Some novelties enacted by the Law on Amendments to the Law on the Use of Renewable Energy Sources

12.05.2023.

Two years after the Law on the Use of Renewable Energy Sources (“RES Law””) entered into force, on April 28, 2023, the Parliament of the Republic of Serbia adopted the Law on Amendments to the Law on the Use of Renewable Energy Sources (“Law“), which entered into force on May 7, 2023.

Some of the new concepts

At the very beginning of the Law, certain new definitions are introduced into the existing framework of the RES Law, which indicate certain measures that are further elaborated in the new provisions of the Law.

The RES Law defines renewable energy sources as non-fossil energy sources such as: water streams, biomass, wind, sun, renewable hydrogen, biogas, landfill gas, gas from sewage treatment plants, geothermal energy sources and other renewable energy sources;

The Law now introduces another definition that primarily refers to wind and solar energy, so now there is also a definition of variable energy sources which states that these are primary energy sources (wind energy, solar energy, etc.) whose energy potential depends on the meteorological conditions that is difficult to accurately forecast, as a result of which, during the production of electricity from such sources, greater deviations may occur between the produced electricity and the planned electricity production in relation to other energy sources.

From all publicly available information so far, it appears that this definition was introduced in order to justify the need to protect the operation of the electricity transmission and distribution system due to the impossibility of planning the amount of energy that will be available and that is produced from variable energy sources, i.e. primarily from energy wind and sun.

Furthermore, the Law introduces two new definitions, which might have been better suited for the Energy Law (“Energy Law“). Namely, the Energy Law foresees that system services are services provided by the system operator, which are necessary for ensuring the safe, reliable and stable operation of the energy system.

In addition, the Energy Law defines ancillary services as services that users of the transmission, distribution and closed distribution system of electricity provide to the operator of the transmission and distribution system, as well as services that operators of the distribution and closed distribution system provide to the operator of the transmission system in order to provide system services.

The Law now introduces a new definition of the term ancillary service of secondary reserve, which states that ancillary service of secondary reserve is a service by which system users provide secondary reserve to the operator of the transmission system based on the contract on the provision of ancillary services for the needs of the system service of secondary regulation of frequency and exchange power.

The Law further regulates the concept of secondary regulation of frequency and exchange power, where it is said that secondary regulation of frequency and exchange power is a type of system service provided by the transmission system operator in accordance with the rules on operation of the transmission system.

The rules on the operation of the transmission system can be found at this link:

https://ems.rs/wp-content/uploads/2022/07/PRAVILA-O-RADU-PRENOSNOG-SISTEMA.pdf

Limitation to the right of priority access of power plants to the transmission or distribution system

Article 11 of the RES Law expressly stipulated that the operator of the transmission, distribution, or closed distribution system was obliged to take over electricity produced from renewable sources as a priority, regardless of whether it is in the incentive system, except in the case when the safety of the operation of the transmission or distribution system is threatened.

Furthermore, it was prescribed that if the operator of the transmission, distribution, or closed distribution system, due to the compromised safety of the operation of the transmission, distribution, or closed distribution system, significantly restricts access to the system for producers from renewable sources, he was obliged to inform the Energy Agency of the Republic of Serbia about the undertaken measures, as well as the measures that need to be taken to prevent possible future restrictions.

The Law foresees certain changes so that Article 11 now stipulates that the operator of the transmission, distribution, or closed distribution system is obliged to take over, on a priority basis, electricity produced from renewable sources in demonstration projects, in power plants whose approved power is less than 400 kW, i.e. for power plants that are connected to the grid after January 1, 2026 with an approved power of less than 200 kW.

Furthermore, the Law now stipulates that if the operator of the transmission, distribution, or closed distribution system, due to the compromised safety of the operation of the transmission, distribution, or closed distribution system, significantly restricts access to the system for producers from renewable sources, he is obliged to inform the Energy Agency of the Republic of Serbia about the measures taken. and producers whose operations are affected by the measures taken.

The Law defines a demonstration project as a non-commercial project from renewable energy sources that demonstrates a technology as the first of its kind and represents a significant innovation that greatly exceeds the highest level of existing technology for the use of renewable sources and has the status of an innovation project in the sense of the law regulating innovation activity.

The aforementioned novelties clearly indicate a major change which will have a significant impact on the operations of electricity producers from renewable sources.

