations never started tooperate, turbines were dismounted and taken out from Lithuania. In scientists’ opinion, there are no objective reasons to resist the emergence of wind power generators. In the areas where wind turbines are installed a level of noise do not exceed allowable hygiene standards. As concerns the impact on the public’s health, the intensity of electromagnetic radiation is almost undetectable. It shows that it is very important to educate the general public on the issues of global problems and benefits of renewable energy resources.

In Lithuania rural communities and individual farmers are interested in construction of wind power-turbines. In 2009 in Smalininkai, Jurbarkas District the wind power generator of the capacity of 250 kW is being finished. Smalininkai community the first in the country decided to make a profit from the wind energy. The community plans to sell all the produced energy and to use the funds for the improvement of the town’s infrastructure and community’s environment. The construction of wind power plant took even 2,5 years. Smalininkai community complained that on purpose to construct wind power plant it was necessary to change the purpose of land from agricultural to infrastructure (it took a few months), to overcome different impediments while the licences were received, technical specifications with electricity suppliers were coordinated, documents for aid were prepared. Hence, there are high administrative hurdles that impede installation of wind turbines.

Under the measure “Modernisation of agricultural holdings” of the Rural Development Programme for 2007–2013 the Ministry of Agriculture of the Republic of Lithuania supports only the construction of wind power stations with the capacity of up to 250 kW that produce energy for own purposes (the largest amount of support for the 2007–2013 period does not exceed 400 thousand EUR per beneficiary, and 200 thousand EUR per project, the intensity of support 40–60 per cent). Other projects are administrated by the Ministry of Energy. In the opinion of experts, to construct wind power generators only for own purposes is unreasonable and uneconomic. Therefore, the Ministry of Agriculture is ready to submit a proposal to the European Commission asking for an amendment to the measure “Modernisation of agricultural holdings” of the Rural Development Programme.

Solar energySolar heat energy. In Lithuania solar heat energy is used for water heating in plain and vacuum tube solar collectors during the non-heating season. According to the data of the Lithuanian Energy Institute, in 2008 the capacity of these collectors was 1,05 MW (1500 m2), when 1 m2 of collector area is equated to the capacity of 0,7 kWth (in 2002 – 0,1 MW, in 2006 – 0,91 MW). Solar collectors operate successfully in Šilute nursing home (90 m2), Kačerginė children

sanatorium (78 m2), Vilnius and Karklė “SOS children” villages (respectively 35 and 20 m2), some individual houses. According to the Lithuanian Energy Institute the main reasons why solar collectors in Lithuania are mounted in small areas, in comparison with other north and central European countries, are as follows: • despite the price of solar collector systems produced in Lithuania is by 25–35 per cent lower than those produced in other European countries, the price of the heat produced of solar power is higher in comparison with the heat produced by fossil fuel;• rather high comparative installation costs, up to nearly 3400–3500 Lt/kWth;• lack of information about the possibilities to use solar power;• lack of state support for the promotion of implementation of solar power systems for water heating.

Film solar collectors for drying of agricultural products are used in Lithuania. Their total seasonal capacity is nearly 200 kWh/m2. They pay off in 1–2 years. However, such collectors are inconvenient in terms of assembling and storing, the polymeric film itself is not everlasting. Small farmers might use such collectors. The overall area of collectors for drying of agricultural products is 228 m2.

Photovoltaics. In Lithuania the utilisation of photovoltaic solar energy is insignificant. At present “Saules energija”, Ltd. is the only company producing and installing photovoltaic modules in Lithuania. The data of this company is shown in Table 11. The utilisation of photo electricity in Lithuania was started in 1996. Solar power supply units are used in different areas: for feeding of batteries of different radio and telecommunication equipment, including cell phones, monitoring traffic intensity stations, video cameras, other electronic devices, medical examinations where is necessary a proper screening, distant from electric sources security objects, yachts, auto trailers, gliders. In agriculture photo electricity is used for electric herds. In private houses, gardens, tourism resorts solar micro stations are used to meet the minimal needs of solar power (50–500 Wp). In individual cases photo electricity is used for feeding of irrigation systems, fountain pumps and other low-capacity electric devices. At present the total capacity of all photovoltaic modules in Lithuania is over 60 kWp. Solar power supply units are also established for teaching purposes. The most powerful demonstration solar power plant with the nominal capacity of 0,6 kWp was installed at Vilnius Gediminas Technical University in 2001. In 2003 micro solar equipment with capacity of 0,2 kWp was installed at Alanta Technology and Business School. Solar cells of similar capacity the same year were installed at the Centre of Renewable Energy Technologies at Kaunas University of Technology. In 2004 its capacity was increased up to 0,32 kWp. In 2004 solar power supply unit with capacity of 0,15 kWp was installed in Šiauliai University.

Hydro-energyThere are no considerable hydro-resources in Lithuania, but the existent rivers are important as alternative energy sources. Large rivers (Nemunas and Neris) and small rivers are suitable for energy purpose in the country. There is one large and a few tens of small (<10 MW) hydropower plants. The largest – Kaunas hydropower plant – with the capacity of 100,8 MW (4 units 25,2 MW each) was constructed on the Nemunas River and successfully has been operating since 1959. During the period of 2001–2008 the production of electricity in small hydropower plants was rapidly growing up. In 2008, as compared to 2001, the number of constructed small

hydropower plants increased from 35 to 83, or 2,4 times and the total capacity went up from 13,2 to 25 MW, or 1,9 times. The business of small hydro power plants became attractive to private investors. According to the data of JSC “Lietuvos Energija”, in 2008, 7 small hydro power plants were owned by farmers. In 2008 Kaunas hydro power plant produced 329,2 GWh of electricity, and small hydro power plants generated 72,9 GWh.

The development of hydro energy in Lithuania is problematic, because the state does not promote it. As it is stated in the legislation of the Republic of Lithuania, this sector of the economy has a negative impact on the natural environment, in particular, on its ecological situation. The Law on Water of the Republic of Lithuania and the Resolution Nr. 1444 of 8 September 2004 by the Government of the Republic of Lithuania on the List of Rivers or their Parts Valuable from the Organic and Cultural Points of View limit the development of hydro power. After the assessment of environmental requirements, the plans to develop hydropower in two important for hydro energy sources – Nemunas and Neris Rivers – were abandoned. So far the development of small hydropower plants was implemented reconstructing disused hydropower plants and installing new ones in existing ponds. At present there are no more effective equipped ponds, and to equip new ones due to high land price in most cases is not worth. Before starting construction of new small hydropower plants in suitable places it is necessary to assess environmental requirements, since the legislation of the Republic of Lithuania limits economic activities in parks, reserves, conservation areas, near water bodies, in rivers of exclusive importance or their parts.

National policyLithuania has no own fossil fuel – coal, oil, gas – resources, therefore, they are bought from other countries. Lithuania imports more than 90 per cent of primary energy resources. Ignalina nuclear power plant produces about 70 per cent of the total electricity produced in the country. Under the Treaty of Accession of Lithuania to the European Union, Ignalina nuclear power plant is tentatively scheduled for closure in the end 2009. Therefore, already now it is a task of extreme importance to foresee what energy sources will be used by industry, agriculture, services and households. Although currently the proposals have been made to construct a new nuclear power plant, at best it might start to operate only about 2016. After the closure of Ignalina nuclear power plant thermal power plants operating in Lithuania will increase their capacities, thus, will increase the demand for the natural gas imported from Russia as well. Currently Lithuania is not connected to the EU power grid. The energy system of the country is still integrated into the Russian energy system that makes motivated concerns for its stability and impedes to implement the principle of solidarity of the EU energy system. In October 2008 the Council of European leaders supported the initiative of the European Commission to prepare the actions plan for energy interconnection in the Baltic region. However, in opinion of experts, Lithuania’s and Sweden power interconnection with capacity of 7000–1000 MT might be ready only about 2015, and the interconnection of Lithuania and Poland with the capacity of 1000 MW in full capacity might start to operate only about 2020. Aiming to implement the strategic tasks of Lithuania – more rapid construction of new nuclear power plant and installing of power networks to Poland and Sweden, in 2009 was established the Ministry of Energy of the Republic of Lithuania. This governmental institution is responsible not only for energy projects that make conditions to enter the EU energy market and have alternative supply of electricity and natural gas sources as well as for the development of alternative energies.

The increase of renewable energies utilisation is an important from the point of energetic security. Since the country’s economy depends on the import of primary energy sources, the situation is becoming vulnerable if the supply is disconnected or the price jump is considerable.

The EU makes great efforts on purpose to reduce air pollution and the impact of climate change. Being a member of the EU Lithuania must follow EU obligations in the field of energy development. In the National Energy Strategy that was renewed on 18 of January 2007 by the Seimas of the Republic of Lithuania is highlighted that the share of renewable energies in the total country’s balance of primary energy in 2005 increased up to 8,7 per cent and in 2010 it is expected to be reached one of strategic country’s objectives – this share is expected to be 12 per cent. The Seimas of the Republic of Lithuania in 2002 ratified the Kyoto protocol to the United Nations Framework Convention on Climate Change., After ratification of this document Lithuania voluntary undertook a specific obligation – during the first period of the Kyoto protocol (2008–2012) to reduce greenhouse gas emissions by 8 per cent, in comparison with 1990. In 1990 the industry and transport emitted 50 million tonnes of greenhouse gas, and beyond 2012 this amount must not exceed 46 million tonnes.

Under the directive 2001/77/EC of European Parliament and Council of 27 of September 2001 on the Promotion of the Electricity produced from Renewable Energy Sources in the International Electricity Market Lithuania has obligated that in 2010 the electricity produced from alternative energy sources will make 7 per cent of the total consumed amount. Implementing the directive 2003/30/EC of the European Parliament and the Council on the Promotion of the Use of Biofuels or other Renewable Fuels for Transport Lithuania has obligated that by 2010 the share of biofuels in the market of petrol and diesel for transport purposes will account for 5,75 per cent. Under the new directive of 2008 of the European Parliament and the Council on the Promotion of Use of Energy from Renewable Energy Resources, in 2020 Lithuania must meet the requirements that the share of energy from renewable energy resources must account for 23 per cent in the amount of final energyconsumed, and the share of biofuel must account for 10 per cent in the balance of fuel for transport.

The following Laws regulate the promotion of the production of all kinds of energy from renewable energy resources in Lithuania:• Law on Energy of the Republic of Lithuania (adopted on 16 of May 2002)• Law on Electricity of the Republic of Lithuania (adopted on 20 July 2000)• Law on Heat of the Republic of Lithuania (adopted on 20 May 2003)

In order to promote the production and consumption of biofuel in Lithuania, on 18 July 2000 the Seimas of the Republic of Lithuania adopted the Law on Biofuel. On 5 February 2004 this law was amended according to the provisions of Directive 2003/20/EC of the European Parliament and the Council on Biofuel Utilisation in Transport and new edition was called the Law on Biofuel, Biofuels for Transport and Bio-Oils.

National concepts and programmesThe increase of the utilisation of renewable energy resources in Lithuania is becoming a priority

field of the energy policy. Promotion of the utilisation of these resources is one of the most important objectives of the energy policy. Aiming to promote the utilisation of renewable energy resources in Lithuania, the following national programmes and strategies have been adopted:

1. The National Energy Strategy was adopted on 18 January 2007 by the Seimas of the Republic of Lithuania; it defines the major provisions of the State and their implementation trends up to 2025. This strategy establishes a target to increase the share of renewable energy resources in the national balance of primary energy by 1,5 per cent every year by 2012, and reach 20 per cent by 2025.

2. National Energy Efficiency Programme for 2006–2010 was adopted on 11 May 2006 by the Resolution No. 443 of the Government of the Republic of Lithuania. The programme provides for organisational, legal, economic and other measures to increase the efficiency of energy resources (including indigenous and renewable resources) and the consumption of energy. The Minister of the Economy on 13 November 2006 (Decision No. 4-423) adopted the schedule of implementation measures of this programme, in which are foreseen funds for different promotion measures, including the informing of the public about the possibilities to use renewable energy resources for the production of energy, for research work and for preparation of different programmes.

3. The Programme for Promotion of Biofuel Production and Use for 2004–2010 was adopted on 26 August 2004 by the Resolution No. 1056 of the Government of the Republic of Lithuania. The purpose of this programme is to ensure the development of the production and use of biofuels from raw materials of the Lithuanian origin.

The fiscal measures for the promotion of utilisation of renewable energy resources are as follows:

1. The Government of the Republic of Lithuania undertaking the EU Directive 2001//77/EC on 5 December 2001 by the Resolution No. 1474 approved The Rules for the Promotion of Production and Purchase of Electricity Produced from Renewable and Waste Energy Resources. On 18 September 2006 by the Resolution No. 897 the Rules were amended. According to this document is promoted the production of electricity produced by wind generators, biomass plants, solar power generators and hydro power plants with the capacity of up to 10 MW as well as the purchase of it. The following promotion measures are applied: 1) Power plants are connected to the energetic grid according to the legislation with a discount of 40 per cent of the interconnection fee for the producers. This discount is reckoned in public procurement of services and is compensated next year. 2) The electricity produced from renewable energy resources is purchased under the tariffs set by the National Control Commission for Prices and Energy. The purchase price of electricity produced from renewable energy resources until 2020 is higher than the market price. From 1 April 2002 until 1 January 2009 the price of the electricity produced consuming biofuel and by smallscale hydro power plants was 0,20 LTL/kWh, and the price of the electricity generated by wind power generators was 0,22 LTL/kWh (average purchase price of electricity 0,09 LTL/kWh). Since 1 January 2009 these prices have changed: the price of the electricity produced consuming biofuel and by wind generators is 0,30 LTL/kWh, and that produced by hydro power plants is 0,26 LTL/kWh.

2. On 15 December 2005 the Seimas of the Republic of Lithuania adopted the Law on Supplementing and Amending the Law on Excise Duties (the article 25) that provides for excise duty preference (zero excise rate) on dehydrated ethyl alcohol.

3. The Law on Environment Pollution Taxes adopted on 22 January 2002 by the Seimas of the Republic of Lithuania provides for:o Natural and legal persons, which transport vehicles consume the standard biofuel and pollute the environment, but they have the confirmative documents about the consumption of biofuel, are exempted from the tax on environment pollution from mobile pollution sources;o Natural and legal persons, which have the confirmative documents about the consumption of biofuel for the pollutants emitted into the air, are exempted from the tax on environment pollution from the stationary pollution sources (this amendment was adopted on 31 March 2005).

4. Every year starting 2004 the Minister of Agriculture passes a decision and approves the Rules on the Financing of Biofuel Production Development that determine the promotion of biofuel production development and make the opportunity to use agricultural production for non-food needs. According to the Rules, the producers of biofuel get payments for grains that are used for the production of biofuel. In 2004–2005 for rapeseeds were paid 160 Lt/t and for cereal grains – 60 Lt/t, in 2006–2008, respectively, 160 Lt/t and 114 Lt/t.

MALTA

http://www.energy.eu/

Maltese target: 10% (2005 = 0%)

Key issuesThe market for RES in Malta is still at an early stage and, at present, penetration is minimal. RES has not been adopted commercially, and only solar energy and biofuels are used. Nevertheless, the potential for solar and wind is substantial. In order to promote the uptake of RES, the Maltese government is currently creating a framework for support measures. In the meantime, it has set national indicative targets for RES-E lower than the ones agreed to in its Accession Treaty (between 0.31% and 1.31%, instead of 5%).

Main supporting policiesIn Malta, RES-E is supported by:o A fixed feed-in tariff of 46.6 €/MWh for PV installations below 3.7 kWp; ando A reduction in value-added tax on solar systems from 15% to 5%.

A framework for measures to further support RES is currently being examined. Since 2005, excise taxes no longer apply to the biomass content in biodiesel. Support measures for RES-H have not yet been introduced in Malta.

http://www.erec.org/fileadmin/erec_docs/Projcet_Documents/RES2020/

MALTA_RES_Policy_Review__09_Final.pdf

Malta is totally dependent upon imported fossil fuels for its energy needs, currently over 63% of the primary energy is used for power generation. Renewable Energy Sources (RES) could play a key role for the Island economy. Little development of RES exists so far. However, the potential for solar and wind is substantial, though costs are high. The Maltese government is currently creating a framework for support measures. The targets that are being proposed in the RES2020 proposal for Malta are 10% RES. Solar thermal applications (for hot water requirements) are RES with highest penetration rate in Malta.

KEY FIGURES - The share of RES in total primary energy consumption was of 0.34% in 2007.- The share of RES in the gross final energy consumption was 0 % in 2005.- The share of RES in the gross electricity production was 0% in 2006.- The share of biofuels in the transport sector in 2006 was 0.52%.- Malta energy dependence on imports amounts to 100% in 2005.

RES TARGETS Mandatory targets set by the Directive on the Promotion of the use of energy from renewable sources

- 10% share of renewable energy on the final consumption of energy in 2020.- At least 10% share of renewable energy in final consumption of energy in transport by

2020.

RES POLICY INSTRUMENTS

Support for RES electricity In order to promote the uptake of RES, the Maltese government is continuing its development of support measures.

- Capital grants on PVs and microwind for domestic use. This amount to 50% up to €3,000 per installation.

- Net metering with a spill tariff – avoided electricity costs range between 16c/kWh and 23c/kWh. Malta promotes the generation of electricity by solar energy systems (in the national territory) through a price regulation in terms of a feed-in tariff. The price regulation is based on the so-called „Net-Metering System“ (Reg. 7 (7) PRESR). A metering device measures the electricity used by the plant operator and fed into the grid. If the proportion of the electricity fed into the grid exceeds the customer’s total electricity consumption, the grid operator shall pay 6.99€ct for every kWh of solar electricity that is fed into the grid.

- Government leading by example (PV installations on public buildings and micro-wind installations).

- The Maltese Ministry of Finance grants once-only investment subsidies for small wind and solar power systems to domestic investors built within the Maltese territory. The grant for wind energy systems amounts to 25% of the purchase price, with a maximum grant of 232.94 € (100 Maltese Liri). The grant for solar energy systems amounts to 20% of the purchase price of a photovoltaic system (panels, inverters, cabling) with a

minimum installed size of 1 kWp (+/- 5%), with a maximum grant of 1160 €. Furthermore, the state grants an additional 580€ for every additional kilowatt above the minimum capacity up to a maximum capacity of 3.7 kWp. Fractions of an additionally installed kWp are treated pro rata.

Support for RES Heating and Cooling Capital grants on solar water heaters for domestic use (50% grant on cost & capped at €450, up from 25% capped at €233).

Support for biofuels There is Exemption of excise duty for biofuels. This measure makes biodiesel currently cheaper than petroleum diesel retailed in filling stations and therefore a fiscal incentive provides one of the driving forces for the biodiesel sales.

http://www.repap2020.eu/fileadmin/user_upload/Roadmaps/REPAP_-_MaltaRES_Industry_Roadmap.pdf

The penetration of renewable energy in Malta is still very low. However, within the last few years, the number of renewable energy suppliers has grown from a few tens to over eighty.

Electricity: Photovoltaic grid-connected installations have reached about 240 kWp in 2008, which accounted for 0.015% of total electricity generation of 2008 amounting to 2,313 GWh. In 2009 and early 2010, the Malta Resources Authority has reported a total installed capacity of 3 MWp.

Heat: The Official Census of 2005 reported a total of 5,030 domestic solar heating systems in Malta and Gozo. Following Government capital incentives from 2006, the take up has increased. It is now estimated that there are around 15,000 systems installed, saving around 26 GWhe, which is 1% of the total electricity generated in 2008. However, in 2010 the market for solar water heating system has almost come to a stand-still, since Government‟s grant for the period 2010-2012 has been restricted to low-income families, first-time home buyers and residents of the island of Gozo, which aims to become an eco-island.

Transport: There is a small amount of biodiesel use in Malta. Consumption in 2005 was just under 1 ktoe. According to the European Biodiesel Board (EBB), biodiesel production capacity on Malta in 2007 was 8 kt/yr and accounted for 1.08% of the total fuel sales for transport.4 There is currently no bio-ethanol production or use on Malta. Use of bio-diesel in 2009 has dropped drastically, following some negative experiences with failure of fuel pump rubber gaskets, which lead to a widespread belief that the recommended 20% bio-diesel mix attacks rubber. Another reason for the unpopular use of bio-diesel is that there is no pre-mixed blends available at the service stations. Purchase and mixing of diesel and bio-diesel will have to be carried out by each driver at the fuel pumping station. This seemed to be time consuming and a source of confusion to drivers.

Current renewable energy support policies

Electricity: Capital Grants for Photovoltaic (PV) and WindOnce-only investment subsidies are granted by the Maltese Ministry of Finance for small wind and solar PV systems to domestic investors within Malta. These grants aim at promoting an increase in domestic electricity generation from small scale solar and micro-wind energy systems. It is implemented and administered by the Malta Resources Authority (Directorate for Energy Resources Regulation) 5.The party entitled to subsidies for wind and solar energy systems are home owners who have installed a wind or solar power system for domestic use that is connected to the grid. A development permit is required prior to application for wind turbines only, while solar systems need no application, provided that they follow the design guidance regulations of the Malta Environment and Planning Authority6. Additionally, systems that produce more electric current than 16 A per phase need a permit from the Malta Resources Authority, while those producing lower current only require to fill up a notification form.

PVThe first scheme had started in 2006 with a capital grant of around Euro 1,165 for the first kWp installed, going down to Euro 700 for the next kWp and further down to Euro 465 for the remaining capacity up to a total maximum capacity of 3.7 kWp. In 2009, this was changed and a 50% grant was given up to a maximum of Euro 3,000. There was a cap on the budget and 200 families benefited from the scheme.

For the next 3 years (2010-2012), Government has kept last year’s scheme but the number of beneficiaries was increased to 400 families per year.9 The 2010 call had been fully subscribed on the first day. Government intends to launch an additional call in June 2010, due to the overwhelming interest from the domestic sector and the availability of some European funds for such support. However, following the discovery of a number of fiscal irregularities with regards to the quoted prices, the scheme was suspended and a new grant scheme, with the same maximum subsidy of €3,000, shall be opened towards the end of June 2010.

The scheme is regulated through Government notice No. 81 of 2009 “A Grant on the Purchase of Systems for Domestic Use that Reduce the Use of Energy, or Use Renewable Sources of Energy”. The support is conditional to certified equipment registered by the local suppliers with the Malta Resources Authority (MRA), which will be updated accordingly. However, the scheme does not exclude the possibility that an individual imports one’s own system from abroad, as long as the products are registered and approved by the MRA.

WindMicro-wind turbines installed on domestic premises may qualify for a grant of 25% on the purchase price of micro wind systems (with a maximum generation capacity of 3.7 kW) and are eligible to a maximum grant of Euro 232.94, only. The once-only grant scheme has been effective since 2006. It is renewed for further periods of one year unless a Notice to the contrary is published in the Gazette. The scheme is regulated through GN 136 2006 “A Once-Only Grant on the Purchase of Wind Energy Systems for Domestic Use”. The support is not conditional to certified equipment and installers. However, very few applicants have made use of this grant over the past years, probably due to its low support value and definitely because a full development application for the installation of the wind turbine will have to be filed with MEPA,

which costs time and money.

The 3.7 kW benchmark stems from the fact that renewable energy systems shall require only a notification from an electrical point of view, but must not produce more than 16 Amperes per phase. For larger systems, an additional permit will need to be obtained from the MRA for grid-connection.

Feed-in Tariff (net metering)Since 2004, Malta has promoted the generation of electricity by domestic PV systems through a net-metering system. A metering device records the electricity consumed by the plant operator as well as the amount that is fed into the grid. If the production exceeds the customer‟s total electricity consumption, the grid operator (Enemalta) pays € 0.06988 for every kWh of solar electricity that is fed back into the grid. This spill-off tariff is credited at a lower feed-in tariff rate than the market value. However, it is to be noted that at the time when this spill-off tariff was introduced, its value was equivalent to the average electricity rate at the time. Today’s rates are at least 3 times higher but so far no efforts have been made to upgrade the spill-off tariff.

The instrument is controlled by the Ministry for Resources and Rural Affairs. It is implemented and administered by the Malta Resources Authority (Directorate for Energy Resources Regulation) in cooperation with Enemalta Corporation 12. The scheme is regulated through the “Subsidiary Legislation 423.19. Promotion of Electricity produced from Renewable Energy Sources Regulations, 30th April, 2004, Legal Notice 186 of 2004”.

Soft LoansAt least one of the local banks offers a beneficial loan for residential installations paid over a 10-year period, at discount rate of 2.5%. This loan ranges between € 500 and € 60,000. Loans for non-residential systems amount to between € 25,000 and € 200,000. For industry, the Maltese government also offers a tax credit on the investment.

Heat: Capital Grant for Solar Water Heaters (SWH)The Maltese Ministry of Finance grants once-only investment subsidies for SWH for domestic use. In 2009, 66% of eligible costs were funded up to a maximum of € 460 per family/installation. There is no more than one grant available per technology, but families are eligible to receive subsidies for more than one technology. There was no cap on the budget but the scheme was limited to 4,000 applications. This scheme terminated on 15th February 2010. The instrument was previously controlled by the Ministry of Finance, but since 1 January 2008, it has been controlled by the Ministry for Resources and Rural Affairs. It is implemented and administered by the Malta Resources Authority (Directorate for Energy Resources Regulation).

The previous scheme that ran from 2006 until 2009 has been terminated with effect from 15 February 2009 in accordance with Government Notice 81 of 2009. From 16 February 2009 until 28 February 2009, new applications for solar water heaters were received.

Applicants who have installed equipment before 15 February 2009 would be eligible to apply under the terms of the 2006 scheme (Government Notice 135 of 2006 for PVs and roof thermal insulation and Government Notice 55 of 2006 and 203 of 2005 for solar water heaters) up to 15

May 2009. No applications under the 2006 schemes will be accepted after 15 May 2009.

