1. Investment in Renewable Energy in
the ECIS
Christoph S. Henrich
Sustainable Energy Consultant
Environment and Energy Practice
UNDP Bratislava Regional Centre
Europe & CIS Region
09 December 2013 – Zagreb, Croatia
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2. Topics of the presentation
 Renewable Energy Policy and Legislation
 Renewable Energy Potential and Deployment
 Barriers to Renewable Energy Investment
 Good Countries for Investment in Renewable Energies
 Conclusions
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3. Adopted RE legislation and policy in the countries covered
Region
Country
Kazakhstan
Kyrgyzstan
Central Asia
Tajikistan
Turkmenistan
Uzbekistan
Albania
Serbia
Western
Croatia
Balkans
Bosnia & Herzegovina
and Turkey
Montenegro
Macedonia
Turkey
Belarus
Moldova
CIS
Russian Federation
Ukraine
Armenia
Caucasus
Azerbaijan
Georgia
Estonia
Latvia
Lithuania
Romania
Bulgaria
European Union
Poland
Czech Republic
Slovakia
Hungary
Slovenia
Feed-in Tariff
Feed-in Premium
Quota Obligation
Tender and Auction Priority Grid Access Tax Rebates and Grants
Low Interest Loans and
Loan Guarantees
Project
Specific
Feed-in tariff
Policy
implemented
Policy not
implemented
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4. 100
0
Ukraine
Latvia
Small Hydro
Azerbaijan
Estonia
Armenia
Czech Republic
FBiH
Slovakia
RS
Bulgaria
Macedonia
Turkey
Serbia
Slovenia
Croatia
Lithuania
Montenegro
200
Hungary
Belarus
Feed-in tariffs for specific RE technology in € / MW-h
150
500
Wind
400
100
50
0
200
Solar
300
200
100
0
250
150
Biomass
100
50
0
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5. Technical RE potential in GW installed electricity capacity
60.00
Biomass
5,000.00
Solar
4,000.00
40.00
3,000.00
2,000.00
20.00
1,000.00
-
800.00
-
Wind
40.00
600.00
30.00
400.00
20.00
200.00
10.00
-
Source: Several National Sources and UNDP calculations
-
Small Hydro Power

6. Some favorable RE legislations adopted
 Among the highest feed in tariffs and promotion for 20 years
Belarus
 Complimentary Grid access
 Several tax exempts for RE investment
 Quota Regulation with Tradable RE Certificates in place
Romania
 Legally binding RE target
 Grants ,Soft Loans, Loan Guarantees and Tax Rebates available
 Regional highest feed-in tariffs for solar power in FBiH
Bosnia &
Herzegovina
 Republic Srpska has an optional feed-in premium implemented
 Republic Srpska offers priority access to the grid, FBiH offers priority access to the
grid for installations smaller than 150 KW
 Very high feed-in tariffs
Ukraine
 Legally binding RE target
 Several tax exempts for RE investment and existence of many funding possibilities
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7. Deployed Solar and Wind Energy Capacity in MW
Poland, Turkey, Romania, Bulgaria and Czech Republic perform the best in Renewable
Energy deployment
2500
2500
2000
2000
1500
1000
1500
Solar PV 2012
Wind Capacity 2012
Wind Capacity 2005
1000
Solar PV 2005
500
500
0
0
Czech
Republic
Bulgaria
Slovakia
Ukraine
Slovenia
Source: Several National Sources and UNDP calculations
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8. Deployed Biomass Capacity in MW
 RE promotion scheme is
necessary to make investment
in RE attractive
1000
800
600
Biomass 2012
400
Biomass 2005
200
0
Poland
Czech Hungary Slovakia Lithuania Romania
Republic
Source: Several National Sources and UNDP calculations
 RE deployment is not tied to a
specific selection of a
promotion instrument
 Favorable legislation has to be
designed to satisfy investor
requirements
RE legilsation may be a necessary condition for RE deployment but does not
automatically explain for differences in RES utilization
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9. Barriers to RE Investment
 Market Distortions and Access to the Market
Subsidies for fossil fuels and monopolistic energy markets
 Grid Access and Inadequate Infrastructure
Prioritized vs. Non-discriminatory grid access
 Concessions, Permits and Licenses
Complicated, bureaucratic and intransparent license and permit
processes can increase transaction costs, delay returns and
discourage investment.
 Capital Scarcity
Some countries show low rankings in World Bank indicators
“Getting Credit” and “Risk Premium on Lending”
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10. Barriers to RE Investment
 Political Instability and Country Risk
Regional average of “Country Risk” indicator by OECD is 5.5
 Governance and Transparency
Transparency in governmental institutions, as license granting or
tariff setting, is indispensable to attract private investor’s
engagement
 Cost of Information and limited experience with RE
High information costs due to cost and time intensive pre-feasibility
and feasibility studies of a plant’s wind speed or water flow,
represent a major barrier for RE investment
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11. Good countries for investment in RE power generation
 Among the highest (and for SHP the highest) feed-in tariffs in the region
Ukraine
 Significant improvement in construction permit processes (increase of 145 ranks)
 Large investment in the recent years strengthened national RE market
 Via Directive 96/92/EC legally binding RE target
 Favorable feed-in tariffs in the region
Croatia
 HEP ODS bears the grid connection costs
 Showed significant deployment of wind power plants in the last years
 EU member legally binding RE target
 Favorable feed-in tariff lastly amended in 2013
Serbia
 Priority grid access for RE power plants
 Brief Investor Guides for RE technologies available
 Via Directive 96/92/EC legally binding RE target
 Favorable feed-in tariff legislation adopted
Turkey
 Priority grid access for RE power plants
 Small scale power plants are exempt of power generation license
 With specific targets Turkish Government shows commitment to RE expansion
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12. Challenging countries for investment in RE power generation
 No RE promotion scheme adopted
Turkmenistan
 Not listed in the “Ease of Doing Business” indicator
 Vertical integrated state owned energy market
 No RE target
 No practical adoption of feed-in tariff legislation
Kyrgyzstan
 High “Country Risk” and “Ease of Doing Business” indicator
 Vertical integrated state owned energy market
 No legally binding RE target
 Project specific feed-in tariff
Tajikistan
 High “Risk premium on lending” and high “Dealing with Construction Permits” indicators
 Despite complementary grid access, vertical integrated state owned energy market
 No RE target
 Project specific feed-in tariff
Uzbekistan
 High “Country Risk” and “Dealing with Construction Permits” indicators
 Despite priority access, vertical integrated state owned energy market
 No RE target
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13. Conclusions
 Except of Turkey and Ukraine, only EU countries showed
significant growth in RE deployment
- Adopted but not applied RE promotion
- Subsidizing of traditional energy sources and electricity prices
- Ongoing market liberalization
- Complicated and cost intensive licensing
- Unfamiliarity with RE investment
 Positive Outlook
- Tremendous technical RE potential in the region
- Some countries already started tackling market barriers
- Growing demand for energy security in the region
- Increasing competitiveness of RES
- Some of the promotion schemes were recently adopted
- Decreasing cost of information
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15. Thank you
for your attention!
Christoph S. Henrich
Sustainable Energy Consultant
Environment and Energy Practice
Europe & CIS Region
UNDP Bratislava Regional Centre
Email: christoph.henrich@undp.org
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