European Commission: Goal met, abolish incentives for renewable sources

In the EC Report for Montenegro, it is recalled that the National Action Plan on the use of renewable energy sources until 2020 was adopted in 2014 and it set the goal of reaching 2020 percent of the share of energy from renewable sources in the total final consumption in 33.
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Krnovo Wind Power Plant, Photo: Svetlana Mandić
Krnovo Wind Power Plant, Photo: Svetlana Mandić
Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate.
Ažurirano: 26.04.2018. 19:11h

The total energy consumption from renewable sources in Montenegro in 2016 amounted to 41,6 percent of the total energy consumption, which exceeded the target of 33 percent, which is why the state should end the current incentives for renewable energy producers and replace them with market support programs. is a recommendation of the European Commission.

In the EC Report for Montenegro, it is recalled that the National Action Plan on the use of renewable energy sources until 2020 was adopted in 2014 and it set the goal of reaching 2020 percent of energy from renewable sources in the total final consumption in 33.

Incentives for the production of energy from renewable sources were introduced in May 2014, and from then until this year, 7,53 million euros have been paid to privileged producers in the name of incentives.

The amount of compensation for the stimulation of electricity production (which citizens pay on their electricity bills) from privileged producers is calculated on the basis of the Law on Energy and on the basis of the Regulation on compensation for the stimulation of electricity production from RES and high-efficiency cogeneration (VEK).

"In 2016, 41,6 percent of total energy consumption came from renewable sources, which exceeded the target of 33 percent in 2020 due to the revision of biomass data," the EC stated in the report. The law on energy foresees the abolition of incentives for RES when the consumption of 33 percent is reached. The EC assessed that the national legislation is partially aligned with the Renewable Energy Directive, and support for renewable energy producers is based on feed-in tariffs.

"The state must switch to an auction system in accordance with the 2014-2020 Guidelines on state aid for environmental protection and energy," said the EC.

The European Union guidelines on state aid for environmental protection and energy 2014-2020 require that RES producers be more exposed to market signals, in order to ensure the economical application of RES. These guidelines call for technology-neutral auctions to procure renewable energy at low costs.

"The development of new projects, especially hydroelectric power plants, should be in accordance with the EU legislation on concessions and environmental protection, and the impact on areas of high natural interest should be taken into account," the EC states.

At the end of January, the government increased the fee for encouraging the production of electricity from RES and RES by 3,5 times, that is, from 0,129 cents per kWh to 0,47316 cents. The reason for the increase was the planned entry into the power system of the Krnovo wind power plant this year. VE Krnovo entered the system only at the end of last year.

Opposition parties condemned the increase in the fee for RES and demanded its abolition. They assessed that this stimulates the business of friends and relatives of the former prime minister and the current president of the state, Milo Đukanović. The son of the former prime minister, Blažo Đukanović, intends to build two HPPs in Kolašin, which is opposed by the residents of the Kolašin village of Lipovska Bistrica. Large consumers of electricity, Uniprom KAP, Railway Infrastructure and Tosčelik Railway Station pay a significantly lower fee for RES compared to the others.

The status of privileged producer is held by the companies Hidroenergija Montenegro (for small hydropower plants Jezerštica, Bistrica, Orah, Rmus, Spaljevići 1 and Šekular in Berane), Sinerdži (MHP Vrelo Bijelo Polje), Igma enerdži (MHP Bradavec and Piševska Andrijevica) and Kronor (MHP Jara and Babino polje Plav) and Hydro Bistrica Podgorica (for mHE Bistrica Majstorovina), as well as the company Krnovo Green Energy for VE Krnovo. According to data from CRPS, the founders of Hidroenergija are Ranko Radović and the company Hemera capital (founder Oleg Obradović). Obradović is an authorized representative of Hidroenergija.

The founders of Sinerdžija are Kia Montenegro (founder Željko Đuranović, representative and executive director Vuk Rajković), Dragana Bošković, Tomaš Hajek, Uroš Karadžić and Radoje Vujadinović.

The owner of the company Igma enerdži is the Igma Grand of Igor Mašović, the brother of the mayor of Andrijevica Srđan Mašović.

The founders of Kronor are Kroling, Mont Hidro and Žarko Burić's Normal company. The founders of Hydro Bistrica are Vodni zdroje from the Czech Republic, Synergy Podgorica, Gradnja Bijelo Polje and Triangle General Contractors from Kosovo.

Citizens paid 4,5 million incentives last year

On the basis of the fee for renewable sources, via the electricity bill, last year around 4,5 million euros were set aside for the owners of MHE and VE Krnovo. From that, VE Krnovo received 2,2 million euros. The owners of MHE were paid a total of 295.629 euros in January, according to the data of the Montenegrin Electricity Market Operator (COTEE) submitted to "Vijesti".

"For the year 2018, the January invoices were paid for small hydropower plants," COTEE explained.

Of this, Hidroenergija Montenegro received the most, about 165 thousand euros, followed by Kronor about 53 thousand, Igma Energy 31,5 thousand, Sinergy almost 24 thousand euros, and Hydro Bistrica 21,6 thousand for the MHE Bistrica Majstorovina, which started commercial electricity production in January of this year.

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