The scheme is regulated through Government Notice No. 81/2009 “A Grant on the Purchase of Systems for Domestic Use that Reduce the Use of Energy, or Use Renewable Sources of Energy”. The former scheme was regulated through Government Notice 55 of 2006, and Government Notice 203 of 2005. The support is conditional to certified equipment and installers that have to be registered with the MRA.

For the next 3 years (2010-2012), the grant has been upgraded to cover up to 40% of the capital and installation costs, up to a maximum of Euro 560. However, the grant are limited to low income families, new first-time home buyers of value lower than Euro 120,000 and all the residents on the Island of Gozo, to promote the Eco-Gozo programme.13. So far, suppliers have reported a serious drop in sales, due to these restrictions.

Transport: In line with the EU Bio-fuels Directive 2003/30/EC (promotion of the use of bio-fuels or other renewable fuels for transport), the Maltese Government set an indicative target for the use of bio-fuels in 2005 of 0.3% of all fuel sold for road transport. In 2010 the compulsory target is set at 5.75%.14, but it is highly improbable to reach, due to the fact that there was a sharp drop in biodiesel sales during 2009, possibly due to a general belief that damage may be caused to rubber seals of vehicle fuel pumps.

In accordance with the new Renewable Energy Directive 2009/28/EC, the Government has set a binding target of 10% renewable energy in road transport by 2020. However, Malta’s forecast document on the renewable energy roadmap, showed a sharp discrepancy due to the limited number of diesel-engine cars on the roads. A possible solution could be to copower electricity generation with bio-fuels as well.

Since 2005, excise taxes no longer apply to the biomass content in biodiesel. Furthermore, there is specific support for bio-fuels produced from wastes, residues, non-food cellulosic material, and ligno-cellulosic material.

Capital Grant for Electric CarsSince 2005, the Maltese Ministry of Finance grants once-only investment subsidies for electric cars. The instrument was previously controlled by the Ministry of Finance, but since 1 January 2008, it has been controlled by the Ministry for Resources and Rural Affairs. It is implemented and administered by the Malta Resources Authority (Directorate for Energy Resources Regulation).

Electric-powered cars may qualify for a once-only grant of 15.25% on the purchase price of the car, and is eligible to a maximum grant of Euro 1,164.69. This Scheme shall remain in implementation for a period of one year from the effective date, unless terminated beforehand by a Government Notice in the Gazette, and shall be renewed for further periods of one year unless a Government Notice to the contrary is published in the Gazette. The scheme is regulated through Government Notice No. 203 of 2005. There is no cap on the budget. However, the uptake of this grant is very low, probably due to the high price of electric cars, when compared with the relatively cheaper second-hand cars that are being extensively imported into the Island

and cover more than 50% of the car sales.

MOLDOVA

http://www.potsdam.ihk24.de/linkableblob/1071254/.2./data/Praesentation_ConsultGroup-data.pdf;jsessionid=013C57BAE84DE66C65B0C82154AFC8EA.repl21

The law of renewable energy form 2007 governs the legal framework for the renewable energy sector. Until 2020, Moldova aims to increase the share of alternative energies up to 20% of the total energy consumption. There is also an obligation of our country to the European Union to achieve these indicators by 2020.

Moldova is implementing a state program for exploitation of renewable energy. At present renewable energies represents only 5-6% form the total Energy consumption. The total technical potential of the main types of renewable energy sources in Republic of Moldova is estimated at 3.65 million tons of oil equivalent, which exceeds 1.3 times the annual energy consumption in the country. However, the potential for renewable energy sources in Moldova has not been realized.

Future Potential of Republic of Moldova

In the Republic of Moldova there will be built a first factory and this will be the second factory in Europe producing biogas from sugar beet presses. The factory will be built between 2011-2012 and will involve an investment of 10 million euros. Renewable energy projects in Moldova are eligible for financing support from the Central European Initiative and a credit line of 20 million euros from the EBRD.

Solar energyIn spite of absence of own traditional energy resources and the vital necessity of using alternative energy sources in Moldova, solar energy has no noticeable usage. The first stage of solar energy use in Moldova will have the following priorities: Heating of water using solar collectors Drying fruit, vegetables and medicinal plants Photovoltaic conversion for pumping water and for electric energy supply of small consumers.

Timing of return on investments in terms of Republic of Moldova is from 3 till 12 years. Until now, in the Republic of Moldova there are installed dozens of solar water heaters with a total area of about 1 thousands sq. m2. In the warm season, such plants can provide a replacement of about 75% of traditional energy spent on heating water sanitary and domestic purposes.

BiomassBiomass in Republic of Moldova is represented by the following categories: wood, waste products of agriculture (straw, animal dung and poultry), the waste of processing industry (husk sunflower, grape, sugar beet, and waste wood treatment) as well as solid and liquid waste. A promising market in Moldova is using more efficient plants for biomass burning (performance

factor up to 80%) .

While there is some experience with small scale rural biomass applications in Moldova, there is no experience of larger scale or more efficient use. The main generators of biomass suitable for energy purposes are forestry, agriculture, food industry and housing services. Time of return on investment, depending on the technology transformation and types of waste, ranges from 4 to 12 years. Moldova has sufficient biomass resource to provide significant generation if utilized.There is good potential for biomass to be included in social infrastructure and energy system development programs, also developing cross-border cooperation, especially with Ukraine.

Wind PowerThe ability to use wind energy in Moldova is very limited due to low, in most places, the average of wind speed of an average 3 - 4 m / s. In some places, where the wind speed is 5 - 7 m / s, can be fully powered windmills (wind turbines), but in terms of return on the investment for them it will be at least 8 years. In addition, such facilities must give power to a network of high voltage, but in the Republic of Moldova there is no statutory obligation to purchase electric energy from such a manufacturer. Plans to build a 400 kW transmission line to transfer the wind power installed in the eastern part of Moldova are being discussed. The line will connect the grids of Moldova to the grids of Romania.

HydropowerDespite the large number of rivers in Moldova, the potential for hydroelectric generation is relatively low, and there are only two significant-size hydroelectric power plants. The largest of these is the Dubasari facility on the Dneister River, which was built in 1954 and has a generating capacity of approximately 48 megawatts. The Dneister River basin covers over half of Moldova’s territory, with several major tributaries.

The greatest potential for hydropower development in Moldova is in small hydro construction. The Dneister River basin and the Prut and Danube river basin cover the vast majority of Moldova’s territory, and technically represent the best areas for development. Electric Power of Micro hydroelectric stations can be used mainly for irrigation of small territories (approximately 6000 hectares in the basins of these rivers). Time of return on investment for such hydroelectric stations ranged from 4 to 8 years.

The energy of low-grade heat sourcesThe Republic of Moldova has significant natural sources of heat with a relatively low temperature (-5 ... +35 °C) : the water of rivers, lakes, reservoirs, wells; soil; geothermal water; atmospheric air.

This energy using heat pumps can be used for heating and hot water supply. Therefore, their use would provide significant savings by using geothermal water heat (temperatures average around 35 °C), the sources of which are in the southern part of the country. In terms of return on investment this ranges from 7 to 12 years. More advantageous is the use of heat pumps with high

power.

On the basis of studies of oil and gas prospecting holes, reservoirs of thermal water were found in Moldova. The usage of thermal water is absent, and there is no national program for geothermal resources. The highest temperature of 50 °C was measured at a depth of 1 km, southeast of Moldova near the city of Cahul.

http://www.energici.com/energy-profiles/by-country/eurasia/moldova

Renewable Energy sources represented 11.59% of total installed capacity in Moldova in 2008, a decrease of -3.3 percentage points over a 5 year period.

8 MW of capacity was added since 2007 and 0 MW were retired. Hydroelectricity Energy grew the most, adding 8 MW of capacity.

This renewable energy capacity generated 0.08 billion kilowatthours of electricity (2.37% of the total), primarily from Hydroelectricity (100% of the 0.08 bn kWh generated).

Biomass and Waste EnergyAs of 2008, there was no Biomass and Waste Energy capacity in Moldova.

Geothermal EnergyAs of 2008, there was no Geothermal Energy capacity in Moldova.

HydroelectricityHydroelectricity had an installed capacity base of 64 MW in 2008, a change of 8 MW over the previous year. It's share of total installed capacity decreased from 14.9% in 2004 to 11.59% in 2008 and it's share of renewable installed capacity remained unchanged at 100% in 2008.

Hydroelectricity generated 0.08 billion kilowatthours of electricity in 2008, equating to 2.37% of the total electricity generated. This is equivalent to 1.27 billion kilowatthours of electricity per million kilowatts of capacity, which was the highest ratio amongst renewable energy sources.

Moldova has 0.09% of the total regional capacity for Hydroelectricity and ranks at #119 in the world for Hydroelectricity installed capacity.

Solar, Tide & Wave EnergyAs of 2008, there was no Solar Energy capacity in Moldova. Wind EnergyAs of 2008, there was no Wind Energy capacity in Moldova.

BiofuelsAs of 2009, there was no biofuels production in Moldova. Carbon Dioxide Emissions

In 2008, total carbon dioxide emissions in Moldova reached 7.34 million Metric Tonnes (mn MT), a compound increase of 1.98% over a 5 year period. Moldova's total represented 0.29% of total regional emissions and 0.02% of total world emissions. On a per capita basis meanwhile, Moldova ranked at #133 worldwide, with per capita emissions increasing on 2007 by 0.04 metric tonnes to 1.7 metric tonnes.

http://www.enercee.net/moldova/energy-policy.html

Energy Strategy of the Republic of Moldova until 2020 The Energy Strategy until 2020, which was approved in 2007, deals with objectives, measures and activities orientated towards a more efficient, competitive and reliable national energy industry whilst ensuring the country’s energy security, the upgrading of energy-related infrastructure, improved energy efficiency and the utilisation of renewable energy sources, and its integration into the European energy market. The fundamental principles are based on the following: • energy supply systems orientated towards serving the needs of the customer;• improvement of the security of energy supply; • improvement of energy efficiency; • increased use of renewable energy sources;• acceptable environmental impact, on the local, regional and global (climate change) level;• energy systems that include distributed generation sources;• selection and implementation of energy technologies based on criteria related to energy efficiency, operational security, environmental impact ;• reasonable tariffs and the development of a favourable investment climate;• supporting research and development in the field of new and efficient energy technologies;• enhancing Moldova’s role as an important transit country for electricity and gas. National Program on Energy Conservation for the period 2003-2010

The program acknowledges that at present the energy efficiency remains at a low level. The government aims till 2010 to reduce the energy intensity by 2-3 % annually. National Program on Ensuring Environmental Security for 2007-2015 One of the main goals of the Program is ensuring environmental security through improving the legal framework and by building up capacity. The Action Plan of the Program provides an elaboration on the production of electrical energy from renewable energy; a national action plan on diminishing GHE; and the regulation on certifying the origin of electrical energy utilised from renewable energy. Legislative framework

Laws•Law no. 160, July 12, 2007 "Renewable Energy"

•Law no. 138-XVI, June 21, 07 "On Scientific and Technological Parks and Innovation Incubators" •Law no. 144-XVI, June 22, 07 "On Compeleting some Legal Acts" (about incentives for residents of scientific and technological parks and innovation incubators) •Law No. 81-XV, March 18, 2004 "On Investments in Entrepreneurial Activity" •Law no. 137-XIV, September 17, 1998 "Electricity Law" •Law no.1525-XIII, February 19, 1998 "Energy Law" •Law on Privatization Program 1997-1998 •Law on Amendments and Supplements to the Law, no. 233-XIV, December 23, 1998 "On Individual Privatization Project for the Electric Power Sector Enterprises" •Law no. 336-XIV, April 1, 1999 "On Restructuring Debt of Electricity Sector Enterprises" •Law no. 613-XIV, October 1, 1999 "On Amending Article 10 of Individual Plan for Privatization of Electricity Sector Enterprises" •Law no. 63-XIV of June 25, 1998 "On Concept of Electricity Sector Enterprises Privatization" •Law no. 1136-XIV July 13, 2000 "On Energy Conservation"

Government Decisions•Prime Minister Decision No. 0919-25 as of January 04, 2006 on Creating a Coordination Council for the Use of Renewable Energy •RM Government Decision No.899, August 25,2005 “On Creating Carbon Trade Office” •RM Government Decision No. 713, as of June 23, 2004"On Construction of Power Plant Next to Burlaceni Village, Cahul Region" •RM Government Decision, no. 113, February 7, 2000 "On Ensuring Conditions of Sale and Purchase of State Shares in Electricity Sector Enterprises" •RM Government Decision, no. 520 dated June 7, 1999 "On Measures to Implement Law on Restructuring Debt of Electricity Sector Enterprises" •RM Government Decision, no. 1059, November 13, 1997 "On Restructuring the State Company "Moldenergo"

Energy Related Funds and Programmes Energy Efficiency Fund

The Fund shall be an independent and financially autonomous legal entity, shall hold settlement accounts in banking institutions; have its stamp, etc. The Fund’s main activity shall be the management of finances, with a view of promoting the financing of energy efficiency and renewable energy in compliance with the state strategies and programs for the development of these fields.

The Fund’s financial resources shall be used exclusively for:•Financing investment projects of energy efficiency and renewables in the Republic of Moldova; •Offering guarantees for loans allocated by financial and crediting institutions for investment projects with a view of increasing the energy efficiency and use of renewable energy sources in the Republic of Moldova; •covering the Fund’s own costs provided in the budget approved by the Administration Board of the Fund, including the services rendered by the Fund’s administrator and Fund’s financial

audits. •Technical assistance if this is considered necessary for implementation of the eligible projects.

EBRD ENVIROS, s.r.o., (Czech Republic) has been conducting in 2008 an Assessment of Sustainable Energy Investment Potential in Moldova. The research is financed by the Czech Republic. Based on the outcomes, EBRD will consider developing a Sustainable Energy Financing Facility (“SEFF”) for energy efficiency and renewable energy projects in Moldova. The financing facility could be in the form of targeted credit lines that will provide funds to local financial institutions for lending for investments in energy efficiency and renewable energy in the industrial, residential, and municipalities sectors.

World Bank Biomass The World Bank has been actively involved in a number of projects aiming to both reduce the economic dependence on the energy imports and to use the locally available resources. In May 2005 the Project “Renewable Energy from Agricultural Wastes” started. The project is financed by the World Bank, Global Environment Facility (GEF). The total project financing amounts to 2,7 mln US Dollars. The main objective of the project is to provide a foundation for a broad use of biomass in substitution for imported fossil fuels. In the course of the project development ten communities will be selected as demonstration sites, where in public buildings the coal based heating systems will be replaced by new ones based on agricultural wastes, namely baled straw. Initially small scale systems of 50 - 500 KWth will be introduced. Furthermore, if the demonstration is successful, in the period 2006-2010 it is planned to replicate the project in 10 % to 33 % of communities carrying out public building development projects. The history behind this project is a World Bank sector study “Potential Use of Renewable Energy (Biomass) in Moldova”, financed under the Austrian Global Environment Consultant Trust Fund, conducted in 2002. The study concluded that primary and unprocessed agricultural wastes, in particular wheat straw, is the most accessible and the least utilized biomass appropriate for thermal energy production in Moldova.

Development of RES is in its early stage in Moldova. In 2005, the share of renewables in energy consumption was 71,4 ktoe, just 3,6% of the total primary energy supply. Hydro energy and biomass have the largest share, while solar and wind energy have been inadequately explored. Biomass, hydro energy, solar and wind energy are available in the territory of the Republic of Moldova. The theoretical potential for these renewable sources, excluding geothermal, has been estimated at 2,7 mtoe.

Wind Energy According to a country profile issued by EBRD on the use of renewable energy in Moldova, there is a good potential for wind power development in the country. Even though, no wind turbines operate in the country, about 10 % of the territory can be used for wind power development. The total potential wind power capacity is approximated at 1.000 MW. Howver,

better documentation is needed. In addition to the poor measurement there is another obstacle to the use of the wind energy, namely the widespread belief that the country wind resources are poor. Areas with high potential wind energy are as follows: in the north-east of the country, separate areas on the Podolsk Hills in the middle reaches of the Dniester river near the border with Ukraine; in the south-east, separate areas near the Dniester estuary; in the west, separate areas in the Carpathians piedmonts near the border with Romania. The Energy Strategy 2020 forsees to intall approx. 30 MW wind capacity by 2015, which is estimated to amount to a total investment o f approx. 40 mln. Euro.

Solar Energy The average solar radiation in Moldova amounts to approximately 4450 h/year. (In fact, the real value is 2100-2300 h/year, approximately 50% of the maximum theoretical period). The best solar season is from April to September, representing more that 75% of the total annual solar period. Solar energy is used as much as the wind energy in Moldova, which means that with the exception of some solar-heating plants with small thermal power, it finds no significant application. Solar radiation is measured only in the capital Chisinau. 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. In the Renewable Energy Resource Assessment, the EBRD estimates domestic solar water heating for public buildings and hotels, passive solar systems, and stand alone systems for sites far from the grid, to be the most promising applications.

Geothermal EnergyThe geothermal energy resource potential is estimated to be poor. A few wells with the temperature between 30° C and 50° C were discovered in the southeast, near the town of Kagul, and in the west, at the foothill of the Carpathian Mountains, near the town of Ungheni. However, no wells with high temperature thermal water are available in Moldova. Biomass EnergyAccording to the EBRD, in addition to coal and wood sunflower stems, shelled maize cobs, maize stalks and other agricultural wastes are currently used for heating. However, since the efficiency of the domestic stoves is below 50 %, biomass is used inefficiently. The technical biomass resource potential is estimated in Moldova as more than 370 thousand toe per year. Yet, relatively high investment costs represent the biggest obstacle to construction of new biogas plants. Coal supplies, traditionally used for heating of the public buildings, have been cut back considerably. This has often resulted in the closure of public buildings in the winter period. District heating plants operate only in big cities. A GEF-Project is being implemented, where the coal-based heating systems are replaced by those burning straw in 10 selected rural communities (see section Energy Related Funds and Programs). Hydro Power By absolute indices of potential hydro resources Moldova is the last among the CIS countries. There are only two major hydroelectric power plants, in spite of the fairly large number of rivers in Moldova. The largest of these is the Dubasari plant on the Dniester River. The power plant was built in 1954, and its installed capacity is 48 MW. The other significant hydro power plant with the installed capacity of 16 MW is located in Costesti, on the Prut river. According to the

EBRD, Moldova has a good potential for the development of small hydropower constructions. Under the Energy Startegy 2020, mini hydro stations with a capacity of 1,2 MW are planned to be built on the Raut river, close to the village of Tribujeni, in the Orhei district.

MONTENEGRO

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Traditionally, renewable energy resources, beside the utilization of hydro power, have no significant history in Montenegro. Shortage in energy supply in Montenegro, which contributes a lot to the total negative trade deficit, initiated discussion how to find an appropriate way to provide stable energy supply. Renewable energy sources could therefore play an important role in the future.

In order to promote the use of renewable energies and to establish strong partnerships with all relevant stakeholders in the Country, including industry, businesses, scientific and research institutions, NGOs, the Government of Montenegro initiated the preparation activities for elaboration of National Strategy for Renewable Energy Resources trying to make a ground for cooperative action with all stakeholders to accelerate the development and the commercialization of renewable energy technologies.

Generally, one of the obstacles for introduction of the proper support mechanism from the Government is the lack of sound and valid analysis of potentials on renewable resources in Agriculture and available technologies. Also, the lagging elaboration of following legal documents and regulations related to this issue is very big obstacle for faster introduction of utilization of renewable energy resources in Montenegro.

The main reason for not having presence of using of the biomass from the agricultural sector is specific character of Montenegrin agriculture. One of the main of its characteristics is lack of field crops’ production (cereals, maize, sugar beet, oilseeds etc). In many strategic documents it was reported that Montenegro does not have commercial production of the cereals.

Situation on EU directives related to RE in the countryAccording to the Agreement on Energy Community of South-East Europe, Montenegro is obliged to adopt EU Directives related to utilization of renewable resources:

• Directive 2001/77/EC on the promotion of electric energy from renewable resources on international electro energy market. Montenegro has prepared the plan for implementation of this directive, although there are a lot of other obstacles that have to be resolved like nomination of national goal, establishment of support system and guaranties of origin, green certificates, short and simple administrative procedures, definition of conditions for attachment to the grid.• Directive 2003/30/EC on promotion of utilization of bio fuels or other renewable fuels for transport: This regulation is refers using bio fuels on the market with share of 5.75% in total amount of fuels in traffic until the 2010. Montenegro has fulfilled its obligations in relations with

the implementation of this directive.• Directive 2001/80/EC on limited emission in the air from big facilities with combustion. This directive is referring to big facilities for heating, thermo power of 50 MW. It is prescribing the limit figures of emissions in the air for new and existing power plants. • Directive 1999/32/EC on reduction of sulphur in liquid fuel. Implementation of this directive is planned by the end of 2011. It refers to reduction of emissions and introduction of limits for sulphur dioxide.• Directive 96/61/EC on integrated protection and pollution control (IPPC directive): Directive goal is to accomplish the integrated protection and monitoring of pollutions caused by different activities (including the whole energy sector)

Generally, by signing of the Agreement on establishment of energy economic community of SEE and EU, Montenegro accepted the responsibility to apply directives linked to increased utilization of renewable resources. Kyoto Protocol was ratified in the Parliament of Montenegro in 2007.

In terms of primary energy, Montenegro produces coal, wood, hydro energy, but no resources with regard to petrol or natural gas. During 1997-2006 main sources of the primary energy were hydro energy (depending of the hydrologic situation) and coal - lignite. In the same period there was positive trend in the energy production, increase of 5.5% in hydro energy production and 3.3% in lignite.

According to the EUROSTAT methodology (?), total production of primary energy in 2006 was 24.59 PJ (100%). In the total production of primary energy, hydro energy participates by 8.26 PJ (33.6%), lignite by 13.88 PJ (56.5%) and wood for heating by 2.45 PJ (10.0%). However, total consumption of the primary energy in 2006 was 46.11 PJ (100%). In total energy consumption in Montenegro the biggest share belongs to the oil derivates (32.3%); then coal (30.1%), hydro energy (19.6%) and wood with 5.3%. It means that share of renewable energy sources in total consumption is 24.9%, which is higher than what was decided as a strategic goal of EU until 2020. Consumption of the final energy in 2006 was 34.4 PJ, with the biggest participation of oil derivates 43%, electric energy 40% and heating energy 11%.

Wind energy PotentialThe results of the research done in the study: Estimation on potential renewable energy sources in Montenegro (2007) are presented as the maps of wind for the whole country. The maps show average speed of wind and average theoretical potential of wind at referent altitude of 50 metres above sea level. The analyses show significant potential of wind energy at certain part of the country.

According to the maps, as the favorable location for using wind energy are the following: Coastal part: the highest wind speed was measured in the region of mountain Rumija sand in the vicinity of place Petrovac, then in mountain area of Herceg Novi. Average speed of wind in these regions is more than 6 m/s; Hills in Niksic municipality – this region is characterized by average wind speed 5.5-6.5 m/s.

According to the study Estimation on potential renewable energy sources in Montenegro (2007),

installing wind generators and using wind energy in these favorable areas, together with zones with average potential, could supply 20-25% of total annual energy consumption in Montenegro.

Solar energyEstimation of potential solar energy and creation of the solar maps in Montenegro was based only on satellite data, since data from the ground were not available. Montenegro has a significant potential in solar energy using, since the number of sunny hours is more than 2000 hrs annually for major part of the country, and more than 2500 hrs in coastal strip. The quantity of solar emission is comparable to the same in Greece and Italy. Precisely, Podgorica has larger annual solar emission (1602 kWh/m2) than Rome or Athens, for example.

Since the clear solar potential in coastal strip and in the central part of Montenegro is very high, it is recommended to use solar energy by using passive and active solar architecture (solar collectors for heating sanitary water and for heating households and tourist premises. As far as solar energy use so far is concerned, only sporadic using can be stated in smaller tourist places, mainly in the hotels, while solar energy in the households were not used. The study Estimation on potential renewable energy sources in Montenegro (2007) does not give estimation on how much solar energy could be produced in Montenegro.

National policyMontenegro response to the challenges of our time, which implies voluntary taking the obligation to treat in the future environmental protection as an issue with undisputable priority and of utmost significance has resulted in proclamation of Montenegro as ecological state at the National Assembly session in 1991. Sustainable development of Montenegro has three preconditions: natural resources (rich environmental and biological diversity); harmonized respect toward nature (traditional concern for natural resources and social mechanism for protection of natural environment) and commitment of present generation to solve the developmental problems using the principals of sustainable development.

Using today renewable energy technologies will benefit generation to come. Therefore, beside already exiting guidance for the sustainable uses and protection of Montenegro’s natural resources, containing in the policies and strategies, the emerging needs for renewable and Montenegro’s resource potential need to be assessed and transferred into a relevant national strategic documents.

Montenegro’s National Renewable Energy Study addresses the Country’s potential for solar, wind, hydro and biomass power production (potential for exploiting different forms of renewable energy), followed with the Action plan of implementation. However, the base for drafting of the National Renewable Energy Study is the existence of Studies of Montenegro solar, bio-mass and wind power potential, as main renewable energy sources. Therefore, this project proposal will be focused on preparing previously mentioned studies in order to help and provide Government of Montenegro necessary ground for drafting National Renewable Energy Study. Government of Montenegro start building this ground certain work on Montenegro’s hydropower potential has been done through the preparation of “Small Hydropower Plant Development Strategy for Montenegro’ (February, 2006).

National concepts and programmesIn May 2006 Montenegro became an independent state. This move was followed with an intense period of establishing multi- and bilateral relations, speeding up the process of EU integrations, and consolidating the normative framework for internal economic development of the young state.

