Bled, Slovenia 15 – 17 October 2007 SMALL HYDROPOWER POLICY FRAMEWORK IN THE NEW EU MEMBER STATES AND ASSOCIATED COUNTRIES Petras PUNYS Lithuanian Hydropower Association / University of Agriculture Contents Background METHODOLOGY of ANALYSIS SHP at a GLANCE SHP ELECTRICITY CONTRIBUTION for ACHIEVING RES-E DIRECTIVE TARGET ADMINISTRATIVE PROCEDURES Water rights (concession), power generation licences Market barriers Environmental legislation SHP SUPPORTING POLICY Instruments to support SHP electricity SHP market perception of support schemes Attractiveness of private investments and commercial security SOCIAL BARRIERS AND PUBLIC ACCEPTANCE Conclusions Background Ongoing project “Small Hydro Energy Efficient Promotion Campaign Action” (SHERPA) Coordinator ESHA: 2006-2008, Funded by Intelligent Energy for Europe programme Work package 2 “Status of SHP policy framework and market development in EU27“ to be completed by October 2008 Swedish Renewable Energies Association (SERO): Old EU Member States (EU15) Lithuanian Hydropower Association: New EU Member States (EU12) + Candidate countries (CC) The main activities covered in WP2 have been: Assessing the potential for future SHP development, both in terms of upgrading the old existing plants and building new sites. Gathering data on the actual state-of-the–art of the SHP development in the EU12 +CC5. Analysing the policy framework in each country, putting emphasis on the constraints that are hindering the development of SHP plants. Yellow - Pre-May 1, 2004 EU Members (EU15); Blue - May 1, 2004 and January 1, 2007 New Member States (EU12); Lavender - Post-January 1, 2007 Candidate Countries (CC5). Methodology of analysis Already existing studies ESHA data base, EuroStat, International Journal on Hydropower & Dams (2006), World Energy Council (2004), IEA (2004) , EREC (2004), ECOFYS (2006), EBRD (2005) ect. Survey of SHP situation: 10 new EU MS (except Cyprus and Malta) + 5 Candidate countries . Reference year: 2006 Information sources of the study Outline questionnaire (69 questions) Environmental Granting law procedures Energy law LEGAL FRAMEWORK Water rights Power pricing Small Hydropower legal framework SHP at a glance 0.050 1 st Specific power GWh/year 0.040 0.030 0.020 0.010 0.000 ey th a a ia ry om d on onia a ze nia a o ria Sl ia Es ic na i M oati ni n ni tv gr ak ga l an rk ub la ch lga vi ua e to La ne Tu ov Po un ov ed r go ep C Bu te Sl ac H Li R R er M H ze & C ia sn Bo Small hydropower specific energy (economically feasible potential) in GWh/year/km2 (annual energy divided by the area of a country) 13 400 30 000 19760 6000 Gross t heoret ical Technical f easible 2nd 1 st SHP potential GWh/year Economically f easible 4000 Developed 2000 0 BG CZ EE HU LV LT PO RO SK SI BA HR MK ME TR Small hydropower potential (gross theoretical, technically and economically feasible potential) in GWh/year 1400 400 Number of SHP 350 SHP installed capacity MW 1200 Installed capacity 300 1000 Number of SHP 250 800 200 600 150 400 100 200 50 0 0 BG CZ EE HU LV LT PO RO SK SI BA HR MK ME TR Number of SHP plants and installed capacity 2.5 Slovenia & Macedonia Contribution to gross electricity 2.0 production % 1.5 1.0 0.5 0.0 BG CZ EE HU LV LT PO RO SK SI BA HR MK ME TR SHP contribution to gross electricity generation Small Hydro Other renewables 100.0 Large Hydro Renewable electricity production % Small Hydro 80.0 Other Renewables 60.0 40.0 20.0 0.0 BG CZ EE HU LV LT PO RO SK SI BA HR MK ME TR Share of large and small hydro, and other renewable energy sources in the total renewable electricity generation SHP electricity contribution for achieving RES-E Directive (2001/77/EC) target Renewable Electricity Directive (RES-E) is a policy tool to assist the EU in the development of