ADVERTORIAL

New Photovoltaics on Hold

A reduction to the limits of the installed capacities of photovoltaic energy facili-ties - the construction of which does not require the prior obtaining of a Certifi-cate of the investment plan’s compliance with the long-term concept of the Slo-vak Republic’s energy policy to 100 kW - along with the negative attitude of SEPS towards the issuance of affirmative standpoints for the construction of so-lar and wind plants that are necessary for obtaining the Certificate, have formed administrative obstacles for the development of photovoltaics in Slovakia. By means of these administrative measures, the state is trying to regulate the con-struction of PV plants, which are considered by SEPS to be unpredictable re-newable energy sources that have a potential influence on the stability of the transmission system.

Schönherr Rechtsanwälte GmbH, o.z.Schönherr Rechtsanwälte GmbH, o.z.

A reduction to the limits of the installed capacities of photovoltaic energy facili-ties - the construction of which does not require the prior obtaining of a Certifi-cate of the investment plan’s compliance with the long-term concept of the Slo-vak Republic’s energy policy to 100 kW - along with the negative attitude of SEPS towards the issuance of affirmative standpoints for the construction of so-lar and wind plants that are necessary for obtaining the Certificate, have formed administrative obstacles for the development of photovoltaics in Slovakia. By means of these administrative measures, the state is trying to regulate the con-struction of PV plants, which are considered by SEPS to be unpredictable re-newable energy sources that have a potential influence on the stability of the transmission system.


The Slovak Republic committed itself, in accordance with the Directive of the European Parliament and Council 2009/28/EC of 23 April 2009, to the promotion of renewable en-ergy sources to achieve a share of energy from such sources to a level of 14% of gross energy consumption by 2010.

With the aim of complying with this ambitious commitment, and to manage duties under the respective Directives of the European Parliament and Council*, the National Council of the Slovak Republic on 19 June 2009 passed Act no. 309/2009 Coll. on the promotion of renewable energy sources and of high efficiency cogeneration production (“Act”), which came into force as from 1 September 2009.

The Act regulates the methods and requirements of the promotion of electric power from renewable energy sources, in particular: (i) the right of priority connection of electricity production plants to the distribution network; (ii) the mandatory import of produced elec-trical energy by regional distribution system operators; and notably (iii) the guarantee of feed-in tariffs for the period of 15 years from the energy installations becoming opera-tional (with the exception of facilities with capacity under 1MW where no such limit ap-plies). Furthermore, the regional distribution system operator assumes liability for devia-tions (i.e. the difference between the production of electricity and demand), however, this applies only to plants with an output up to 4MW.

With the passing of the above Act, Slovak legal regulation in the field of renewable en-ergy sources came closer to the legislation of countries such as Germany and the Czech Republic, both of which recently reported a huge upswing in photovoltaic (“PV”) power plants. After the Act was passed however, other legislative and administrative changes were also adopted that significantly limit the development of PV power plants.

Within the interpretation of Act No. 656/2004 Coll. on the energy sector (“Energy Act”), PV power plants may be constructed only on the basis of a Certificate on the investment plan’s compliance with the long-term concept of the Slovak Republic’s energy policy ("Certificate"), as issued by the Ministry of Economy of the Slovak Republic. This Certifi-cate is the basic document for planning and construction proceedings as regards the con-struction of PV power plants, as well as for the issuance of permits for doing business in the electricity sector. The Certificate is also required to be filed along with the application for connection of the PV power plant to the distribution network.

The newest amendment of the Slovak Energy Act, effective from 1 May 2010, restricts the limits of installed capacities of photovoltaic power plants, the construction of which do not require the prior obtaining of the Certificate. The current applicable installed ca-pacity cap of 1 MW in the case of PV facilities is reduced to 100 kW. Thus recently it has only been small PV facilities with a total capacity not exceeding 100 kW (installed on building roofs) in relation to which the Ministry consent requirement is waived.

The prerequisite for the issuance of the Certificate is the affirmative standpoint of the Slovak Electricity Transmission System (“SEPS“). As the transmission system operator, in June 2010 SEPS issued a statement that it will not issue affirmative standpoints for the construction of solar and wind power plants that are required for the issuance of the Cer-tificate.

SEPS anticipates that by the end of 2011 there will be approximately 700 MW of installed output of solar power plants in Slovakia. According to SEPS, the unchecked construction of PV or wind power plants in Slovakia may jeopardise the operational safety and reliabil-ity of the electricity transmission system.

These concerns probably arise out of the strong development of PV renewable sources in the Czech Republic, where, according to an estimate by the Czech regulatory authority, by the end of the year the total installed output of energy facilities utilising renewable energy sources will represent between 1200 and 1400 MW.

After evaluating the influence of all types of renewable sources of energy for generating electricity on the electricity grid of the Slovak Republic, including solar energy sources, SEPS have also stated that at the beginning of 2012 the situation will be revised again and a new procedure for the issuance of standpoints will be introduced.

This SEPS decision represents an obstacle to the future development of photovoltaics in Slovakia. In June 2010, the prepared National Action Plan for renewable energy sources assumed that the Slovak Republic will meet its commitment primarily by way of support-ing the generation of heat by electricity using biomass. According to the Action Plan, in 2020 the share of renewable energies in the generation of electricity should represent 25%, but the share of solar energy in electricity from renewable sources should be just 3%, i.e. about 1% of all electricity production. A lot of criticism was raised against this Action Plan, especially from the circle of photovoltaic producers of electricity who regard the current conditions as liquidating for the photovoltaic sector.

Considering the fairly ambitious commitment regarding the share of renewable sources in the final consumption of energy (14%), whereby currently the share is 7%, and also con-sidering the replacement of the Board of Directors at SEPS with the arrival of the new government, it is possible that SEPS will still re-evaluate its position with regard to photovoltaic facilities.

JUDr. Šimon Gmiterko is an Attorney at Law with Schönherr Rechtsanwälte GmbH, o.z.

This article is of an informative nature only. For more information go to www.schoenherr.eu

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*Directive of the European Parliament and Council 2004/8/EC and Directive of the European Parliament and Council 2001/77/EC

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