Treaty Establishing the Energy Community: Montenegro became an adhering party of the Treaty to Establish an Energy Community in October 2005. The intension of the treaty is to promote energy security by allowing all members (EU members and SEE countries) to trade power with each other and help to balance supply and demand across the region. The Treaty also sets out the rights and obligations of members. Adherents are expected to create free and fair conditions for free trade of power. They are obliged to create the institutions and rules for power trade, unbundled the energy sector, and allow transparent and non-discriminatory opportunities for new generating opportunities. Under the treaty adherents are also obliged to set a renewable energy generation target, however in the case of Montenegro, it is unlikely they would be obliged to expand their target beyond the existing share of renewable energy generating capacity.

Environment Law: The Government of Montenegro declared itself as an ecological state in 1991. The environment law adopted in 1996 declares that Montenegro will adopt stricter environment norms and standards than international legislation. This includes emission standards and environmental impact assessment, and the higher standards effect the government’s options for developing its generating capacity. It makes it difficult for Montenegro to develop its large hydro power potential, particularly in protected areas, and will increase the cost of power generation from new and existing thermal sources, since generators will need to make additional investments to complying with higher air emission standards.

Energy Law: In 2003, Montenegro approved a new Energy Law laying the legal foundation for unbundling the energy sector, confirming the policy making role of the government and Ministry of Economy, establishing a fully independent Energy Regulatory Agency, and setting the framework conditions for an electricity market. The law makes provisions for foreign investment in the sector and for non-discriminatory access to the transmission and distribution network and to the sale of power for renewable energy generating sites of 10 MW and less, along with simplified procedures for authorization and licensing.

Energy Development Strategy: The Ministry of Economy has published energy policy guidelines based on which the energy development strategy is now being drafted. The government’s policy goals and objectives in the energy sector include: a secure, high quality, reliable power supply; a reduction in dependence on energy imports; the creation of conditions for investment in new and upgrading existing generating capacity; and higher utilization of renewable energy resources. First drafts of the energy development strategy indicate the government is expecting private investment to drive the construction of new generating capacity. While the regional power market is not yet established the government is expecting regional market prices for energy to drive private investment in new generating capacity, however they will consider subsidies where necessary.

The Small Hydropower Development Strategy: The part of the government’s plan to build new

capacity is enshrined in the newly adopted Small Hydro Power Development Strategy, which will become part of the Energy Development Strategy once it has been drafted. The strategy sets out specific steps to realize between 15 and 20MW of new small hydrogenating capacity by 2015:- Assessment of technical potential for small hydro power development in Montenegro and its environmental impact;- Development of administrative and operational procedures for purchase of electricity from small hydropower plants and its delivery to the Montenegrin grid;- Designing simplified and streamlined procedures for tendering and authorization procedures for construction of new small hydropower plants;- Harmonizing a system of fees and charges for small hydropower electricity producers;- Methodology for setting purchase price for electricity from small hydropower plant;- Governmental investment support schemes for small hydropower development projects.

http://www.reeep.org/index.php?id=9353&text=policy&special=viewitem&cid=9

While electricity demand is growing fast in Montenegro, production is hampered by old structures, limited investments, and the run down assets in the state-owned electricity company, Electric Power Company of Montenegro (EPCG), which has reported annual losses of about 1 percent of GDP since 2002. Significant capacity additions with high investment costs will be required to meet the growing energy demand in the country.

In Montenegro the share of renewable electricity sources as a percentage of gross electricity consumption reached 39.8% in 2006 (1,876 GWh). This figure is misleading since Montenegro is highly dependent on electricity imports, as domestic production amounts to only about two thirds of gross consumption; therefore the share of renewable electricity generation in terms of domestic production is significantly higher than in the case of consumption, reaching 63.6%. Montenegro’s renewable electricity generation is dominated by hydro generation, which is the only renewable source currently used. Large hydro plants have an installed capacity of 649 MW, while small hydro plants only amount for 9 MW. Montenegro does not have an official renewable target for 2020 and is highly dependent on electricity imports; however, it has significant potential in local renewable energy sources to reduce this dependence. Key renewables in Montenegro are hydro, wind, biomass and solar energy. The largest potential is that of hydro, with approximately 11 TWh/year hydro generation potential; while the current utilization level is about 17%. Potential for small HPP generation is approximately 400 GWh, with potential sites being characterized by relatively small flows and high slopes. Wind energy potential is relatively low in Montenegro. Wind speeds in excess of 5 m/s are only present in the central and coastal regions of the country. Except for traditional uses, biomass has not been adopted as a power source. However, the resource potential in Montenegro is good, with 42% of the country being forested.

Based on the studies that are supporting the National Energy Strategy, Montenegro has one of the greatest potentials for solar energy in South East Europe, with direct solar irradiation accounting for 17-18% of annual time. Average energies of 4.45 kWh/m2 have been recorded at seaside towns in the country. The only study into the geothermal potential of Montenegro was undertaken in the territory of the capital, Podgorica. Underground waters of 12-13 degrees Celsius were found, which could be used for summer cooling.

The Energy Policy of the Republic of Montenegro was adopted in April 2005. In June 2007 the document Energy Development Strategy of Montenegro by 2025 was prepared. The next step following the adoption of the Energy Development Strategy was the preparation of its implementation through the development of the Action Plan for the first 5 years (2008-2012). The Energy Development Strategy of Montenegro by 2025 functions as the starting point for a European model of a sustainable and strategic development of its energy sector and the enactment of other necessary legislation, and the institutional support for a successful implementation of Montenegro’s energy policy on its way to European and broader international integrations, and certainly as a support to the Government of Montenegro and other government institutions in the preparation of other energy program documents. Montenegro has developed an Energy Efficiency Action Plan 2008–2012 to promote more efficient use of energy across economic sectors. The Montenegro Energy Efficiency Project will finance improvements in heating systems, insulation, thermostatic valves, heat substations and networks, and other installations in buildings such as schools and hospitals.

POLAND

http://www.energy.eu/

Polish target: 15% (2005 = 7.2%)

Key issuesProgress towards the RES-E target in Poland is slow. The penalties designed to ensure an increased supply of green electricity have not been adequately used. The potential of hydro power, biomass and landfill gas is high in Poland. Hydro power plants have not been fully used to date, biomass resources (in the form of forestry residues, agricultural residues and energy crops) are plentiful in Poland, and landfill gas is promising as well.

Main supporting policiesPolish RES-E policy includes the following mechanisms:o Tradable Certificates of Origin introduced by the April 2005 amendment of the Law on Energy (1997).o The Obligation for Power Purchase from Renewable Sources (2000, amended in 2003)

involves a requirement on energy suppliers to provide a certain minimum share of RES-E (3.1% in 2005, 3.6% in 2006, 4.8% in 2007 and 7.5% in 2010). Failure to comply with this legislation leads – in theory – to the enforcement of a penalty. In 2005, these were not sufficiently enforced.o An excise tax exemption on RES-E was introduced in 2002.o The Energy Act of April 2007 incorporates a principal support mechanism of Certificates of Origin for RES-E: all energy companies selling electricity to end users have to obtain and present for redemption a specified number of Certificates or pay a substitution charge.o A liquid biofuel quality requirement regulation entered into force in September 2006.

Since January 2007, biocomponents for liquid fuels and liquid biofuels have been exempt from excise duty; preferential excise duty treatment was planned to increase under an Act of May 2007. An obligation to add a specified volume of bio-component to fuels was also introduced by two recent Acts (June 2006). Another element in this policy mix is structural funds, which can be used to improve the infrastructure of biofuels and other RES.

http://www.paiz.gov.pl/files/?id_plik=12126

Under the EU directive Poland is obligated to reduce CO2 emissions through increased use of renewable energy sources (RES) in energy production. By 2020, energy from renewable sources must account for 15% of gross final energy consumption in Poland. In a bid to implement EU's decisions regarding energy, Poland adopted assumptions for internal energy policy enshrined in a document entitled "Poland's energy policy till 2030" covering a long-term development strategy for the power sector, fuel and energy demand forecasts, an implementation action plan, and projections for the use of renewable energy sources and development of this segment of the power sector.

The following are the key objectives of Poland's energy policy on RES: Increase the share of renewable energy sources in final energy consumption to 15% by 2020 and 20% by 2030, Achieve a 10% share of biofuels in the transport fuel market by 2020 and maintain this level in the years to follow, Protect forests against excessive exploitation aimed to obtain biomass and promote sustainable use of farmland for RES-related purposes, including biofuels, with a view to preventing competition between energy generation from renewables and agriculture.

Currently, given the actual technological potential that can be used in economic terms, Poland's renewable energy resources suffice to meet almost half of the demand for final energy (heat, electricity, transport fuels). This potential will be growing as RES application technologies keep evolving proportionally to the development of RES technologies. If realised, Poland's potential will allow to meet 48% of the demand for renewable energy by 2050. This potential is currently scarcely used, at a level of 17%.

BiomassBiomass is regarded as the most abundant source of renewable energy in Poland. It is so cheap to use that it can compete with fossil fuels. Solid biomass resources are currently based on surpluses of straw and hay, woodchip, energy crops and farm waste. Biomass is chiefly used for

the production of thermal energy in distributed generation low- and mediumcapacity units (individual boilers and local boiler plants) and for the production of electrical energy in coal-fired condensing boilers in high-capacity power stations in co-firing process. Poland's renewable energy sector currently pins high hopes on biomass as it can be used for energy generation in direct burning of solid and gaseous biofuels and be processed into liquid fuels used for the production of electrical and thermal energy. The coming decade is expected to see the conversion of farm products (straw, rapeseed oil, potato) plants (trees, branches) and other products into thermal energy.

BiogasAccording to government calculations, Poland can produce 5-6 billion m3 of biogas with natural gas parameters per year. It is estimated that farm and agri-food industry by-products alone can suffice to generate around 1.7 billion m3 of biogas per year which accounts for ca. 10% of domestic gas consumption. The Ministry of Environment assumes that more than 2 thousand of farm-scale biogas plants with a power capacity of ca. 1 MW each will be built in Poland by 2020. Construction of a 2.1 MW biogas plant costs ca. 28 million zlotys. Around 50% of investment costs will be covered by investors and the remaining funding will come from subsidies or preferential credits.

BiofuelsThe term biofuels refers to transport fuels produced from organic materials. Biodiesel (produced from vegetable oils) and bioethanol (produced from sugar and starch plants) are the most common forms of biofuels called 1st generation of biofuels. The international biofuel market is dominated by bioethanol, but biodiesel still reigns in EU countries, accounting for over 80% of total biofuel production in volume terms. Biodiesel is so popular because it can be used in its pure form or as any mix with diesel oil. Over the next few years the 2nd generation of transport fuels produced from non-consumable / energy crops and waste (wood, grass and certain types of waste) will appear in the Polish market. 3rd generation biofuels, derived from hydrogen, will appear in the market by 2020. Hydrogen share will be on a constant increase, while the 2nd generation biofuel market will become saturated around 2050. Towards the end of the period in question 1st generation biofuels will be ousted from the market. Considering the minimum share of biocomponents in the transport fuel market, the following are the respective values that Poland is expected to achieve in the years 2010-2014.

According to data released by the Energy Regulatory Office, domestic production of biofuels totaled 15.6 thousand tonnes in the first half of 2009, while total biofuel sales in the domestic market reached as many as 60.4 thousand tonnes. This means that the volume of imported biofuels offered in the Polish market is three times higher than production at home. 45.5 thousand tonnes of pure ester were sold in Poland in the first half of 2009, with only 2.1 thousand tonnes of the fuel being produced internally. Total sales of diesel-based biofuels reached 14.9 thousand tonnes, including 13.5 thousand tonnes produced at home (90% of market demand). In the first half of 2009 Poland did not report sales of biofuels based on engine petrols.

PhotovoltaicsPhotovoltaics technology allows to convert sunlight into electrical energy. Photovoltaic installations are regarded as the most environment-friendly technology for electrical energy

generation. Production of energy obtained through systems of solar cells does not involve harmful emissions of gases, waste or noise into the environment.

Currently photovoltaic is most widely applied in the form of standalone systems generating from a few to a few thousand W of energy. There are a few dozen installations of their kind working currently in Poland. The systems are mainly installed in difficult access areas or locations far away from power lines. Photovoltaics applications include navigation systems in the Baltic Sea, demonstration systems, installations for drying and ventilating agricultural produce, lighting in individual recreation homes, power supply for warning lights.

Photovoltaic systems have a number of merits, including infallibility and no need for maintenance. Among faults mention is chiefly due to costs related to the production and installation of such systems. Also, with technological advances and growing costs of energy generated by conventional methods, attention is drawn to the fact that the payback time for investments in solar energy becomes increasingly short. Over the past 50 years the efficiency of photovoltaic installations has increased from a few to a dozen-so percent. During the same time the price of 1W of the nominal power of a photovoltaic installation has dropped from 1500 USD/W to ca. 4.5 USD/W.3 Forecasts predict that the prices of electrical energy produced by photovoltaic systems may catch up with the prices of energy generated in conventional power stations as early as 2020.

In 2006 the power of photovoltaic systems installed in Poland totalled 440 kW, with autonomous systems (mainly road signs) accounting for ca. 75%. According to experts, photovoltaic in Poland has huge technological potential.4 It is assumed that by the mid 21st century solar power plants will provide ca. 30% of energy. In view of increasing profitability of these solutions and expanding road network, there is no doubt that the solar energy sector will continue to develop at a level of 100-200 kW annually.

Wind energy227 licensed wind power stations are currently sited in Poland which means that a single turbine installed has a capacity of nearly 2MW. Wind power density per km2 in Poland ranks among the lowest in Europe. Installed wind power per capita is 0.0037 kW per km2 of water area and 0.45 kW per km2 of land area. Among wind farms built in Poland mention is due to 14 existing professional projects and 13 facilities under construction.

Wind energy production in Poland in 2008 totalled 729 GWh, and the share of wind energy accounted for ca. 0.5% of total domestic consumption of electrical energy. Wind farms installed in this country currently have a power capacity of ca. 666 MW. Even though the market is developing at a very quick pace (ca.171 MW added in 2008), we are still lagging way behind European leaders. According to a report of the Polish Wind Energy Association entitled "Assessment of wind energy development opportunities and potential in Poland till 2020”, installed power capacity of 14000 MW and generated electricity at a level of 30 TWH are the realistic targets for the wind energy segment till 2020.

Wind power potential is put at 6.0 – 8.0TWh of electrical energy per year. According to government plans, wind turbines should generate 2.3% of domestic energy consumption by

2020. To achieve this goal Poland must install at least 2000 MW of wind power. Wind energy resources are strongly interconnected with local climate and terrain conditions. Particularly good wind conditions occur along the Baltic coast, especially in its western stretch, and in Poland's north-eastern corner. Investors planning construction of wind power plants can also consider other locations, especially areas lying at higher altitudes above sea level, areas without terrain roughness, and unforested areas of hills and slopes in southern Poland. Such areas can also be found in the Sudety, Beskid Slaski and Zywiecki mounting ranges, in the Bieszczady mountains, the DynowskiePlateau, the Hump of Lubawa, and in Kielce area.

Legislation governing the renewable energy marketThe following legal acts have been adopted with a view to supporting the establishment of a system of expenditure of EU funds:

• Within EU legislation: Directive 2001/77/WE of the European Parliament and of the Council on the promotion of electricity produced from renewable energy sources in the internal electricity market. Directive 2003/30/WE of the European Parliament and of the Council on the promotion of the use of biofuels or other renewable fuels for transport.

• Within Polish legislation: Biocomponents and liquid biofuels act, Energy act, Environmental protection act, Act on the release of information about the environment and its protection, society's involvement in environmental protection and on environmental impact assessments, Nature protection act, Building act, Water act, Ordinance of the Council of Ministers on National Indicator Goals for 2008 – 2013, Ordinance of the Minister of Economy establishing detailed provisions regarding the obligation to obtain certificates of origin and to present them for redemption, payment of substitution fee, purchase of electrical energy and heat generated in renewable energy sources and obligation to confirm data related to the amount of electrical energy generated in a renewable energy source.

http://www.greenworldinvestor.com/2011/05/12/renewable-energy-in-poland-windbiomass-in-brief-increasing-with-huge-prospects-due-to-90-dependence-on-coal/

Poland is one of the largest countries in Europe to have such a high dependence on Coal Energy to meet its Electricity Needs. European Union has a target to meet 20% of its Energy by 2020 from Renewable Energy sources which has mad the fossil fuel dependent Eastern European countries looks towards Wind, Solar and Biomass Energy. Eastern European countries like Romania have seen a boom in wind energy driven by incorrect Green Energy subsidy policies while the Solar Boom in Czech led to a drastic increase in electricity prices forcing the government to Bust it with a combination of FIT cuts, tax increases and strict regulation. Poland

which is the largest Eastern European country in the EU has traditionally depended on Coal to meet most of its Energy Needs. Despite the major disadvantages of Coal, Poland has resisted reducing the support given to the Thermal Power Industry. The cheapness and abundance of Coal has made it hard for Poland to shift its Energy Policy like other Coal dependent nations like South Africa, China and India.

Poland Renewable Energy Target

Poland has established a target of 7.5 percent of energy production from renewable sources by 2010, and 15% by 2020. However, these targets have not yet been enforced, discouraging large scale renewable development. Even so, the aggressive targets combined with strong economic growth provide a healthy investment atmosphere for renewable energy developers. Utilities are required to purchase electricity from renewable sources, although prices are not regulated by tariffs. The Energy Act of April 2007 states that all energy companies selling electricity to end users have to obtain and present a specified number of renewable energy certificates or pay a substitution charge.

Solid biomass had the highest share in renewable energy production in 2008. It amounted to nearly 87% of the total domestic production of energy from renewable sources. Liquid biofuels were the next largest carrier in primary energy production from renewable sources (5.4%), followed by water (3.4%), biogas (2.4%) and wind (1.3%). Heat pumps, geothermal energy, solar radiation and energy from municipal waste were less significant in the total balance.

Renewable Energy in Poland Increasing with Wind and Biomass Energy

Biomass and wind appear to be the most promising renewable energy resources for development in Poland, with an estimated potential of about 4,000 MW each.

Wind Energy in Poland

Poland also has some of the best documented wind resources in Central and Eastern Europe with areas reaching up to 1,000 W/m2 in power density. Poland has started to increase its Renewable Energy Industry with 460 MW of Wind Energy installed in 2010 .Poland is set to install around 500 MW of Wind Energy this Year. Poland had 1,005 MW of installed capacity for wind-generated power in the middle of 2010.

The Polish Wind Energy Association predicts very dynamic growth of installed capacity in the wind power sector, amounting to about 13 GW in 20203). The figure comprises almost 11 GW of onshore wind farms, 1.5 GW in offshore wind and 600 MW of small wind.

Biomass Energy in Poland

Thermal Power Plant are being converted into a Biomass Power Plants because Biomass Energy has a number of advantages over Coal Energy. Both liquid and solid biomass are considered to be the main sources of renewable energy in Poland, for both electricity and thermal energy production. Currently, biomass is mainly used as heat in small and medium scale boilers in

industrial settings. Common fuel is wood pieces, sawdust, and wood shavings. Combined heat and power (CHP) plants using organic waste from pulp and paper operations, and straw and wood fired heating plants are also in operation.

The amount of electricity generated from biomass between 2006 and 2008 increased nearly twofold – from 1818 GWh to 3267 GWh. A large part of it was generated in co-combustion processes (84% in 2008). Also the amount of electricity produced from biogas increased almost twice during the three analysed years, from 117 GWh in 2006 to 221 GWh in 2008. Over half of this was generated from landfill biogas (63% in 2008), one third from biogas produced in sewage treatment facilities and the remaining small part was generated in the agricultural sector (4% in 2008).

French energy company GDF-Suez plans to convert a 225 MW Coal powered Plant will be converted into a biomass powered plant making it one of the biggest biomass plants in the world. The 205 MW Biomass power plant in Polaniec, south-eastern Poland will use about 1 million tonnes of biomass a year.GDF is also interested in purchasing assets from Sweden’s Vattenfall. The latter company intends to leave the Polish market by selling its major holdings there. Poland’s second-largest utility, Tauron, has taken a z?.30 million loan to help it finance the conversion of its coal-fired power plant in Tychy so that it can burn biomass instead. Pure Play Biomass Companies are difficult to invest in as Biomass Power Plants are built by the utilities.

Electricity in Poland

Polish power generation system is the largest in Central and Eastern Europe in terms of capacity. Poland has around 3 GW of Total Electricity Capacity with 90% coming form Thermal Power .It also has around 2 GW of Renewable Energy Capacity. Household electricity prices have increased by 32% since 2004, but they remain about 14% below the EU-15 and EU-25 averages. Prices for industrial customers are about 28% below the European averages The power system is very fragmented, with nearly 400 power plants. Solar and Hydro Energy Resources in not well developed in Poland though a few companies have started to manufacture solar energy products in the country.

ROMANIA

http://www.energy.eu/

Romanian target: 24% (2005 = 17.8%)

Key issuesIn terms of RES of gross electricity consumption, Romania is on target. In 2004, the majority of all RES-E was generated through large-scale hydro power. To a large extent, the high potential of small-scale hydropower has remained untouched. Between 1997 and 2004, both the level of production and the growth rate of most RES have been stable. Provisions for public support are in place, but renewable energy projects have so far not been financed.

Main supporting policiesRomania introduced the following measures to promote RES-E:o A quota system with tradable green certificates (TGC) for new RES-E has been in place since 2004. The mandatory quota increased from 0.7% in 2005 to 8.3% in 2010. TGCs are issued to electricity production from wind, solar, biomass or hydro power generated in plants with less than 10 MW capacity.o Mandatory dispatching and priority trade of electricity produced from RES since 2004.

Legislation on biofuels was transposed into national legislation in December 2005. The list of priorities of the Romanian Energy Efficiency Fund (2002) includes the use of RES for heating. The September 2007 energy strategy includes upgrading and retooling of hydro-power plants with total installed power of 2,328 MW.

http://www.renewableenergyworld.com/rea/news/article/2010/12/quick-look-renewable-energy-development-in-romania

PolicyIn line with EU requirements to develop E-RES (electricity from renewable energy sources) production capacities, Romania has set itself an ambitious target to generate 33% of total electricity consumption from renewable sources by the end of 2010, increasing to 38% by 2020. Romania has operated a tradable green certificate (GC) system since 2005, requiring power suppliers to purchase GCs equivalent to the portion of renewables in the total supply mix, subject to a minimum quota of 6.28% (2009). All technologies are awarded 1 GC per MWh, with the GC price allowed to fluctuate between €27-€55. Historically, GCs have traded at upper limits given the low level of renewable energy produced. In 2008, the Romanian Government passed Law 220, which differentiates between technologies by offering 2-4 GCs/MWh. In June 2010, the RES Law was revised (139/2010), with the most significant change being the increase in the number of GCs offered to solar, from 4 to 6 GCs. However, while both laws have been enacted, neither can yet be applied since they remain under review by the EU Commission, and the Secondary Regulations required to apply the laws cannot be released until EU approval is received. The reasons for delay are not clear. Romania’s renewable market has seen significant developments since 2008 and many of the best wind locations have already been secured by key industry firms such as CEZ, Iberdrola and RWE. However, uncertainty over the stalled legislation continues to be an obstacle for investment in major renewables projects, therefore it is hoped that this much-awaited legislation will be applied in the near future since it will introduce extremely favorable incentives for potential RE investors. However, the country will also need to overcome the challenges of a bureaucratic authorization process and of a transportation system in need of development. WindRomania is considered to have some of the best wind conditions in Europe, with an estimated annual potential of 23TWh. Under Law 220/2010, energy producers will receive 2 GCs/MWh up to 2018 and 1 GC thereafter for a total of 15 years.

Despite an installed capacity of only 14MW at the end of 2009, the Romanian Wind Energy Association (AREE) aims to achieve a total 650MW by the end of the year, with potential to increase this to 5GW by 2020. CEZ’s €1.1b Fantanele-Cogealac project is key to achieving this target. Poised to be Europe’s largest wind complex with a capacity of 600MW when fully commissioned, the first few dozen turbines have already been connected to the grid. Earlier this year, Iberdrola was granted a licence to connect up to 1.5GW to the network, while many other key players such as Enel, Energias de Portugal, RWE, and Verbund are already establishing a project pipeline in excess of 1GW. While access to the Black Sea provides Romania with some offshore wind potential, existing projects such as Fantanele are already located near the coast, therefore grid congestion issues may delay large-scale offshore developments. SolarDespite a strong annual solar energy flux of 1,000-1,300 kWh/ m2/year and a potential generating capacity of 1.2TWh per annum, Romania’s installed capacity to date is less than 500kW. It is hoped that the decision to award 6 GCs per MWh for solar PV generated power under Law 139 will stimulate investment in the sector. The country is already seeing increased investment by solar panel producers, creating the foundations of a strong domestic supply chain. Hydro Romania’s small-scale hydro potential is estimated to be 3.6TWh, with a current installed capacity of approximately 374MW at the end of 2009. The country’s hydro potential is significantly higher when large-scale projects are taken into account; however, it is hoped that the incentive of 3GCs/MWh for hydro facilities less than 10MW under Law 220 shifts investor’s focus toward small-scale hydro developments. Biomass and geothermalRomania has significant biomass and geothermal resources; however, both are primarily used for heating rather than electricity generation. Law 220 offers 3GC/MWh to both technologies, which may increase investment going forward.

http://investeast.ro/renewable_energy_in_romania.pdf

The key to commencing a successful development of renewable energies in Romania has required a combination of political commitment and decision making as well as support mechanisms that are now set in law and are comprised within Law 220/2008 & more recently further modified beneficially in Law 139/2010. The Energy laws promoting production of renewable energy have set well defined targets for all types of renewable energy production.

The total rural population, together with the urban population living in medium-sized towns will be considered as the primary market segment for RES applications (about 61% of a total population of 22.8 million). Historically, Romania’s domestic energy production from coal,

lignite, oil, gas and hydropower, covered about 70% of the energy needs. In 2002, the share of RES to the primary energy consumption was less than 1% excluding large hydro facilities (> 10MW).