sustainable energy sector 50 SHP 1997 National indicative target % SHP 2004 40 SHP 2006 Large Hydro 2006 30 TARGET 2010 20 10 0 a ia ia y ia ia a ic nd a i ar ni en ni tv ak an bl ar la ng ua to La pu lg ov ov m Po Es Bu th Hu Re Ro Sl Sl Li h ec Cz Actual contribution of SHP electricity in 1997, 2004 and 2006 versus 2010 target (as set in the RES-E Directive) for EU-12 countries SHP 1997 National indicative target % (without Large Hydro) 12 SHP 2004 SHP 2006 8 TARGET 2010 (without Large Hydro) 4 0 Bulgaria Czech Estonia Hungary Latvia Lithuania Poland Romania Slovakia Slovenia Republic Actual contribution of SHP electricity in 1997, 2004 and 2006 versus 2010 target (as set in the RES-E Directive) for EU-12 countries SHP generators: National Targets 2010 will most likely not be met (neither will New Renewables) !!! Main cause: risks due to uncertainties in the policy framework •Key barriers: •administrative, environmental, financial and social nature Administrative procedures Environmental Grid related barriers barriers Administrative MAIN BARRIERS FOR THE Financial barriers and regulatory DEVELOPMENT OF SHP Social barriers Classification of barriers Administrative and regulatory barriers: 1) high number of authorities involved (no “one–stop shop” for SHP developers in all countries); 2) lack of co-ordination between different authorities; 3) long lead-times to obtain permits or licenses; spatial planning; 4) SHP insufficiently taken into account in spatial planning; Water rights (concession), power generation licences Water rights (“water permit, site right etc”) 10 years (Bulgaria) up to 30-50 and more years (Lithuania, Slovenia, Slovakia) with possible renewal. The optimal duration should be at least 30 years. No reversion principle (when concession rights go back to the state) The length of validation of power generation licenses: 5 years (Estonia), 10 years (Latvia, Macedonia), 20-30 (the Czech Republic, Bosnia and Herzegovina), 35 (Bulgaria) and 49 years (Turkey) The whole process to get licenses takes from 3-6 months in Poland and Estonia (without the time required to carry out EIA) to 1-2 years in the remaining countries. Market barriers Perception 0 1 2 3 4 5 Market perception of the costs of electricity Lack of funding or financing Lack of experience among decision makers 1. Decision makers Lack of experience among banks or investors Lack of experience in the SHP industry Lack of awareness of multipurpose uses of SHP plants Buy-back rates Infrastructural barriers 3. Power pricing Electricity resource is remote from areas of high electricity demand Administrative barriers Legal barriers Perception of general market barriers in EU-12 countries (1=no barrier….. 5=very high barrier) barriers Social acceptance and/or awareness 2. Administrative Market barriers (EU12 +CC) (out of 12 listed barriers on the 5 point scale: 1=no barrier….5=very high barrier ) Most significant: a) Lack of experience among decision makers - 3.6 (not a problem in Turkey -2); b) Lack of experience / trust among banks or investors -3.4 (Lithuania -2); c) Lack of funding or financing - 3.2 (Croatia -1, Lithuania -2); d) Administrative barriers -3.3 (Estonia and Latvia - 2); e) Low buy-back rates -3.2 (Estonia and Croatia -1). Less significant: a) Social acceptance and/or public awareness - 2.8 (the Czech Republic, Poland and Slovenia - 4); b) Market perception of the costs of electricity - 2.6 (Bosnia and Herzegovina, Macedonia - 4), c) Lack of experience in the renewable/SHP electricity industry - 2.4 (Macedonia - 5); d) Remoteness of electricity from areas of high electricity demand -2.1 (Bosnia and Herzegovina -4). Environmental legislation Fishery Visual impact Visual impact 5 Fishery Water regulation Environmental regulation Competition w ith other uses Other kinds or resistance 4 Degree of gravity 3 2 1 BG CZ EE HU LV LT PO RO SK SI BA HR MK ME TR Resistances to SHP development (1=no impact, 5=severe impact) 5 4 Degree of gravity 3 2 1 BG CZ EE HU LV LT PO RO SK SI BA HR MK ME TR Average score of the impact of environmental regulations on SHP development (1=no impact……. 