RULE ON SUPPORT SCHEME. (On Support of Generation of Electricity from Renewable Energy Sources)

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1 ZYRA E RREGULLATORIT PËR ENERGJI ENERGY REGULATORY OFFICE REGULATORNI URED ZA ENERGIJU RULE ON SUPPORT SCHEME (On Support of Generation of Electricity from Renewable Energy Sources) Prishtina, 23 December 2014 Address: Str. Dërvish Rozhaja no. 12, Prishtina, Kosovo Tel: ext. 101, Fax: , info@ero-ks.org, web:

2 The Board of the Energy Regulatory Office, pursuant to the authority given in conformity with Article 14, paragraph 2, subparagraph 2.16, and Article 25, paragraph 1, subparagraph 1.1 of the Law No. 03/L-185 on Energy Regulator, Article 13 of the Law No. 03/L-184 on Energy, Administrative Instruction No. 01/2013 on Targets of Renewable Energy Sources, and Administrative Instruction No. 02/2013 on Use and Support of Energy Generation from RES, in the meeting held on 23 December 2014, approved the following: Rule on Support Scheme CHAPTER I GENERAL PROVISIONS Article 1 Purpose The Rule on Support Scheme aims at supporting the generation of electricity from renewable energy sources, in order to meet the set out Indicative Targets of Renewable Energy Sources. Article 2 Scope 1. The Rule defines the criteria and procedure for application and admission to the Support Scheme in order to support the generation of electricity from renewable energy sources. 2. The application procedure for admission to the Support Scheme shall be implemented in compliance with objective, transparent and non-discriminatory criteria, and support the establishment of a competitive energy market by promoting investment and ensuring the security and stability of the energy sector in Kosovo. 3. The present Rule does not include the generators, which have been developed through competitive procedures, including, without limitation, the tendering procedures for other generating capacities from the RES, and they are therefore not eligible for the Support Scheme. Article 3 Definitions 1 The phrases used in this Rule shall mean the following: 1.1. ERO Energy Regulatory Office; 1.2. Directive 2009/28/EC - Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the Promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC; 1.3. TSO Transmission System Operator; 1.4. MO Market Operator; 1.5. DSO - Distribution System Operator; 1

3 1.6. Targets Targets for Renewable Energy Sources, pursuant to the Administrative Instruction No. 01/13 issued by the Ministry; 1.7. Renewable Energy Sources (RES) renewable non-fossil energy sources, such as: wind, solar, geothermal, wave, bio-energy, biomass, and biogases; 1.8. Public Supplier Energy Enterprise licensed by the Energy Regulatory Office to carry out the activity of a public supplier of electricity. 2. The terms used in this Rule shall have the same meaning as in the Law on Energy Regulator, Law on Electricity, and Law on Energy. CHAPTER II APPLICATION AND ELIGIBILITY FOR ADMISSION TO THE SUPPORT SCHEME Article 4 Application for admission to the Support Scheme 1. A generating operator has to apply for admission to the Support Scheme when submitting the completed application for obtaining the Notice for Decision on Preliminary Authorization for new generating capacities. 2. By the Notice for Decision on Preliminary Authorization, within the relevant decision, the ERO shall define whether the targets are available for the applicant to be automatically qualified for admission to the Support Scheme. 3. The Notice for Decision on Preliminary Authorization, issued by the ERO, defining the admission of the applicant to the Support Scheme, shall guarantee the Feed-in Tariff by default. 4. In case the Applicant applies directly to obtain the final authorization and submits a request for admission to the Support Scheme, the ERO, within the relevant decision shall define the available targets, and the applicant shall be qualified by default to be admitted to the Support Scheme. 5. Final authorization issued by ERO and which determines the admission of the Applicant to the Support Scheme, shall by default guarantee them the Feed-in Tariff. 6. When ERO issues a Notice for Decision on Preliminary and Final Authorization whereby the available targets are met, it shall notify all the other applicants for the meeting of targets, as well as the impossibility to guarantee a Feed-in Tariff in accordance with the present Rule. 7. ERO shall consider the targets as fulfilled when the Notices for the Decision on Preliminary and Final Authorization on the installed capacity are issued pursuant to the Administrative Instruction No. 01/2013 on the Targets of RES until Regardless of annual targets, new capacities may be commissioned into operation for all targets provided by the Administrative Instruction No. 01/2013 on the Targets of RES until