The average figure for the European Union is about 4% (including large hydro) with increasing trends in all RES sectors, especially in wind energy. RES project implementation will reduce the dependency on energy imports and consequently improve the balance of payments for the energy sector. Moreover, efforts will primarily focus on decentralized RES systems targeting the growing domestic, industrial and agricultural energy demands for thermal and energy needs.

Wind energyThere are several influences that may impact the speed of development of commercial wind energy projects:• Grid connected applications on a strictly commercial basis. In the past, the successful roll-out of these applications depended largely on the support structures being put in place. In July 2010, the Romanian Energy laws 220/2008 and 139/2010 have been signed by Parliament and the President. It is now anticipated that with the clarity of the support systems comprised within the Energy laws, that there are a strong reasons to support large scale commercial development of Wind energy solutions over the next 7 years. One wind developer alone has sold wind projects totalling 880 MWp. A number of Europe’s leading energy utility companies have made commitments to develop large scale wind energy investments in Romania, the largest of which is the Czech Energy company, CEZ, whose wind park is the world’s largest outside the USA. This is an indication of future velocities in the wind energy segment.

• Romania’s potential in wind energy is considered the highest in south eastern Europe. The Moldova and Dobrogea provinces (in the southeast of the country, near the Black Sea) were considered the most appropriate areas for wind farm developments. In particular, the southeast of Dobrogea was ranked, according to different specialized studies, second in terms of potential in Europe.

• The wind potential of Romania is estimated at 14,000 MW installed capacity, equivalent to total annual production of 23 TWh. According to a development scenario proposed by the National Institute of Energy (IRE), it would be sustainable for wind farms units to make a contribution of 13 TWh in 2020, which would involve complementary development of flexible gas turbine power units up to production of 15 TWh. The anticipated implementation of up to 3,000 MW in wind farm capacity in the period up to 2011-15 would lead to an increase in the total investments in new capacities of over EUR 5bn (+28%).

• Romania is fortunate to have large areas of onshore locations in areas of low population that are classified as excellent on the American Wind Energy Association (AWEA) scale. The low environmental impact in these areas of low population, in a coastal belt devoid of buildings or forested areas provides optimal wind conditions for Wind energy development.

• The escalating cost of Offshore wind solutions that are being considered on the North Sea and Atlantic coasts of Europe is likely to result in a stronger focus on onshore wind locations that can provide strong year round wind speeds. A recent project in the Netherlands estimated that the

construction costs of a specific offshore wind project was close to three times that of an onshore wind solution.

• Supply of isolated remote areas. If there is a political commitment to supply isolated rural towns, then small wind turbines are an economically attractive alternative in conjunction with PV systems, where wind resources are sufficient.

• There are distinct advantages to combine Wind and PV solutions to achieve important energy balancing advantages. It is likely that operators of wind farms will make a second stage investment into solar pv systems thereby increasing their energy sales on the forward markets.

Solar Photovoltaics (PV):Solar PV generates electricity in well over 100 countries and continues to be the fastest growing power-generation technology in the world. Between 2004 and 2009, grid-connected PV capacity increased at an annual average rate of 60 percent. An estimated 7 GW of grid-tied capacity was added in 2009, increasing the existing total by 53 percent to some 21 GW (off-grid PV accounts for an additional 3–4 GW). This was the largest volume of solar PV ever added in one year and came despite a precipitous decline in the Spanish market relative to 2008. Solar PV accounted for about 16 percent of all new electric power capacity additions in Europe in 2009.

Germany again became the primary driver of PV installations, more than making up for the Spanish gap with 3.8 GW added—about 54 percent of the global market. This was far above Spain’s prior record-breaking addition of 2.4 GW in 2008, and brought Germany’s capacity to 9.8 GW by the end of 2009, amounting to 47 percent of existing global solar PV capacity. Other strong markets included the Czech Republic, which saw a nine fold increase in total capacity relative to 2008—to 411 MW—thanks to generous feed-in tariffs for solar PV, although they are not likely to remain that high after 2010. The country installed more new PV per capita than any other country except Germany. It was followed by Belgium (292 MW), France (185 MW, with and China (160 MW).

Under the current situation, a number of stand-alone PV plants could be developed within a rural electrification program supported by the State as a least cost and effective electrification solution for the rural population. In the medium term, PV applications for rural electrification could be developed with limited public funds. Other specific applications could be developed on a commercial basis without any public funds, particularly, now that the performance of Solar PV technology has become increasingly efficient during 2009-2010 and at the same time, price performance improvements have been little short of dramatic. Active Solar Thermal Systems: Domestic Hot Water (DHW) solar systems for single or multifamily buildings and for commercial buildings (mainly hotels), drying and swimming pool heating are the most promising applications. Solar DHW systems as Demand Side Management measure for electricity or gas utilities, has gained an increasing awareness all around the world.

Small Hydro Power (SHP)Forecast Growth of SHP Development in Romania 2010-2020•It has been estimated that there are more than 2000 locations in the Transylvania mountains that are suited for the development of small hydro plants.

• From an economic perspective, it is considered that Greenfield developments offer greater economic returns than obtainable from renovating existing facilities.

Biomass Applications can be grouped into the following main market segments:• substitution of part of the fossil fuels in existing district heating schemes (wood chips)• enhanced uses of biomass as industrial fuels (wood chips and logs as industrial fuel for steam or hot water boilers) instead of oil• improved uses of biomass for new district heating schemes for small towns and villages near the resources, in the countryside, where the population has no access to central co-generation or gas supply• uses of straw and other agricultural by-products in appropriate biomass boilers for heat supply of farms and small villages (in the medium term)

Geothermal EnergyThanks to the implementation of medium temperature power plants (binary cycle), some new locations have engaged in geothermal power plant development (especially CHP plants, due to the more economical usage). Such areas are found in the following the west of the country.

While the average temperature gradient throughout the world is around 3Co per every 100m of depth (e.g. in the Pannonian basin in Hungary), this value varies between 5 and 7 Co per 100m, which allows for cost-efficient binary plants. This is due to the fact that amortization (around 20 years) is the highest cost in the operational expenses; in other words, the initial investment is the highest cost, while the gross operating margin is very high (~90%). In terms of investment cost, drilling is very high-cost - around 30% for an HCP plant, while for a heating plant it is even higher, around 50-70% of the total investment. The drilling cost increases almost exponentially with the depth of the well. In the above-mentioned regions, at 2-3km depths, a proper (110-220 Co) temperature exists.

Although the utilization of geothermal energy can be considered broadly cost-competitive, it has a relatively high investment cost as one disadvantage. However, its availability is high and it has stable production. These are significant advantages compared to wind or solar power production. The lack of geological availability can be solved by the Enhanced Geothermal System (EGS), which allows for low-to-medium temperature applications via binary cycles and cascading usage.

Applications for geothermal energy can be grouped into three main market segments:• market for district heating for urban areas and possibly for villages.• market for thermal applications within the primary, secondary and tertiary sectors• market for power generation connected to the grid in case of high enthalpy sources.

According to the discussion on economic potentials, the top priority is the use of geothermal sources for thermal applications:• mainly in existing district heating supply system in the cities nearby the geothermal fields and in new DH schemes for smaller towns and large villages,• thermal applications for industrial or agricultural uses.

Romanian Regulatory Framework

For the promotion of the production of electricity from renewable energy sources, a system of Green Certificates is in place, including a purchase obligation for distribution companies and the obligation to fulfil an annual quota of purchased green electricity. At the end of each year, distribution companies have to deliver a certain amount of "Green Certificates" corresponding with the annual quota. Since October 2005, the certificates have been traded at the newly created electricity market administrator OPCOM. According to the Energy Law, all producers of electricity have equal access to the network. The tariffs are regularly adapted to the actual production costs by the Romanian Regulator.

http://www.euroqualityfiles.net/AgriPolicy/Report%202.2/AgriPolicy%20WP2D2%20Romania%20Draft.pdf

Romania has significant reserves energy sources. The share of electricity produced from renewable energy resources in the national gross electricity consumption was about 29% in 2004, close to the target of 33%, by 2010, but almost entirely in large hydropower plants. Therefore, the gap should be bridged primarily by other renewable sources, in order to avoid a heavy reliance on hydro energy produced in large capacities.

Industry accounts for 38% of final energy consumption, with two industry sectors - iron/steel and chemicals - accounting for 60% of industrial consumption. Furthermore, industry accounts for 59% of electricity demand. The low shares of electricity in other sectors are due mainly to the high use of natural gas and heat in the household and service sectors, along with the high level of direct uses of biomass in households - which accounts for one-third of total household energy consumption.

Romania has a fairly diversified electric power mix, with natural gas, hydro and coal complemented by nuclear starting in 1996, when its nuclear plant came on line. Oil has almost been phased out, while very small amounts of wind and biomass have only recently been added. Hydropower accounts for one-third of installed capacity, nuclear accountsfor 4% and the remaining 63% is thermal. Overall demand was 10% higher in 2006 than it was in 1996. At the same time, demand has been generally flat after the structural changes that started in the 1990s, and Romania was a net exporter of 10% of its electricity in 2006. Romania has a significant share of renewables, amounting to 12% of gross inland consumption and 29% of electricity production.

While the EU target for 2020 is to achieve 20% of the total Community energy consumption from RES, Romania sets out an even more ambitious goal of 33% as share of electricity produced from renewable energy resources in the national gross electricity consumption till 2010. In this view, Romania has to intensify its efforts to use renewable energy resources. The renewable energy resources will be used both in the sector of electricity production and in the heating sector; in the latter both building of new power plants for high efficiency cogeneration (especially based on biomass use) and building of new power plants based on solar and geothermal energy are envisaged, thus leading to an increase of RES-based heat production. The production of bio fuels used in electricity/heat generation will also help to comply with the environmental standards. Moreover, the various locations of renewable energy resources in Romania may lead to a diversification of the energy production capacities/sites and to increasing

employment opportunities in less economically developed areas.

The share of electricity produced from renewable energy resources in the national gross electricity consumption was about 29% in 2004. Another significant area of renewable energy consumption is biomass in the household sector; the household sector accounts for 85% of biomass use. The proposed target for 2020 is 24% in final consumption. Although the target is ambitious in that it would double the current share of renewables, there is significant potential in Romania for wind and biomass as well as for further hydro expansion, particularly smaller-scale hydro. A quota system for renewable electricity was introduced in 2004 and biofuels legislation was passed in December 2005.

Use of wastes of agricultural production, e.g. liquid manure: is there a development to 2nd

generation production of biofuels. The biofuel production in Romania is at the very beginning. Romania has a great potential for cultivating energetic crops and for using biomass in other to produse biofuels. The use of wood for thermal energy was larger then that of other biomass resources. Wood fuel contributed to the primary energy resources in Romania.

Despite the diversity of RES available, resources other than hydro used in large capacity power plants have been exploited only to a small extent until now. It is necessary to increase the valorisation of as many types of available RES as possible. Romania has five main types of renewable energy resources: wind, hydro, solar, biomass, geothermal. A study explores the market potential for each of the above renewable energy resources, as follows:• Biomass reserves are based on wood, wastes and agricultural crops. Biomass production is not only a renewable energy resource, but also a significant opportunity for sustainable rural development. The power potential of biomass is approx. 7,594 tho. toe/year, out of which 15.5% is waste wood, 63.2% agricultural waste, 7.2% household waste and 7.7% biogas. Wood based biomass, as a energy resource, is available especially in the North- East (over 35% of total), Centre and North-West development regions. In the case of agricultural biomass, the richest regions are South-East, South and North-East.• The wind technically exploitable power potential is estimated at about 8 TWh/year. The main areas suitable for windmills in Romania are: o mountain peaks, o Black Sea coast, Danube Delta, the Northern part of Dobrogea area, o Barlad plateau, East of Baragan plains, the Western border and hills.• The hydro technically exploitable power potential is of 36 TWh/year (2/3 given by inner rivers and 1/3 by the Danube). The economically exploitable hydro energy potential is estimated at about 23-25 TWh, with an installed capacity of 8,000 MW. In 2005 approximately 70% of the economic potential was capitalized and hydro capacities comprising 600 MW installed capacity are being built, with a production potential of 1,870 GWh/year.• The microhydro technically exploitable power potential is around 3.6 TWh/year, whereas the economic one may reach up to 1.2 TWh/year. In terms of territorial distribution, the Olt, Mures and Tisa-Somes rivers are considered to best fit the microhydro power application.• The most relevant areas of implementing solar power applications are Dobrogea area, the Black Sea coast and the Danube Delta, areas where the solar power yearly average flow is above 1200-1250 kWh/m2. In addition, also efficient for solar power exploitation are the Romanian Plain, the West Plain, the Banat region and a part of Transylvanian and Moldavian hill areas, with a solar power yearly average flow of over 1000-1250kWh/m2. The energy potential of solar-

thermal systems is estimated at about 1,434 thousand toe/year and that of the photovoltaic systems is about 1,200 GWh/year.• Geothermal energy may be exploited especially in the Western Plains and the Eastern Carpathians. Romania benefits from an energy economic potential of approx. 167 thousand toe/year in geothermal resources of low and medium enthalpy, out of which 30 thousand toe/year are already exploited.

RUSSIA

http://www.merar.com/weblog/2011/03/28/renewable-energy-russia-giant-yet-be-awakened/

Although Russia as a whole exports energy, most of its regions import fossil fuels from the few energy-rich ones. Transporting fuel over vast distances dramatically increases its total cost and increases the risk of disruptions in supplies. If more regions exploit locally-available renewable energy resources, that could improve energy security and reduce costs. For example, geothermal plants are viable in Kamchatka, the Kuril Islands and the North Caucasus. Large-scale use of biomass energy is cost-effective in north-western Russia, which has a well-developed pulp and paper industry. Wind projects can become commercially attractive in far eastern coastal areas, in the steppes along the Volga River and in the North Caucasus. One study suggests that developing just 25 percent of Russia's total wind power potential will lead to the installation of 175 GW capacities. As Russia is home to 9 percent of the world's hydro resources, many regions enjoy favourable conditions for small-scale hydroelectric power. Solar is reasonable in the southern region. Climate change concerns are also not to be ignored when considering possibilities for Russian energy market development. Public opinion has started to warm up to clean power, especially after the fires disaster Moscow suffered this summer. Even the generally high price tag of renewable power may soon be not so high at all. At present, domestic gas prices are state controlled and are often kept below cost, as are electricity and heat tariffs. However, Russia has declared it wants to gradually move toward market-based pricing and plans to increase domestic fares on energy carriers up to European levels. Such a move will inevitably lift gas prices, opening new opportunities for renewables. Government Policy Russia's government has already come to realize these opportunities and has begun to place a greater focus on the development of alternative energy.

A new national energy strategy until 2030, approved by the Russian government in November 2009, aims to reduce Russia's dependence on fossil fuels by increasing the share of renewable sources in its energy mix. Defined as hydropower plants with a capacity of below 25 MW, tidal, geothermal, wind, solar and biomass, renewable sources should reach a 1.5% share in the country's electricity generation in 2010, 2.5% in 2015 and 4.5% in 2020. This includes 5 GW of wind capacity, expected to create a market worth EUR 5 billion (USD 6.4bn). In May this year, Russian President Dmitry Medvedev announced a set of ecological directives, including measures to enforce mandatory purchase of energy generated from renewable sources. Medvedev has also proposed the establishment of a single federal authority in charge of coordinating ecological supervision in the country to ease bureaucratic burden of project development. At present three state agencies are involved: the Ministry of Natural Resources and Ecology, the Russian Federal Service for Natural Resources Management Oversight (Rosprirodnadzor), and the Russian Federal Service for Ecological, Industrial Production, and Atomic Supervision (Rostekhnadzor). The government was instructed to develop a comprehensive legislative package and present it for consideration by the Russian parliament, the State Duma, before December 1, 2010. Major Projects With the general improvement in political outlook, several major renewable energy projects were announced in Russia in recent months. In June, Russia's energy company RusHydro and Italy's Enel have signed a memorandum on hydro-energy cooperation. In July, German industrial conglomerate Siemens signed a partnership agreement with two Russian companies, Rostechnologii and RusHydro, planning to develop 1,250 MW of wind capacity by 2015. The German engineering giant said it would build wind farms across Russia and set up 3 joint ventures to manufacture products for them locally. Siemens's investment announcement came on the heels of the news that Russian oil and gas major Lukoil and Italian ERG Renew have signed a letter of intent to cooperate onrenewables development in Russia and eastern European countries. In August, Adolf Chernyavsky, the chief specialist of the Rostovteploelektroproekt engineering company, told news agency RIA Novosti, that his company intends to inject USD 200 million in a 100 MW wind power project near the southern city of Yeisk, close to the Azov sea as well as a 13 MW solar plant, the first of its kind in the country. Chernyavsky said that the construction on the project, to be located in Kislovodsk, may begin in 2011.

Prospects Overall, the renewable energy industry in Russia remains largely undeveloped, hindered by low tariffs for conventionally sourced electricity and lack of clear rules for operating in the sector. The incumbents in the renewable energy market are fairly consolidated and it still looks more viable an existing utility company to diversify into the provision of renewable energy than a brand new company to enter the market. However, the liberalization of the market following the transformation of the state-owned monopoly RAO UES into several state-owned and private companies, the new national energy strategy and the forthcoming legislative changes aimed at improving the investment climate for clean power, are a clear sign that this vast potential may soon be open for development even to foreign investors.

Potential As vast a territory as Russia offers tremendous potential for renewable energy development. For example, hydropower is one of Russia's greatest energy resources, making up about 21% of total current generating capacity, although it only accounts for about 16% of production. Russia is currently the world's fifth largest producer of hydropower, at about 167 TWh/year (BP Statistical Review of World Energy, 2009), and only about 18% of its hydropower potential has been developed. The case with other renewable energy sources is pretty much the same. WindRussia is one of the largest countries in the world and is situated in different climatic zones, which result in high wind energy potential. According to data from the Russian Wind Atlas, published by the Russian-Danish Institute for Energy Efficiency and Riso National Laboratory, the highest wind energy potential is concentrated along Russia Federation seacoasts, in the vast territories of steppes and in the mountains. The regions most favorable for wind energy use include the North of Russia and Far East. Solar The technical potential of solar energy was estimated as 18.7×106 GWh, with an economic potential around 1×105 GWh per year in the national report titled “Role of renewable energy sources in energy strategy of Russia”. BiomassThe available resource potential of biomass in Russia is practically inexhaustible: it includes significant reserves of bioenergy - in agriculture, arable land - 9% of world; in forestry - up to 25% of world's timber reserves. Geothermal According to the Institute of Volcanology, Far East branch of Russian Academy of Sciences, the

geothermal resources near Kamchatka are good enough to fully supply it with electric power and heat for more than 100 years. Besides the high temperature Mutnovskoe field with capacity of 300 MW(e) located in the south of Kamchatka, there are known rich geothermal resources at Koshelevskoe, Bolshe Bannoe and Kireunskoe (in the north) fields. In total these fields may produce about 2,000 MW(e).

Its vast geography includes every type of condition favourable to renewable generation, including windswept steppes, areas of high insolation and forestation and significant geothermal regions. Yet that potential remains almost completely unrealised. At the end of 2009 just 13 MW of wind and negligible solar capacity was present in a country with a total installed generation base of 220 GW. And, if large hydropower is excluded from the equation, only around 1% of Russia's power is currently generated from renewables.

http://www.renewableenergyworld.com/rea/news/article/2011/03/country-profile-russia

Energy in Russia is dominated by oil, coal and above all, gas. The nation has huge reserves, allowing it to supply its consumers with relatively cheap energy and wield the power that comes from being a key exporter to Eastern Europe and beyond. Indeed, the drive to develop domestic renewable sources by many states in Central and Eastern Europe is motivated by a desire to reduce dependency on their giant neighbour. Nonetheless, compared with progress in the former Soviet sphere of influence and in Western Europe, Russia's enthusiasm for renewables has appeared lukewarm at best. Prime Minister and former President Vladimir Putin has on occasion sounded dismissive. According to local reports, in a speech last year he chose to focus on the environmental risks of wind, claiming that turbines pose a threat to birds and other wildlife. Hardly a ringing endorsement, but there are signs that the Russian authorities are softening their stance on renewables. A decree supported by current President Dmitry Medvedev, Putin's successor, set a target for a 4.5% share in electricity generation by 2020, a goal confirmed in its latest Energy Strategy, which talks about 'an increasingly important role for renewables.'

Medvedev's public statements have been less sceptical than Putin's and the decree has at least put renewables on radar, albeit still at its margins. The president is especially keen on the high-tech, high-value elements, such as wind turbine manufacture and PV. As part of the decree, Russia's energy ministry is charged with developing support mechanisms to bring renewables into a power economy that needs massive investment to bring large parts of its creaking, Soviet-era, infrastructure up to date. KPMG estimates that Russia will require US$320 billion of investment in generation alone, creating a significant market for renewables to chase. Those promoting renewables in Russia are convinced that the sector is tantalisingly close to lift-off, and that if it could just be given a sufficiently robust kick-start it would soon gather momentum.

The International Finance Corporation (IFC), part of the World Bank group, hopes to provide a significant part of that momentum jolt through its new advisory programme, the Russia Renewable Energy Program (RREP). Supported by the Global Environment Facility, RREP was launched in December 2010 and IFC hopes that it will create a platform that can support at least the beginnings of a significant share for renewables in Russia. Its work will see the programme team co-operating with the Russian Energy Agency, RusHydro and other key players to develop favourable policies and instruments. It will work with the private sector to encourage project development and generally raise the profile of renewables, especially in regions where it could have a significant early impact. RREP hopes to be the catalyst for the addition 205 MW of renewable capacity over the five years of the programme. The IFC says it will have around $150 million to invest when the time is right.Before committing investment capital, however, Patrick Willems, programme manager for RREP, says the most urgent task is to get the basics in place, beginning with a legislative framework. 'When we talk about the legislative framework, we don't mean only laws, but the whole framework required to get renewables off the ground needs to be tackled before anything can be done,' he says. The presidential decree and 4.5% renewables target is highly promising as far as it goes, adds Willems. But unless it is underpinned by rigorous, specific policies of the type seen elsewhere, it is more likely to remain a figure on paper than a reality. Willems cites grid access as an example of the type of measures he has in mind. 'In most European countries there is priority access for renewables and an offtake obligation on the part of wholesalers to get electricity produced by renewables to the end consumer,' he says. Although he does not necessarily expect a full, European feed-in tariff system to emerge in Russia, he is looking for some sort of feed-in support system, perhaps based on generation capacity. The bottom line is all about sufficient political goodwill, and Willems believes it has so far been lacking. 'There is an attitude that says "we'll have to do something about it sometime," but there is no real hurry to get down the road to renewables.' He points out that the first stage of the 4.5% by 2020 target required Russia to achieve 1.5% by the end of 2010. This was not met, yet Willems still notes a lack of urgency by the authorities. He says more arguments need to be made to answer a question that is frequently asked by those sceptical of renewables (and not just in Russia): 'Why should a premium for renewable generation be paid in a country where conventional sources are abundant and, at least for now, relatively cheap?' Despite the obstacles, the head of the RREP sees grounds for hope. Renewables can form part of a general policy designed to encourage modernisation and technical innovation in Russian industry, a cause dear to the heart of a number of senior Russian politicians. The credentials of renewable energy as a 'new industry' could be a significant aid to its prospects in Russia, the RREP team hopes. 'That is a message we are trying to get across,' says Willems, adding: 'Many Russian cities are dominated by monolithic outdated industries and employers.' Willems believes it is possible to make equally pragmatic arguments about the role of renewables: 'Too often we hear that renewable energy needs support from government

organisations, yet at the same time fossil fuels in Russia get as much if not more subsidies from governments. It's a question of what strategic choices are made,' he says. Wind and biomass have a 'tremendous opportunity' to make an impact within 10 years, claims Willems, especially for the 10% or so of Russians who are not connected to the grid. And when allied with state-of-the art transmission technology, even its vast geography need not be an obstacle to wind contributing to the Russian grid system as well. Large hydropower can also play a key role, providing its overall environmental impact is demonstrably not a negative one. Above all, RREP is keen to highlight that the choice is not one of making major investment in renewables or of saving the money by staying as it is: 'Russia will have to make substantial investments in its oil and gas sector if it wants to keep meeting domestic demand in the way that it does now,' says Willems. The man from the RREP is generally optimistic about the future of renewables in Russia — though he admits that optimism is almost a prerequisite in a job with so many challenges. He does not expect dramatic progress within the next few months, but beyond that he thinks there are grounds for hope. 'I believe we will see significant progress within the next two years, with a basic framework in place in the next year,' says Willems. 'There are now people starting to put projects on the table and using their contacts to get the ball rolling. Those people know that they cannot afford to just ignore it, that this is going to come to Russia whether they like it or not.' Willems believes one early win for Russia could come in the promotion of energy saving as a way of demonstrating the economic benefits of cleaner, more efficient energy consumption. Elena Merle-B&eacute;ral, an energy analyst at the International Energy Agency who specialises in renewables' potential in Russia, shares the belief that efficiency measures can play a major role in boosting renewables' overall share of the mix. 'There is huge energy efficiency potential in Russia,' says Merle-Béral. 'If Russia manages to reduce its energy intensity it will need much less energy overall,' she says. Merle-B&eacute;ral is excited by the potential of local renewable resources to increase self-sufficiency within the Russian Federation. She points out that Russia's national status as an exporter of energy belies the fact that whole regions of the vast country are heavily reliant on 'imports' from internal region which are energy-rich, especially western Siberia for instance. If you are a region far from the source of production, transportation costs will inevitably make your energy more expensive. Merle-Béral cites the central-Asian republic of Tyva, deep in the south of the Russian Federation on the border with Mongolia, as an example of a territory that spends more than half of its budget on fuel. In such cases, she argues, an appropriate programme geared around local renewables could quickly make an impact, for example via biomass deployment in north-western Russia where the well-established pulp and paper industry ensures favourable conditions.

