Category: Issue 11.3

An in-depth look at Viliam Mysicka of Kinstellar covering his career path, education, and top projects as a lawyer as well as a few insights about him as a manager at work and as a person outside the office.

Career:

• Kinstellar; Partner; 2018-present
• Kinstellar; Counsel; 2015-2017
• Kinstellar; Managing Associate; 2012-2015
• Kinstellar; Senior Associate; 2011-2012
• Kinstellar; Associate; 2009-2011
• Kinstellar; Junior Associate; 2008-2009
• Linklaters; Junior Associate; 2007-2008
• Procter & Gamble – Central Europe South; Legal Counsel; 2006-2007

Education:

• Harvard Law School Executive Education; Accelerated Leadership Program, Law; 2023
• BPP Law School; Solicitor (England & Wales), English Law; 2011
• Comenius University, Faculty of Law; Master of Law (Mgr.); 2005

Favorites:

• Out-of-office activity: Running, rock climbing. Spending time with my kids. 
• Quote: “If someone asks you to walk a mile with them, do more. Go two miles.” – from the Bible
• Book: The Alchemist by Paulo Coelho
• Movie: The Shawshank Redemption and John Wick.

Top 5 Projects:

• Advising AIP Asset Management, a Seoul-based asset manager, and London real estate investment manager The Valesco Group on the EUR 125 million acquisition of the Twin City Tower project in Bratislava.
• Advising Dan Slovakia – AGRAR on the acquisition of several small farms in Slovakia within a distressed sale organized by UniCredit and Danish Export Bank.
• Advising Stada Arzneimittel, an international pharmaceutical company, on the acquisition of Walmark, a leading manufacturer of consumer health products in Central Europe, from Mid Europa Partners.
• Advising Sygic, a Slovak leading developer of car and truck mobile GPS navigation technology, on its strategic cooperation with the Czech company Eurowag and their mutual M&A process.
• Advising Veolia Energia Slovensko on the acquisition of PPC Investments (part of Avant Energy), which owns and operates a combined cycle natural gas-fired power plant near the Slovak capital, Bratislava.

CEELM: What would you say was the most challenging project you ever worked on and why?

Mysicka: From the last years, I would mention the advice provided on the proposed acquisition of US Steel in Kosice and later also in relation to the sale process, or the recent work for Veolia on a significant M&A project in Slovakia, but there are, of course, many more. The areas that may typically be challenging for lawyers are the cross-implementation of other transactional workstreams into a share purchase agreement, such as the correct implementation of acquisition financing, insurance, and the like. 

CEELM: And what was your main takeaway from it?

Mysicka: The market and legal practices keep changing – you have to be ready to cope with new standards and developments. Quick adaptability is probably even more significant now, with new technologies evolving faster and faster each day.

CEELM: What is one thing clients likely don’t know about you?

Mysicka: I am primarily an M&A lawyer, but most clients usually do not know that I am heavily involved in the restructuring of companies as well. In fact, I’m very active in the area of restructuring & insolvency, and not just as a lawyer – I’m also a member of the Association of Bankruptcy Trustees of the Slovak Republic, and I serve as the chairman of the Slovak desk of the Turnaround Management Association, the only international non-profit association dedicated to corporate renewal and turnaround management. The Slovak branch was established in 2023 with the aim to improve the awareness level of the management of companies facing difficulties or insolvency and thus enable local businesses to be inspired to act in these situations.

CEELM: Name one mentor who played a big role in your career and how they impacted you.

Mysicka: I actively seek advice and cooperation with mentors. Professionally, Patrik Bolf – as the Managing Partner of the Linklaters and later Kinstellar office in Bratislava – taught me all the basics in M&A, but I also respect him as a role model when it comes to leadership and interpersonal relationships.

CEELM: Name one mentee you are particularly proud of.

Mysicka: That is definitely Lukas A. Mrazik, my colleague from the Bratislava office who was promoted to Managing Associate last year and who also serves as the firm-wide co-head of the TMT sector, together with me. Lukas is a true star in the technology space, having advised a number of domestic and international companies, from startups to the largest players in this area. I am very proud that I hired him and have supported him on his career path ever since.

