East Central Europe Renewable Energy - Electricity Report - 2013

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East Central Europe Renewable Energy - Electricity Report - 2013

The report covers six east and central European countries—Poland, Czech Republic, Romania, Hungary, Slovak Republic, and Bulgaria (ranked by their total energy consumption). Turkey is also covered since its market turned more recently very attractive to investors (even without a national action plan) due to official commitments for renewable energy and particularly with a sharply growing electricity market. The report also includes corporate news for firms such as Finland’s Fortum, Samsung, Filasa International, and China’s Lightway Solar.

In terms of business, Poland has been and remains the major market—followed by Romania. Investments continue in these two countries, even if regulatory instability put many projects on ice. Both countries saw rapid expansion of wind farms, an expansion that is likely to continue in Poland. Investments in Czech Republic and Bulgaria have lost ground (after solar investments euphoria) and the investors in both countries face tough regulatory adjustments. While in Czech Republic the problems are related to excessive support, in Bulgaria they are broader in nature and are amplified by the problematic functioning of the market. Slovak Republic witnessed a sharp expansion of small- and medium-sized solar projects, just like neighboring Czech Republic, and is currently trimming down support to avoid excessive expansion. Although Hungary is the slowest of the six countries to increase its renewable electricity production, it actually placed its bet from the very beginning on generating more heat from renewable resources in order to meet the overall green energy target.

The industry is currently at turning point regarding regulatory predictability versus flexibility. European national governments, including those in the six ECE countries, are at a critical point in regard to their renewable energy policies. They have reached the moment when they need to radically reshuffle their support schemas for renewable energy—schemas that were designed and enforced only several years earlier. Following major changes in the global and local economic environment—including weaker growth rates, tighter public budgets and technological progress in renewable industry—the support schemas became unnecessarily strong and particularly expensive for governments and/or end-users.

Key Points:

• In corporate news, Finland's Fortum has decided to suspend its further investments in the power sector in Poland until the legal framework is clarified.

• South Korea's Samsung has become the largest investor in Romania’s photovoltaic sector after completing a EUR 100mn (45MW) solar farm in the southern Giurgiu county.

• France’s Filasa International has confirmed in July 2013 its plans to resume works at a 519MW/EUR 780mn wind project in Romania's Suceava county.

• Chinese company Lightway Solar has decided to develop a 50MW photovoltaic park in Romania.

• While many critical issues are being currently tackled by policymakers, the progress toward an unified European policy for renewable energy is marginal. While the EC strives for internal energy market, the drive toward common policy in renewable energy support remains weak.

Table of Contents

1. Executive Summary
2. Broad Picture – Renewable Electricity in Europe
3. Update – EC Drafts New Guidance Package
4. The markets
4.1 Region-wise
4.1.1 Six-country region form heterogeneous, rather small electricity market…
4.1.2 … Which is still likely to consolidate en route to EU internal market formation.
4.1.3 Region is still far from an “optimal single-grid area”
4.1.4 More of Region’s market structure

4.2 Technology-wise
4.2.1 National Renewable Energy Action Plans [NREAPs]
4.2.2 2010-2020 – 16.8GW new renewable capacities in region
4.2.3 Photovoltaic: end-2012 installed power 62% above target; 11 times above plans in Bulgaria
4.2.4 Wind: end-2012 installed power only 4% above target; 24% expansion above target in Poland
4.2.5 CEZ cautious on new investments, to scale back renewable [wind mainly] plans
4.2.6 The six countries spread differently among sectors their “greening” target set by EU

BOX 1: GLOBAL RENEWABLES: solar beats wind in 2012; due to small, distributed capacity?

5. Special Case: Turkey
5.1 Turkey’s electricity consumption to rise by 7% p.a. by 2020
5.2 US-based General Electric reportedly to invest USD 5bn in 3,000MW wind power plants in Turkey
5.3 Enerjisa targets 4,000MW renewable energy capacity until 2020
5.4 Ayen Enerji’s 30.75MW wind farm in Izmir comes online
5.5 Turkish energy company Aksa completes acquisition of 34.85MW wind plant

6. Poland
6.1 IAEA: Poland has made progress toward introducing nuclear power
6.2 Poland down in EY ranking following government’s proposal to adjust support system
6.3 Installed renewable power capacities as of 2013
6.4 Share of renewable energy in Poland at 10.4% in 2011
6.5 Renewable energy generated in Poland in 2012 amounts to 13.94mn TWh…
6.6 … But contracts to only 23% of 2012 figure in Jan-Jul 2013
6.7 Ernst & Young: Poland fails to use 90% of its wind power potential
6.8 Bank DnB NORD sees wind farms investments in Poland totalling EUR 20bn by 2020
6.9 Renewables capacities rise to 4.4 GW at end of 2012
6.10 Polish power utility Tauron launches its fourth wind farm in north-west of Poland
6.11 GDF Suez inaugurates one of world's biggest biomass units in Poland
6.12 Polish power utilities PGE, Energa to buy wind farm stake in Ibedrola from EBRD
Finland's Fortum suspends investments in Poland till legal framework is clear
6.13 EBRD to provide EUR 58mn loan for Polish Energy Partners' wind farm project

7. Romania
7.1 Government cuts overcompensation to future renewable energy projects…
7.2 … And also cuts down support for existing projects [ordinance 57/2013]
7.3 And still market regulator ANRE suggests thorough reconsideration of renewable energy strategy
7.4 Romania’s 2020 electricity use forecast cut to 60TWh from 75TWh– market regulator
7.5 ANRE’s step seems to have been inspired by industrialists unhappy with the high surcharges
7.6 Enel Green Power completes 36MW PV capacity in Romania...
7.7 … After developing 500MW wind farms in the country
7.8 Iberdrola abandons 1.2GW wind farm plans
7.9 Energreen Investment Europe invests EUR 37mn in two solar parks
7.10 GDF Suez completes 50MW wind farm
7.11 Samsung invests EUR 100mn in Romania's largest solar project
7.12 Filasa International confirms plans for 519MW wind farm in Suceava
7.13 Verbund commissions 225MW wind farm
7.14 China's Lightway Solar to build 50MW solar power park

8. Bulgaria
8.1 System operator repeatedly imposes restrictions on renewable energy
8.2 Budget committee proposes 20% fee on revenue from sale of green energy
8.3 Investors fight against would-be fee on renewable energy
8.4 Resources used for heating – electricity and firewood, not best choice
8.5 Bulgaria down on EY ranking following support reduction

9. Czech Republic
9.1 Czech Republic down on EY ranking following support reduction
9.2 Czech renewable energy output at 6.2TWh in Jan-Sept 2013
9.3 Solar power investors seek EUR 128mn compensation from Czech state
9.4 Solar investors launched in May arbitration against state

10. Slovak Republic
10.1 Slovakia's parliament approves in fall 2013 amendments to renewable energy bill

11. Hungary

Number of pages: 44
Release Date: Wed, 11 Dec 2013