Construction of Power Plants and Electricity/Heat Generation from Biomass in Serbia - Energy Permit and Requirements for Connection

Energy Permit (*58)

An energy permit is a permit for construction of an energy facility. It is necessary to point to the fact that the energy permit for a biomass/biogas power plant shall be issued provided that the construction of such a facility, by its type and use, is in compliance with the Energy Sector Development Strategy of the Republic of Serbia and with the Program of Implementation of that Strategy. In order to obtain the energy permit, it is necessary to meet the criteria for construction of power generating facilities stipulated in the Rulebook on Criteria for Issuing Energy Permits, Contents of the Application, and Procedure for Issuing Energy Permits. (*59) The energy permit for construction of facilities for electricity generation shall be issued by the Ministry of Mining and Energy while, for construction of facilities for heat generation, it shall be issued by the unit of local self-government, or by the City of Belgrade, depending on whose territory the structure is going to be constructed. In case it is a biomass/biogas power plant, which generates both electricity and heat, the project owner shall have to submit two applications for the energy permits: to the Ministry of Mining and Energy – the application for the energy license for electricity generation, and to the unit of local self-government, or to the City of Belgrade – for construction of a heat generating facility.

For electricity generating power plants of a capacity below 1 MW and for heat generating power plants of a capacity below 1 MW, issuing of the energy permit has not been envisaged, which means that, for such facilities, the Construction Permit shall be issued, without following the procedure for issuing the energy permit. The application for the energy permit, subject to the Energy Law, shall contain the data on: 1) The location at which the power plant is to be constructed; 2) The deadline for completion of construction; 3) Type and capacity and energy efficiency; 4) The energy commodities, which the energy facility will use; 5) The method of generation and takeover of electricity/heat; 6) The method of protection of the environment in the course of construction and operation; 7) The requirements that are related to the termination of operation; 8) The amount of planned financial resources for construction and the method of providing such resources.

The Rulebook on Criteria for Issuing Energy Permits, Contents of the Application, and Procedure for Issuing Energy Permits specifies the Application Form for the energy permit, separately for construction of the energy facility for electricity generation, and separately for construction of an energy facility for heat generation. Depending on the capacity of a power plant, the application for the energy permit for construction of the energy facility for electricity generation shall be submitted, specifically: for rated capacities from 1 MW to 10 MW – Form O-1, or for rated capacities of over 10 MW – Form O-2. The application for the energy permit for construction of an energy facility for heat generation of a capacity exceeding 1 MW shall be submitted by filling in the Form O-10.

The following data shall be specified in the Application Form for the energy permit for construction of a power plant: 1) General data on the applicant (name, address, state, official registration number of the applicant, tax identification No., legal and organizational form, data on the management, data on registration, name of the contact person); 2) Basic data on the facility (name of the facility, the location of the land, technical data on the energy facility, share of the energy facility in system services, primary and secondary fuels); 3) The value of the investment (the amount of the planned financial resources and the method of their securing); 4) The financial position of the applicant (relevant statement of a bank that it is willing to support the applicant or the investor in financing the construction of the energy facility and evidence of adequate credit-worthiness of the applicant); 5) The envisaged economic and service life of the facility as well as the method of rehabilitation of the location upon termination of the service life of the facility (removal, disassembly of the facility); 6) Harmonization with the spatial plans and the concept of development of the energy sector (the excerpt from the urban development plan or the decision on urban development requirements – if such a decision has been adopted or issued, the decision of the competent authority on the use of the land including the established measures of and requirements for protection of the environment – if such a decision has been handed down, and the opinion of the electricity transmission or distribution system operator on the requirements for and possibilities of connection to the systems; 7) Feasibility study for construction of the energy facility. In case the energy facility is to be constructed in stages, which represent technical and technological entireties, the application shall contain the data on the planned stages of construction and the final deadline for completion of the work.

The Application Forms for the energy permit for construction of a power plant from 1 to 10 MW and of a power plant of a rated capacity of over 10 MW are almost identical, the only difference being that the Form for issuing the energy permit for construction of a power plant of a rated capacity exceeding 10 MW is more detailed with respect to the provision of basic data on the facility and definition of the share of the energy facility in system services. In case of such a facility, the applicant shall propose possible options for share in system services with respect to the regulation of active power, with respect to the regulation of reactive power, and the possibility of a share in the primary, secondary, and tertiary regulation.

