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Serbian Legislation on Energy

Serbian Legislation on Energy. Milos Vulic, Attorney at Law. CONTENT. New Serbian Energy Law Energy policy and development planning Energy Activities, Energy Licenses and Energy Permits Business climate in Serbia Conclusion. I. ENERGY LAW – BASIC FEATURES.

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Serbian Legislation on Energy

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  1. Serbian Legislation on Energy Milos Vulic, Attorney at Law

  2. CONTENT New Serbian Energy Law Energy policy and development planning Energy Activities, Energy Licenses and Energy Permits Business climate in Serbia Conclusion

  3. I. ENERGY LAW – BASIC FEATURES • New Energy Law (the “Law”) came into force on August 09, 2011; • Ratio legisfor rendering the Law: • Harmonization with EU regulative in this area • Fulfillment of necessary conditions for obtaining the status of EU member candidate.

  4. The Law defines the 10 general goals of energy policy: • 1) creating conditions for the safe and reliable energy systems operation; • 2) creating energy market competition based on the principles of non-discrimination, publicity and transparency; • 3) providing conditions for promoting energy efficiency in carrying out energy activities and energy consumption; • 4) creating economic, commercial and financial conditions for generating energy from renewable energy sources and combined heat and electricity generation; • 5) creating conditions for use of new energy sources; II. Energy policy and development planning (1)

  5. The Law defines the 10 general goals of energy policy: • 6) promoting environmental protection in all energy related areas; • 7) creating conditions for investments into the energy sector; • 8) energy customers protection; • 9) connecting the energy system of the Republic of Serbia with the energy systems of other countries; and • 10) electricity and natural gas market development and their connecting with the regional and internal market of the EU. II. Energy policy and development planning (2)

  6. Goals set under the Law should be achieved through: a) National Strategy for Development of Energy Sector (“Strategy”) – adopted by Parliament of RS for a period of 15 years; b) Program of Implementation of the Strategy (“Program”)– adopted by Government of RS for a period of 6 years; c) The Energy Balance (“Balance”) – adopted by Government of RS each year for the following year. II. Energy policy and development planning (3)

  7. The Strategy - The current Strategy which is applicable until 2015 sets for five priorities of energy policy in Serbia: • 1. Technological modernization; • 2. Rational use of energy; • 3. Use of new renewable energy sources; • 4. Investments in new electro-energetic sources; • 5. Construction of new energy facilities. II. Energy policy and development planning (4)

  8. The Program specifies the Strategy; It defines conditions, methods, dynamics and measures for implementation of the Strategy on all the areas comprising energy sectors in Serbia; • The Program is adopted by Government for a period of six years at the proposal of the Ministry for Energy (current Program is applicable until the end of 2012). • c) The Energy Balance defines annual needs of energy and/or energy sources, expressed on a monthly level to be provided for the reliable, safe and quality supply of final customer. • The Energy Balance is adopted by the Government at the proposal of the Ministry for Energy by end of December of the current year for the following year, at the latest. II. Energy policy and development planning (5)

  9. Energy activities are: III. Energy Activities, Energy Licenses and Energy Permits

  10. III. Energy Activities, Energy Licenses and Energy Permits (2) b) Energy License is the necessary precondition for performing energy activity in Serbia; Issued by the Energy Agency of the Republic of Serbia, within 30 days as of the submission of the request for license issuance; Requirements for obtaining the License • proper registration of the applicant, • valid permit for using the energy facility, • the existence of qualified staff and • proper equipment, fulfillment of safety measures • Sufficient funds for performing the energy activity, etc • Approval of the state on performing energy activities which are considered activities of public interest. (only for specific energy activities) The Energy License issued for a period of 10 years (except for electricity production, combined electricity and heat energy production and heat energy production is issued for the period of 30 years) and it is non-transferable.

  11. The Energy License is not required for performing the following energy activities: 1) production of electricity in facilities with total approved connection power up to 1 MW; 2) production of electricity exclusively for own needs; 3) biofuel production of up to 1000 tones per year and biofuel production for own needs; 4) oil transport via oil pipelines exclusively for own needs; 5) oil derivatives transport via oil derivatives pipelines for own needs; 6) oil, oil derivatives and biofuel transport by other transportation means; 7) oil, oil derivatives and biofuel storage for own needs; 8) heat generation in facilities of total power up to 1 MWt and heat generation exclusively for own needs; 9) combined electricity and heat generation in thermal power plants – district heating plants in facilities of up to 1 MW of total approved electrical connection power and 1 MWt of total heat power as well as combined electricity and heat generation in exclusively for own needs; 10) retail trade in liquefied petroleum gas bottles. III. Energy Activities, Energy Licenses and Energy Permits (3)

