Legal Alert-The New Renewable Energy Act
Once the Bulgarian Ministry of Economy, Energy and Tourism reports that the national target share of 16 % renewable energy is achieved, any further projects shall not be able to benefit from any incentives, including FIT.
- FIT levels
One of the most important changes is that the prices for mandatory off-take of energy to be generated by new installations shall be fixed for the entire term of the power purchase agreement (PPA) at the respective levels defined by DKEVR and effective at the time of completion of the construction works.
The existing installations that have become operational prior to the new RE Act shall stick to the prices applicable upon its entering into force.
- PPA terms
The RE Act reduces the mandatory off-take periods for new renewable energy projects. The long-term PPAs concluded between energy suppliers and new producers shall contain fixed mandatory off-take periods, as follows:
– 20 years for solar, geothermal and biomass projects (as opposed to 25 years);
– 12 years for wind projects (as opposed to 15 years);
– 15 years for hydro- and other renewable energy projects (remains the same).
Renewable energy in transport
The RE Act addresses key issues associated with securing energy supply in transport sector through introduction of incentive measures fostering the use of first- and second-generation biofuels and other renewable energy sources.
From 2012 onwards, blending of bioliquids in common oil fuels used in transport shall be mandatory. The new Act furthermore ensures the placing on the market of higher blends than those previously envisaged. Bioliquid quantities are gradually rising through years as follows:
- minimum share of biodiesel in diesel fuel starts at 5 % and reaches 6 % as of 01.06.2012;
- minimum share of bioethanol in petrol fuel starts at 2 % and reaches 9 % as of 01.03.2016.
Moreover, the maximum threshold of 5 % share of bioliquids in all oil fuel blends is now abolished tracing a path to achieving adequate market share of biofuels.
Excise duty reductions for biofuels are preserved.
It should be highlighted that biofuels favoured by the new Act, are required to fulfill certain sustainability criteria limiting the negative impact on biodiversity and agricultural food products.
The mandatory 10 % target share of final energy consumed in transport which is to be achieved at national level shall be however contributed from renewable sources as a whole, and not from biofuels alone.
Renewable energy in construction
The RE Act facilitates the use of renewable energy through laying down “green” regulations in construction sector related to energy efficiency.
The new Act requires that in the event of construction of new buildings or major renovation of existing ones, renewable energy installations shall become operational ensuring at least 15 % of total energy consumption for heating and cooling where technically possible and economically reasonable.
This measure shall be applicable for public buildings as of 01.01.2012, and for residential and other buildings – as of 31.12.2014.
Renewable energy in education
The RE Act provides that installation and maintenance of facilities for renewable energy production shall be performed by certified workers only, who have obtained special professional qualification.
In relation to the above, vocational training programmes shall be developed and implemented.
This Legal Alert has been prepared by DELCHEV & PARTNERS for information purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Readers should not act upon this without seeking professional counsel.