4 8. In case the Applicant proceeds with the procedures for obtaining the Notice for the Decision on Preliminary and Final Authorization without applying to the Support Scheme, the ERO shall specify in its decision whether the Applicant is no longer eligible to enter the Support Scheme. 9. Starting from the moment the available target have been met, by issuing Notices for the Decisions on Preliminary and Final Authorizations upon the request of the Applicant to enter the Support Scheme, the ERO shall specify in the relevant decisions that the process of admission to the Support Scheme shall be suspended until the available targets are free, pursuant to the Administrative Instruction No. 01/2013 on ERO. The ERO shall consider these Applications as pending Applications for admission to the Support Scheme. 10. The Applicant to whom the Notice for the Decision on Preliminary Authorization or Final Authorization is issued with a note by ERO, pursuant to paragraph 9 of the current Article, the time limits set out by the Rule on Authorization Procedure shall start to run, not starting from the date of the issuance of the relevant decision, but from the date of written notice by ERO for admission to the Support Scheme. 11. Starting from the moment the available targets are free, the Applicant shall be notified in writing by ERO. In case the Applicant has the Notice for the Decision on Preliminary Authorization for a higher capacity than the freed ones, the Applicant shall be entitled to request that the Notice for Decision on Preliminary Authorization be split/modified so that the right to the freed targets be guaranteed, while the remaining capacity may continue to be pending, upon the Applicant s request. 12. Starting from the moment when the available targets are free, the Applicant shall be notified in writing by ERO. In case the applicant has a Final Authorization for a capacity higher than the freed available targets, the Applicant shall wait until the available targets are free or request the amendment of the Final Authorization. The remaining part of the capacity shall not continue to be pending as it is set out in the Notice for the Decision on Preliminary Authorization, defined in paragraph 11 of this Rule. Article 5 Limitation of the capacity for admission to the Support Scheme 1. Only applicants who apply to obtain the authorization for constructing new generating capacities for electricity generation by the ERO shall be admitted to the Support Scheme, pursuant to the Rule on Authorization Procedure. 2. Planned capacity in MW of the applications that shall be admitted to the Support Scheme for the electricity generation by photovoltaic energy shall be up, and equal, to 3 MW (( 3 MW) 3. Planned capacity in MW of the applications that shall be admitted to the Support Scheme for the electricity generation by solid biomass, shall be up, and equal, to 14 MW ( 14 MW), as set out by the AI No. 01/13 on Targets of Renewable Energy Sources. 4. Planned capacity in MW of the applications that shall be admitted to the Support Scheme for the electricity generation by Wind, shall be up, and equal, to 35 MW ( 35 MW). 3

5 5. Planned capacity in MW for hydro power plants shall not be limited, while one generating unit (turbine) that shall be admitted to the Support Scheme for the electricity generation shall be up, and equal, to 10 MW ( 10 MW). 6. Applications which exceed the generating capacities described by this article shall not be admitted to the Support Scheme, nor shall they be entitled to the feed-in tariff pursuant to this Rule. Article 6 Request for Admission to the Support Scheme 1. The written request shall be submitted to ERO, by filling out Annex 1 to this Rule. 2. Request for admission to the Support Scheme must be filed when applying for the issuance of the Authorization pursuant to the Rule on Authorization Procedure. 3. All the applications for obtaining the Authorization, which do not contain the request for admission to the Support Scheme, or further continue to seek authorization for construction, withdrawing from the request for admission to the support scheme, shall not be admitted to the Support Scheme in the future, pursuant to this Rule. Article 7 Register of Support Scheme 1. The ERO shall create and continuously update the register of Support Scheme for electricity generated by the Renewable Energy Sources. 2. For admission to the Support Scheme, the ERO shall create a register which shall contain the applications admitted to the Support Scheme and the generators which are pending to be admitted to the Support Scheme. 3. The applications considered as pending applications shall be registered in the waitlist according to the date of issuance of the Notice for the Decision on Preliminary or Final Authorization. 4. The ERO, when creating the register and applying the procedures for pending applications for admission to the Support Scheme, shall equally treat the possessors of the Notices on the Decision on Preliminary or Final Authorization and shall act in compliance with the chronological order in the register. 5. The ERO shall notify the Applicants which have been registered in the waitlist according to the order of their Applications, when the available targets become free. 6. The Register of Support Scheme shall be published in the internet website of ERO and shall be updated according to the new applications. 4