  12. c) The Energy Permit – required for construction of energy facilities The Energy Permit should be obtained prior to construction of the following facilities: III. Energy Activities, Energy Licenses and Energy Permits (4)

  13. - The information required for obtaining the Energy Permit are following: • Basic information about the applicant; • Basic information about the facility; • Value of the investment; • Information on financial conditions of the applicant; • Compliance with the spatial and urban plan; and • Feasibility study. • - Beside these information, a request for issuing the EnergyPermit should also contain: • Conditions for safe and smooth operation of the energy system; • Requirements for location determination and land use; • Measures for public health protection and for the safety of persons and property. • - Issued for period of 3 years, non transferable III. Energy Activities, Energy Licenses and Energy Permits (5)

  14. In Serbia, there are currently 834 companies that are performing different kinds of energy activities (i.e. possess appropriate Energy Licenses). • More than 70% of these companies is performing energy activities related to distribution, transport and storage of oil. • 134 of companies are involved in activities related to natural gas, while 104 are performing activities related to electricity. IV. Business climate in Serbia

  15. IV. Business climate in Serbia (2)- South Stream Pipeline - • The number of Energy Licenses issued in different area of energy activities does not correspond to the actual energy consumption in Serbia and to projected needs of Serbia in area of consumption of natural gas. • Natural gas represents one of the most important sources of energy and the intention of the Republic of Serbia is to completely open the market of natural gas. • The construction of the • “South stream natural • gas transportation pipeline” • which would connect Russia • with western Europe should • be conducted in Serbia.

  16. IV. Business climate in Serbia (3) - South Stream Pipeline - • The construction of the South stream natural gas transportation pipeline is not important just for Serbia, but for entire region. • Pipeline sections in Serbia, Hungary, and Slovenia will have capacity at least 10 billion cubic meters (350 billion cubic feet) per year. • At least two gas storage facilities would be constructed of which one would be an underground storage facility in Hungary with capacity of minimum 1 billion cubic meters (35 billion cubic feet) and another one in Banatski Dvor, Serbia with capacity of 3.2 billion cubic meters (110 billion cubic feet).

  17. IV. Business climate in Serbia (4) - South Stream Pipeline - • The “South Stream” pipeline will enable the achievement of the projected imports of energy in Serbia. • *This is Projection is made in 2002 in current Serbian Strategy

  18. IV. Business climate in Serbia (5) - Renewable energy sources (RES) - • the potential of RES in Serbia is over 4.3 M t.en per annum out of which 2.7 M t.en is in biomass, 0.6 M t.en hydro potential, 0.2 M t.en in geothermal sources, 0.2 M t.en in wind power and 0.6 M t.en in solar energy • the biggest potential is biomass and hydro power

  19. IV. Business climate in Serbia (6) - Renewable energy sources (RES) - • Production of biogas may be up to 42.200 t.en (the installed capacity of power plant should be up to 80 MWe) and in respect of biofuel it is recognized that bioethanol and biodiesel could be potentially produced in Serbia. • Currently, there is a total of 21 energy permits issued for construction of mini hydro power plants (issued in 2009 and 2010). However, only 11 are registered as the privileged producers – which means that only 11 entities completed the entire process. • 9 energy permits for wind farms, no privileged producer status yet

  20. IV. Business climate in Serbia (7) - RES – Privileged Producers - • Privileged producers of electric energy are the producers who: • Use renewable resources or waste in the process of the electric energy production, • Produce electric energy in power plants that are considered “small plants” (with power output of up to 10 MW), and • Simultaneously produce electricity and thermal energy, provided that they fulfill certain criteria in terms of energy efficiency; • The public company for electricity production generation, distribution and trade – ElektroPrivredaSrbije (“EPS”); is obliged to purchase electrical energy from a privileged power producer at the defined prices.

  21. IV. Business climate in Serbia (8) - RES – Price List (Feed – in Tariff)-

  22. V. CONCLUSION • The investments in energy sector in Serbia are so far not very significant and are mostly of domestic capital, thus leaving the room for investors to come • It is still to be determined whether the new Energy Law will influence modernization of energy sector and increase of foreign investment • With respect to RES / The current investments are insignificant and are related to mini hydro power plants only

  23. Thank you for the attention.

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