Further limitations and postponements

The Law introduces certain amendments to the existing articles of the RES Law and introduces completely new articles of the RES Law which are aimed at limiting the access of power plants to the distribution, i.e. transmission system, i.e. postponing their connection to the distribution, i.e. transmission system due to the potential lack of electricity reserves needed for balancing the power system, which are a consequence of the variability of certain types of energy as a renewable energy source.

Postponement of the procedure for connecting power plants to the transmission system

After Article 67 of the RES Law, the titles, and Articles 67a and 67b are added, which read as follows:

Duty of the transmission system operator when developing the transmission system development plan

Article 67a

The operator of the transmission system is obliged to present, in the analysis of the adequacy of the production and transmission system, when developing the transmission system development plan in accordance with the law governing the field of energy:

1) a list of connection projects for which a contract has been concluded with the operator of the transmission system on the preparation of the facility connection study, i.e. for which conditions for the design and connection of the power plant have been issued by the operator of the distribution system, i.e. closed distribution system and whose connection cannot be postponed in accordance with paragraph 2 of this article;

2) review of historical data on the contracted and realistically provided reserve for balancing the system in the relevant period;

3) methodology for estimating the available and required reserves for balancing the system;

4) assessment of the required reserve for balancing the system in the control area;

5) assessment of currently available reserves for system balancing in the control area;

6) assessment of whether and how much reserves are missing for balancing the system in case of connection of all power plants that are in the process of being connected, and which use variable renewable energy sources;

7) indicators of the adequacy of the production system to satisfy consumption based on calculations;

8) conclusion on the risks to the safe operation of the electric power system and the need to postpone the connection of power plants that use variable renewable energy sources, with the exception of power plants from point 1) of this article.

If the adequacy analysis referred to in paragraph 1 of this article indicates risks to the safe operation of the electric power system due to the lack of reserves for balancing the system, as well as the existence of justification for the application of the connection postponement measure, the transmission system operator shall publish on its website, within ten working days from the day of the Agency’s approval of the transmission system development plan, which includes an adequacy analysis, notification of the occurrence of conditions for postponing the connection procedure of power plants that use variable renewable energy sources.

The operator of the transmission system is obliged to notify the party within 15 days from the date of publication of the notification in the procedure of connection of the power plant that is subject to postponement from paragraph 1 of this article.

Postponement of the connection procedure to the electric power system, for power plants that use variable renewable energy sources, ceases to be applied when the adequacy analysis from paragraph 1 of this article shows that there is a reserve for system balancing in the electric power system that allows all power plants that are subject to that limitation, to be connected to the power system without jeopardizing its safe operation.

Postponement of the connection procedure to the transmission system for power plants that use variable renewable energy sources

Article 67b

Postponement of connection to the transmission system does not apply to power plants that use variable renewable energy sources, if the applicant for the preparation of the connection study:

1) provides new capacity for the provision of secondary reserve ancillary service that will be offered to the transmission system operator for the system service of secondary regulation of frequency and exchange power or

2) allocates a new capacity from its own existing production capacities to provide the ancillary service of secondary reserve, which will be offered to the operator of the transmission system for the system service of secondary regulation of frequency and exchange power or

3) ensures that another participant in the market, instead of him, provides a new capacity for providing the ancillary service of secondary reserve and which will be offered to the operator of the transmission system for the system service of secondary regulation of frequency and exchange power.

The regulatory range for the provision of ancillary services from paragraph 1 of this article must amount to at least 20% of the installed active power of the power plant that uses variable renewable energy sources.

If the power producer installs battery storage, the capacity of that storage must be at least 0.4 MWh/MW of the installed power of the power plant.

The new capacity referred to in paragraph 1 of this article is considered to be a synchronous production module or electricity storage capable of operating in secondary regulation that was not available to the transmission system operator at the time of the valid adequacy analysis.

The Ministry prescribes in more detail the method of proving the fulfillment of the requirements from paragraph 1 of this article and article 68b paragraph of this law.

A power plant that uses variable renewable energy sources, for all the time it is connected to the electric power system, must have a secured capacity on the territory of the Republic of Serbia to provide an ancillary service of secondary reserve that will be offered to the transmission system operator in accordance with the law regulating energy.