5=severe impact) EU Water Framework Directive 2000/60/EC (WFD) and SHP No fears: Hungary and Turkey No information : Bulgaria, the Czech Republic, Romania, Bosnia and Herzegovina, Macedonia and Turkey List or rivers exempt from damming causing reduction of SHP production: Estonia, Latvia, Lithuania Augmentation of environmental flow rates (Slovenia) Majority of respondents: SHP development and the WFD requirements can be reconciled. WFD should be considered as an opportunity for the sector; the chance to show how SHP developments can be integrated into the ecosystems of the rivers with a minimum of environmental impact. SHP operators agree to augment environmental flow providing the resulting losses in electricity production do not exceed 5 %. Only a few respondents think that large hydro, i.e large reservoirs would undermine the achievements of the WFD objectives. SHP SUPPORTING POLICY Instruments to support SHP electricity Feed in Tariffs Quota Obligation BG EE CZ HU LT SI SK PL RO LA CERTIFICATE SYSTEMS SK SI Tenders Fiscal Incentives Overview of primary renewable electricity support systems in EU-12 countries SHP market perception of support schemes 5 4 Score 3 2 1 Investment Feed in Tariff Quota Tax Tendering incentives obligations incentives system based on TGC Average score of support instruments according to the survey in the EU12 Member States (1=least important; 5 =most important) Attractiveness of private investments and commercial security Electricity prices €cents/kWh 14 Household EU 15 12 SHP 10 8 6 4 2 0 BG CZ EE HU LV LT PO RO SK SI BA HR MK ME TR EU27 EU15 EU12 CC EU 12 SHP electricity buy-back rates and electricity prices for household consumers (€cents/kWh) Electricity prices €cents/kWh 1 10 9 8 7 6 0 5 BG CZ EE HU LV LT PL RO SK SI BA HR MK TR 4 3 Attractivness of investments 2 Commercial security 1 Power price €c/kWh -1 0 Attractiveness of private investments and assurance of commercial security of the SHP sector under the current support system (positive =1; negative = -1). SOCIAL BARRIERS AND PUBLIC ACCEPTANCE NGOs General public Politicians (e.g. Parliament) Officials in charge of environment protection Officials in charge of promoting RES • NGOs: Neutral (except General public: positive, Politicians: positive, less Latvia). Positive (Croatia, reserved (Croatia, Latvia, active (Croatia, Latvia, Montenegro) Slovenia) Montenegro) Environ. bodies: big opposition (Lithuania), RES institutions: good neutral (Estonia, Latvia, Croatia), positive or very good support (Poland, Bosnia.., Macedonia, Monetenegro) NGOs General public 5 Politicians Environm. bodies RES bodies 4 3 2 1 0 BG CZ EE LV LT PO RO SI BA HR MK ME TR SHP acceptance (1 = very Negative….. 5 = very Positive). CONCLUSIONS (Coming soon!!!!) SUMMARY OF SHP MARKETS AND POLICY in EU27 and CC (due for release on October 2008) 1. Water Resources 2. Background (Energy situation of the country) 3. Renewable Energy Sources RES policy: Supporting Policies + RES-E targets RES market status 4. SHP within the electricity and RES-E mix Current status of SHP SHP Potential SHP Policy Framework 5. SHP Sector Development Impact of EU Directives (Water framework, RES-E) SHP Economic Issues SHP manufacturing Industries Technological advancements Environmental integration Social and Public Acceptance Bled, Slovenia 15 – 17 October 2007 Thank you for attention !
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