She points out that regions remote from the power network rely on local petroleum-based generation systems, with fuel needing to be brought in by road, rail or even by helicopter. Renewable generation could be price competitive with this, especially if subsidies for the 'imported' fuel were removed, says Merle-Béral. Heating is another highly promising renewables application in a country with a notoriously cold climate, she adds, for example via conversion of district heating boilers from oil to biomass. This has already happened in some parts of Russia and is common in other eastern European nations. Last year brought signs of new life in the Russian renewables sector, with the announcement of planning approval for significant projects in both wind and solar. Its energy ministry said suitable sites had been identified for the country's largest planned wind facility near the city of Yeisk, on the shore of the Sea of Azov, which adjoins the Black Sea. The government will invest $200 million in the grid connected project, which would begin operations with a capacity of 50 MW rising eventually to 100 MW. According to the Russian Association of Wind Industry (RAWI), wind is gathering momentum more generally and is ready to roll once the correct legislative framework is in place. RAWI says the development phase has been completed on projects totalling 1700 MW, with a further 3 GW announced. Russia also unveiled plans for its first significant solar plant, a 12 MW facility at Kislovodsk in the Northern Caucasus, in a project led be state-owned Rusnano. Foreign businesses operating in the clean energy sector are well aware of the potential of Russia as a market for their technology and expertise. This is especially true in hydro energy. Large hydropower's status as a renewable energy source may be contested by some, but in a nation so dominated by fossil fuels, hydro is as about clean as it gets and accounts for around 20% of installed capacity. Russia was a hydropower pioneer in the Soviet era, but the industry languished in the period of political reform in the 1990s and now faces the need for huge investment in overhaul and upgrade. To this end, in the latter part of 2010 RusHydro — the majority state-owned company that dominates the sector in Russia — signed agreements with foreign businesses including Alstom of France and Voith Hydro of Germany. The wide-ranging agreements cover upgrades to existing plant, exploring new development opportunities and establishing local hydropower equipment manufacturing and supply facilities within Russia. Technology and equipment manufacturing is central to the nation's wider economic goals in pursuit of Medvedev's modernisation agenda. For that reason, an agreement last year between Siemens, Rostechnologii and RusHydro setting up a joint venture for wind turbine component manufacture was especially warmly welcomed in Russia. In the face of scepticism from a nation so rich in fossil resources, the jobs, exports and other economic benefits that flow from the new energy industries may turn out to be the strongest card that renewables can play.

At the far eastern edge of Russia, the Kamchatka peninsula hosts one of the country's most promising renewable resources in the form of abundant geothermal energy. With 90 volcanoes and hundreds of hot springs, Kamchatka is estimated to possess geothermal potential equivalent to 2 GW of power production, including 300 MW at the high-temperature Mutnovskoe field alone. RusHydro, which is responsible for strategic development of geothermal energy in Russia, operates two plants in Kamchatka with a combined capacity of 62 MW, one of which recently signed a deal to supply local mining operations. In October 2010 energy minister Sergei Shmatko signalled the country's intent to develop its geothermal resources further. This will include co-operation with Iceland, widely acknowledged as the global leaders in geothermal exploitation, which could see the two countries launch joint projects in Kamchatka. Crucially, geothermal seems to enjoy significant political goodwill, with even Prime Minister Putin signalling his support for the expansion of operations in the area.

SERBIA

http://www.euroqualityfiles.net/AgriPolicy/Report%202.2/AgriPolicy%20WP2D2%20Serbia%20Final.pdf

Tradition and introduction of renewable energy resources, beside the utilization of hydro power, has significant history in Serbia. During the 80’, following the pioneer attempts and new technology developments at that time, Vojvodina Province Secretariat had a special fund for support for utilization of renewable sources of energy. During this period biomass was combusted in about 1200 boilers, mainly straw and leftovers from wood factories, and in small amount mealie after harvesting. Also maize cob and sunflower heads were combusted on industrial level. Total power of these facilities at that time was estimated on cca 140MW. Today barely 25% of these facilities is still in function. Straw and mealie, sunflower heads, leftovers from pruning of orchards and vineyard were used for briquette in several facilities but none of these is in function today. At that period of time, construction of 9 biogas plants was initiated in Serbia. Only one was accomplished and operated for several years, but none of others were completed or utilized. Today none of these facilities is in function and the existing equipment is out of date and in most cases can’t be used or modified.

Due to a low level of punishments for environment pollution, most of the farmers are not pushed to invest in proper manure management, although there is a raising awareness among farmers that this issue will become very important in near future. One of the problems is that at this moment Serbian farmers are facing big challenges in the period of transition and government has no sufficient funds to assist them. Having in mind the latest tendencies in EU and the economic situation in the country, related to decrease of subsidies for agriculture producers and the market turmoil’s of agriculture products, farmers are looking for new resources and possibilities to increase farm income. Having the available support schemes from the Government large number of farmers are introducing new actives on their farm trying to provide an added value to their products. Knowing the tradition and good knowledge of farmers about the possibilities for

utilization of biomass, and latest more frequent dialogs on this topic, more and more farmers are making inquiries’ about the possibilities and means for introduction and utilization of agriculture biomass. Recognizing the importance of implementation of modern technologies and frequent demands from farmers which are interested in energy production, MAFWM organized the first conference on the topic- Green Drop for the future in May 2006 - trying to bring some new developments in this sector in Serbia, to a larger number of farmers. Several small workshops were held and some pilot initiatives for construction of biogas plants were initiated in cooperation with foreign consultants and potential investing companies, but none of them have initiated the process of construction.

However, one of the obstacles for introduction of the proper support mechanism from the Government is the lack of sound and valid Analysis of potentials on renewable resources in Agriculture and available technologies. Also, the lacking elaboration of following legal documents and regulations related to this issue is very big obstacle for faster introduction of utilization of renewable energy resources in Serbia. Recently the Serbian government initiated the preparation activities for elaboration of National Strategy for Renewable Energy Resources.

According to the Agreement on Energy Community of SEE Serbia is obliged to adopt EU Directives related to utilization of renewable resources. At this moment the share of renewable energy resources in Serbia is about 6% (including the big hydropower plant) and it is estimated that that it will remain stable until 2015.

Situation on EU directives related to RE in the country• Directive 2001/77/EC on Promotion of electric energy from renewable resources on international electro energy market. Serbia has prepared the plan for implementation of this directive, although there are a lot of other obstacles that have to be resolved like (nomination of national goal, establishment of support system and guaranties of origin, green certificates, short and simple administrative procedures, definition of conditions for attachment to the grid...)• Directive 2003/30/EC on promotion of utilization of bio fuels or other renewable fuels fortransport. This regulation is referring to use of bio fuels on the market in share of 5.75% related to total amount of fuels in traffic until the 2010. Serbia is in the preparation phase for implementation of this directive.• Directive 2001/80/EC on limited emission in the air from big facilities with combustion. This directive is referring to big facilities for heating, thermo power of 50 MW. It is prescribing the limit figures of emissions in the air for new and existing power plants. Full implementation of this directive is planned for December 2017.• Directive 1999/32/EC on reduction of sulphur in liquid fuel. Implementation of this directive is planned for end of 2011, and it is referring to reduction of emissions and introduction of limits for sulphur dioxide.• Directive 96/61/EC on integrated protection and pollution control (IPPC directive). IPPC Directive goal is to accomplish the integrated protection and monitoring of pollutions caused by different activities (including the whole energy sector)

By signing of the Agreement on establishment of energy economic community of SEE and EU, Serbia accepted the responsibility to apply directives linked to bigger utilization of renewable resources (2001/77/EC and 2003/30/EC). In 2004 Law on integrated protection and pollution

control was adopted but still some of the by laws are missing for full implementation of this Law. Deadline for acquiring of the integrated licence for existing enterprises and activities is year 2015. Kyoto Protocol was ratified in the Parliament of Serbia in 2007. And establishment of the CDM infrastructure, including the elaboration of CDM Strategy is in the process.

From available statistic data, it can be seen that the share of renewable energy sources (excluding large hydro power plants) is negligible. It is well-known fact that in the majority of country households and even in some urban households, the wood is used for heating and cooking. As there was no reliable information about that kind of consumption it was neglected in this report.

Serbia has very diverse energy supply sector, composed of coal extraction, coal and hydro electricity generation and oil and gas production. According to the energy balance, in 2006, total primary energy supply in Serbia was 14.8 million toe. Coal represented 55% of primary energy balance in Serbia. It is followed by oil (27%), gas (13%) and renewable sources (6%).

The electricity generation in Serbia is in hands of the state company the Electric Power Utility of Serbia (EPS) owing the capacities: Thermal power plants- 3.936 MW (55,3%), Thermal power-heating plants- 353MW (5,0%) and Hydropower plants- 2.831MW (39,7%). At this moment production of electricity from renewable resources is not present in Serbia, at least not in the industrial or economic way. In last couple of years, the interest for production of electricity from renewable resources is becoming very popular topic but legal constrains and prices of electricity, as well as other obstacles are slowing down this process.

Wind energyAccording to the recent reserches there is a significant number of locations for construction of wind devices in Serbia. The study concludes that under the assumption that average wind speeds at 50m height need to be at least 5 m/s or higher, based on ten-minute average speeds at the height of 50 m above the ground level, then Serbia has significant potential. The area with suitable wind is some 471 km2 with 244 km2 where wind speeds of 6m/s are present at least 50% of the time. At 20% annual average load factor, a 2300 GWh/year could be generated at some 1300 MW of capacity at sites with average wind speeds of 5 m/s or greater.

Identifyed sites are:1. Eastern parts of Serbia - Stara Planina, Vlasina, Ozren, Rtanj, Deli Jovan, Crni Vrh etc. In this regions ther are some locations with average wind speed higher than 6m/s. 2. Zlatibor, Žabljak, Bjelasica, Kopaonik, Divčibare are mountain regions where sutable micro locations for construction of wind devices could be determend.3. Panonian lowlend, northen parts of Danube are also rich in wind. This area coveres around 2,000 km² and is sutable for construction of wind devices because it has a sound road infrastructure, electric grid already exist and there is a large number of electicity consumer centers nearby.

Solar energyFirm estimates of the potential of Serbia for installation of solar collectors and systems are unavailable. It is known that there are many solar installations throughout the country, but a systematic inventory of potential applications is unavailable.

As in the case of other countries in the area, solar levels in the former Yugoslavia including Serbia and Montenegro are among the highest in Europe. The most favourable areas record a large number of hours of sunlight, with the yearly ratio of actual irradiation to the total possible irradiation reaching approximately 50 percent. Of course, the monthly distribution is particularly important in determining utilization for heating; and whether back-up systems will be needed during periods of extended cloudiness.

In 1998 annual sales of solar flat plate collectors was around 250,000 m2. Some 28,000 solar thermal units were in operation, replacing the equivalent of 140 GWh of fossil fuel derived energy being used mainly for water and space heating in the domestic and tourist sectors. The total potential for solar active technologies has been estimated to be approximately 50-60 percent of heating demand in the cloudier central regions. The in-country manufacturing base for the whole of FR Yugoslavia was reported as being strong, with about nine firms in production. But the majority was operating at less than one fifth capacity. And it is not known how many the recent crisis survived. The available expertise, however, indicates that as the economy recovers, it would be easy to accommodate growing demand. In 2009 firm estimates of the potential of Serbia for installation of solar collectors and systems are still unavailable. However, it is known that there are many solar installations throughout the country, but a systematic inventory of potential applications is unavailable. Also one of the main reasons for low number of new installations is the fact that for individual homes the economics of domestic solar hot water heating appear less favourable at the present tariffs.

Hydro-energyThere is undoubtedly a significant small hydro potential in Serbia. However, the present information base is simply insufficient to be able to make any firm conclusions about the supply curve of small hydro projects. Consequently we recommend as a next step the completion of a series of feasibility studies for which the prospects of economic and financial feasibility appear to be good. It is estimated that at least 3,000 MWs of new hydro capacity could be developed; one third of this capacity is medium size plants (10-100 MW each). This encompasses 3% of total potential of renewable energy resources in Serbia. 60 SHP are said to be in existence, of which 50% are out of operation. The technical energy generation potential of this SHPP is estimated at some 1,500GWh/year. Small hydro power plants are objects for energy production with maximal power less than 10 MW and they belong to the category of privilege power producers.

There are nine hydro-power plants (HPPs) within the power system of Serbia (generate around 36% of electricity in the country), with fifty hydro-units of the total capacity of 2,831 MW, producing on average 12 billion kWh a year. The total power content of the seasonal reservoirs is about 1,2 billion kWh.

GeothermalGeothermal investigations in Serbia began in 1974, after the first world oil crisis. An assessment of geothermal resources has been made for all of Serbia. Detailed investigations in twenty localities are in progress. The territory of Serbia has favourable geothermal characteristics.

There are four geothermal provinces. More than eighty low enthalpy hydro geothermal systems are present in Serbia. The most important are located at the southern edge of the Pannonia Basin. The reservoirs of this systems are in karstified Mesozoic limestone’s with a thickness of more than 500 m. Geothermal energy in Serbia is being utilized for balneological purposes (60 spas), in agriculture and for space heating with heat exchangers and heat pumps. The total installed energy use is 74 MWt, out of which 36 MWt are in balneology, and 38 MWt for other types of uses.

Exploration to date has shown that geothermal energy use in Serbia for power generation can provide a significant component of the national energy balance. The prospective geothermal reserves in the reservoirs of the geothermal systems amount to 400 x 106 tonnes of thermal equivalent oil. The prospects for use of heat pumps on pumped ground water from alluvial deposits along major rivers are very good.

For intensive use of thermal waters in agro- and aqua-cultures and in district heating systems, the most promising areas are west of Belgrade westward to the Drina, i.e. Posavina, Srem, and Macva. Reservoirs are Triassic limestone and dolomites >500 m thick, which lie under Neogene sediments. The priority region is Macva, where reservoir depths are 400-600 m, and water temperatures are 80 °C.

The economic blockade of Serbia stopped a large project in Macva: space-heating for flower and vegetable green-houses over 25 ha (1st stage). The completed studies indicate that thermal water exploitation in Macva can provide district heating systems for Bogatic, Sabac, Sremska Mitrovica, and Loznica, with a population of 150,000. In addition to the favourable conditions for geothermal direct use from hydro geothermal reservoirs in Serbia, geothermal use can also be made of hot dry rocks, as there are ten identified Neogene granitoid intrusions. Geothermal exploitation program have been prepared, but they have not been brought into operation.

National policyStarting from 2002. Serbia introduced the National Program of Energy Efficiency where Program for utilization of renewable energy was incorporated. Several pilot projects and research studies were conducted for use of renewable and alternative energy resources. In the process of harmonization of the national legislation with the EU requirements, the Ministry of Mining and Energy of the Republic of Serbia has prepared a reform of the energy sector, establishing a new legal, institutional and regulatory framework in order to create a more efficient energy market. The above reform is based on the Energy Law (2004) and the Energy Sector Development Strategy by 2015 (ESDS)4, adopted by the Government of the Republic of Serbia at the end of 2004, and approved by the Serbian Parliament in May, 2005. The ESDS has foreseen the development of the Program for the Implementation of the ESDS, focused on the main priorities: modernization of the existing power plants, rational utilization of the fossil fuel sources, utilization of the renewable energy sources and implementation of the clean technologies, as well as construction of the new power plants. Beside the latter, the ESDS identifies the implementation of the Kyoto Protocol as a useful tool in order to achieve the European standards on environmental protection.

National agricultural policy was never linked to direct support to utilization of renewable energy

resources. One of the main reasons was the lack of proper base line analysis and plan for introduction of renewable energy resources. Also the institutional set up was not fully in place, as well as other preconditions for preparation of sustainable subsidy measures. Although there were some initiatives from the field, the MAFWM didn’t have the capacities to deal with this issue, and the benefits of utilization of Renewable energy sources (RES) for agriculture sector was not recognized as the most important factor in agriculture development. Also the preparations of support measures include the detailed elaboration of technical characteristics, criteria for approval of applications and projects and proper monitoring and evaluation. The market of the available technologies for utilization of biomass in Serbia is still not developed in a way to secure the provision of modern technologies from several suppliers, which is important for tendering procedures. Due to this and absence of expertise in this field in the MAFWM this type of support measures were never introduced in practise before.

Also the environmental protection, although identified as one of the strategic aims and important topic, was never supported with significant budget resources. This was because of the very limited budget for agriculture, and at the same time because of the very difficult situation in the Agriculture sector. That is also one of the reasons why there was no specific support from the budget that was aiming the increase of energy plant production or utilization of biomass. The only support measure that was conducted in the previous years that could be linked to RES, is the support to farmers for assistance in land cultivation in the sowing seasons. This measure provide subsidy to farmers to cover some of the costs for procurement of sufficient amount of diesel for cultivation of land. Farmers who used biodiesel had 10% higher subsidy. In 2009 this measure is no longer active and this type of support is incorporated in payments per hectare, and biodiesel is no longer present as positive exception.

In 2006 the topic of RES became more important and the MAWFM started with some promotional actives mainly with donor support in organization of conference for promotion of utilization of biomass in agriculture, and realization of several seminars for potential users. Even there were no available budget funds, in 2006, MAFWM prepared the project proposal together with PKB Agro Combinate and Institute for Nuclear Sciences Vinca (VINCA), in order to assist in realization of construction and installation of first boiler for soya sow combustion under the Biom-Adria Project. For this purpose MAFWM allocated 5 mil RSD from National Investment Fund, and the project was realized in 2007 when the first pilot boiler was constructed and installed at the PKB Corporation.

In 2007 and 2008 the Province Secretariat for Energy and Mining introduced the subsidy support for financing the projects related to construction or reconstruction of facilities for direct use of waste biomass from wood processing industry for energy purpose and subsidy for co financing of construction of facilities for use of land energy by system of heat pump water/water or land/water for heating/cooling of objects, promoting the use of geo thermal resources. These measures were created under the Energy Efficiency program.

National concepts and programmesAlthough renewable energy is becoming more and more important on the Governmental level, there are no subsidies or other defined support measures developed or implemented in Serbia, excluding the small pilot projects and programs. One of the reasons is the lack of legal

documents and absence of clear strategic plans. On the other hand existence of this type of the support in the previous period, and strong latest initiatives on the Government level, introduction of support measures can be expected in the near future.

Establishment of decentralised energy-supply systems is very important for assurance of the stable electrical grid and reduction of import of electricity and other fossil fuels. That is the reason why the Government initiated the preparation of National Strategy Plan for utilization of RE which is to be finalized until the end of 2009. For the purpose of preparation of this document Government of Serbia has formed special inter-ministerial working group with representatives from the Ministries of Energy and Mining, Ministry of Spatial Planning and Environment Protection, Ministry of Economy and Regional Development and Ministry of Agriculture Forestry and Water Management and several experts from institute and faculties from related fields. This group already started with their work and with assessment of potentials and plans in line with actual legal frames and existing strategies and policy.

In 2006. MAFWM prepared the project proposal together with PKB Agro Combinate and Institute for Nuclear Sciences Vinca (VINCA), in order to assist in realization of construction and installation of first boiler for soya sow combustion under the Biom-Adria Project. For this purpose MAFWM allocated 5 mil RSD, and the project was realized in 2007 when the first pilot boiler was constructed and installed on specially constructed facility on one of the land parcels of PKB, near the glass houses. The PKB corporation management accept to add a new facility for combined heat and power generation to the existing boiler room. Also there is an agreement of the largest company in Belgrade and Serbia for distribution of thermal energy, the Public Utility Company BEOGRADSKE ELEKTRANE, which guarantees skilled work with the facility and by which the facility gets the formal owner. The fact that the city of Belgrade is owner of the Public Utility Company BEOGRADSKE ELEKTRANE indirectly means that the city of Belgrade is managing the facility which operates for the purpose of the citizens communal needs. Major donor of this project was the Italian Region Emilia-Romagna (RER) and constructed boiler for heating of greenhouses is 1.5 MWt.

Since prices of electricity are very low and “privileges” have not been implemented (although defined in Energy Law), privileged producers cannot compete with EPS, even if they manage to break trough the long list of permits and approvals, and connect to the grid. The Government of Serbia is planning to introduce the Fund for support to production of energy from renewable resources as well as feed in tariffs until the end of 2009, as foreseen in the New Energy Law which should came in power in August 2009. This new changes in Law should provide better assistance for producers of green energy with feed in tariffs, tax reliefs, easier procedures for obtaining the permits and financial support through establishment of special Fund for assistance in investments for construction of facilities for production of energy from renewable resources.

Producers with power of 1-10MW have to be licensed by the Serbian Energy Agency. As until July 2008, Serbian Energy Agency has issued 618 licenses for energy related activities to companies in the electricity sector and in the natural gas sector. No privately-owned production facilities can be found in the Register of Licenses. However, there are private companies active on the electricity market in Serbia. 33 licenses have been issued for electricity trade. Main interest of these companies is seasonal export-import transactions. With the new legislation that

should be in place in the second part of 2009, this situation is expected to change. According to the recent announcements made by the Ministry of Energy, Electrical Company of Serbia will offer a 12 years contract with guaranteed price of Euro 0,114 – 0,136 per kWh to all investors who want to produce electricity from RES.

http://www.balkans.com/open-news.php?uniquenumber=88307

According to a new report by EWEA on Serbia Wind Energy, Serbia has no current wind power installed but expected to reach 100MW by the end of 2012. Currently, 34% of Serbia's total capacity is hydro with coal being the traditional energy source.

The report continues to say that wind power is expected to become a significant part of the renewable energy portfolio in Serbia in the future but the first 6 MW of installed wind capacity is not scheduled to become operational until the end of 2011. That figure is expected to grow to about 100 MW by the end of 2012. According to Serbia’s ministry of mining and energy, the country’s total estimated wind power capacity to be connected to the system is 1,300 MW, approximately 15% of the nation’s total capacity. Ministry documents show locations in the northeastern part of the country have a high wind potential based on wind speeds. Other locations potentially suitable for wind energy development include Midzor, Suva Mt., Vrsacki Breg, Tupiznica, Krepoljin and Deli Jovan.

Oil, gas and coal are among the natural resources of Serbia, which has a population of about 7.4 million people living in its 77,500 km2. Serbia’s ministry of mining and energy has noted that in 2007 the nation consumed 15 million tonnes of oil equivalents (Mtoe), of which 6.14 Mtoe — or roughly 40% — were imported. It is worth noting that coal accounted for 54% of the Mtoe total, followed by oil at 27% and gas at 13%.

The ministry also said that “Serbia’s endowment of renewable energy resources ‘RES’ is considerable, around 4.89 Mtoe potential in the long term (only 17.6% of this potential is currently used by hydro power plants).”

The ministry document added all of the renewable energy in the country (9.928 GWh in 2007) was produced by hydro power plants, representing 24.9% of Serbian electricity consumption.“The Energy Development Strategy anticipates efforts to improve energy efficiency and the use of renewable sources, enacting i nancial and non_i nancial incentive policies and implementation of investment projects,” the document says.

Energy infrastructures and power generation facilities are totally controlled by the Government of Serbia through two public companies: “Elektromreza Srbije“ (EMS or EMC), the only market operator, and “Elektroprivreda Srbije” (EPS), the only power producer. The document says EPS accounts for a net installed capacity of 8,359 MW, of which 62% corresponds to thermal power plants, 34% to hydro power plants and the remaining to combined heat plants. The regulatory framework designed to increase the use of renewable energy sources is based on the adaption of the current Energy Law. Amendments will allow so-called Privileged Power Producers, such as wind energy, to have priority in grid connection, access to feed-in tariffs representing €95 per MWh, standardised power purchase agreements and various tax incentive.

SLOVAKIA

http://www.energy.eu/

Target: 14% (2005 = 6.7%)

Key issuesIn the Slovak Republic, large-scale hydro energy is the only RES with a notable share in total electricity consumption. Between 1997 and 2004, this market share has stabilised. The share taken up by small-scale hydro energy has decreased by 15% per year on average over the same period. An extended development programme with 250 selected sites for building small hydro plants has been adopted. In the Slovak Republic, the highest additional mid-term potential of all RES lies with biomass. The Government has decided to only use this source in remote, mountainous, rural areas, where natural gas is not available.

Between 1997 and 2004, the Slovak republic has moved further away from its RES target. The Strategy of Higher Utilisation of RES in the Slovak Republic was approved in April 2007.

Main supporting policiesRES-E policy in the Slovak Republic includes the following measures:o A measure that gives priority regarding transmission, distribution and supply was included in the 2004 Act on Energy.o Guarantees of origin are being issued.o Tax exemption is granted for RES-E. This regulation is valid for the calendar year in which the facility commenced operation and then for five consecutive years.o A system of fixed feed-in tariffs has been in place since 2005.o Subsidies up to €100,000 are available for the (re)construction of RES-E facilities.

In 2005, the National Programme of Biofuel Development was adopted. Legislation concerning the minimum amount of biofuels on the Slovakian market and a decree laying down the requirements for fuel quality and maintenance of records of fuels were scheduled for 2006. RES-H is promoted through the Programme supporting Energy Savings and Utilisation of RES (2003). It aims to create a favourable climate for investments. Subsidies up to €100,000 are also available for the (re)construction of RES-H facilities.

http://www.energici.com/energy-profiles/by-country/europe-m-z/slovakia

Renewable Energy

Renewable Energy sources represented 24.68% of total installed capacity in Slovakia in 2008, an increase of 5.17 percentage points over a 5 year period. 48 MW of capacity was added since 2007 and 0 MW were retired. Hydroelectricity Energy grew the most, adding 33 MW of capacity. This renewable energy capacity generated 4.55 billion kilowatthours of electricity (16.65% of the total), primarily from Hydroelectricity (87.88% of the 4.55 bn kWh generated),

Biomass and Waste (11.98%), and Wind (0.14%).