CEELM: What is the one piece of advice you’d give yourself fresh out of law school?

Mysicka: Law is a lifelong journey – be patient. I would also emphasize getting experience and internships during law school (with law firms or associations like Nexteria, Socrates/Erasmus, or ELSA) – these are the best ways to get in touch with the legal world and ensure a smooth career start.

This article was originally published in Issue 11.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Bosnia and Herzegovina (BH) has embarked on a transformative journey in its energy sector as both Republika Srpska (RS) and the Federation of Bosnia and Herzegovina (FBH) initiated comprehensive amendments of the energy legislative framework in an effort to reshape the country’s energy sector landscape and align the legislation with Energy Community regulations, EU acquis, and international standards and best practices.

RS has led the way by adopting a set of new energy laws, including the RS Law on Electricity in 2021, the RS Law on Renewable Energy Sources in 2022, and comprehensive amendments to the RS Law on Energy, paving the way for a new era of the energy sector.

The FBH followed in late 2023 by adopting a set of new energy sector laws aimed at ensuring alignment with Energy Community regulations, addressing the need for clearer regulation of energy activities, and redefining the renewable energy sector: the FBH Law on Electricity, the Law on Energy and Regulation of Energy Activities, and the FBH Law on Use of Renewable Energy Sources and Efficient Cogeneration.

The recently adopted energy sector regulations in both FBH and RS have dual aims: tackling crucial aspects of energy sector regulation to ensure adequate strategic planning and stability of the energy system while also fostering fast and sustainable growth of the energy industry, with a focus on renewable energy sources. Ultimately, these regulations aim to help meet the 2030 EU targets for greenhouse gas emissions, the share of renewable energy in gross consumption, and energy efficiency. We explore the key novelties introduced and provide an overview of the most recent developments in the adoption and implementation of secondary legislation and their anticipated effects.

Strategic Planning of Energy Sector Development

The new regulatory framework in RS and FBH defines the requirements and procedures for the adoption of long-term energy strategies, action plans, and energy and climate plans, which are expected to enhance energy security, attract foreign investment, and facilitate regional energy cooperation. The new regulatory framework determines the obligation for alignment and adoption of detailed plans for the production of electricity from renewable sources, which is expected to substantially contribute to the strategic and planned development of renewable energy production facilities, optimize the incentive mechanisms, and establish a clear strategic framework which is ultimately expected to attract substantial new investments in the renewable energy sector.

In February 2024, RS adopted the Program for Use of Renewable Energy Sources which defines the overall goals of RS for participation of energy from renewable sources until 2030, sectoral goals by year, total contributions expected from individual technologies, types and methods of incentives, and other matters important to achieving the goals established by the Energy and Climate Plan of RS and BH. Detailed plans for FBH are expected in 2024.

New Incentive Mechanisms for Renewable Energy Sources

The new regulatory framework for renewable energy sources in RS and FBH aims to enhance the renewable energy sector by introducing new incentive mechanisms such as FIT for small power plants (up to 250 kilowatts) and FIP auctions for large production facilities. After a period of delay, RS has recently taken significant steps toward implementing the new incentive mechanisms by adopting the Program for Use of Renewable Sources and the Rulebook on Auctions in January and February of 2024. Although several bylaws required for the implementation of the first FIT auctions in RS are still outstanding, their adoption is expected in the coming months, which should enable the organization of the first FIT auctions in RS in late 2024 or early 2025. So far, bylaws for the implementation of new incentive mechanisms are not adopted in FBH but are expected in the second half of 2024, which implies that the first FIT auctions in FBH could be expected in early 2025.

Unbundling of Electricity Utility Companies and Market Liberalization

New energy legislation sets clear obligations and deadlines for unbundling of electricity utility companies, which is expected to contribute to liberalization and competition in the energy market. New energy legislation envisages the establishment of a day-ahead energy market which, when implemented, will reshape the energy market paradigm, contribute to better flexibility and integration of renewable energy sources, further encourage the participation of independent electricity producers, and stimulate investments in energy infrastructure.