6 Article 8 Feed-in Tariffs for the Support Scheme 1 The ERO shall define the Feed-in Tariffs, which are guaranteed by Article 4, paragraph 3 and 5 of this Rule, and are applicable for the electricity generated by the generating units admitted to the Support Scheme. 2 By a relevant decision, the Feed-in Tariffs referred to in paragraph 1 of this article, shall be adapted to inflation on a yearly basis, after the first year of operation. The exact dates for the correct manner for applying the inflation, shall be determined by a Power Purchase Agreement (PPA). The inflation rate shall be determined by the rate of change over the previous 12 months, at the level of Prices of the domestic industrial product capital goods NACE Rev2, Index for 15 countries of Eurozone (ea15), published by Eurostat. Article 9 Assessment of Request 1 The ERO shall assess the content of the Request for admission to the Support Scheme, as well as the Application for Authorization. 2 Any change or modification required by the ERO for admission to the Support Scheme shall be requested when assessing the Application for Authorization, pursuant to the Rule on Authorization Procedure. 3 The ERO shall inform the Applicant about the granting or rejection of the admission to the Support Scheme, by a decision on authorization. In case the Application is rejected, the ERO shall provide an explanation for the reasons which have led it to this rejection. Article 10 Exclusion and withdrawal from the Support Scheme 1 The Applicants which have no valid authorizations pursuant to the Rule on Authorization Procedure, shall be automatically excluded from the Support Scheme. 2 A generating operator admitted to the Support Scheme may withdraw from the Scheme by a written request of its operator addressed to the ERO. 3 The ERO shall confirm the withdrawal of the generating operators from the Support Scheme within thirty (30) days from the receipt of the request, and shall include the generating unit from the Register of the units admitted to the Support Scheme. 4 A generating operator, which is excluded from the Support Scheme, shall not be allowed to apply for re-admission to the Support Scheme on a later date. Article 11 Rights and obligations of generating operators admitted to the Support Scheme 1 The generating operator admitted to the Support Scheme shall sell the electricity generated by Renewable Energy Source (Sources) by the generating unit, to the Public Supplier licensed by the 5

7 ERO, starting from the date of the operation commencement, as provided by Article 9 of the Law No. 03/L-201 on Electricity. 2 The sale of electricity to the Public Supplier shall be covered by the Power Purchase Agreement, which shall be concluded between the generator of RES and Public Supplier. 3 Power Purchase Agreements (hydropower, wind, solid biomass) shall have a duration of 10 years, while the Power Purchase Agreements for the electricity generated by photovoltaic panels shall have a duration of 12 years, with prices (Feed-in Tariffs) applicable in the Support Scheme. 4 The Power Purchase Agreement, pursuant to this Rule, is guaranteed for all the generating units which have been admitted to the Support Scheme. The Agreement shall be concluded at least thirty (30) days before the date of commencement of generation operation. Article 12 Power Purchase Agreements 1. The Public Supplier shall draft the Power Purchase Agreements for purchase of electricity generated from Renewable Energy Sources by the generating operators admitted to the Support Scheme. 2. The Power Purchase Agreements should include provisions on the grounds of which the generating operator that has been admitted to the Support Scheme pledges to comply with the obligations set throughout the duration of the agreement. 3. The Public Supplier, in consultation with the ERO, shall prepare the draft-models of the PPAs. These draft-models shall be approved by the ERO, upon a consultation with third parties. The ERO may instruct the Public Supplier in any moment before signing the PPA, in order for it to make the changes in the draft-models in question as it deems necessary. 4. Within fifteen (15) days from the date of receipt of the PPA, the generating operator shall sign it and send a copy of it to the Public Supplier. The Sale of Power to the Public Supplier shall enter into force by the beginning of the second (2 nd ) month after the date on which the Public Supplier has received the signed copy of the Power Purchase Agreement. 5. Within fifteen (15) days from the receipt of the Power Purchase Agreement by the generating operator, the Public Supplier shall inform the TSO/MO and when necessary, also the DSO, about the date on which the Power Purchase Agreement shall enter into force, in order to initiate the procedure of the collection and verification of meter (measurement) data. 6. The generating operator admitted to the Support Scheme shall send the monthly invoice to the Public Supplier within twenty-four (24) days after the end of the month, based on the information provided by the Public Supplier. The invoices shall be prepared by the end of the third month following the month they refer to. 7. Termination of the PPA by any of the contracting parties, pursuant to the applicable law, causes the exclusion of the generating operator from the Support Scheme and deletion of it from the Register of the Support Scheme. 6

