Legal Alert-The New Renewable Energy Act
Eligibility assessment of the applications is the final stage. Grid operators shall approve the eligible applications following their order of filing and strictly observing the available connection quotas determined by DKEVR. Once the maximum grid capacity for the respective year is reached, any further applications shall be rejected.
The new quota-based mechanism shall not be applicable for the following projects:
- roof-top installations with total capacity of 30 kW in urban territories;
- roof-top installations with total capacity of 200 kW in production areas;
- plants with total installed capacity of 1 MW for electricity production from biomass;
- producers who declare to give up the mandatory off-take of produced energy at fixed prices (the so-called “feed-in-tariff”).
Guarantee of origin system
Guarantees of origin are electronic documents used by end suppliers for proving to a final consumer that a given share or quantity of energy in the supplier’s energy mix was produced from renewable sources. No significant changes to the regime are brought in by the new Act.
Guarantees of origin shall be issued to the producers of renewable energy at request. Any use of a guarantee of origin shall take place within 12 months of production of the corresponding renewable energy unit. A guarantee of origin is cancelled, once it has been used or has expired.
The issuance, transfer and cancellation of guarantees of origin shall be performed by the newly established Sustainable Energy Development Agency. The guarantee of origin system is envisaged to function electronically only.
The so-called “feed-in-tariff” (FIT) is a policy mechanism designed to promote investment in renewable energy sector by offering long-term power purchase agreements (PPAs) to renewable energy producers at fixed prices, typically based on the cost of generation for each different technology.
The RE Act preserves and furthermore introduces some significant amendments to this incentive measure in comparison to the previous provisions.
Energy suppliers are still obliged to purchase from producers connected to the grid the whole amount of renewable energy certified with a guarantee of origin, except for the share used by the producer for his own needs if any.
FIT shall not be applicable for producers who are beneficiaries under national support schemes for their projects or who have previously declared to give up the FIT in order to be connected to the grid.