Biomass and Waste EnergyBiomass and Waste energy had an installed capacity base of 178 MW in 2008, a change of 14 MW over the previous year. It's share of total installed capacity increased from 0% in 2004 to 2.42% in 2008 and it's share of renewable installed capacity increased from 0% in 2004 to 9.8% in 2008 to 9.8% in 2008. Biomass and Waste Energy generated 0.55 billion kilowatthours of electricity in 2008, equating to 2% of the total electricity generated. This is equivalent to 3.06 billion kilowatthours of electricity per million kilowatts of capacity, which was the highest ratio amongst renewable energy sources. Slovakia has 0.69% of the total regional capacity for Biomass and Waste Energy and ranks at #26 in the world for Biomass and Waste installed capacity.

Geothermal EnergyAs of 2008, there was no Geothermal Energy capacity in Slovakia.

HydroelectricityHydroelectricity had an installed capacity base of 1,632 MW in 2008, a change of 33 MW over the previous year. It's share of total installed capacity increased from 19.51% in 2004 to 22.18% in 2008 and it's share of renewable installed capacity decreased from 100% in 2004 to 89.87% in 2008. Hydroelectricity generated 4 billion kilowatthours of electricity in 2008, equating to 14.64% of the total electricity generated. This is equivalent to 2.45 billion kilowatthours of electricity per million kilowatts of capacity, which was the 2nd highest ratio amongst renewable energy sources. Slovakia has 0.97% of the total regional capacity for Hydroelectricity and ranks at #57 in the world for Hydroelectricity installed capacity.

Solar, Tide & Wave EnergyAs of 2008, there was no Solar Energy capacity in Slovakia.

Wind EnergyWind Energy had an installed capacity base of 6 MW in 2008, a change of 1 MW over the previous year. It's share of total installed capacity increased from 0% in 2004 to 0.08% in 2008 and it's share of renewable installed capacity increased from 0% in 2004 to 0.33% in 2008 to 0.33% in 2008. Wind Energy generated 6.6 million kilowatthours of electricity in 2008, equating to 0.02% of the total electricity generated. This is equivalent to 1.1 billion kilowatthours of electricity per million kilowatts of capacity, which was the 3rd highest ratio amongst renewable energy sources. Slovakia has 0.01% of the total regional capacity for Wind Energy and ranks at #60 in the world for Wind Energy installed capacity.

BiofuelsIn 2009, 4 thousand barrels per day of biofuels were produced in Slovakia, a decrease of -0.4 thousand barrels per day on the prior year. Biodiesel represented 50% of the total with fuel ethanol accounting for the remainder. Biofuels have grown by 21.67% on a 5 year compound annual basis. Slovakia accounts for 1.7% of the regional biofuels total and 0.24% of the world total.

http://www.euroqualityfiles.net/AgriPolicy/Report%202.2/AgriPolicy%20WP2D2%20Slovakia%20Final.pdf

Growing technological and innovative advancements and transition towards post-industrial society began to generate technical assumptions for more effective raw materials and energy resources. Similarly as whole world the Slovak economy has also only a few decades to change the way it produces and consumes energy. Crucial goals are the reduction of the dependence on imported fossil fuels and mitigate vulnerability of economy to energy supply breakdown. Analysts estimate that primary energy needs in the world will grow by more than 50 % by 2030. The imperatives nowadays are ensuring energy at affordable prices, more efficient use and conservation of energy resources and supply diversification (wind, solar, water, geothermal, nuclear energy). Fossil fuels resources worldwide are running out and their prices are rising, therefore it is necessary for all countries to seek alternative energy sources. One of the possibilities appears bio-fuel production made from energy crops. Demand for biofuels and bioenergy is driving up energy crops prices but on the other hand it boosts farm income and farmland values. Discovery of proper safe ratio using agricultural crops for industrial and food purposes would be great opportunity and benefit for farmers, processing industry, rural residents and whole population. Research efforts and technological advance will focus on biofuels and bioenergy made from second and third generation feedstock. Energy crops must grow only on marginal lands without environmental damage and negative affects on food production.

There is not uniform opinion to energy crop cultivation around growers and population. Biomass ofvegetable origin is not automatically renewable as water, wind or solar energy and cultivation of such plants and wood species also requires considerable material and labour costs. Some farmers, scientists and environmentalists are afraid of biodiversity risk and soil fertility reduction by intensive energy crops growing.

Renewable energy sources utilization in Slovakia is still at the beginning. The country fell behind not only EU-15 but also some east European countries such as Ukraine, Bulgaria and Romania. Experts from public and business sector agreed to largest potential in biomass use. Energy crops cultivation and processing could slightly improve employment rate in agriculture, forestry and utilities sector. In the near future undoubtedly with growing demand the biomass prices will rise. Slovak Association of Heat Producers is persuaded that price scissors between fossil fuels and renewable energies will open up more. At present nearly one sixth of electricity originates in large water power stations but there is still unexploited potential in small water power stations.

Biomass potential as third most important alternative energy source after water energy and geothermal energy utilized potential. Biomass could prospectively replace 20 % of total energy needs of Slovakia. . Biomass provides few types of energy: heat, electricity, transport fuels such as bioethanol, biodiesel and biogas. Analysts estimate utilisable biomass potential from agricultural and forest activities up to 120,3 PJ, i.e. 33,4 TWh. Including municipal and industrial waste total biomass potential is higher 147,0 PJ, i. e. 40,8 TWh. Development of biomass energy industry will depend on raw materials prices, deliveries reliability and availability, transport costs and state support. The production of biomass has to be sustainable through conservation of

soil fertility, water quality and biodiversity.

Due to biomass exploitation for heat production the renewable energy sources is recording permanent albeit small growth. It is caused by gradual fuel basis transformation as well as higher heating consumption by households as natural gas alternative. Agricultural sector could significantly ensure biomass supply for heating energy intents and partially for electric and biofuels power. New agricultural methods, biotechnology and plant breeding advancements create the possibilities for non-cultivated and set-aside lands utilization.

Increased electricity production from biomass during period 2006-07 was caused mainly by start of heating station in town Zvolen suitable for up to 30 % biomass share combustion. In 2006 there were installed a few cogeneration stations using wastewater for simultaneously generation of electricity and heat.

According to calculations of Research Institute for Atomic Energy even if it will be used 100 % biomass potential from agricultural sector in Slovakia, total heat energy output would be 7 TWh per year maximum. Annual heating consumption needs represent more than 30 TWh of net energy but heating capacity performance must be much more higher.

By contrast civic group For Mother Earth declared renewable energy sources potential in Slovakia is certainly high. Supporters are convinced entire heating energy and hot water consumption, at least in households and small companies could be substituted through alternative energies and savings.

Water energy and biomass consumption constitute around 5 % from total gross energy consumption. In agricultural sector alone it would be possible to use 10 to 30 % of biomass energy potential estimated at 28.6 PJ. Legal persons and individual farmers could sell a part of produced fuel (e.g. packaged straw, briquets, pellets) or transmit heat energy to municipalities. Further income source for agricultural companies could be processing of wood chips, trees top, limbs etc. According to preliminary estimate such activities could carry up to 900 thousands cubic metres of softwood annually. The construction of such sidelines operations will bring new job opportunities in rural areas.

Water energyElectricity production in large water power stations with installed capacity more than 10 MW is relatively stable and depends on water flow fluctuations at the rivers Danube and Váh. Small water power stations (up to 10 MW) contribute to electricity production around 250 GWh per year.

Solar energySolar electricity production by means of photovoltaic modules is negligible and constitute less than 0,05 GWh. It is not statistically declared because it relates to very small systems mostly not connected into electric network and they are usually used for auxiliary lighting. Up to now it was installed approximately 60 kW using for public phone boxes or as auxiliary electric transmission network lighting.

Wind energyRealistic sustainable wind energy potential that will not intrude the migration routes nor birds or other animals in natural parks and in nature protected areas is able to substitute up to 6 % electricity consumption. Wind turbines building are suitable only in locations where average wind speed achieve minimum 6 m/s in 60 metres height. Natural reservations and national parks are excluded from wind turbines construction. Beyond favourable wind conditions crucial factors are also connectivity into electric distribution network and non-interference to protected landscape and populated areas. Assuming application of wind turbines with 1 500 – 2 000 kW output, wind potential in Slovak republic represents around 1 100 GWh. Regardless of significant effect on safety and electricity supply reliability and 1 500 up to 2 000 hours of wind efficiency, the annual electric power output will be at 600 GWh level.

Geothermal energyExperts accomplished yet around 1 787 litres per second waters with temperature range 18 – 129 Celsius scale at the mouth of drill hole. Using reference value 15 centigrade degree their total heat output represent 307 MW. Geothermal energy is currently used in 36 spots with utilizable heat output 131 MW. Additionally it is 60 GWh of electricity production potential per year. Until now it as not installed yet device for electricity production using geothermal energy. Geothermal energy potential is predominantly utilized for households heating in particular villages and thermal water parks.

Ratio of renewable energy sources on gross national fuel, electricity and heat consumption reached 3.5 % in 2007. New investments in renewable energy sources and simultaneously in particular know-how as well as technologies is driven usually and largely by policy targets and measures. Despite approved several conceptual laws and regulations dealing with renewable energy sources use in Slovakia in past years the expected development did not occur. Great expectation could bring new regulation that apart from other legal sections guarantees purchase electricity price produced from alternative energy facilities for at least 12 years. This provision can ensure stability of renewable energy investments. Volume of investments into renewable energy facilities construction was very low in recent years. Notably few heating plants for biomass utilization were constructed. Biomass use could play a most important target in whole energy policy but it needs to accomplish various measures in legislative and support mechanism. Part of biomass will be used in agriculture for building heating, water warming, vegetable plants drying, biogas production and consecutively electric and heat power production. All varieties of use will contribute for lower energy demanding and thereby production costs reduction.

National policyDraft bill of renewable energy sources and highly effective combined energy support guarantees to electric power producer made from renewable energy sources. Such electric power supplier will gain a priority connection and access to local electric transmission system and the right to obligatory electric demand by electric energy system operator through 15 years period since start of the operation or reconstruction of technologies and devices.

Since second quarter 2008 government provide state support households on solar collectors and biomass boilers purchase in total value 3.3 millions EUR. Individual applicant can receive state investment support 100 EUR per square meter installed solar collector area up to 8 square

meters. Support on larger devices is fixed at amount 797 EUR plus 50 EUR per each square meter above 8 square meter installed solar collector area. For installation of biomass boiler that incinerates wood pellets, briquets and wood chips, an applicant can gain financial amount 830 EUR, i. e. around quarter of purchase price. Problem consists in fact that sellers explained the state measure by themselves and offer to customers just most expensive boilers and solar collectors that they cannot afford to buy.

Supporters of the financial grants say they form conditions for better renewable energy sources exploitation and energy supply diversification. State support will have positive effect on environment and can raise employment in solar energy and biomass industry as well as in agriculture. Opponents claim that state financial support is at too low and is focused just on two selected segments of renewable energy that discriminate others. Besides a vast majority of family houses have outdated heating systems and insufficient thermal insulation that are unsuitable for effective solar systems use.

National concepts and programmesQuestion stands that renewable energy and fuel production have to be recognized as price and quality competitive comparing to fossil fuels. Policymakers must take into consideration economic but also environmental, social and rural development benefits as well as negatives associated with alternative energy production. Most significant factors of bio diesel and bio ethanol production growth are availability of feedstock at comparative prices without food safety threat. The aim is to avoid conflict between production for food and for biofuels that will require a move towards biofuels production of second and third generation.

At current level of research and development it is not possible to fully cover energy needs of Slovakia by renewable energy sources. There are missing financial resources into new technologies of renewable energy sources utilization. Weak education (although there is Action plan of environmental education at all types of schools) of public and business sector in alternative energies reserves and energy savings are also the hampering factors.

Great opportunities for capturing renewable energy would be accomplished if rural communities aggregate own resources (capital, land, expertise etc.) to develop new energy projects at local level. Naturally local authorities and central government have to assist in creating renewable energy power facilities.

Soil, water, wind, solar and geothermal conditions are already located in rural areas. Target setting of sustainability and development of rural areas needs to attract experts from various qualified vocations to live and especially to work in countryside. They will create a technical base to improve alternative energy source capacity and use. Higher income group of people will bring larger revenues into community budgets. Joint approach of rural communities, all interesting parties, lobbying groups, central state and local authorities would be very useful in alternative energy capacities building.

Acceleration of state support to more intensify renewable energy sources use could be effective measure for lowering energy dependency and creating new job opportunities. Green party established own energy commission of experts whose aim is to show the way of Slovak power

energy transition towards renewable energies.

Focus just on bio ethanol production from cereal starch and its mixture into motor fuels is economically ineffective already in advance. There has to be overall processing of stem, leaves and roots into biomass and furthermore to heat or electric power production. It could happen that losses during saccharification, fermentation and ethanol separation will reach up to 70 %. Efficiency rests on complex biomass utilization into heat and electric power.

Expected approval of law about “green energy” guaranteed electricity purchases for 15 years period could attract new producers. There are disclosed news about planned projects to build up power plants based on biomass and wood waste processing. Due to more reliable and balanced electric power supplies Ministry of Economy of the Slovak republic and Slovak electricity transmission system rather support biomass electricity production than wind or solar energy sources. Both state organisations also declared opinion to grant concessions on alternative energy plants construction deliberately. Moreover law proposal contain limitation guaranteed electricity purchase prices just for power plants with capacity up to 30 MWh. For wind power plants the limit was set up to 15 MWh.

Energy demands of the country and emissions cut can be achieved also through higher energy effectiveness. Majority of population has opinion that the country practically without any mineral resources depends on nuclear energy utilization, naturally with meeting all modern and possible safety measures and parameters. Fluctuations of water stream running as well as insufficient wind activity, several fully sunny days, lack of fossil fuels do not provide great opportunities for steady electric and heat supplies. Regarding outlook of biogas production made from dung and manure is also not very optimistic due to permanent decline of animal production.

Non-profit consultancy organisation Energy centre stated that cheapest energy is unconsumed one. Important steps towards energy save everywhere including rural areas are thermal insulation of buildings, premises, family houses and public facilities. Lower credit rate provided by four selected commercial banks on given alternative energy projects can assist in energy save.

SLOVENIA

http://www.energy.eu/

Slovenian target: 25% (2005 = 16%)

Key issuesSlovenia is currently far away from meeting its RES targets. The potential of solid biomass is high, with over 54% of land covered with forests. This RES has recently started to penetrate the market. Hydro power, at this time the principal source of RES-E, relies on a large amount of very old small hydro plants. The Slovenian government has made their refurbishment part of the renewable energy strategy. An increase in capacity of the larger-scale units is foreseen as well. In Slovenia, a varied set of policy measures has been accompanied by administrative taxes and complicated procedures.

Main supporting policiesIn Slovenia, the RES-E policy includes the following measures:o RES-E producers can choose to receive either fixed feed-in tariffs or premium feed-in tariffs from the network operators. A Purchase Agreement is concluded, valid for 10 years. According to the Law on Energy, the uniform annual prices and premiums are set at least once a year. Between 2004 and 2006, these prices have stayed the same.o Subsidies or loans with interest-rate subsidies are available. Most of the subsidies cover up to 40% of the investment cost. Investments in rural areas with no possibility of connection to the electricity network are eligible to apply for an additional 20% subsidy.

Since 2004, pure biofuels used as motor fuels have been exempt from the excise inspection and payment system. When blended with fossil fuels, a maximum 5% exemption from the payment of excise duty can be claimed. Slovenia applies a system whereby distributors are obliged to place on the market a percentage of biofuels that corresponds to the national target. This measure was introduced in 2005. Since 2004, Slovenia has supported the growth of RES-H through subsidies (up to 40% of the investment), and through loans with interest-rate subsidies.

http://www.investslovenia.org/en/news-media/e-newsletter/e-newsletter-june-2011/renewable-energy-on-the-rise/

In accordance with the energy guidelines issued by the European Commission in 2008, Slovenia has been adopting an active policy aimed at increasing the usage of renewable energy sources. On 10 June of this year, the recently drafted National Energy Program (NEP) 2010-2030 was publicly presented by the Ministry of Economy and Directorate for Energy. The program is currently undergoing public discussion, which should be concluded in mid-September. One of the seven basic operational goals contained in the document is to increase the share of renewable energy sources in overall end energy usage to 25% by 2020 and 30% by 2030. These figures are higher than those prescribed by the EU (20% by 2020). More precisely, the NEP foresees the attainment of a 53% share of electric energy usage, 37% for heating and 10% for motor traffic within the next two decades. The goals set by Slovenia are ambitious, but nevertheless feasible since the country possesses quite a renewable energy potential. During a conference hosted by the Slovenian State Council in June, it was even estimated that Slovenia could become 100% energetically dependent on renewable sources by 2050. According to provisional data on energy statistics, steady progress can already be observed with an 8% increase in production and 10% increase in the supply of renewable energy sources observed in 2010. One of Slovenia’s greatest assets, noted also by the EBRD Renewable Development Initiative, is biomass. The largest sources of biomass are the well-preserved forests which cover 58.5% of the state’s territory, making Slovenia the third most wooded country in the EU. According to official data, forests offer a nearly 331 million cubic metre stock of wood, the latter of which has been expanding by 8 million cubic metres annually. Presently, only 82% of the country’s wood resources are being used.

Another important factor, making Slovenia not only a user of renewable energy but also an exporter of technology, has been the swift advancement of solar power and photovoltaic industries that took place during recent years. The number of solar plants had risen to 600 by 2010, increasing the capacities of Slovenian solar energy production by 235%. Moreover, several of the companies comprising the Slovenian Photovoltaic Industry Association have already penetrated foreign markets and participated in technologically highly demanding projects, such as for instance, BISOL’s solar system in Buštehrad, Czech Republic.

http://www.enercee.net/slovenia/energy-sources.html

Hydropower

Current statusHydropower supplies about one-third of Slovenia's electricity generating capacity. The Drava River is the major source of hydroelectric power in Slovenia and has a technical potential of 2,896 GWh (of which 97,8 % are already developed).The Sava River has the second largest technical potential of Slovenian rivers (usable potential of 2,794 GWh). About 18 percent of the Sava is being utilized currently. The rest of the rivers have 3,455 GWh of potential with about 22 percent of the potential being utilized. In 2006, 400 small hydropower plants with a total capacity of 85 MW were operating in Slovenia. The majority of small hydropower plants is recently built: over 300 plants are between 0-20 years old. According to a publication by the Thematic Network of Small Hydropower, the remaining technically and economically feasible potential for small hydro is estimated at another 40 MW (taking into account environmental constraints). The National Energy Plan states an existing capacity of 60 MW with a potential to increase this to 110 mW until 2020, whereas ApE estimated the (cumulative) potential at up to 200 MW until 2020.

Hydro Power Potential and TargetsThe technically feasibable hydropower potential of the Republic of Slovenia is estimated 8,800 GWh/yr and only a third of this potential has been tapped to date. With an estimated 8,800 GWh/yr of technically feasibly hydropower potential (only a third of which has been developed to date) and a desire to minimize import costs, increased hydroelectric power generation is a strategic objective of Slovenia’s energy policy. Slovenia currently has approximately 930 MW of hydroelectric capacity.

Refurbishment of existing small scale hydropower, as well as increasing the capacity of the large-scale units, are part of the Government's renewable energy strategy. The Slovene Government would also like to develop another five hydro sites along the lower Sava River, which could add about another 200 MWe of new hydro capacity to the system by 2010. Approximately 230 MW of capacity is currently under construction throughout the entire country; another 520 MW of capacity has been planned. Bioenergy

Current statusOver half of Slovenia is covered with forests and wooded areas. Wood is an important fuel for space heating, particularly in the residential sector. According to a review about Slovenia’s energy policy in regard to RES, the highest potential for development is given in the areas of forest biomass – in particular for utilization in district heating systems (wind energy is mentioned next). Within 10 years, energy consumption from biomass could be increased from currently 12 PJ by another 5 PJ. According to the national forest institute, 600,000 metric tons of wood biomass would be available for district heating systems. The installed capacity of combined heat and power plants fuelled by solid biomass was 6 MW in 2004. The National Energy Programme states a potential to increase this to 9 and to 11 MW by 2010 and 2020, respectively. In order to meet the targets stated in the National Energy Programme (see chapter: Energy Policy), it would be required to increase the utilization of wood biomass to 3.1 PJ, of biogas to 0.4 PJ, of geothermal energy to 0.4 PJ and of other renewable energy sources to 0.1 PJ. This could be reached by installing annually 1,500 wood boilers in households, 50 larger biomass boilers in industry or the public sector, 3-5 biomass district heating installations, 10,000 square meters of solar collectors and 500 heat pumps.

Forest residues account for about 359 th MW. In the country's wood processing industry there are about 80 wood waste boilers of capacities of greater than 1 MWth. There are also two small municipal wood-fueled district heating plants. Other main installations are a 6 MWth facility in the city of Zelezniki that supplies hot water to local business, public and residential buildings. A 4 MWth unit is operating in the city of Gornji Grad, which also supplies hot water to public and residential buildings. Moreover, many rural households and farms use firewood as a fuel source. Between 2001 und 2005, a programme by UNDP aimed at reducing barriers hampering biomass utilization. This included measures to raise awareness in municipalities about the benefits of the utilization of forest biomass, feasibility studies and pilot projects. Biogas has an even higher potential. Currently, 6 mostly agricultural biogas plants with a total installed capacity of 3.4 MWel and 4.1 MWth are in operation.

According to the National Energy Programme, this could be increased to 28 MW in 2010 and 33 MW in 2020. In 2005, 8,000 tons of biodiesel were produced in Slovenia. According to a separate study by ApE for the National Energy Programme, a capacity of 10,000 – 20,000 could be reached by 2010 – 2020. Wind energy Current Status of Wind EnergyThere is currently little use of wind energy in Slovenia, except for minor installations for recording purposes, or minor remote locations for water pumping and feed grinding. Average wind speeds recorded by the Hydrometeorological Office of Slovenia (Hidrometeoroloski zavod Slovenia) over many years show the following results:

Potential for Wind EnergyPotential for wind energy utilization is primarily given in the region Primorska. However, most of the potential sites are situated in ecologically sensitive mountain regions which are under consideration for national parks. Solar energy

Current Status of Solar EnergySlovenia has good conditions for both solar thermal and photovoltaic energy use. The total installed capacity of photovoltaic installations was 0.216 MW in 2005. Solar Thermal installations amounted to 106,300 square meters in 2005, equivalent to a capacity of 74.4 MWth.

Solar Energy Resource PotentialThe capacity of solar thermal installations could be increased to 300,000 square meters in 2010, and 500,000 in 2020. The potential for increasing the utilization of photovoltaic systmes is estimated at 1 to 10 MW until 2020 by the National Energy Programme and the related study by ApE, respectively. Geothermal Energy

Current status:The existing installed capacity of Geothermal energy in Slovenia amounted to about 44 MW in 2004. Geothermal energy is currently not used for electricity production. Potential / ProspectsThe utilization of geothermal energy for heat production could be increased to 330 MWth in 2010 and 500 MWth in 2020. Geothermal energy is currently not used for electricity production. Until 2020, the contribution of geothermal installations to electricity production could amount to 40 MW. Support Mechanisms and feed-in conditions for electricity from renewable energy sources The latest amendments to the Energy Act (EZ-C) (Official Gazette of the Republic of Slovenia, No 70/08) were adopted by the Slovenian National Assembly to ensure harmonisation of Slovenia's legal order with EU regulations. Amendments were needed partly in order to regulate support for power stations generating electricity from renewable energy sources (RES), in accordance with the Community Guidelines on State Aid for Environmental Protection (2008/C82/01) and th create a conducive investment environment for new projects. Reference costs are the basis for determining prices for guaranteed purchase and for the level of operating support. Reference costs are indicative costs of generating electricity for an individual representative group and size of generating plant.

Suppor is financial aid for electricity production in RES generating plants, where the costs of producing electricity exceed the price that can be obtained for it on the electricity market.

Support comprises:•Guaranteed purchase of electricity (if guarantees of origin are in place, RES/CHP Support buys net electricity at guaranteed prices set out in the Decree)•Financial aid for current operations (if guarantees of origin are in place, and costs for producing energy are greater than the price that can be obtained on the electricity market). Operating support is the difference between the reference cost of producing electricity in individual RES generating plants and the reference price of electricity.

Support for investment•Tax exemption of the CO2-Tax (13 €/t CO2) of up to 40 % of the investment eligible for subsidy. Eligible are enterprises operating combined heat and power installations (minimum primary energy saving of 5%), measures for energy efficiency in industry (minimum CO2 reduction of 5 %), replacement of fossil energy sources by renewable energy sources, and energy efficiency measures in buildings (minimal energy savings of 15%). •For Households, subsidies of the Ministry of Environment and Spatial Planning are available through annual tenders, which are open until all funds are exploited, or until the end of the respective year, for he investments, e.g., in solar systems, heat pumps, or biomass heating systems. The nonrepayable subsidy amounts to up to 40% of the cost of the main parts of the subsidized measure •Companies can also apply for subsidies at the Ministry of Environment and Spatial Planning (also through annual tenders, which are open until all funds are exploited, or until the end of the respective year) for solar systems for water heating, heat pumps for warm water and space heating, for geothermal installations as well as autonomous systems for electricity generation (solar, wind). The subsidies amount to 20-50% of the investment costs. Biomass boilers are subsidized with 20%, under certain conditions with up to 60%. •Also from the Ministry of Environment and Spatial Planning, there are annual tenders for funds to develop energy concepts and feasibility studies in the area of renewable energy, energy efficiency and combined heat and power. •Attractive loans for environmental and RES projects are available at the Environmental Fund of Slovenia.