8 Article 13 Integration of electricity generated by Renewable Sources 1 Transmission System Operator shall give priority to the dispatch of electricity generated by the Renewable Energy Sources, pursuant to Article 12 of the Law No. 03/L-201 on Electricity. 2 The generating units which generate electricity from RES shall abide to the provisions of the Grid Code, Metering Code, Electrical Equipment Code, Distribution Code, Market Rules and any other applicable code or rule. 3 The generating units admitted to the Support Scheme shall account for 25 % of the cost of the imbalance caused. 4 The Transmission System Operator and the Distribution System Operator shall give priority to the assessment of the application for connection, submitted by the generating units generating electricity from RES, regarding the conclusion of the Agreement for Connection and completion of connection. 5 When there is more than one supplier, a renewable energy fund shall be established to fund the support scheme. CHAPTER III FINAL AND TRANSITIONAL PROVISIONS Article 14 Transitional provisions 1. Within ninety days, starting from the date this Rule enters into force, the Applicants which possess Notices for Decision on Preliminary Authorization or Final Authorizations, which have been issued pursuant to the Rule on Authorization Procedure before this Rule entered into force, must meet the requirement for admission to the Support Scheme and shall be automatically admitted to the Support Scheme and treated pursuant to this Rule, taking into consideration the targets for RES. 2. Within ninety (90) days, starting from the date this Rule shall enter into force, the Transmission System Operator and the Distribution System Operator shall send to the Energy Regulatory Office the proposals for necessary changes to the Grid Code and other technical codes for implementation of the provisions contained in this Rule. Article 15 Official language This Rule has been issued in Albanian language and will be translated into Serbian language. In case of discrepancies between the versions, the Albanian version shall prevail. Article 16 Amendment 7

9 1. ERO is entitled to modify or amend any provision of this Rule. 2. The procedures for modification or amendment of this Rule shall be the same as those for its approval. Article 17 Interpretation In case of confusion about the provisions of this Rule, the Board will give clarifying information. Article 18 Abrogation This Rule shall abrogate the Rule on the Support of Electricity for which a Certificate of Origin has been issued and Procedures for Admission to the Support Scheme issued pursuant to the Law No. 03/L-185 on Energy Regulator and approved by the Board of Energy Regulatory Office on 29 December Article 19 Entry into force This Rule shall enter into force on the date of approval by the Board of ERO and shall be published in the official website of ERO. Attached Annex for application to the Support Scheme. Board of ERO: Enver Halimi, Chairperson Merita Kostari, member Krenar Bujupi, member 8

10 Annex 1 Application for the Support Scheme Details of the applicant Name Address Contact person (s) Tel. no. Fax no. Details of the Generating Operator Name Installed capacity (MW) In case of combined generation with conventional fuels, only the capacity of RES shall be presented. Position address Location Expected Annual Production (MWh) Primary Renewable Energy Sources Source Technology Type Wind Solar Water Wind turbine Photovoltaic Hydro Reservoir Run-of-river Mark X Additional notes. Biomass. Place and date Energy crops Forestry and agricultural byproducts and waste Landfill gas Biogas Sewage gas Energy from by-products and waste Other Municipal solid waste Industrial byproducts and commercial waste Signature and stamp of authorized person 9

RULE ON LICENSING OF ENERGY ACTIVITIES IN KOSOVO

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