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The support system for renewable energies in Belarus is based on a state-guaranteed feed-in tariff that is higher than the regular market tariff for electricity within the first 10 years of commissioning of the plants. Its amount is derived from a coefficient to be applied, which is multiplied by the officially determined and fixed market tariff. Which coefficient is applied depends, among other things, on the type of generation. The amount of electricity that can be fed into the grid at the increased tariff is capped by a quota system. The construction of new plants is only permitted within the framework of tendered quotas or for own consumption.
The quotas are not granted for the amount of energy to be fed into the grid, but for the electrical output of the planned renewable energy plants. In the course of the quota tender, the tender participants indicate the total output of their planned energy plants. The construction of energy plants with a higher capacity than that approved within the framework of the quota granted is not permitted.
The State purchases all the energy generated by these installations and remunerates it in accordance with the applicable increased tariff. This increased feed-in tariff is guaranteed for 10 years of operation. It is calculated by multiplying the applicable coefficient by the market tariff. Depending on the energy source, the coefficient currently varies between 1.01 and 1.3. In this way it offers 1.01 to 1.3 times higher revenues compared to the actual market tariff.
Since the subsidised quotas are quite low (e.g. for 2020 only 19.8 MW wind and 0 MW solar for the whole of Belarus), it is advisable to look for alternatives for the use of renewable energy plants.
The State cross-sectoral commission on allocation of quotas for renewable energy has recently announced new quotas for RES plants to be constructed within the period of 2020-2022. This is a strong signal that support will continue in the form of fixed feed-in tariffs in Belarus. Nevertheless, despite the overall growth of green energy production, the incentive coefficients and the quotas allocated for RES tend to gradual reduction. This may be due to the planned commissioning of the Belarus Nuclear Station that is expected to be occurred in 2020. The projected capacity of the said power plant is more than likely covers the vast majority of energy consumption in Belarus. Thus the purchase of the green energy by the state is constantly reducing economic feasibility.
The construction of renewable energy plants outside the quota regulation described above is made possible for legal entities that generate energy from renewable energy sources for their own consumption. Renewable energy plants to be used for own consumption can be installed without significant restrictions.
In addition, these plants have a feed-in guarantee for surplus production to cover their own requirements. However, this excess energy is purchased by the energy supplier at the market rate multiplied by a so-called reducing coefficient (x < 1). The reducing coefficient for electricity generation plants commissioned since 1 January 2018 is currently 0.1.
Although the purchase guarantee for excess energy represents a significant advantage, the prices paid for it are far below the market price. The currently applicable coefficient of 0.1 would mean a revenue of only 10% of the market price for the producer.
More than half of the renewable energies in Belarus are already produced today for self-consumption. This is likely to increase further in the coming years. In addition to sector-specific guarantees, investors in the construction of renewable energy plants can also receive additional benefits provided for under investment law. For example, investors can be exempted from value-added tax when importing renewable energy systems or corresponding accessories from abroad. Land plot tax can also be waived for land plots, on which such systems are located. Some of such incentives can also be used for systems that are to produce for self-consumption.
PPAs play rather significant role in Belarus and under the effective laws such agreements are concluded between the grid owners and the state energy company “Belenergo” (its subsidiaries).
The general information on the PPAs is publicly available at the Internet site of Belenergo at: http://www.energo.by/. Nevertheless, no precise terms of PPAs as well as the parties thereto are subject to mandatory disclosure.
Due to the fact that Belarus belongs to the category of countries that do not possess significant own fuel and energy resources the state places significant importance on energy security issues. Thus, the figures show the overall growth of the capacity of plants, which energy is contemplated to be purchased by Belenergo under the PPAs.
It should be noted, that PPA is split into the ones as follows:
The General PPA is the common agreement that provides for energy supply with power-providers to the end-users and widely used in the ordinary course of business. Normally, it is the state-owned power provider that serves as an energy supplier.
The Renewable energy PPAs are entered into between the owner of plant and Belenergo (its subsidiaries).
The state energy company “Belenergo” thus is obliged to purchase all the energy actually produced by the respective plant connected into the grid at the price adjusted with the coefficients as mentioned above.
In Belarus, there is no possibility of marketing energy outside the public grid without the involvement of the grid operator “Belenergo”. In principle, energy may only be supplied to the end consumer via the public grid with the participation of the state electricity supplier, i.e. an “off-grid” solution (the producer sells his electricity with a direct connection directly to the consumer) is not possible.
In Belarus, there is practically no possibility of marketing energy outside the public grid without the involvement of the grid operator “Belenergo”. In principle, energy may only be supplied to the end consumer via the public grid with the participation of the state electricity supplier.
Also, the theoretical possibility resulting from the regulations on own consumption that a system realised for own consumption belongs to a third party, who then leases it to his own consumer, for example, cannot be implemented in practice. Although the applicable laws do not yet contain any regulations regarding the question of whether the plant must be owned by the energy consumer, the documents for the project planning, construction and commissioning of an energy plant must contain the purpose of the project: the owner's own energy consumption. This means that the energy system to be built must be connected to the owner as a consumer. For the connection of another consumer (e.g. the tenant of the plant) the permission of the national power supplier would have to be obtained for this. There are no precedents for this yet and we do not consider the granting of such a permit feasible at the moment.
In Belarus, there is practically no possibility of direct marketing of renewable energy. As a general rule the electricity may be supplied to the end-user only via public grid with involvement of the state energy company “Belenergo”.
The owners of plants may dispose the energy gained in the ways as follow
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Tobias Kohler
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