In May 2022, the European Commission announced the REPowerEU Action Plan, proposing a package of measures to accelerate the energy transition, made even more urgent by the high dependence on Russian gas. Given the urgency of deploying renewable energy installations, the EC highlighted the generation of electricity from solar energy (i.e., solar power plants, photovoltaics) as a priority and key issue. Such technology has a minimal environmental impact (especially when installed on existing built surfaces), high public acceptance, the fastest technical feasibility, and, last but not least, a low cost (the price of the technology has fallen by around 82% over the last decade).
Slovenia is committed to achieving its renewable energy targets – for 2020, 25% renewable energy in final energy consumption – and at least 27% by 2030. These targets will be further increased with the revision of Directive (EU) 2018/2001 on the promotion of the use of energy from renewable sources in the context of “Fit for 55” – a set of proposals to revise and update EU legislation to reach the EU’s climate goal of reducing its carbon emissions by at least 55% by 2030.
To promote the development of renewable energy sources, Slovenia’s government drew up the Act on the Siting of Installations for the Production of Electricity from Renewable Energy Sources (Act) and sent it for inter-ministerial coordination.
If adopted, one of the key areas to be regulated by this Act is the construction of solar power plants on artificial aquatic and coastal land and in water protection areas. The construction of such plants is already established practice in the Czech Republic and the Netherlands, cited by the Slovenian government as examples of good practice. In particular, it has been recognized that artificial water surfaces – such as lakes created by the subsidence of coal mine workings and gravel pits, water reservoirs and canals, and the banks of hydroelectric storage basins and embankments – are untapped potentials for the production of electricity from renewable energy sources. The latter will be the site of so-called floating solar power plants, which have the advantages of allowing highly efficient electricity generation, operating without emissions or noise, and reducing evaporation, which is particularly problematic during prolonged dry periods, while also helping to reduce unwanted algal blooms.
A key aspect of the proposed legislation is that water use for floating solar power plants is secondary, while the primary use of water remains unchanged. The purpose of the proposed Act is thus to enable the use of, and other interventions in, water or on aquatic and coastal land for the development of renewable energy sources, and to regulate interventions on land in protected and endangered areas, to ensure that the status of water does not deteriorate, to protect against the harmful effects of water, to preserve natural processes, the natural balance of aquatic and peripheral ecosystems, and to protect natural values and areas covered by nature conservation regulations. Investors will also have to comply with other relevant legislation on construction, spatial planning, environmental protection, etc. Under the Building Act, such a facility is an object for which a building permit will have to be obtained. Furthermore, the proposed Act also foresees the installation of storage facilities that allow for the adjustment of production to the needs of the grid and, therefore, it is necessary to allow for their installation as well, with the Act not imposing any specific limitation on those.
It should be pointed out, however, that the proposed Act stipulates that the installation of floating solar power plants is only allowed on water and coastal land that has been degraded due to mining or human intervention for hydroelectric power – artificial bodies of water.
In Slovenia, which is extremely rich in water areas, including artificial bodies of water created by human intervention, such a strategy is logical and very welcome among investors. We noticed great interest among domestic and foreign investors in installing such facilities. The key reasons why investors are choosing such projects are that, in addition to the imminent energy transition, the initial investment is low, as the installation is not technically demanding, and the price of the technology is also low currently and, according to some forecasts, it is expected to fall even further. However, the crucial factor for investors will be that the relevant legislation will be adopted and will have to be enforced predictably. If this is not done or is delayed too long, investors will choose other countries, as has been their practice many times before.
If Slovenia adopts this law, and we would point out that we see no reason why this should not happen, a regulatory framework will be put in place that will allow Slovenia to attract additional investment, both from domestic and foreign capital.
By Uros Cop, Managing Partner, Senica & Partners
This article was originally published in Issue 10.2 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