Mandatory targets set by the EU Directive on the Promotion and use of energy from renewable sources:•25 % share of RES in final energy consumption by 2020•minimum of 10 % share of renewable energy in final consumption of energy in transport by 2020

The Energy LawThe Energy Law was passed in September 1999. The Energy Law introduced the energy market in Slovenia with the purpose of organising the power sector in a modern way, taking into account new developments in this sector. At the same time, the EL also represented an important step in the process of harmonisation of the Slovenian legislation with the legislation of the European Union in the energy sector. The process of liberalisation and deregulation of the energy sector set the foundations for the new image of the Slovenian energy market. For the supervision of functioning of the electricity and natural gas market, the Energy Agency of the Republic of

Slovenia was established according to the provisions of the EL as an independent organisation, carrying out the duties, specified by the law. Amendments in November 2006 (Official Gazette RS 118/2006) - eliminated the obligation of obtaining the licence for wholesale trading in Slovenia. This means that foreign companies no longer need to establish a subsidiary in order to trade on the wholesale market. The lates amendment to the Energy Act (Official Gazette of the Republic of Slovenia, No 70/08) were adopted by the Slovenian National Assembly to ensure harmonisation of Slovenia's legal order with EU regulations. Amendments were needet partly in order to regulate support for power stations generating electricity from renewable energy sources, in accordance with the Community Guidelines on State Aid for Environmental Protection. Energy related Funds and Programmes Environmental Development FundEko sklad j.s. offers favourable credits and guarantees for private households as well as for enterprises and facilitates investments which are in line with the national environmental programme and the EU environmental policy. The funds are accessible through annual tenders which remain open until the fund is fully utilized, or until the end of the respective year. Sustainable Energy Programme 2007-2013In the framework of the programme planning period for EU Fonds 2007-1013, a programme for sustainable energy with a volume of 410 Mio Euro is envisaged. The funds shall trigger investments in primarily in the area of energy efficiency, and also in the area of renewable energy by subsidizing investments with 15-40 % of the total investment.

http://euroqualityfiles.net/AgriPolicy/Report%202.2/AgriPolicy%20WP2D2%20Slovenia%20Final%20Rev.pdf

Wood has traditionally been the most important source of renewable energy in Slovenia, followed by hydropower. First hydro power electricity plant was built already in 1912 in Fala on Drava river. In the last years other renewable sources are gaining importance, especially biogas, biodiesel and solar energy.

In the Resolution on the promotion of the use of energy from renewable sources EU sets targets to reach a 20% share of energy from renewable sources by 2020 and a 10% share of renewable energy in transport sector. In this context, Slovenia has to increase the share of renewable energy sources from the current 16% to 25% of gross final consumption of energy by 2020.

The share of renewable energies(RE) in the total supply of energy is about 10%. Wood biomass and hydro-energy contributes more than 90% of all energy from renewable sources. The contribution of renewable energies to the national energy supply has decreased since 2000, mostly due to the growth of total energy demand not followed by growth of RE supply.

Wind energyThere is currently little use of wind energy in Slovenia. At the end of 2008 two small wind power plants were constructed with the total installed power of 2.5 kW. The company Elektro Primorska is planning to build several small and one large wind power plant in Primorska region with the total capacity between 30 and 50 MW, but the project has been put on hold due to environmental concerns.

Solar energySlovenia has good conditions for solar thermal and photovoltaic energy use. According to the data from EnGIS there are 145 solar power plants in Slovenia with the total installed power of over 5 MW. The potential for increasing the utilization capacity of photovoltaic systems is estimated at 10 MW in 2020. Bigger installations are on the roofs of public institutions and enterprises. It is estimated that at least half installations are on private houses, alpine cottages and farms. One of the biggest solar power plants was built on the roof of the cattle barn in the Biotechnical Centre Naklo with the total installed power of 89 kW.

Hydro-energyHydro-energy represents the highest share of renewable energy sources in total primary energy consumption. There are 18 large hydro power plants in Slovenia and most of them were built in the previous century. Those plants produced between 90% and 86% of all electricity from renewable sources of energy in the period 2000-2007. The share is decreasing because the production of electricity from hydro power largely depends on the weather conditions which have impact on the water levels of Slovenian rivers. There are currently more than 400 small and medium hydro power plants with the total production of 409 GWh.

National policySlovenia has started with the activities for improving energy efficiency and enhancing the use of renewable energy sources already in 1995. It has adopted numerous strategic documents such as Resolution on the Strategy of Energy use and Supply of Slovenia (1996) where it states the long term objective “to substantially increase the share of renewable sources within the primary energy balance” and considers that in the long term, renewable energy sources are the most important sources of primary energy in Slovenia. Therefore the energy sector should focus on hydropower, biomass, geothermal, solar energy and waste heat.

The second important document was The Resolution on the National Energy Programme (Ur.l. 57/2004) where Slovenia defined long term development goals in the field of energy supply, energy systems and mechanisms for stimulating the use of renewable sources of energy. The most recent strategic document is National Action Plan for Energy Efficiency. In The Resolution on the National Energy programme Slovenia sets up the targets for renewable energy sources in 2010. According to the programme the share of renewable energy sources in primary energy balance will increase from 9% to 12% and the share of heat supply from 22% to 25% by 2010.

In the period 1995-2007 Slovenia supported different actions for more efficient use of renewable sources of energy. The measures were divided to financial incentives for the investments, financial incentives for the operations, promotional and training activities. Promotion of the use of renewable sources of energy in Slovenia is under the responsibility of various ministries. The

greatest role has the Ministry of the Environment and Spatial Planning and its European Affairs and Investment Directorate. The Directorate performs professional and administrative tasks concerning the development of policies of national programmes and Governmental Regulations aimed at the promotion in the use of renewable energy sources. The activities are supported by the loans of Eco Fund - Slovenian Environmental Public Fund. Eco fund provides loans for the environmental protection investments at favourable interest rates (soft loans).

National concepts and programmesThe production of electricity from the renewable sources of energy is under responsibility of the Ministry of Economy. Reducing import dependency on fossil fuels and GHG emissions are the main objective in promoting greater use of renewable sources of energy in generation of electricity. Rapid development of RE technologies together with rapid growth in the price of fossil fuels has further accelerated this development in recent years. In May 2009 Slovenian government adopted new support schemes which support the producers of electricity and high-efficiency combined heat and power from renewable sources.

Producers can choose to receive either guarantee purchase of electricity or operating support. Guarantee purchase of electricity may be received only by RE generating power plants with a nominal electric capacity of up to 5 MW. A Purchase Agreement is concluded, valid for 15 years. According to the Law on Energy, the guaranteed purchase prices and operating support are set at least once a year.

Operating support can be received by producers which sell electricity on the market by themselves or use it for their own consumption.

The use of biofuels is one of the measures in the Strategy and Short-Term Action Plan for Reducing Greenhouse Gas Emissions. The strategic goal of Slovenia is to increase the degree of energy self sufficiency and agriculture could play an important part in the area of renewable energy sources, especially biofuels. To promote production of RE, agricultural policy supports production of energy crops by granting specific direct payment to producers and supports investments in production and use of RE in rural areas.

Since 2004, pure biofuels used as motor fuels have been exempt from the excise duty payment system. When blended with fossil fuels, a maximum 5% exemption from the payment of excise duty can be claimed. Slovenia applies a system whereby distributors are obliged to place a percentage of biofuels that corresponds to the national target on the market. This measure was introduced in 2005.

TURKEY

http://www.todayszaman.com/news-264735-opinion-turkeys-renewable-energy-potential.html

Turkey has become one of the forerunners in generating renewable energy in recent years and investment in the sector is growing massively as it has become clear that this is a sector with enormous growth potential. The government's support adds a sense of safety to potential

investments. The geographical conditions in Turkey and its climate are excellent for generating wind, solar and geothermal power. Accordingly, Turkey has started a major renewable energy and energy efficiency program. The country aims to increase its clean energy share to 30 percent of its power supply by 2023 -- the 100th anniversary of the republic. With over $40 billion in investment expected in this area, foreign and local investors will see major business development opportunities in solar, wind, geothermal, hydro and all elements of energy efficiency. Turkey has an ideal climate for wind and solar energy investments, with an average of more than seven hours of sunshine a day and bordering the Mediterranean, the Aegean and the Black Sea. As announced just recently, the World Bank is to provide an additional $500 million to help fund the private sector renewable energy and energy efficiency project “Private Sector Renewable Energy and Energy Efficiency Project” in Turkey. The funding -- which is guaranteed by the Republic of Turkey -- is to tap the country's significant renewable energy potential from hydro, wind, solar, biomass, geothermal and other resources. The additional funds complement an initial World Bank loan of $500 million and Clean Technology Fund financing of $100 million, which were approved on May 29, 2009, and came into effect on Aug. 12, 2009. The main goal of the Private Sector Renewable Energy and Energy Efficiency Project is to help increase privately owned and operated energy production from local renewable sources, and, as a result, to help improve energy efficiency and curb greenhouse gas emissions. The project has already established a financial mechanism through Turkish banks that assist Turkish entrepreneurs in leveraging their capital to develop economically feasible renewable resources. The mechanism is expected to increase developments in the Turkish renewable energy sector. Turkey's market developments created a range of excellent opportunities for companies already established in the renewable energy sector or just entering it. For companies considering getting involved in the Turkish market, a number of opportunities are available: direct product marketing, establishing a local sales office, a strategic partnership or a joint venture, or setting up a production site in Turkey. Significant potential lies in the area of wind turbines, geothermal exploration, drilling and geophysical engineering services, geothermal power plant equipment, biomass power generation, waste to energy systems and solutions, hydroelectric power plant equipment supply, solar power generation systems, and energy efficiency systems and solutions.

http://www.enercee.net/turkey/energy-sources.html

The Ministry of Energy and Natural Resources is the responsible body for policy making, and its General Directorate of Electrical Power Resources Survey and Development Administration (EIE) is in charge of the promotion and research in the field of renewable energy sources. The Energy Market Regulatory Authority (EMRA) is the competent authority for regulating the market and for licensing.

Turkey is endowed with a significant amount of renewable energy sources (hydro, wind, geothermal, solar power and biomass) potential. Renewables are the second largest domestic sources for energy production after coal. In 2006, the energy produced from renewable sources has reached to the amount of more than 10,8 Mtoe which is 11% (in 2007 %10.2) of the total

primary energy sources.

Renewable energy supply in Turkey is dominated by hydropower and biomass. More than two thirds of renewable energy supply is biomass, mostly wood and animal wastes that are almost exclusively non-commercial fuels. They are mainly used in the residential sector for heating. The remaining one-third of renewable energy supply is predominantly hydro-power. The contribution of wind and solar is limited but expected to increase rapidly. The large potential of Turkey for geothermal, wind and solar have not been systematically developed until recently. In 2007, their combined share in TPES was only 1.5 %

Hydro The economically usable hydropower potential of Turkey is determined as 130,000 GWh per year (estimated approx.180.000 GWh including small hydro), of which 35% has been exploited. 9% of the potential is under constraction and the rest (56%) is at project level. Installed capacity of hydroelectric plants in Turkey stood at 13,393 MW at the end of 2007. It is projected that hydroelectric power plant capacity will be reached to 35000 MW by the year 2020. Unused potential consists of many small hydro projects and the small hydro projects have been one of the most attractive options for private investors in Turkey. WindTurkey has considerable wind energy potential. Studies that were carried out for harnessing wind energy were initially focused on the identification of wind energy potential. According to these studies the potential for wind power is especially high on the west coast and in the south-eastern Anatolia. The Turkish Wind Energy Potential Atlas was developed in 2007. It has been calculated that wind power plants operating at an installed capacity of 5000 MW can be installed where the annual wind speed is higher than 8,5 m/s. Further 48000 MW can be installed where the annual wind speed is higher than 7,0 m/s. Today installed windpower capacity in Turkey has reached from 20 MW to 200 MW and 600 MW under construction. Additionally, new applications, nearly 85000 MW, applied for the construction license and 2126 MW of these applications are already granted a license. Solar Turkey is located in a relatively advantageous geographical position. The solar energy potential evaluations made by EIE, based on the data measured by the State Meteorological Services during 1966-1982 revealed an annual average total sunlight period of 2640 hours (daily total 7.2 hours) and an average annual solar radiation of 1311 kWh/m²-year (3.6 kWh/m²-day).

The main solar energy utilization in Turkey is the flat-plate solar collectors for domestic water heating. The systems are widely used and commercially available in the country. Technical solar energy potential is 76 Mtoe and 11,5 million m2 of solar collectors are presently used in Turkey. This means that solar collector usage is 0,15 m2 /person. It is possible to increase the existing 11,5 million m2 solar collector to 30-35 million m2. In 2007 solar heating produced about 400 000 toe in Turkey. This makes Turkey indeed one of the leading countries in the world according to its total installed capacity. The systems are mostly used in the Aegean and Mediterranean regions. Total photovoltaic applications are approximately 1000 kW and mainly used where transmission of electricity is not economically feasible. If prices decrease and new technologies

emerge, the utilisation of photovoltaics will increase significantly.

GeothermalTurkey possesses rich geothermal resources. There are nearly 1000 hot springs and mineral waters and 95% of the known geothermal fields are suitable for space heating purposes. A rest of 5 % could be used for electricity production.. Turkey is one of the first countries (among China, Japan, USA, Iceland and Turkey) in the world using geothermal heat and hot springs explored at 170 geothermal fields. Most of the geothermal resources are found in Menderes Massif in Western Anatolia. With the evaluation of geothermal discharges, total geothermal potential is estimated around 500 MWe and 31,500 MWt. MWt which is equal to 5 million dwellings’ heating energy while proven thermal geothermal capacity of Turkey is about 3173 MWt. Currently, only 10% of this capacity is used for heating 71 000 residential units. Two geothermal electricity generation plants with a capacity 23MW and 8 MW are in operation. A 52 MW power plant is under construction. In 2006, contribution of geothermal energy to total primary energy amounted to about 1Million TOE.

Biomass Turkey’s main biomass sources are agricultural, forestry, animal and organic wastes. Biomass potential is 8,6 million TOE and the amount of 6 million of this potential is being used. Biogas production potential has been estimated at some 2 Mtoe. Biodiesel production capacity is 1.5 Mt and Bioethanol production capacity is about 3 Mt per year. The 2015 biofuel production targets are 1.250.000 tonnes biodiesel ve 735.000 tonnes bioethanol.

Support Mechanisms and feed-in conditions for electricity from renewable energy sources In accordance with the EML No. 4628, with respect to the renewable energy sources, Energy Market Regulatory Board "shall take necessary measures to promote electricity production from renewable and domestic energy sources due to environmental effects and take action on behalf of the relevant agencies for the implementation of the relevant incentives.'"The Law No. 5346 on the Use of Renewable Energy Resources for Electricity Production Purposes (May 18, 2005) was enacted.The purpose of this Law is to ensure the widespread use of renewable energy sources for electricity production, utilization of these sources in a reliable, economic and qualified manner, increase in resource diversification, reduction of greenhouse gas emissions, recovery of wastes, protection of the environment and development of the relevant manufacturing sector to achieve these goals.

Renewable energy resources (RES) covered within the scope of this Law are; wind, solar, geothermal, biomass, biogas, wave, and tidal energy resources suitable for the electricity generation together with hydraulic generation plants, either canal or run of river type or with a reservoir area of less than fifteen square kilometres.

The statement of "real and legal entities establishing electricity generation plant and micro-cogeneration plant using renewable energy sources with a maximum installed capacity of 200 kW to meet only their own demands shall be exempt from obligations of obtaining license and

establishing a company" is added to the end of the Article 3 of Law No. 4628 by Article 15 of Energy Efficiency Law No. 5627 published in the Official Gazette No. 26510 of 2 May 2005. Within this framework, no license will be required for the plants with a maximum production capacity of 200 kW (this threshold is increased in 2008 to 500 MW with new Law) from renewable energy sources to meet only their own demands. This provision will make things easier, particularly for small producers.

The existing legislations regulation provides following incentives for RES generation facilities:•Legal entities that apply to obtain a license for the establishment of generation plants producing energy from renewable energy sources shall pay 1 percent of the total licensing fee and shall be exempt from annual license fees for the first eight years following plant completion date as stated in the relevant licenses.•Legal entities that apply to obtain a license for the establishment of generation plants producing energy from renewable energy sources shall be allowed to purchase electricity from private sector wholesale companies on condition that the annual amount of production does not exceed the amount projected in their licenses within a calendar year. •In the event that the price for electricity produced from renewable energy sources is below or equal to that of the Turkish Energy Trading and Contracting Company (TETAS) or there is no other supplier with lower prices, legal entities holding a retail sales license shall be obliged to give priority to generation plants producing electricity from renewable energy sources to purchase electricity. •Turkish Electricity Transmission Company and/or legal entities with a distribution license shall give priority to system connection of generation plants producing energy from local natural resources and renewable energy sources. •Within the scope of the RE Law, a feed-in system combined with purchase requirement for electricity produced from renewable energy sources by legal entities holding electricity generation license and RES Certificate is developed and upper and lower limits are put on purchase price for electricity produced from renewable energy sources. (However, no differentiation has been made between purchase prices of RES technologies.) Feed-in tariff is valid for the first ten years of the plants that are put into operation before 31 December 2011. The period shall be extended by the Council of Ministers for a maximum of two years. Purchase guarantee for a price that will not be below Turkish Lira corresponding to at least 5 Euro Cent/kWh during 10 years.However in accordance to the Balancing and Settlement Regulation, renewable energy producers has been preferred to sell their electricity to the open market(which is 13 % of total electricity market as kwh base) with more attractive prices. Because of high electricity demand in the market and difficulties for meeting this demand time to time, made the prices increased in spot energy market. •EMRA shall grant a “RES Certificate” (Guarantee of Origin) for identification and monitoring of the resource type in purchasing and selling of electricity generated from RES in the domestic and international markets, to the legal entity holding generating license. •Priority on allocations of treasury and forestry lands and in allocations of forestry lands, a discount in the rate of 85 %t is applied in the costs of license, rent, servitude right and use permit during the first 10 years of the investment and operating periods of such plants. In the forestry lands, ORKÖY and Afforestation Special Appropriation Revenues are not collected.

•Res incentive mechanism is enhanced with the energy efficiency law. In decreasing energy intensity, use of RES will be incentivized in industrial establishments. 20% of energy cost of industrial facilities belonging to the last year of the voluntary agreement between the real persons and legal entities, who signed voluntary agreement by government and fulfilled their commitments on decreasing energy intensity at least at the ratio of 10% in any facilities within 3 years, shall be paid. Energy generated from RES, by entities, who have signed voluntary agreement or energy generated in cogeneration plants consumed , shall not be included in the calculation of energy intensity. •TUBITAK (Turkish Research Institute) shall support research and development projects for improving energy efficiency, utilizing new and renewable energy resources prior. Ethanol and bio-diesel produced artificially from domestic agricultural can be blended with liquid fuel and amount of 2 % is exempt from special Tax by Biofuel Incentive Decision of The Council of Ministers.

Explanation on Feed in tariff

Within the scope of RE Law, a feed-in system combined with a purchase requirement for electricity produced from renewable energy sources by legal entities holding electricity generation license and RES Certificate is developed and upper and lower limits are put on purchase price for electricity produced from renewable energy sources. However, no differentiation has been made between purchase prices of RES technologies. Feed-in tariff is valid for the first ten years of the plants that are put into operation before 31 December 2011. The period shall be extended by the Council of Ministers for a maximum of two years. Legal entities holding retail sale license who violate the relevant provisions of Article 6 entitled "principles of implementation" shall be charged a penalty. There are also some other incentives for investments on renewable energy sources and for land on which such plants will be constructed.

http://web.firat.edu.tr/iats/cd/subjects/Energy/ETE-33.pdf

Renewable energy appear to be the one of the most efficient and effective solutions for clean and sustainable energy development which accounted for 12.89% of the world’s total primary energy supply in 2006 [6, 9]. On the other hand, Turkey, with its young population and growing energy demand per person, its fast growing urbanization, and its economic development, has been one of the fast growing power markets of the world for the last two decades. It is expected that the demand for electric energy in Turkey will be 580 billion kWh by the year 2020. Turkey is heavily dependent on expensive imported energy resources that place a big onus on the economy and air pollution is becoming a great environmental concern in the country. When viewed from this aspect, for green energy development renewables are influential solutions. [10]. Turkey’s geographical location has several advantages for extensive use of most of the renewable energy sources which are biomass, hydropower, geothermal, solar and wind [6].

Biomass EnergyBiomass is abundant and has remarkable potential in Turkey. It is the term used for all organic material originating from plants, trees and crops and is essentially the collection and storage of the sun’s energy through photosynthesis. Biomass can be either obtained directly from plants or

indirectly from industrial, domestic, agricultural, and animal wastes and can be thermochemically converted into liquid fuel, gases such as methane, carbon monoxide, or hydrogen by pyrolysis and gasification [11, 12].

Biomass is important because share of total energy consumption is still high in Turkey [10]. The annual biomass potential is approximately 32 Mtoe in Turkey. The total recoverable bioenergy potential is estimated to be about 16.92 Mtoe [13]. Using vegetable oils as fuel alternatives has economic, environmental, and energy benefits for Turkey. Vegetable oils have heat contents approximately 90% of that of diesel fuel. A major obstacle deterring their use in the direct injection engine is their inherent high viscosities, which are nearly ten times that of diesel fuel. The overall evaluation of the results indicates that these oils and biodiesel can be proposed as possible candidates for fuel [10].

HydropowerHydropower provides unique benefits, rarely found in other sources of energy. These benefits can be attributed to the electricity itself, or to side-benefits, often associated with reservoir development. Hydro-turbines convert water pressure into mechanical shaft power, which can be used to drive an electricity generator, or other machinery. The power available is proportional to the product of pressure head and water discharge [14].

Turkey has a huge hydropower potential and the second largest energy source after coal is hydro [15]. The gross and technical hydropower potential of Turkey where has the highest hydropower potential in Europe are estimated at 433 and 216 TWh/year, respectively. The economic potentials for installed hydropower capacity and electricity output have been anticipated about as 45 GW and 140 TWh/year, respectively. The gross hydroelectric potential of Turkey is about 1% of the world total and about 14% of the European total [16, 17]. The Turkish government expects the construction of 332 more hydroplants in the long term to make use of the potential remaining hydrosites. This would bring the number of hydroplants to 485, and add more than 19 GW of capacity to the hydrosystem. This increase in the hydrogenerating capacity includes the Southeastern Anatolia Project (GAP) that covers 1/10th (74,000 km2) of Turkey’s total land area, one of the largest hydro developments ever undertaken. Upon its completion, GAP will have an installed capacity of 7476 MW. The construction of all these new dams requires an investment of more than US$ 30 billion. Forecasting that Turkey’s hydropower potential can meet 33-46% of its electric energy demand in 2020 (571 TWh) [15, 18].

Geothermal EnergyAlthough geothermal energy is categorized in international energy tables as one of the new renewables, it is not a new energy source at all. The inventorial works and chemical analyses of the hot springs and mineral waters started in 1962 [19]. The geothermal power plants are designed to operate 24 h/day, and the operation is independent of the weather or fuel delivery so it is the most stable renewable energy source. The geothermal energy source that can be easily converted into electrical power is generally considered renewable, because reservoirs may be recharged by rain or by re-injection of the wastewater [20].

Turkey’s percentage of the total capacity is 0.25% of the total which has an important place among the richest countries in geothermal potential [19, 20]. The first geothermal researches and

investigations in Turkey started by Turkish Mineral Research and Exploration Institute (MTA in Turkish initials) in 1960s. Since then, about 170 geothermal fields have been discovered by MTA, where 95% of them are low-medium enthalpy fields, which are suitable mostly for direct-use applications [21]. The present use of geothermal energy in Turkey (105 GWh/year for electricity and 4465 GWh/year for direct use) is a very small fraction of the identified geothermal potential. Only 3% of the total geothermal potential of Turkey has been utilized so far. When Turkey uses all of this potential, it can meet 14% of its total energy need. Geothermal energy has the potential to play an important role in the future energy supply of Turkey [20]. Future supply of geothermal energy depends on energy prices and technical progress, both of which are driven by energy policy priorities [21].

Solar EnergySolar power is one of the most promising and more predictable than other renewable sources and less vulnerable to changes in seasonal weather. Whereas, generation of power from other renewable sources is limited to sites where these resources exist in sufficient quantities and can be harnessed, solar energy can produce power at the point of demand in both rural and urban areas [22].

Due to its location, Turkey has virtually rich solar potential [23]. In spite of this high potential, solar energy is not now widely used, except for flat-plate solar collectors. They are only used for domestic hot water production, mostly in the sunny coastal regions [10]. The electricity generation from the solar is realized by photovoltaics (PV) and solar collectors. Unfortunately, PVs have high installing costs; hence, an economical usage of them is not available today. In Turkey, only the Ministry of Environment and Forestry (forestry observation towers), Turkish Telecommunication Companies (transfer stations), the Highway Board Department (emergency calling, traffic management systems), Electrical Power Resources Survey and Development Administration (EIE) and various research associations (most of them are off-grid) have a common installed PV capacity of 300 kW [23]. PV cells are produced in various research establishments in order to study the feasibility of local manufacturing. So far none of these studies yielded a positive result in order to justify a mass production facility in Turkey. There are more than 30,000 small residential areas where solar powered electricity would likely be more economical than grid supply. Another potential for PV market is holiday villages at the long coastal areas. These facilities are frequently far from the main grid nodes and require additional power when solar insolation is high [25].

Wind EnergyWind energy can be thought of as the indirect conversion of solar energy. It is formed naturally in the atmosphere and does not produce environmental pollution; wind energy represents an appropriate solution for energy-related problems but is not persistent for long durations [25, 26]. Now a global multi-billion-dollar industry, wind energy is regaining its once prominent place in the energy industry [27]. Nowadays total installed wind power capacity reached 120,798 MW in the world. Approximately 62% of the installed wind capacity of the world is in the Europe, 22% in America and 16% in Asia. However, Germany has the highest installed wind capacity with 22,247 MW which is equal the 45% of European and 31.2% of world installed capacity [28].