The Application Form for the energy permit for construction of an energy facility for heat generation of a capacity exceeding 1 MW is almost identical to the Form for the energy permit for construction of a small power plant; it is even somewhat simplified in the part, which is related to the provision of the basic data on the facility – technical data.

The investor shall submit the following with the application for the energy permit: 1) The information on the location issued within a period of maximum one year; 2) The decision of the competent authority on the use of the land on which the energy facility is going to be constructed including the established measures and requirements for environmental protection (if such a decision has been handed down); 3) The feasibility study for construction of the energy facility for which the energy permit (*60) is applied for, which shall also specifically contain the study of possible impacts on the environment including the proposed measures for environmental protection (*61); 4) Relevant statement of a bank that it is willing to support the applicant or the investor in financing the construction of the energy facility, specifying the name and type of the energy facility to which the statement refers, the location of the energy facility, maximum capacity of the facility, and the amount of the investment in construction of the energy facility; 5) The opinion of the electricity and/or heat transmission or distribution system operator on requirements for and possibilities of connection of the new facility to the system. (*62) (*63) (*64)

The energy permit shall be issued within thirty days from the date of submitting the application. The unsatisfied party may lodge an appeal against the decision on the energy permit within seven days from the date of receipt of the decision. The energy permit shall be issued for a period of two years and its validity may be extended at the request of the holder.



Requirements for Connection

Prior to issuing the location permit, it shall also be necessary to obtain the requirements for connection to the electricity grid and to the heat distribution network. If the investor fails to obtain the above requirements on his/her own, the authority in charge of issuing the location permit shall obtain them ex officio prior to issuing the location permit.

Within the procedure for preparation of the urban development planning document, the location permit or of the main design for construction of the facility, at the request of the investor or of the competent authority, the energy entity to whose system the power producer’s facility is to be connected, shall issue the requirements for connection of the producer’s facility to the electricity grid. The requirements for connection shall define the possibility for connection of the producer’s facility to the electricity grid, or define the electric power and technical requirements needed for preparation of the main design for construction of the facility.

The procedure starts when the application is submitted for the requirement for connection. The following shall be submitted with the application: 1) Evidence of the payment of the expenses of issuing the required requirements for connection as per the pricelist; 2) Other documentation, which is specified by the energy entity in the application form for the requirements for connection.

The technical report, based on the analysis made, shall establish whether there are electric power and technical conditions for possible future connection of the facility according to the submitted application. Based on the technical report, the energy entity, to whose system the facility of the producer is to be connected, shall issue the decision on the requirements for connection to the investor in construction of the facility, or to the competent authority. The requirements for connection shall contain the definition of their validity period. An appeal may not be lodged against the decision on the requirements for connection (the decision on the requirements for connection does not contain the grounds for it or instructions on the legal remedy). The decision on the requirements for connection shall be issued within the deadline prescribed by the law (*65).



Details of Relevant Legislation

(*58) In addition to the energy license, the Energy Law stipulates the procedure for initiation of the public invitation for tenders. This procedure shall be initiated in case there is no application for the energy permit for construction of a future facility and the planned time schedule of construction of energy facilities cannot be ensured, and there is a need to ensure safety in supply of power. The Government shall decide on the initiation of the public invitation for tenders. The public invitation for tenders shall be announced by the Ministry of Mining and Energy, or by the unit of local self-government, according to the procedure regulating concessions.

(*59) The criteria for construction of electricity/heat generating facilities are as follows: 1) Fulfillment of the requirements for safe and unobstructed functioning of the power system; 2) Fulfillment of the requirements for designation of the location and land use; 3) The requirements for environmental protection; 4) Requirements with respect to the measures for protection of the health of people and safety of people and property; 5) Requirements related to energy efficiency; 6) Requirements for the use of primary sources of energy.

