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14 bne IntelliNews Daily
South-eastern Europe
May 14, 2015
Winds change for renewable energy in Southeast Europe
attracted numerous international investors from Europe and Asia, in addition to local companies.
However, in June 2013 the Romanian government announced cuts to green cer- tificates issued to generators of wind, solar and small hydropower plants put into oper- ation after January 1, 2014. This resulted in new projects being cancelled, while many of those already under construction were put on hold.
Investors are now responding in a sim- ilar way to Zagreb’s decision. On January 26, Germany’s Luxor Solar, which controls around 10% of Croatia’s solar power gener- ation sector, announced it had completed a greenfield solar system with capacity of 360 kilowatt peak (kWp). “A further installation of similar size is due to be constructed in spring 2015 before the relevant licence be- comes invalid. The two installations will be amongst the last of their kind in Croatia, as greenfield systems will no longer receive sufficient support in this sunny country,” the company said in a statement.
The cutbacks have raised the ques- tion about whether countries in the re- gion will meet medium- and long-term renewables targets. Under the EU’s Re- newable Energy Directive, the bloc as a whole has set a target of generating 20% of electricity from renewable sources by 2020, although individual country targets vary from just 10% in Malta to 67.5% in Norway (a non-member that has joined the initiative).
Along with Bulgaria the only other EU countries to have already met their target are Estonia and Sweden. Currently for the EU as a whole 16.3% of power is produced by renewable sources. But southeast Eu- rope’s three EU member states are close. Croatia generated 16.8% of energy from renewable sources compared with its 20% target, at 22.9% Romania was slightly be- low its 24% target, and Slovenia, which is targeting 25%, was on 20.2%.
Industry members say government's flip flopping on the renewables issue makes it impossible to invest in the sec- tor: "“Bulgaria and Romania are paralysed at the moment. Sudden changes have pe- nalised investors and may scare them off from coming back even if the incentives are changed again in future due to the un- certainty,” says the EWEA’s Joy.
Clare Nuttall in Bucharest
On paper at least, the Balkans looks like the ideal location for clean-energy produc- tion, and for several years the region has been a magnet for investment and subsi- dies. But lately there appears to have been a rethink on the part of governments and investors alike.
Both Bulgaria and Romania enjoyed a brief boom in renewable energy invest- ments in recent years, especially in wind and solar power, when their governments introduced generous incentives in an at- tempt to meet EU targets.
More recently, however, Bulgaria and Croatia have backtracked, cutting incen-
Sofia citing higher electricity tariffs and the rising debt burden at the state power company NEK.
Electricity tariffs are a sensitive issue for the current Bulgarian administration under Prime Minister Boyko Borissov, following protests over rising electricity bills that forced the resignation of his previous gov- ernment in 2013. But generous incentives resulted in Bulgaria becoming one of the first EU countries to meet its 2020 targets for renewable energy generation almost a decade before the deadline.
In a recent interview with bne IntelliNews, Oliver Joy, political affairs spokesman for
their dependence on a single country for energy imports,” Joy points out.
Meanwhile, Croatia does not plan to pro- vide any new licences for solar projects this year, despite the high potential for solar generation there.
Romania also decided to slash incen- tives for renewable electricity generation following a dramatic boom in the sector between 2010 and 2013. Bucharest’s gen- erous “green certificate” incentive scheme
“The key is stability around incentive schemes”
tives for renewable energy investment af- ter making faster than expected progress towards meeting the targets. This follows similar cuts in Romania and several other European countries.
The Bulgarian parliament voted in Feb- ruary in favour of legislation that will scrap preferential pricing for new renewable en- ergy installations. Incentives for renewa- ble energy producers have already been scaled back in the last two years, with
the European Wind Energy Association (EWEA), said that Bulgaria actually pro- duces too much electricity and has to ex- port the surplus to Turkey, Greece and the Balkans, meaning there is little motivation for investment in yet more generation ca- pacity. “However, given that [the Bulgari- ans] rely almost 100% on Russian gas, their electricity sources are not very diversified. The potential for wind and solar energy is there if they decide they want to reduce