Turkey is reported as one of the countries with the best wind maps among European countries,

after the United Kingdom. Due to its geographic position, Turkey is under the influence of different air masses that give rise to potential wind energy generation possibilities in different areas [25]. It is estimated that Turkey’s technical wind energy potential is 88 GW and economical potential is approximately 10 GW depending on the technical condition. The EIE’s wind atlas reported that, Turkey’s technical wind energy potential was 83 GW and production potential was 166 TWh/year. However, Turkey’s total installed wind capacity is only 1300 MW in 2005 and 2800 MW in 2010. At the end of 2009, 120 new wind power plant applications have been made to get generation license with 3564.63 MW up to January 2005, from the Energy Market Regulatory Authority (EPDK). Distribution of the projects to the regions is: Marmara (35 projects) with 966.3 MW, Aegean (62 projects) with 1864.6 MW, Mediterranean (20 projects) with 574.3 MW, middle Anatolia (2 projects) with 120.4 MW, and south east Anatolia (1 project) with 47 MW [28].

RENEWABLE ENERGY POLICY OF TURKEYThe aim of energy policies is to meet the energy needs of increasing population and growing economy in a continuous, qualified and secure manner through primarily private sector investments in a competitive and transparent free market environment [8, 29]. The aims of Turkish energy policy are to satisfy energy demand consistent with economic, sustainable development, and environmental objectives. Because of that, Turkish energy policy is concentrated on assurance of energy supply, reliability, domestic sufficiency, in time, in economic terms, and sustainability [30, 31]. This policy includes consideration for environmental impacts; also it supports and orients targeted growth and social developments. The government focused its efforts on improvement in domestic production by utilizing public, private, and foreign utilities and increasing efficiency by rehabilitation and acceleration of existing construction programs to initiate new investments [31]. Special attention in the Turkish Government’s energy policy has been paid to the development of international cooperation [1, 32].

Turkey’s renewable energy policies are being improved, thus there are a few government-backed incentives to promote renewable energy investments [3, 30]. Energy pricing policy should not be employed as an anti-inflationary instrument. It should be applied in such a way that it does not create cross subsidies between classes of consumers. Conventional financing of major infrastructure projects would only increase the amount of foreign credit, therefore the Ministry of Energy and Natural Resources (MENR) has conceived other options for financing projects. In 1984, BOT (build, operate, and transfer) model was issued in order to meet the dynamic demand for electrical energy and to attract local and foreign capital to invest in the sector. Private investors build and operate private sector energy generation, at which point they transfer ownership to the state. In June 1996, necessary legislative arrangements were carried out to eliminate difficulties arising from implementation, thus MENR introduced the BOO (build, own, and operate) financing model [1, 3, 30, 32, 33, 34]. The BOT and BOO financing schemes were ended in 2000 and replaced in 2001 by financial incentives within the framework of the Electricity Market Law (Law no. 4628). According to the Electricity Market Licensing Regulation, promotion of renewable energy sources in the electricity market has been assigned to the Energy Market Regulatory Authority (EMRA). Before the Electricity Market Law, the price of energy was decided as a result of negotiations between the energy production companies and the state, which is the buyer [11].

General energy and environmental policies of Turkey can be listed as below [1]:1) Measure to encourage wider use of natural gas,2) Support the utilization of clean and renewable energy sources as well as passive solar energy applications,3) Decentralization in energy generation,4) Optimizing sustainability of energy supply and environmental costs,5) Setting integrated energy consumption targets for organized industrial zones.

Renewable energy policies are driven by the well-recognized need for a sustainable society. The protection of environment and public health from pollution arising from energy production and consumption activities is one of the principles of the current Turkish National Energy Policy. In conjunction with this policy, in 1983 “Environment Law” was promulgated in which the general principles of the Turkish environment policies were established. In line with the Environment Law, various regulations (i.e. Air Quality Control Regulation-1986, Water Pollution Control Regulation-1988, Noise Control Regulation-1986, Control of Solid Waste Regulation-1991, Environmental Impact Assessment Regulation-1992, Regulation on Control of Medical Waste-1993, Control of Toxic Chemical Substances and Products Regulation-1993, Control of Hazardous Wastes Regulation-1993) have been issued since 1983 [30].

The main objectives of Turkey’s Energy Policy including renewable are [3, 35]:1) To meet demand using domestic energy resources as the highest priority. In the medium and long term, this is to occur through a mix of public, private and foreign capital.2) To develop existing sources while accelerating the penetration of new and renewable sources.3) To diversify energy sources and to avoid dependence on energy imports from a single source or country.4) To encourage private-sector investment and to accelerate capacity construction and privatization in the powerindustry. Preparations are to be made for the introduction of nuclear power.5) To improve the reliability of electricity supply through upgrades in the power transmission and distribution grid.6) To improve energy efficiency in end use and transformation, e.g. through reduction of losses in energy production, transmission and consumption.7) To protect the environment and public health.8) To make use of Turkey’s geopolitical location to establish the country as a pivotal transit area for international oil and gas trade (“Eurasia energy corridor”).

UKRAINE

http://www.renewableenergyworld.com/rea/news/article/2011/12/renewable-energy-recap-ukraine

Policy Ukraine is an emerging market economy at the cross-roads of Eastern Europe, Russia, Central

Asia and the Middle East, and as such holds great potential as a new market for trade and investment. However, an uncertain economy and continued political instability have caused potential investors to hesitate, and inefficiencies in the energy system have resulted from aging power plants and corroding power lines. There are strong signs; however, that the country is fully committed to meeting its goal of generating 19% of energy from RES by 2030 as set out in the Government’s 2006 strategy. Further, in mid-2010, a new deal with the International Monetary Fund (IMF) secured a $15 billion (€11b) credit line over a two-and-a-half-year period, which it is hoped will spur renewed investor interest. The country’s renewable resource potential is impressive, and in April 2009, a new “Green Tariff Law” was approved which, unlike the previous tariff system, sought to differentiate between renewable sources. The Green Tariff (GT) is calculated by applying various coefficients to the Basic Tariff which was set on 1 January 2009. The Law also introduced a fixed minimum GT denominated in euros based on the exchange rate at the time, in order to mitigate the impact on the GT of a devaluation of the Ukrainian Hryvnia. The GT Law obliges the state to purchase green energy under the tariff system until 2030 and also ensure connection to the grid. Further, where there is a subsequent change to the GT rules, an energy producer will have the right to either follow the new rules, or those valid at the start of operations. In a bid to improve supply chain security, the Law also provides that, from 1 January 2012, a generation company can only charge its customers the GT rate where at least 30% of the materials, works and services associated with the project are based on domestic supply, increasing to 50% from 1 January 2014. However, to meet its 2030 target, the country will first need to address the challenges posed by its complex permittingprocedures and inadequate grid. While overall grid capacity is around 7 GW, the network around strong RES areas such as Crimea are limited to 2 GW. Tax incentives and access to finance A significant range of tax exemptions are available to green energy companies and projects including corporate taxexemption on the sale of RES electricity for 10 years from 1 January 2011, VAT exemptions on certain imports, and a 75% land tax reduction on the purchase of land for green energy projects. The main source of finance for RES projects has historically been the Government. In April 2011, the Cabinet of Ministers approved a €7 billion increase in funding for the 2010-15 “economic program on energy saving to program on energy saving” to €32 billion, the majority of which will in fact be used to renovate the power grid. WindUkraine has significant wind energy potential; however, it remains an under-developed market with only 87 MW installed at the end of 2009 and zero installations in 2010. The average wind speed in open sites is around 6.5 m/s, potentially reaching 8 m/s in hilly areas. Wind power

potential is estimated to be 19-24 GW and a strong project pipeline currently exists, although only a few of these have the necessary construction permits. MAKE forecasts an additional 750 MW in the next five years. Crimea and the steppes of Southeast Ukraine are the most promising wind regions. Crimea expects €1.2 billion to be invested in a 900-MW wind farm, with signs construction could begin on the first 125-MW stage by the end of the year. Wind Power, a subsidiary of utility DTEK, has also already begun work on its 1.2-GW portfolio of wind capacity on the coast of the Sea of Azov. Government goals indicate that by 2030, 20%-30% of power will be generated by wind, supported by strong GT rates. SolarUkraine also has strong solar energy potential, with irradiation of around 800-1450 kWh/m² per year in the north and south respectively. Installed capacity was negligible at the end of 2010; however, Austria’s Activ Solar has this year completed for all phases of its 80-MW Ohotnikovo project on the Crimean Peninsula, claimed to be the largest PV project in Central and Eastern Europe. The country’s target capacity for the period 2010-15 is 1 GW. Other Biomass represents more than two-thirds of Ukraine’s total estimated renewable potential thanks to its traditional focus on agriculture. The country currently produces less than 0.5% of its energy from biomass; however, it is estimated it could produce more than 10 times its current level of output. Hydropower is currently the leading source of renewable energy in the country. There are approximately 22,400 rivers within the Ukraine of which only 110 are longer than 100 km. As such there is significant potential for small hydro plants, around 2.3 GW compared with the current installed capacity of 150 MW.

http://www.enercee.net/ukraine/energy-sources.html

In 2008, renewable energy (including large hydro power stations) accounts just for some 2.8% of total primary energy supply in Ukraine. The Government Energy Strategy projects their growth. The Ukrainian Government is aware of the perspectives of renewable energy and launched various programs to develop strategies and specific projects. Most of Ukraine’s renewable energy today is concentrated in large hydro power and biomass-fired heating boilers and stoves. There are also several wind power plants and geothermal heating systems. Ukraine has a scientific and industrial base for manufacturing renewable energy technologies, but the quality and reliability of existing Ukrainian technologies have to be improved. Some forms and uses of renewable energy are already economically viable in Ukraine. For example, biomass-fired boilers are often competitive compared to gas fired boilers in areas with available biomass resources. Other renewable energy technologies are still on the stage of

research and development or demonstration, and their share in energy supply is insignificant. The “Energy Strategy of Ukraine for the period till 2030” adopted in March 2006 estimates the annual technical potential of renewable energy, waste and nonconventional energy sources at about 79 mill tce. At that consumption of RES is forecasted at 18.3 mill tce in 2030 (6% of total primary energy consumption). The largest increase is expected in the use of solar energy, methane gas from coal mines and heat pumps operating on low potential heat. The strategy envisages that the electricity production from renewable energy will increase up to 1.6 billion kWh in 2020 and 2.1 billion kWh in 2030. The Scientific Engineering Center “Biomass” in cooperation with non-governmental organizations developed an alternative strategy for RES development till 2030. According to it the share of RES will be 16.5% of total primary energy consumption or 39.2 mill tce in 2030. The major sources, that can contribute to the generation of renewable electricity are wind energy, small scale hydro and biomass. In the strategy 2030 no separate targets have been set for the generation of renewable electricity. In accordance with key principles of the EU green paper, the long-term renewable energy development in Ukraine should be based on economic competition with other energy sources, with the state providing support to renewable energy sources advanced technologies which reflect public interest as regards enhancing the energy security level, environmental cleanness and combating global climate change.At present only 0.8% of the energy in Ukraine is provided by renewable energy sources. According to the strategy 2030, this should be increased to 18.3% in 2030. The EU countries have agreed to generate 20% renewable energy in 2020. Several stakeholders have presented alternative targets, showing a faster growth path and higher final targets, especially in the field of biomass and wind energy. In order to develop an effective and efficient renewable energy support framework, it is necessary to develop a clear view on future targets, which are both challenging and realistic.

HydropowerHydro power is the most developed renewable energy source in Ukraine today. Large hydro is a mature technology and hydro power currently is the least expensive power source on the wholesale market. Of the country’s 4,700 MW of hydro power capacity, the majority is in large-scale hydro. Eight power stations on the Dnipro River have the total capacity of 3907 MW and the Dnistrovska station on the Dnistr River – an additional 700 MW. Combined, they produce 11-13 TWh/year. Ukraine has some 70 operational small scale hydropower stations, of which 50 are active and generate 0.25 TWh/year. Additionally, there are some 100 small hydropower stations that are not operational but could be eventually restored. Ukraine also has plans for 5 additional hydro power plants with a total capacity of 8,143 MW (EBRD 2005). Ukrainian environmental organizations project that hydropower production may reach 15.1 TWh/year by 2030 (including 3.7 TWh/year of small hydro) and up to 25 TWh/year in 2050.

BioenergyUkraine has quite a big potential of biomass available for energy production. Expert estimation performed for 2007 shows that theoretical potential of biomass in Ukraine is about 50 mtce,

technical potential comes to 36 mtce and economic potential amounts to 27 mtce. Main components of the potential are agricultural residues and energy crops. Of the agricultural residues, the biggest economic potential falls on residues of sunflower production (stalks, husks, heads), then comes residues of production of corn for grain (stalks, leaves, ears); straw of grain crops and straw of rape occupy third and forth place correspondingly. Economic potential of energy crops is even higher than that of agricultural residues. It includes not only biomass of the crops but in case of rape and corn is recalculated into biodiesel (plus straw) and biogas. Coming from the present level of the total primary energy consumption (TPEC) in Ukraine (210.7 mtce in 2007), economic potential of biomass can satisfy about 13% of Ukraine’s energy demand.

Wind energyUkraine has eight wind power plants: four in Crimea and one each in the Sea of Azov; near Mariupol; near Mykolaiv; and near Truskavets in the Carpathians. These plants have a total of over 70 MW of capacity15. Before 2006 wind energy development was funded from a charge of 0.75% on all electricity sales. At the beginning of 2006 the charge was cancelled, and fixed sum of money (about 80 mill UAH/year) for the support of wind energy was included in the state budget. Wind is the most expensive source of power on the wholesale market. The estimated technical potential of wind energy capacity is 16 000 MW, which could generate up to 30 TWh/year. The Ukrainian Energy Strategy of 2006 projects that wind power will generate 2 TWh/year in 2030 that will substitute consumption of 0.7 mtce/year.

Solar energyThere were about 1,000 collectors (10,000 m2) installed in Ukraine in 2002, according to experts’ estimates.16 Ukraine has potential for developing solar heating, particularly in the southern part of Ukraine, where solar radiation intensity reaches 1,450 kWh/m2/year (the country’s average is 1,200 kWh/m2/year). Solar heating could be attractive in areas with low population density, where district heating is not economically justifiable. Ukrainian environmental organisations project that solar collectors may supply up to 23 TWh/year of heat in 2050. Photovoltaic (PV) systems are practically not used in Ukraine because of their high cost. Most PV panels manufactured in Ukraine are exported.

Geothermal EnergyUkraine has 13 MWth of geothermal capacity installed; there are plans to increase geothermal use for district heating to 250 MWth by 2010. There is also potential for small geothermal power plants using existing wells at abandoned oil and gas fields; a 1.5 MW pilot project in Poltava was being installed in 2005. The best conditions for geothermal energy development are in the Carpathian area, Crimea, Kharkiv, Poltavsk, Donetsk, Lugansk and Chernigiv regions. The Ministry of environment estimates thermal water reserves at 27.3 million m3/day. The technical potential is estimated at 53.5-97.7 TWh/year, but according to experts’ estimates no more than 8 TWh/year could be used by 2030 and 14 TWh/year in 2050.

Support Mechanisms and feed-in conditions for electricity from renewable energy sources Law on green tariff

In September 2008 the Law on green tariff for electricity produced from renewables was adopted

by Verkhovna Rada. (601-VI from 25.09.08). Due to this Law: "green" tariff – special tariff according to which the electricity, produced on the power energy objects which use the alternative energy sources (excluding the blast-furnace gas, coke oven gas and including only small hydropower plants) is purchased; small hydropower plant – power plant, which produces electricity using hydro energy with the installed capacity less than 10 MW”. Wholesale Electricity Market of Ukraine is obliged to purchase electricity, produced on the power energy objects which use the alternative energy sources (excluding the blast-furnace gas, coke oven gas and including only small hydropower plants) according to the “green” tariff, and those electricity, which wasn’t sold by the negotiated prices directly to consumers or to the power supply companies, which perform economical activity concerning the electricity supply by the regulated tariff. Electricity, produced from the alternative energy sources could be sell according to the “green” tariff by the direct agreements with consumers. In this case electricity consumer receives from the authorized by the Cabinet of Ministers of Ukraine agency the appropriate document with the set form, which confirms the purchase of electricity, produced from the alternative energy sources, and defines itself usage order”. "Green" tariff is accepted by the National Electricity Regulatory Commission of Ukraine on the electricity, produced by the market participants at the power objects using the alternative energy sources (excluding the blast-furnace gas, coke oven gas and including only small hydropower plants). The size of the “green” tariff is established annually for the each market participant at the level not less than twice as higher as the average weighted tariff on electricity, which is purchased from the power generating companies, which work on the Wholesale Electricity Market of Ukraine for the price bid of the year, before that one for which the green tariff is established. Such an order of incentives on electricity production from the alternative energy sources is applied for each market participant during ten (10) years starting from the date of tariff establishment”. As can be seen, the Ukrainian green tariff is not differentiated according to energy source (solar, wind, biomass, etc.) or the capacity of the power plant, as it is stipulated, for example, in the German Renewable Energy Sources Act. Nor it depends on the date of commissioning (the later a power plant begins operation, the lower the green tariff is) as it is in Germany. Instead of that, a single average tariff shall be introduced, regardless of the peculiarities of each energy source and investment costs.

Until October 2008, when the “Law on green tariff” was adopted, the priority for the development of renewable energy sources was initially in the wind sector and since 1994 a number of documents have been issued by the President, Parliament and the Cabinet of Ministers regarding the construction of new and extended wind farms.

•The Resolution of the Government of 15 June 1994 No. 415 “On Construction of Wind Farms” provided for funding by applying a 0.5% levy to electricity tariffs, accumulating these funds in a separate account of the Ministry of Energy and Electrification allocating them for the construction of wind farms and extending facilities for the production of wind-power equipment. •In 1996, a Decree of the President of Ukraine (03.02.96 No. 159) “On Construction of Wind Farms” increased the value of the levy to that of 0.75% of total power output. This Decree also instructed the Cabinet of Ministers of Ukraine to approve a State Programme for Wind Farm Construction by the end of 1996. The Comprehensive Wind Farm Construction Programme was adopted and approved by the Resolution of the Cabinet of Ministers of Ukraine (02.03.97 No. 137). •Legal confirmation of the priority development of the wind sector is contained in the Law of 06.08.2000 No. 1812-III “On Introducing Changes and Amendments to Certain Laws of Ukraine on the Promotion of the Development of Wind Power Industry of Ukraine” which introduced changes for the period until 1 January 2011, particularly, in the Law of Ukraine “On Power Sector” that required: •promotion of the wind power industry as a principle of state policy;•purchase/sale of electricity generated at wind farms exclusively on the Wholesale Electricity Market; •the establishment of a target surcharge of 0.75% of the existing tariff for electricity sold by electricity producers on the Wholesale Electricity Market to finance the construction of wind farms in compliance with the Comprehensive Programme.

With regard to solid BM, presently no law supports utilization of wood waste, straw, husk and other types of solid BM as a fuel. In our opinion, it is essential gap in Ukrainian legislation. We think that under present conditions, first of all it is necessary to encourage and support introduction of boilers for solid BM combustion. Production and utilization of liquid and gaseous fuels obtained from BM is determined and promoted by the Law of Ukraine “On alternative kinds of liquid and gaseous fuel” (N 1391-XIV from 14/01/2000). According to the law alternative fuels of such kind include alcohols and oils produced from biomass, coal methane, biogas of different types, producer gas and some other fuels. Due to this law financial support must be given to landfill gas utilization projects, biogas projects and production of liquid fuel from biomass. Again, it is a declaratory law, which supports activity in this area on the whole, mentions about possible subsidies, exemptions from tax and other privileges but does not define them and does not indicate concrete mechanisms how to obtain them. Activity on liquid biofuels production, biodiesel and bioethanol, has livened up lately and is supported by the state. Before, development of the production was restricted by non-competitiveness of liquid biofuels with traditional ones. After rise in price of petrol and diesel in Ukraine in 2005, cost of biofuels and traditional fuels became nearly equal. In 2005 the Cabinet of Ministers of Ukraine approved conception for the development of biodiesel production in Ukraine for the period till 2010. In a year, in 2006, “Program for the development of biodiesel production” N 1774 from 22.12.06 was approved. There was developed in Ukraine the technology for production of high-octane oxygen containing

admixture to gasoline (HOA) – Ukrainian name of bioethanol. The law giving real support to utilization of HOA by introducing reduced excise tax was accepted in February 2006. The law has been in force since 1 January 2007. Among other laws which may be favourable for bioenergy development, one should mention the law concerning so called technological parks. This is the Law of Ukraine “On amendments to the Law of Ukraine “On special regime of innovative activity of technological parks” and other laws of Ukraine”, N3333-IV from 12.01.06. The law creates favourable conditions for implementation of innovative projects including ones in bioenergy area. Besides, in March 2007 a law encouraging activity on energy saving was passed. The full name of this law is Law of Ukraine “On amendments to some legislative acts of Ukraine regarding stimulation of energy saving activity”, N 760-V from 16.03.07. The law has been in force since 01.01.2008. According to the law, equipment employing non-traditional and renewable energy sources, energy saving equipment and materials are free of custom duty and taxes when they are imported to Ukraine provided certain conditions are met. Besides, if an enterprise manufactures and sells equipment employing non-traditional and renewable energy sources, energy saving equipment and materials, metering and control devices for fuel-energy resources, and equipment for production of alternative fuels, its income is free of taxes. Mechanisms for Promotion of the Use of Renewable Energy Sources Article 9 of the Law of Ukraine “On Alternative Sources of Energy” stipulates that the promotion of production and consumption of energy from alternative sources should be carried out by:•applying the economic incentives provided by the legislation on energy conservation and environment protection with the purpose of extending the use of alternative sources of energy; •creating favourable economic conditions for construction of alternative energy facilities.

The Law also establishes that financing of alternative energy sources shall be from the funds provided for in the wholesale tariffs for electricity and heat (through introduction of a special target surcharge to the tariff) and from private and other funds not specifically banned by the legislation. A procedure for forming the fund for target financing of the stated measures and carrying out control over the proper use of these funds is established by the Government. The Cabinet of Ministers was charged, within six months, to develop the financial mechanism for promoting the development of alternative energy and submit the proposals on its legal support for consideration by the Verkhovna Rada. NERC developed a Procedure for forming the fund and controlling its proper use as detailed in its letter of 22 July 2003 and this Procedure was adopted by Resolution of the Cabinet of Ministers. However, the Cabinet of Ministers has yet to approve the procedure for forming the support fund for alternative energy sources and, therefore, no financial support mechanism has been introduced. Measures to promote alternative energy are therefore specified by the Law but are not supported by the relevant secondary legislation. The Law “On Energy Conservation” adopted in 1994 also specified the need to promote energy conservation, particularly, by granting tax incentives to enterprises – manufacturers of energy-saving equipment, devices and materials, metering equipment, control and energy management

systems and to enterprises using equipment operated by non-traditional and renewable energy sources. It also envisaged the need to establish increased rates of depreciation of fixed assets, provide priority credits for energy efficiency measures, and to give state and other grant aid for research in the area of energy-saving technologies and non-traditional types of energy. However, this has not been further developed in Ukraine tax legislation making implementation impossible. The Law “On Introducing Changes in Certain Legislative Acts of Ukraine on Promotion of Measures on Energy Conservation” No. 760-V of 17 March 2007 introduced changes in a number of laws on taxation and envisaged tax incentives for alternative energy facilities. Changes in the Law “On Common Customs Tariff” envisaged the exemption from duties for: •equipment operating on non-traditional and renewable sources of energy, energy-saving equipment and materials, metering, control and energy management systems, equipment and materials for production of alternative types of fuel (hereinafter referred to as the goods) imported in the customs territory of Ukraine by domestic enterprises provided that these goods are used by them for their own production if identical goods are not produced in Ukraine; •materials, equipment and components which are imported into Ukraine and used for the production of equipment operating on non-traditional and renewable energy sources, energy-saving equipment and materials, metering, control and energy management systems, equipment and materials for the production of alternative types of fuel if identical goods are not produced in Ukraine.

Simultaneously, changes were introduced in the Law of Ukraine “On Value Added Tax” regarding applying an exemption from value added tax for the above goods. In accordance with the changes in the Law of Ukraine “On Enterprises Profit Tax” introduced by the Law No. 760-V of 17 March 2007 the profit of enterprises received from the sale of equipment in Ukraine which operate on non traditional and renewable energy sources of their own manufacture according to the list established by the Cabinet of Ministers of Ukraine shall also be exempted from tax. These changes in the Law “On Common Customs Tariff”, “On Value Added Tax” are valid from 1 January 2008 for three years from the date of coming into force of the Law. The provisions of the law that stipulate introduction of the changes in the Law “On Enterprises Profit Tax” are valid for five years from the date of receiving the first income due to the increase of energy efficiency of production. Changes were also introduced in the Law “On Energy Conservation” requiring the formation of State and Local Energy Conservation Funds with the purpose of targeting the financing of the rational use and saving of the fuel-energy resources. Article 16 specifies measures regarding the promotion of energy conservation and the establishment by the Cabinet of Ministers of a Procedure for priority funding for energy efficiency measures, a Procedure for making grants for research works relating to energy-saving technologies and non traditional types of energy, for production and improvement of new types of energy-saving devices and methods. With a view to implement the provisions of Article 16 of the Law “On Energy Conservation” which stipulates the need to establish increased rates of depreciation of energy-saving fixed assets, it is proposed to relate certain types of energy-saving equipment to group 4 of fixed assets which attract a

depreciation rate of 15% of the book value. The development of the applicable equipment list by the Cabinet of Ministers would still be required.

These regulatory legal acts of the Government have yet to be developed making practical implementation of the provisions of the Law on the promotion of measures on energy conservation - except for tax incentives effective from 2008 - impossible.