(*60) The feasibility study for construction of the energy facility, for which the energy permit is applied for, shall contain in particular: 1) Objectives of the investment including the basic data on the investor; 2) The analysis of current state - spatial location of the facility, its function, and importance in view of the type and capacity of the energy facility; 3) Market analysis – the method of generation, procurement, takeover, and sale of electricity/heat and energy commodities; 4) Technical description of the plant and technological processes – operating modes and the method of exploitation of the plant; 5) The analysis of energy efficiency of the facilities including the data on electricity/heat and energy commodities to be used; 6) The planned deadline for construction of the energy facility and service life of the energy facility; 7) The analysis of the procurement market; 8) The analysis and assessment of the selection of the location, analysis of possible impacts on the environment including the proposed measures of environmental protection, relationship with respect to natural, cultural, and historic assets, impact on climate, surface and ground waters, flora, fauna, and soil; 9) Financial analysis of the assessment including calculation of the required investments and sources of financing and obligations towards the sources; 10) Sensitivity analysis and analysis of the risk of the investment; 11) Analysis of the sources of financing and financial obligations (own funds, domestic sources, foreign and international sources, guarantees, and liabilities); 12) The analysis of the organizational and staff capacities (organization, staff potential); 13) Proposed measures concerning the requirements for and method of regulation of relationships in case of a temporary or permanent termination of operation, or exploitation of the energy facility; 14) Proposed measures to be undertaken for the purpose of protection of the energy facility and the proposed measures, which will define all the required parameters for possible restart of operation of the energy facility at a later stage. By its contents, this feasibility study is the closest to the Preliminary Feasibility Study including the general design.

(*61) The environmental impact assessment is described in more detail in Chapter 3.2.5 hereof.

(*62) The Energy Law, the Decree on Conditions of Electricity Delivery, the Distribution Grid Code, and the Transmission Grid Code specify the procedure for connection of the producers’ facilities to the electricity grid. Neither the Decree, nor the Codes, or indeed any other regulations stipulate the procedure for issuing the opinion of the energy entity in charge of transmission, or of distribution of electricity within the procedure for issuing the energy license. In view of the above fact, this procedure does not have a specific form, but the economic operator, whose facility should be connected to the electricity grid, when preparing the application for such an opinion, should submit as many documents as possible, which are necessary for connection of the facility to the electricity grid or, if he/she does not have such documents, then at least as many data as possible, which the specified documents should contain. The application for connection to the electricity grid has been dealt with in Chapter 7 hereof.

(*63) Drafting of the Rulebook amending the Rulebook on Criteria for Issuing Energy Permits, Contents of the Application, and Procedure for Issuing Energy Permits is under way, according to which some of the documents, which are required with the application for the energy permit, are amended. According to that draft, the following shall be submitted with the Application for the energy permit: 1) The Information on the Location or the location permit issued within a period of maximum one year (if issued), 2) The Preliminary Feasibility Study, 3) Relevant statement of a bank that is willing to support the applicant or the investor in financing the construction of the energy facility, 4) The opinion of the electricity transmission or distribution system operator on the requirements for and possibilities of connection of the new facility to the system.

(*64) Prior to the adoption of the new 2009 Law on Planning and Construction, there had been a discrepancy between the provisions of the Rulebook on Criteria for Issuing Energy Permits, Contents of the Application, and Procedure for Issuing Energy Permits and the provisions of the Law on Planning and Construction with respect to the priority in issuing the Except from urban development plan and issuing of the decision on urban development requirements and the energy permit. This discrepancy was avoided by deletion of the terms: the decision on urban development requirements and the excerpt from the urban development plan. Instead of them, the terms: the location permit and the information on the location were introduced.

(*65) The deadline for issuing the requirements for connection is 30 days; more about this can be found in the footnote No. 55 hereof.

Note: This text is taken from the document-guide for investors "Construction of Plants and Electricity/Heat Generation from Biomass in the Republic of Serbia", of which authors are Dr. Branislava Lepotic Kovacevic, PhD Law, and Bojan Lazarevic, BSc El. Eng.

The project was implemented under the patronage of USAID, GTZ / GIZ Serbia and the Ministry of Energy in 2010.

You should also read the text about LEGAL ASPECT and the text about POWER PLANT CONSTRUCTION PROCEDURE AND ELECTRICITY GENERATION

Ministarstvo rudarstva i energetike Republike Srbije

USAID Srbija

GIZ Beograd

Vlada Republike Srbije

Grad Beograd

biomass power plant

biogas power plant

biomass

biogas

Energy Development Strategy of the Republic of Serbia

energy permit

Law on Energy

Brana Lepotic Kovacevic

Bojan Lazarevic