ACQUIRING THE ENERGY PERMIT

ACQUIRING THE ENERGY PERMIT

 

In recent years, the energy sector, particularly facilities utilizing renewable energy sources, has come into the spotlight due to climate changes occurring worldwide over the past decade, as well as the profitability of investments and the shift towards the “green agenda.” Naturally, for construction projects, including energy facilities, especially larger ones, appropriate permits must be obtained.

Thus, for energy facilities that produce energy from renewables with capacities of 10MW and above, it is necessary to obtain a construction permit. However, according to Article 135 of the Law on Planning and Construction, for the construction of energy facilities, and before issuing a construction permit, the investor must obtain an energy permit in accordance with a special law. Such special law is the Energy Law and the appropriate by-laws adopted based on it. Below, we will provide a general overview of the procedure for issuing an Energy Permit.

ENERGY PERMIT

The Energy Permit is regulated by the Energy Law and represents an act of the competent authority obtained for the construction of energy facilities and powerplants. Considering that it is a necessary prerequisite for the issuance of a Construction Permit, it is submitted along with the application for the Construction Permit. However, this does not mean that the Energy Permit is issued only in cases provided for by the Law on Planning and Construction.

On the contrary, Article 30 of the Energy Law stipulates in which cases, i.e., for which facilities, the Energy Permit is issued, regardless of whether a Construction Permit is required for that facility. This means that for some facilities, a Construction Permit is not necessary (for example, the aforementioned energy facilities with capacities below 10 MW), but an Energy Permit is still required by the Energy Law. Accordingly, an Energy Permit is required for the construction of:

1. Facilities for the production of electricity with a capacity of 1 MW and above;
2. Facilities for the production of electricity with a capacity of up to 1 MW that use water as the primary energy source;
3. Facilities for combined production of electrical and thermal energy in thermal power plants with an electrical capacity of 1 MW and above and a total thermal capacity of 1 MW and above;
4. Direct power lines;
5. Facilities for the production of petroleum derivatives;
6. Oil pipelines and product pipelines, facilities for the storage of oil, petroleum derivatives, biofuels, compressed natural gas, and liquefied natural gas with a total tank capacity greater than 10 m³;
7. Facilities for the transport of natural gas, facilities for the distribution of natural gas, and facilities for the storage of natural gas;
8. Direct gas pipelines;
9. Facilities for the production of thermal energy with a capacity of 1 MW and above;
10. Facilities for the production of biofuels with a capacity of over 10 tons per year.

An exception where the mentioned permit is not required is if the energy facilities are constructed in accordance with the Law on Public-Private Partnerships and Concessions.

PROCEDURE AND REQUIREMENTS

The Energy Permit is issued by the Ministry of Mining and Energy (except for the facilities mentioned in items 9) and 10) above, where the permit is issued by the local self-government unit) within 30 days from the date of submission of a proper application and is valid for three years, with the possibility of extending its validity for a maximum of one more year. The energy permit is non-transferable, which means it is issued to the applicant and cannot be disposed of further.

To issue the permit in question, certain conditions must be met, and documentation proving that these conditions are satisfied must be submitted. The procedure is entirely electronic and digitized, so the application and documentation are submitted in accordance with the law governing electronic administration, i.e. in electronic form.

Regarding the conditions for issuing an energy permit, they are prescribed by Article 33 of the Energy Law and relate to:

1. Reliable and safe operation of the energy system;
2. Conditions for determining the location and use of land;
3. Possibility of connecting the facility to the system;
4. Energy efficiency;
5. Conditions for the use of primary energy sources;
6. Occupational safety and the safety of people and property;
7. Environmental protection;
8. Economic and financial capability of the applicant to carry out the construction of the energy facility;
9. Contribution of the capacity for electricity production to achieving the overall share of energy from renewable sources in gross final energy consumption in accordance with the National Action Plan;
10. Contribution of the capacity for electricity production to emission reduction;
11. Contribution of the capacity for the transport or storage of natural gas to increasing supply security.

These are general conditions regardless of the facility type. Therefore, the Rulebook on Energy Permit provides more information depending on the type of facilities. The Rulebook divides facilities into two groups, prescribing conditions for one group in Article 2 and in Article 3 for the other.

Article 2 recognizes three types of facilities - facilities for the production of electricity with a capacity of 1 MW and above, facilities for the production of electricity with a capacity of up to 1 MW that use water as the primary energy source, and facilities for the combined production of electrical and thermal energy in thermal power plants with an electrical capacity of 1 MW and above and a total thermal capacity of 1 MW and above.

Article 3 prescribes the conditions for all other energy facilities (i.e. there is no specific listing, but all those that do not fall into the three categories mentioned in Article 2 of the Rulebook are considered other energy facilities).

The conditions for both groups of facilities are more or less the same, with the difference concerning the deposit (paid into the budget of the Republic of Serbia or the budget of the local self-government unit) and the fact that for the other group (other energy facilities), there is no condition related to renewable energy sources. Regarding the conditions that are the same, we shall mention some.

Thus, regarding the reliable and safe operation of the energy system, it is necessary that the technical and technological solutions for the design, construction, and use of the energy facility ensure the application of technical regulations that establish the conditions and measures for the safety of facilities, plants, and equipment, which is prepared by the responsible designer/architect; regarding environmental protection - it is necessary to consider the possible harmful impacts of the construction of the facility on the land, water, air, and other natural values; regarding the economic and financial capability of the applicant to carry out the construction of the energy facility - a deposit of 0.5% of the investment’s value in dinars, excluding VAT, must be paid, or funds must have been previously invested in the construction of the energy facility in at least the same amount (i.e. the investment in construction must correspond to the aforementioned amount of 0.5%), etc.

To prove the existence of the aforementioned conditions, the applicant must submit certain documentation, which is prepared in collaboration with the responsible designer/architect, lawyer, and other relevant persons if necessary (an extract from the competent registry for a legal entity-applicant, or if the applicant is an individual, a photocopy of the ID card, certificate of citizenship or passport for a foreigner, proof of deposit payment or a certified document proving investment in the construction of the facility at least in the amount of the deposit, information about the location or location conditions, etc.).

If the documentation is in order and the conditions are met, the Ministry issues the permit in the form of an electronic document.

CONCLUDING REMARKS

The Energy Permit is an extremely important document for the construction of an energy facility, and the procedure may seem extensive and complicated. In reality, the process is relatively quick, digitized, and, with adequate expert assistance, does not have to be overly burdensome for the investor.

Considering the evergrowing interest for this particular are in the future, it is important to remain adequately prepared and informed for every segment of energy project development.

 

Author:

Aleksandar Čermelj

Senior Associate

 

*The information in this document does not represent legal advice and is provided for general informational purposes only.

**Partner, Senior Associate, Associate and/or Junior Associate refers to Independent Attorney at Law in cooperation with IVVK Lawyers in Cooperation with LexQuire.