Four new exploration blocks in the Dinarides have been offered in the third licensing round for the exploration and production of hydrocarbons in Croatia. This recent licensing round of the Croatian Hydrocarbon Agency focuses on the central and southern regions. The deadline for the submission of bids is 10 September 2019 and the licences are tentatively scheduled to be announced in December 2019.
The second of three planned onshore licencing rounds for the exploration and production of hydrocarbons in Croatia is currently underway. Seven exploration blocks in southwest and central Croatia and central Slavonia have been offered in this bidding round. After the tender procedure has been completed and the most successful bidder has been selected, the Croatian government will issue a decision on awarding an onshore exploration and exploitation licence for each of the seven blocks.
The government recently adopted a number of amendments to the Act on Renewable Energy Sources and High-Efficiency Cogeneration. According to the government, the amendments aim to harmonise national law with the EU legal framework, introduce an integration process for eligible producers of renewable electricity and high-efficiency cogeneration on the electricity market and reduce the obligation on suppliers to purchase renewables at a regulated price that is higher than the market price.
The Krk liquefied natural gas terminal project changed course when the government decided to construct a floating terminal instead of the initially planned land-based terminal. The reason for this decision was to make the terminal operationally faster and reduce costs, since it was clear that the deadlines for making the land-based terminal operation were unattainable. Since the deadlines for building the terminal are short, LNG Croatia is simultaneously undertaking several activities in order to meet them.
As part of its goals, the Act on Amendments to the Gas Market Act sets out a new gas market model. Under the new gas model, on receiving a proposal from the ministry and following approval from the Gas Regulatory Agency, the government will set the maximum price for gas, according to which the wholesale supplier must sell gas to retail suppliers for households. It remains to be seen how this new gas market model will affect consumers, the economy and the overall gas market.
The signatories to the Energy Agreement recently decided the location of the first of three new offshore wind farms that will be put up for tender. Unlike previous projects in which the government was responsible for developing the offshore site and preparing the grid connection, the new wind farm will be procured through a procedure in which the winning tender will be responsible for developing and preparing the grid connection.
The government and all parties in Parliament recently entered into an agreement which entails a major commitment to developing green energy by 2030. The agreement contains a broad range of green initiatives and tax reliefs on electricity which aim to encourage Danish consumers to swap fossil fuels for green electricity. Similarly, the planned modernisation of the heating sector aims to provide both companies and consumers with greener and cheaper heating.
The Danish transmission systems for electricity and natural gas are owned, operated and developed by Energinet, an independent public enterprise owned by the state. The government recently made a new political agreement with a broad number of political parties concerning Energinet's future economic regulation, which means that it will become subject to a revenue framework. With the new agreement, Denmark will follow the same regulatory tendencies seen in other northern and western European countries.
A new executive order, which provides a framework for how grid companies can cover operational costs and return of investment, will be one of the most important tools for such companies going forward. The executive order stipulates the rules governing the prices that electrical grid companies can charge consumers to cover the costs of running the grid and has introduced a five-year regulation period.
Due to a recent agreement between the government and the Danish People's Party, solar and wind power projects will compete for state subsidies for the first time. Under the new subsidy model, the solar power, land windmill or near-shore windmill projects which deliver the highest amount of megawatts for the lowest price will receive subsidies until the budget is allocated. Subsidies will be awarded as a fixed additional charge to the electricity cost.
In April and May 2019 solar and wind renewable energy systems producers will compete for the first time for operating state aid and a place in the Greek energy market in a joint competitive tender procedure organised by the Energy Regulatory Authority. Despite certain doubts, the market signs indicate that a significant number of players and capacities plan to participate in the upcoming joint competition.
A draft law on the further unbundling and privatisation of the public natural gas company DEPA was recently submitted to Parliament. The draft law proposes that DEPA be divided into two companies: DEPA Infrastructure and DEPA Trade. The main opposition to the draft law centres on the fact that the state will retain a 14% stake in DEPA Trade, which some have argued will allow the state to retain too much control and potentially veto strategic policy issues.
The second regular wind and photovoltaic (PV) state aid auction held in December 2018 resulted in the award of all of the capacities for two of the three categories of renewable energy system project, a significant (up to 26%) reduction in the reference prices compared with the initial reference prices and the cancellation of the auction for large PV projects by the Regulatory Energy Authority due to insufficient competition.
The new renewable energy sources state aid scheme was introduced in Greece in 2016 by way of Law 4414/2016. On 18 October 2018 the Regulatory Energy Agency launched the second regular competitive procedures for determining the reference prices of state aid for wind and solar energy producers in Greece, which offers a total tender capacity of 423 megawatts. The first regular competition procedures were conducted on 2 July 2018.
Pursuant to the commitments undertaken by the Greek state after the first memorandum of understanding between the Hellenic Republic, the member states of the European Union, the Monetary Fund and the European Central Bank was signed, the privatisation of energy companies in Greece has significantly progressed. The Hellenic Republic Asset Development Fund – the legal entity entrusted with implementing the privatisation programme of the Hellenic Republic – has undertaken a number of relevant projects.
Government Regulation 1/2019 requires exporters in the natural resources sector to repatriate their forex-denominated export earnings to Indonesia. Thus, forex-denominated export proceeds in the mining, plantation, forestry and fisheries sectors must be deposited in the Indonesian financial system. Overall, the regulation is clearly intended to bolster Indonesia's balance of payments situation, which has worsened considerably over the past year.
Following the recent issuance of the Ministry of Energy and Mineral Resources decree which imposed price caps on coal supplied for power generation in the public interest, the coal industry was expected to undertake significant lobbying in order to reduce or limit the decree's impact. This anticipated lobbying appears to have commenced already, as the decree was amended on March 12 2018 after having been on the statute books for just four days.
The government recently imposed caps on the prices payable for coal to be used for power generation in the public interest. The maximum price payable under the new Ministry of Energy and Mineral Resources decree is 30% less than the Indonesian benchmark price for equivalent coal sold for export in February 2018, which means that the country's coal producers will suffer a substantial cut to their profitability by selling coal for domestic power generation.
The Ministry of Energy and Mineral Resources recently announced the revocation of 32 regulations in furtherance of the government's efforts to reduce the regulatory burden on the energy and mineral resources sector. However, it was unclear which of these regulations had been revoked before the announcement and which would be revoked in the future. This situation has now been clarified with the issuance of four new revoking regulations, which form part of what some have called a 'big-bang' reform.
The Ministry of Energy and Mineral Resources recently announced the revocation of 32 regulations in the energy and mineral resources sector, three of which are of particular importance to independent power producers in the new and renewable power sub-sector. However, a subsequent examination revealed that most if not all of the regulations have yet to be revoked, and the lack of clarity in this regard has called the ministry's commitment to transparency into question.
The deep seabed mining (DSM) industry is growing rapidly, expanding beyond national jurisdiction and onto the high seas. The legal framework governing the DSM industry is unique and continues to evolve. While the opportunities in this territory – much of it literally uncharted – are hard to overstate, with a new and evolving legal regime comes special risks. While securing project finance for DSM projects is already challenging for technical and operational reasons, sovereign risk is another major factor.