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New law sets rules for green energy

THE RULES for alternative producers of electricity will change now that parliament has passed an amendment to the law on supporting renewable sources of energy at its January 29 session in a fast-tracked proceeding. The ruling Smer party accepted a slightly revised version of the law, omitting certain measures from the original version that were widely criticised by the opposition.

Photovoltaic power plants (Source: SME)

THE RULES for alternative producers of electricity will change now that parliament has passed an amendment to the law on supporting renewable sources of energy at its January 29 session in a fast-tracked proceeding. The ruling Smer party accepted a slightly revised version of the law, omitting certain measures from the original version that were widely criticised by the opposition.

Currently, each high-efficiency cogeneration power plant with an installed capacity of 200MW or less is eligible for state aid, but the amendment’s authors originally proposed to increase the capacity limit to 300MW. However, the proposal met with strong criticism from the opposition, which claimed that the subsidy was tailored to favour only a select group of power plants, including Steam-Gas Cycle (PPC), which is owned by the Penta financial group. Though the authors of the amendment later changed the measure to allow all such power plants to seek subsidies, regardless of their capacity, they ultimately decided to drop the reference to capacity from the amendment completely.

“We see it as a result of a consensus after a professional debate in parliament,” said Stanislav Jurikovič, the spokesperson for the Economy Ministry, which prepared the changes, as quoted by the Hospodárske Noviny daily.

This means that the original measure will remain unchanged and all high-efficiency cogeneration power plants with a capacity of 200MW or less will be allowed to ask for more money, the TASR newswire wrote.

The opposition said it is still dissatisfied with the new version of the law, criticising the fact that it was passed in a fast-tracked proceeding and arguing that it lacks a new energy concept.

Several opposition MPs had therefore called on the ministry to withdraw the amendment from parliamentary discussion and to start a completely new legislative procedure.

Economy Minister Tomáš Malatinský refused the request, however, explaining that the changes are, among other things, necessary to keep U.S. Steel in Košice.

“We have amended some of the parameters in the law [so as] to be used during negotiations with the US company,” Malatinský told the SITA newswire on January 24. He added that he would not reveal any other details since the owners of the steelworks asked him not to.

Moreover, Malatinský said that the ministry is already working on the new energy policy and plans to introduce it some time this year, TASR wrote.

The political fight

One of the most criticised measures of the amendment was the proposal to increase the installed capacity limit of high-efficiency cogeneration power plants from 200MW to 300MW in order to be eligible for state subsidies. Several opposition MPs called the proposal theft, while independent MP and former interior minister Daniel Lipšic even dubbed it “lex Penta”, saying that the financial group’s PPC would receive an additional €27 million from its distributor.

However, Penta spokesperson Martin Danko rejected the claims. He said that the company viewed the amendment critically because no experts were brought in to discuss it and it was passed in a fast-tracked proceeding. Moreover, the author of the changes did not have a clear idea over the final version of the changes, Danko stressed.

“The amendment became the subject of a political fight and its wording was finally changed in the end [when MPs revised the amendment]”, Danko told The Slovak Spectator, adding that the laws that create a legal framework for businesses in the energy sector should not be passed in such a way.

Danko also pointed to the fact that in other countries, like the Czech Republic, Poland and Germany, there are no limits on the capacity of high-efficiency cogeneration power plants for receiving state aid. The only condition is that they have to fulfil the requirements of the European Union set by the directive 2004/8/EC on the promotion of cogeneration based on useful heat demand in the internal energy market, he added.

If the Economy Ministry really had the ambition to harmonise the current Slovak legislation with the systems in other countries, it should do it in “a standard way”, i.e. by allowing experts and businesses affected by the law to comment on it, Danko stressed.

New rules for producers

The amendment to the law on supporting renewable sources of energy will focus on several areas. First, it is to establish a more effective method of price-setting, basing it on the development of costs for the technology necessary to generate electricity, SITA reported.

Secondly, it is to restrict murky practices involving alternative sources of energy, for example where certain electricity producers built solar farms to take advantage of unsustainably large state subsidies. Additionally, the changes should also eliminate the negative impacts that subsidising such producers has on the final prices of electricity, the ministry explained.

The Economy Ministry also proposed to give the subsidies only to new combined-cycle power plants or to those which will modernise their technology, SITA wrote.

On the other hand, the amendment will decrease support for photovoltaic power plants. At the moment all facilities with a capacity of 100kW are eligible for subsidies, but the new rules will decrease the limit to 30kW.

“So the law on the support of renewable sources of energy […] could be called the law on supporting fossil fuels,” the head of the Slovak Association of Photovoltaic Industry (SAPI), Veronika Galeková, said.

Moreover, at odds with EU legislation, the changes prohibit connecting the resources to the local distribution network, which in fact means that the new rules will “favour certain private companies over other private companies”, Galeková said. She added that the amendment also contains a disputable measure over fines, which may be retroactive.

“Yet, [our] biggest objection is that it was not prepared soon enough, nor professionally [with a] dialogue and it absolutely goes against the interests of Slovak citizens,” Galeková stressed.

Meanwhile, the Economy Ministry invited SAPI to cooperate on another amendment to the law on supporting renewable sources of energy, which should be introduced by June 30, Galeková told The Slovak Spectator.

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