Amendments to the regime for the construction of renewable energy installations for own consumption

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The National Assembly adopted amendments to the Renewable Energy Sources Act (“RESA”), facilitating and accelerating the construction of renewable energy installations for self-consumption with a capacity of up to twice the amount of the granted capacity, but not more than 5 megawatts. In this form, the changes would allow the construction of renewable energy capacities in notification regime and without connection to the electricity distribution network.  The proposal is to apply the innovation to all those who intend to set up installations for the production of electricity from renewable sources in order to cover part of their electricity needs. The importers point out as the main motives for the amendments the reduction of the terms for construction of such type of sites, and as a consequence of this the possibility for faster commissioning of the installations. On 07.06.2022 in the State Gazette were published the amendments voted by the National Assembly in the regime for construction of renewable energy installations for self-consumption.

The adopted changes extend to three laws – the Renewable Energy Sources Act, the Spatial Planning Act (“SPA”) and the Excise and Warehouses Tax Act (“ЕWTA”). The most significant innovations are proposed in the RES Act, affecting both the procedure and the technical parameters for the construction of RES installations for self-consumption. The first amendment is the elimination of the necessity to be connected to the electricity distribution network when constructing a RES installation for self-consumption with a capacity of up to twice the provided, but not more than 5 megawatts. As a consequence, a notification regime is introduced for the construction of such installations and the obligation to issue a connection statement is extinguished. The notification for the construction of a RES installation shall be submitted to the electricity transmission network operator or to the relevant electricity distribution or closed grid operator. In connection with the change in the regime from permissive to notificational and in view of the energy security, it is assigned to the entities using the mentioned RES power plants to ensure that the produced energy will not be returned to the electricity distribution network, but will serve their own needs. In fact, this is done by concluding an additional agreement to the end-user access and transmission contract, which contains the technical requirements for the scheme of connection of the energy site to the end-user’s electricity grid, as well as regulating the rights and obligations of the parties in order to ensure security and prevent the release of electricity and disturbances to the grid. It is stipulated that the additional agreement shall be concluded within 14 days of the notification submitted to the relevant network operator.

Pursuant to the voted changes in the Renewable Energy Sources Act, the installations can be build on roof and facade structures of buildings connected to the electricity transmission, distribution or closed electricity distribution network, including on the real estate attached to them in urban areas. Initially, the bill contained a proposal to be able to build renewable energy installations on real estate in urban areas without additional construction, but in the course of the legislative process this proposal was dropped. In any case, it is necessary for the energy from the RES plants built in this way to be used only for own consumption. In an instance where an end customer decides to sell the electricity produced through RES installations, he/she has to go through the connection procedure as a producer regulated by the Energy Act.

A number of amendments to the Spatial Planning Act have also been voted, the aim of which is to facilitate the administrative procedures related to the investment intentions of the users of RES power plants which would be used for their own needs. They are as follows:

  1. Pursuant to Article 124 of the Spatial Planning Law, the Municipal Council acquires the competence, in addition to adopting a decision to prepare a draft of general development plan (“GDP”), to adopt a decision to amend the existing GDP upon the proposal of the Mayor.
  2. According to the voted amendments, renewable energy installations are regulated as sixth category of construction.
  3. The need for approval of investment projects for the issuance of building permits for RES installations up to 5 MW to serve the consumer’s own needs is eliminated.
  4. In Article 147, paragraph 2 of the Spatial Planning Act, a second sentence has been added, according to which for the construction of renewable energy installations with a capacity of up to twice the provided capacity, but not more than 5 megawatts, are required the following documents: A) A statement by a structural engineer and/or electrical engineer with drawings, schemes, calculations and instructions for their implementation and B) the additional agreement that shall be concluded between the end customer and the operator of the relevant electricity grid .

The last legal act whose amendment was voted is the Excise and Tax Warehouses Act. The bill provided for the abolition of compulsory registration under the ETWA for persons who consume their own electricity produced from renewable energy capacities of up to 5 megawatts. Such an amendment was not adopted and the entities are currently subject to compulsory registration under the Excise and Tax Warehouses Act. An exception has been made for persons who consume electricity generated by RES plants to cover their own domestic needs. According to the provision of Article 2, par. 3 of the ETWA , electricity is liable to excise duty. In this connection, the persons using the mentioned RES stations are obliged to pay excise duty, the tax period is one year and it is matching the calendar year.

The voted amendments are in line with Directive 2018/2001 of the European Parliament and of the Council on the promotion of the use of energy from renewable sources.

As stated above, the Law on Amendment of the Renewable Energy Sources Act was published in the Official Gazette issue No. 42 of 07.06. 2022 and entered into force on the same day. It remains to be seen whether it will justify the good intentions of its importers and to what extent it will benefit citizens and businesses.

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