Template for country interventions (5 min) South East Europe Regional Consultation Meeting Bucharest, Romania 6 – 7 October 2016 Session II: Opportunities and Challenges in RE Deployment in the Region Template for country interventions (5 min)

Structure: SLIDE 1: Status of RE development in a country ? SLIDE 2: Encountered challenges in deploying renewables ? SLIDE 3: Identified opportunities from the uptake of renewables ? SLIDE 4: Expected future developments in the frameworks for renewables ? SLIDE 5: Potential areas of required support ?

SLIDE 1: Status of RE development in a country RE target - 21% until 2020 Share of RE in gross final energy consumption – 17,2 % in 2014 according to the State Statistics Office Current RE installed capacity –117,027 MW from 165 preferential producers, 603,2MW from 10 non-preferential (large hydro power plants) Support scheme for renewables - Feed-in Tariff Long-term energy development strategy - Strategy for utilization of RES until 2020

SLIDE 2: Encountered challenges in deploying renewables Legal challenges – some of the barriers related to administrative procedures linked to authorization, urban planning and property issues are removed. Shortened deadlines, unnecessary procedural steps have been abolished, some gaps in coordination between authorities have been overcome. A one-stop shop for all permit applications does not exist. Full compliance with Article 13 of Directive 2009/28/EC remains to be achieved. Technical challenges – Grid Code amendments in 2014 = simplified application form for producers connection and possibility for application for grid connection before obtaining construction permit = this results in shortening the procedure. Economic challenges – Companies facing difficulties in obtaining loans from banks, due to banks lacking of information for RE projects. Political challenges – Government`s Decision for total installed capacity; frequent elections in the country that delay the process of adoption of necessary legislation.

SLIDE 3: Identified opportunities from the uptake of renewables Since 2007, the Government of Macedonia adopted Program for partial subsidizing of purchased and installed solar thermal collectors in households and introduced subsidies of 30% from the total investment up to 300 EUR per household that installs solar water heaters. This measure was repeated in 2009, 2011, 2012, 2013, 2014 and 2015. With the budget of € 800.000 a total of 3.611 households were subsidized. In order to support the development of the solar collector market, the Government adopted a decision lowering the VAT rate for solar collector systems from 18% to 5%. New job openings. The support for RE is reflected in the end-user price and the results indicate the burden on end-consumers is expected to remain comparatively low. Guidelines for investors on the procedures for the construction of power plants that use different technologies of RES are publicly available.

SLIDE 4: Expected future developments in the frameworks for renewables New RE target - In 2017 in line with Energy Community Treaty and the commitments taken to reach the 28% target in 2020. New/revised support scheme – Planned for 2017. New/revised National Renewable Energy Action Plan - NREAP is adopted in November 2015, should be revised in 2017 in line with the commitments taken to reach the 28% target in 2020. New/revised long-term energy strategy – New Strategy on RES until 2030 to be adopted by the end of 2016. Others – new Energy Law transposing Third Energy Package and fully implementation of the Directive 2009/28/EC.

SLIDE 5: Potential areas for required support A competitive procedure for granting support to renewable energy producers based on technology neutral auctions has to be implemented in line with the requirements of Guidelines on State Aid for Environmental Protection and Energy 2014 - 2020. Moreover, the capacity cap per type of renewable energy technology has to be removed to ensure cost-effective achievement of the 2020 renewable energy targets. Introducing cooperation mechanisms among the Contracting Parties or with EU Member States.