1. Part 2: New EU Member States (EU12) and Candidate Countries (CC) (Status of small hydropower policy framework and market development in the old and new EU Member States and selected EFTA countries) Petras PUNYS Lithuanian Hydropower Association / University of Agriculture Granada, Spain 15 – 17 October 2007

2. OVERVIEW  Background  Methodology of analysis  General overview of SHP sector of the new Member States (EU10) and Candidate Countries (CC5)  Barriers and burdens for further SHP deployment  Conclusions

3. Background

4. Ongoing project “Small Hydro Energy Efficient Promotion Campaign Action” (SHERPA) Coordinator ESHA: 2006-2008, Funded by Intelligent Energy for Europe programme Work package 2 “Status of SHP policy framework and market development in EU27“ to be completed by September 2008 Swedish Renewable Energies Association (SERO): Old EU Member States (EU15) Lithuanian Hydropower Association: New EU Member States (EU12) + Candidate countries (CC)

5. The activities covered in the project have been:  Assessing the potential for future SHP development, both in terms of upgrading the old existing plants and building new sites.  Gathering data on the actual state-of-the–art of the SHP development in the EU12 +CC5.  Analyzing the economics of SHP sources in order to understand how competitive SHP is today with respect to the other principal power generation technologies.

6.  Analysing the policy framework in each country, putting emphasis on the constraints that are hindering the development of SHP plants.  Analysing the situation and competitiveness of the EU manufacturing industry in the SHP sector.  Give some concrete recommendations in promoting SHP development in the short and medium term, suggesting some good policies and “best practices” to achieve this goal.

7. Yellow - Pre-May 1, 2004 EU Members (EU15); Blue - May 1, 2004 and January 1, 2007 New Member States (EU12); Lavender - Post-January 1, 2007 Candidate Countries (CC5).

8. Methodology of analysis

9.  Survey of SHP situation: 10 new EU MS (except Cyprus and Malta) + 5 Candidate countries. Reference year: 2005/2006  Already existing studies: BlueAGE (Blue Energy for a Green Europe) 2001, TNSHP (2004, “Small Hydropower (SHP) situation in Accession countries” Information sources of the study  ESHA data base, EuroStat, International Journal on Hydropower & Dams (2006), World Energy Council (2004), IEA (2004), EREC (2004), ECOFYS (2006), EBRD (2005) ect.

10. Outline questionnaire (69 questions)

11. General overview of SHP sector of the new Member States (EU10) and Candidate Countries (CC5)

12. Small hydropower specific energy (economically feasible potential) in GWh/year/km 2 ( annual energy divided by the area of a country) 1 st

13. Small hydropower potential (gross theoretical, technically and economically feasible potential) in GWh/year 2 nd 1 st

14. Number of SHP plants and installed capacity

15. SHP plants age Old plants Young plants

16. SHP contribution to gross electricity generation Slovenia & Macedonia

17. Share of large and small hydro, and other renewable energy sources in the total renewable electricity generation Other renewables

18. SHP buy-back rates and electricity prices for household consumers Average

19. Barriers and burdens for further SHP deployment

20. Administrative and regulatory barriers 1)high number of authorities involved (no “one–stop shop” for SHP developers in all countries); 2) lack of co-ordination between different authorities; 3) long lead-times to obtain permits or licenses; 4) spatial planning; 5) low awareness of benefits of RES at local and regional authorities.

21. The length of validation of power generation licenses: 5 years (Estonia), 10 years (Latvia, Macedonia), 20-30 (the Czech Republic, Bosnia and Herzegovina), 35 (Bulgaria) and 49 years (Turkey) The whole process to get licenses takes from 3-6 months in Poland and Estonia (without the time required to carry out EIA) to 1-2 years in the remaining countries.

22. Market barriers (out of 12 listed barriers on the 5 point scale: 1=no barrier….5=very high barrier ) Most significant: a)Lack of experience among decision makers - 3.6 (not a problem in Turkey -2); b)Lack of experience / trust among banks or investors -3.4 (Lithuania -2); c)Lack of funding or financing - 3.2 (Croatia -1, Lithuania -2); d) Administrative barriers -3.3 (Estonia and Latvia - 2); e) Low buy-back rates -3.2 (Estonia and Croatia -1).

23. Less significant: a)Social acceptance and/or public awareness - 2.8 (the Czech Republic, Poland and Slovenia - 4); b)Market perception of the costs of electricity - 2.6 (Bosnia and Herzegovina, Macedonia - 4), c)Lack of experience in the renewable/SHP electricity industry - 2.4 (Macedonia - 5); d) Remoteness of electricity from areas of high electricity demand -2.1 (Bosnia and Herzegovina -4).

24. Resistances to SHP development (1=no impact, 5=severe impact) Environmental barriers Fishery Visual impact

25. EU Water Framework Directive (WFD) and SHP  No fears: Hungary and Turkey  No information : Bulgaria, the Czech Republic, Romania, Bosnia and Herzegovina, Macedonia and Turkey  List or rivers exempt from damming, reduction of SHP production: Estonia, Latvia, Lithuania

26.  Majority of respondents: SHP development and the WFD requirements can be reconciled.  WFD should be considered as an opportunity for the sector; the chance to show how SHP developments can be integrated into the ecosystems of the rivers with a minimum of environmental impact.  SHP operators agree to augment environmental flow providing the resulting losses in electricity production do not exceed 5 %.  Only a few respondents think that large hydro, i.e large reservoirs would undermine the achievements of the WFD objectives.

27. Social and public acceptance  Politicians (e.g. Parliament): Support SHP development Less active in Croatia, Latvia and Montenegro  General public: positive in almost all countries Reserved (Croatia, Latvia, Slovenia)  Officials in charge for environment protection: Big opposition in Lithuania Neutral in Estonia, Latvia and Croatia Positive in Poland, Bosnia and Herzegovina, Macedonia, and Montenegro

28.  Officials in charge of promoting RES: Good or very good support  NGOs: Neutral (except Bulgaria, Latvia) Positive (Croatia, Montenegro)

29. Only a fragmental overview on small hydropower policy and market development has been presented in 15 surveyed countries. The next step will be to combine this information with one obtained from the old Member States (EU15) in order to depict a global picture on SHP developments all over Europe CONCLUSIONS

30. Thank you for attention ! Granada, Spain 15 – 17 October 2007