/6th November 2019, RENEWABLE MARKET WATCHTM/ During the last ten years (2008 – 2018) most of the market growth has been driven by incentives and the largest share of cumulative installed solar photovoltaic capacity in some of Central East Europe and South-East Europe (CEE & SEE) countries was realized by large scale ground-mounted solar power plants. Cumulative installed solar PV capacity in the CEE & SEE region scored 23 per cent increase in 2018 compared to 2017, according to the 'Central East and South-East Europe Solar Photovoltaic (PV) Power Market Outlook 2019÷2028'. The results of this study provide concrete inputs for the decision-making process for investors in solar photovoltaic power in the CEE & SEE region. Furthermore, it presents investment frameworks for renewables, including the latest solar photovoltaic developments, and provides assessment and an index of the RES support scheme's quality per countries. The retroactive taxes imposed to photovoltaic investors in the Czech Republic, Bulgaria, Romania, Slovakia, and Greece, and many developers turned attention to rooftop residential (up to 30 KW), and commercial (from 100 KW to 1 MW) photovoltaic installations. With the increasing costs of electricity and fossil fuels and unpredictability of these costs, the rooftop market segment together with corporate renewable PPA market and utility-scale projects under auction (tender) procedures shall play an increasing role in the solar photovoltaic market development in the CEE & SEE countries by 2030 and beyond.
Targets and Incentives for Renewable Electricity Generation in Central East Europe and South-East Europe (CEE & SEE) Countries
Solar photovoltaic energy and renewable energy sources must be increasingly used as a part of the EU’s strategy to improve energy supplies' security and reduce the impact of energy production and consumption. The EU’s revised renewable energy directive (RED II) includes a binding EU-wide 32% renewables target for 2030. EU countries must transpose the renewables directive into national legislation by 30 June 2021.
In order to boost the adoption of solar power and to increase its competitiveness in all EU Member States (incl. CEE & SEE countries) by 2030, it is necessary to create an attractive framework. In the first place, it entails financial support or tax deductions, which encourages the growth of the industry, even where the cost of photovoltaics is above grid parity. Another crucial aspect is the reduction of administrative hurdles and grid barriers. However, most Member States do not place importance on adequate support for its development.
Every Member State chooses its support scheme itself. The possibilities are wide, ranging from investment support (capital grants, tax exemptions or reductions in the purchase of goods) to operating support (price subsidies, feed-in premiums, green certificates, grants, rebates, tender schemes and tax exemptions or reduction in the production of electricity).
All of the CEE & SEE countries have renewable energy capacity targets by 2020, assisting their aims to obtain a share of its power generation from renewable energy sources, including solar photovoltaic energy. Some of the countries have already renewable energy targets by 2030. In EU member countries, these targets are set by the European Commission (EC). In non-EU member countries, RES targets are set in energy strategies or renewable energy action plans. To achieve these goals, the countries' transmission infrastructure might require considerable improvements to allocate additional capacity increments.
The transition from Coal to Clean Electricity
The current levels of dependence on fossil fuels, the need of reducing the carbon emissions associated with energy use and the prospects of developing a new and extremely innovative technology sector in the CEE & SEE countries, make solar photovoltaic energy increasingly attractive. Coal-fired power plants across the CEE & SEE countries are responsible for the largest amounts of key pollutants released into the air. Serious problems with the CO2 emissions of coal-fired power plants exist in Poland, Ukraine, Czech Republic, Romania, Serbia, Bulgaria, Bosnia and Herzegovina, Kosovo, Turkey, etc. For this reason, CEE & SEE countries are at a crucial moment in deciding on the optimal strategy for achieving a future with reduced carbon emissions and clean, sustainable power sources to drive future economic growth.
Solar electricity costs are becoming more and more competitive. Solar energy will become cost-competitive with newly built coal power plant units by 2030 in several countries from Central East and South-East Europe, predicts the Renewable Market Watch™. A stronger effort towards further development and technological innovation will make the sector more productive and competitive, and accelerate its evolution. As a result, the whole community will benefit from the increasing possibility that solar photovoltaic energy will be able to contribute substantially to the CEE & SEE countries clean electricity generation by 2030.
Replacement of the Old Power Generation Infrastructure
The key elements of the energy infrastructure (e.g., major thermal and hydropower plants) in the CEE & SEE region were built in the 1960s and 1970s. This concentration in age, combined with inadequate maintenance in the 1990s, is now creating serious technical and policy challenges. As a consequence, there is an urgent need for widespread rehabilitation and replacement of this infrastructure. At the same time, electricity consumption is expected to increase in most of the CEE & SEE countries, as can be observed in the NREAPs. This leads to an inevitable discussion on future changes energy mixes in the region, and solar photovoltaic energy is one of the best alternatives, according to the Renewable Market Watch™.
As part of the post-2020 reform of the EU Emissions Trading System (ETS) for its fourth trading period, a new fund will be established to support the modernisation of energy systems in the Central and Eastern Europe (CEE) countries. The Modernisation Fund represents an instrument for enabling investments in small-scale energy projects, improvements in energy efficiency, and the modernisation of energy systems in lower-income member states with a GDP per capita at market prices less than 60% of the EU average. The fund will be financed through the auction of up to 2% of the total EU ETS allowances (EUAs) for the period 2021-2030 (approx. 310 million with the current size of the EU ETS cap), amounting to a total of between €6.2 billion and €9.3 billion.
Future Market Trends
After many years of unfettered growth and innovation, the solar photovoltaic industry in Europe is now going through a challenging period, shifting market dynamics, changing political support and end of the feed-in tariff support for solar PV installations with above 100 KW power capacity in many countries. The CEE & SEE region already possesses solid foundations to attract large-scale investments in solar photovoltaic power. Still, it more needs to be done to ensure a successful energy transition, such as strengthening enabling policies as well as regulatory and institutional conditions, and providing strong support schemes for renewables.
For this reason, CEE & SEE countries present one very good alternative for investors from already matured and developed solar photovoltaic markets in Western Europe, and for investors from Asia, which are looking aggressively to get stakes from new photovoltaic markets.
The solar photovoltaic power market in the CEE & SEE region has excellent growth prospects in 2019 – 2028 period, reveals the study 'Central East and South-East Europe Solar Photovoltaic (PV) Power Market Outlook 2019÷2028'. However, strong political willpower is still needed to build investor’s confidence, establish a solid ground to support future growth, remove bottlenecks and maintain a reliable but dynamic framework for the remuneration of solar photovoltaic energy. But even under the most pessimistic scenario, solar photovoltaic energy will continue to increase its share of the energy mix in the CEE & SEE countries, becoming a reliable source of clean, safe and infinitely renewable energy for all.
The more information about the solar photovoltaic energy market in Central East Europe and South-East Europe (CEE & SEE) countries, including full contact details of renewable energy project owners, developers and stakeholders, you may read here: ’Central East and South-East Europe Solar Photovoltaic (PV) Power Market Outlook 2019÷2028’. Furthermore, you may receive up to 4 quarterly updates.
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