Limitation of connection and postponement of the procedure for connecting power plants to the distribution system

After Article 68 of the RES Law, the titles, and Art. 68a and 68b, are added and read as follows:

Limitation of connection to the distribution, i.e. closed distribution system of power plants that use variable renewable energy sources

Article 68a

The operator of the distribution system, i.e. closed distribution system, is obliged to limit the connection to the distribution, i.e. closed distribution system of power plants that use variable renewable energy sources so that:

1) the total installed power of power plants that use renewable energy sources and are connected to a part of the distribution or closed distribution system, connected to the transmission system, is not greater than 80% of the installed power of the transformer station at the point of transmission of electricity between the distribution, i.e. closed distribution system and of the transmission system, provided that the total active power transferred from the distribution, i.e. closed distribution system to the transmission system in one transformer station does not exceed 16 MW;

2) the maximum power of a power plant that uses variable renewable energy sources does not exceed the value of 10 MW per connection.

The total power of all power plants referred to in paragraph 1, point 1) of this article is obtained as an algebraic sum of all individual modules for the production of electricity that are installed by electricity producers from renewable sources and prosumers on the part of the distribution or closed distribution system that are supplied from one measuring point on the transmission system.

The operator of the distribution system and the operator of the closed distribution system do not apply the limitations from paragraph 1. item 1) of this article to prosumers.

Postponement of the connection procedure to the distribution, i.e. closed distribution system for power plants that use variable renewable energy sources

Article 68b

In the event that the adequacy analysis, as an integral part of the transmission system development plan, indicates risks to the safe operation of the electric power system due to the lack of reserves for balancing the system, the operator of the distribution system, i.e. the closed distribution system, is obliged to publish on the website a notice of the occurrence of conditions for delay of the connection procedure for power plants that use variable renewable energy sources within ten working days from the date of the Agency’s approval of the transmission system development plan.

Postponement of the connection procedure to the distribution, i.e. closed distribution system, does not apply to:

1) power plants that use renewable energy sources, if the applicant in the connection procedure fulfills one of the prescribed conditions from Article 67b paragraph 1 of this law;

2) power plants with a capacity of less than 5 MW and greater than 400 kW, for which the applicant in the connection procedure provides electricity storage with a capacity of at least 20% of the installed power of the power plant that uses variable renewable energy sources, whereby the storage capacity must be at least 0.4 MWh/MW of the installed power of the power plant;

3) power plants whose capacity is less than 400 kW.

The operator of the distribution, i.e. closed distribution system, is obliged to notify the party within 15 days of the date of publication of the notice in the connection procedure that is subject to postponement.

Data management

In Article 68 of the RES Law para. 1. and 2. are changed and read as follows:

The operator of the distribution, i.e. closed distribution system is obliged to keep an electronic, centralized and publicly accessible register of all connected power plants that use renewable energy sources, which contains: the name of the electricity producer, the power of the power plant, the location of the power plant and the year of permanent connection.

The operator of the distribution, i.e. closed distribution system, is obliged to publish a list of all submitted requests in the connection procedure, which contains: the name of the requester, the location of the power plant, information on the required power of the power plant and the stage of the connection procedure.

After paragraph 5, paragraph 6 is added, which reads as follows:

The operator of the distribution, i.e. closed distribution system, is obliged to submit data on connected power plants and data on power plants in the process of being connected to the transmission system operator within ten working days from the date of submission of the transmission system operator’s request, relevant for the preparation of the adequacy analysis referred to in Article 68a of this law, namely data on: name of the power plant, location of the power plant, active power of the power plant, year of connection for existing power plants, status and estimated year of connection, as well as cumulative active power for buyers-producers who will be connected to the system, by year.

Deadlines for actions of the transmission system operator and the Energy Agency of the Republic of Serbia

The Law, in independent article 20 stipulates that the transmission system operator is obliged to adopt a transmission system development plan with an analysis of the adequacy of production and transmission system in accordance with the provisions of article 67a paragraph 1 within 90 days from the date of entry into force of the Law, i.e. from May 7, 2023. The Agency is obliged to issue consent to the transmission system development plan, aligned to the provisions of Article 67a paragraph 1 within 60 days from the date of its submission by the transmission system operator.

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When the amended legal framework for the use of renewable energy sources is completed with the adoption of the foreseen by-laws, practice will show how the relations of participants in the process of production and distribution and transmission of electricity will be further developed.