Support of green electricity may change (The Slovak Spectator)

 Martin Vlachynský 5.12.2016 komentoval schému podpory výroby energie s obnoviteľných zdrojov pre The Slovak Spectator

Support of green electricity may change (The Slovak Spectator)

 While renewable energy resources have already become an inseparable part of the primary energy market in Slovakia, support for them remains an issue. This is because the current scheme of support via so-called feed-in tariffs has been increasing electricity prices for all end-users. Stakeholders in the electricity market have been calling for a change for years and now also the Economy Ministry has indicated changes to come.

“We will reform the scheme of support of electricity generation from renewable energy resources as well as combined production of electricity and heat," said Economy Minister Peter Žiga at a session of the Energy Commission at the parliamentary committee for economic issues on October 24, as cited by the SITA newswire. “Our intention is to curb, but not completely halt support of generation of electricity from renewable resources."

The idea of the government is to minimise the impact of support for generation of green electricity on end prices.
The ministry plans to submit a revision to the law on support of renewable energy resources as well as combined production of electricity and heat into the legislative process during the first half of 2017, Juraj Rybanský from the Economy Ministry informed.

In Slovakia, green electricity is supported via a scheme of feed-in tariffs, in which producers of electricity from renewable energy sources (RES) sell the generated electricity for prices higher than those of electricity produced conventionally. Additionally, the price of electricity for all consumers, also contains a special tariff for operation of the system. Within this system, they also support generation of electricity from renewable energy sources and highly effective combined production of electricity and heat as well as support for coal mining used for generation of electricity.

“Owing to the fact that the current system excessively burdens all consumers including households, the need for change is urgent," said Lenka Ferenčáková, the editor-in-chief of the website Energia.sk dedicated to the energy sector.
Ferenčáková recalled that all the participants of the energy market have been calling for a change for years. These are not only the operators of the distribution network that are currently buying up green electricity from the producers, but also independent analysts, consumer associations as well as producers of electricity from RES.
Yet, while the regulated tariff for operation of the system is constantly increasing, Ferenčáková sees as the main disadvantage of the current scheme various partial steps by which the regulator and politicians try to moderate the impacts of the implemented scheme.

“Measures are often neither analysed nor communicated properly with affected subjects," said Ferenčáková.
Martin Vlachynský, an analyst of the Institute for Economic and Social Studies (INESS), sees the current support scheme as extremely expensive and stuck at a dead end, as phasing in of new subsidised producers of green electricity would increase the already high end prices of electricity.

“The main disadvantage of the current system of support of RES is the high price of emission reduction and installed capacity, which reflects in the end price of electricity," Vlachynský told The Slovak Spectator.
Another problem is that within the special tariff, consumers support green electricity as well as production of electricity from brown coal, which is considered to be a very dirty energy source.

Producers of solar energy electricity are among those calling for the change as well.
“After six years, it is high time to adopt measures that will reduce the final price of electricity not only for consumers, but mainly for companies, so that they will maintain competitiveness," said Veronika Galeková, the director of the Slovak Association of Photovoltaic Industry (SAPI).

The Slovak government committed to the joint effort of the participatory countries of the Climate Change conference in Paris in December 2016. The goal is to lower the amount of CO2 emissions by 20 percent by 2020.
Matúš Burian from the Slovak Association of Renewable Energy (SKREA) sees support of RES as a topic for serious discussion.

“Support of electricity produced from renewable sources is a priority for the European Union from the point of view of safety and diversification of energy supply, protection of the natural environment and sustainable development," Burian told The Slovak Spectator, adding that consumption of such generated electricity represents a significant part of measures necessary to meet the Paris Agreement.

Burian also recalled that one should have in mind that the notion of unsubsidised energy does not exist and that also fossil fuels are subsidised in Slovakia. But he admits that the current scheme has transferred the risk of doing business from entrepreneurs to consumers, and thus there is no pressure to reduce costs, which is the source of the growth of prices and problems in investments and consumption.

Burian points out that instead of materialising 8 MW of solar capacity, the Economy Ministry allowed building of 500 MW of installed capacity. Sticking to the original plan there would be no problem with buy-out of electricity generated from renewable resources.

He also criticises the support of fossil fuels. It drives the energy prices higher and harms the natural environment.
“Lack of transparency in regulating the energy markets does not allow us to identify measures that are harmful to the environment," said Burian.

The scheme should change
Ferenčáková believes that the support scheme of RES should be relegated to market conditions as much as possible.
“Abroad, more and more countries are leaving the feed-in tariff scheme and changing to feed-in premiums," said Ferenčáková. “It does not guarantee the overall sum for the support of the produced energy, but only a certain amount added to the stock market price of the energy as a commodity."
Increasingly, utilised kinds of support, pushed through also by the European Commission, include auctions and tenders, said Ferenčáková.

“These secure maximum effectiveness of money spent, as operators of various power stations openly compete with each other," said Ferenčáková. “The pressure on production costs also supports rational placing of sources in localities with the most suitable conditions."

SAPI proposes as a method of reform of the current scheme also the concept of the so-called local source, while support need not always be financial, as also mitigation of administrative and technical conditions for phasing in of new facilities up to certain output levels would be sufficient.

Burian of SKREA believes that the principle the polluter pays should be directly linked and that the reform should have an impact on improvement of the natural environment.

Alternatives for Slovakia
From the point of view of natural conditions, the most viable alternative sources for Slovakia are geothermal, water energy and biomass, according to Ferenčáková. On the other hand, Galeková believes that Slovakia has the potential to use all types of renewable energy sources, stressing that photovoltaic energy is most suitable for the energy effectiveness of buildings. But she believes that traditional sources should remain the main producers of energy.

Based on the adopted Slovakia's Energy Policy, nuclear energy should account for 63 percent of electricity be generated in 2025, 21 percent for RES and 16 percent for fossil fuels, said Rybanský.
Burian agrees that Slovakia has good prospects in regard to RES and their usage has increased over recent years. While in 2002 their share was at about 1.6 percent of the total consumption of primary energy sources, now it is more than 10 percent. Moreover, he believes that new technological and technical solutions may bring surprising results.
“Whoever will be able to solve problems in the way that they will be self-sufficient in terms of energy, they will win a competitive advantage."

Erik Rédli
The Slovak Spectator, 5.12.2016

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