Conclusion

Although reforms of the energy sector in BH are still a work in progress, a new era is on the horizon and the country is on a clear path to unlocking the full potential of its energy sector.

By Nihad Sijercic, Senior Partner, and Ferid Kapidzic, Senior Associate, Independent Attorneys at Law in cooperation with Karanovic & Partners

This article was originally published in Issue 11.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Renewable energy is a key priority within the EU due to its goal of achieving climate neutrality by 2050. This has intensified following the energy crisis experienced in 2021 and 2022. Against the backdrop of the post-crisis environment, and driven by the REPowerEU initiative, Croatia is adopting crucial legislation – the Rules on the organization of the wholesale electricity markets (Rules).

The EU has long been advocating for the more active participation of consumers, and the electricity market design reform put forward in March 2023 took a step further and recognized the importance of power purchase agreements (PPAs) for the further development of the renewables sector. In line with this, the Croatian Energy Market Operator (HROTE) is proposing a regulation that will allow final customers to actively participate in the electricity market.

The Rules in their current form should enable final customers that regulated their status with the HROTE as active customers to purchase electricity to meet their needs in the electricity market. The Electricity Market Act focuses on the active customer selling on the market the excess electricity generated within its premises and does not mention the purchase of electricity. However, the Rules make it clear that active customers can also purchase their electricity on the market and allow them to engage in physical PPAs directly with the producers. This represents a shift from the traditional system, where final customers were restricted to purchasing electricity solely from regulated suppliers. 

Active customers must take several other steps before a concluded PPA can be implemented. First, a final customer must conclude an agreement with the HROTE to formalize their status as an active customer and pay a market organization fee. Additionally, an active customer must conclude a balancing agreement due to its status as a market participant and an agreement with the system operator for the delivery of electricity. Moreover, given the variable nature of renewable energy, active customers may still need to secure agreements with suppliers or other producers to cover any deficits not met by their primary PPA.

Therefore, the concept of an active customer may not be suitable for all final customers, especially households or small enterprises. The Rules have introduced additional market participants that may be better suited for final customers with smaller consumption capacities – citizen energy communities and renewable energy communities. Both of these communities comprise natural persons, local authorities, municipalities, and small enterprises, enabling them to collectively participate in the market to meet their energy needs (or to sell electricity that was produced but not consumed within the community). Although these communities have several distinctions, the key difference is their regulation as market participants.

Both communities can play various roles on the market, ranging from producer to supplier to aggregator, but the way the communities will obtain their permit is different. While a citizen energy community requires only one permit for the services it provides, a renewable energy community must obtain as many permits as the number of market roles it intends to undertake. The permit required for the citizen energy community is among the factors currently delaying the adoption of the Rules since the HROTE and the Croatian Energy Regulatory Agency (HERA) – the agency responsible for issuing these permits – are still in the process of determining the procedure for their issuance. Both communities are envisioned as legal entities that can take almost any form, but due to the lack of best practices and given the novelty of the regulation, the optimal type of entity for these communities is yet to be determined. Consequently, organizing these communities initially may entail lengthy and complex negotiations regarding their structure and internal organization.

The approval of the Rules is still pending, and it is yet to be seen how they will reshape the energy sector in Croatia. Despite the inevitable hurdles that come with implementing novel legislation, this initiative is a step in the right direction. With time and experience, these challenges will likely diminish, while the increased participation of the consumers on the market will pave the way for the development of the renewable energy sector in Croatia while also supporting the achievement of wider EU goals.

By Tena Tomek, Partner, and Ivona Zagajski, Senior Associate, Marohnic, Tomek & Gjoic

This article was originally published in Issue 11.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

The Romanian Energy Regulator (ANRE) recently published a proposal for a new procedure regarding the passporting in Romania of energy or natural gas supply and trading licenses issued in other EU countries, based on ANRE’s confirmatory decisions (New Passporting Procedure).

The New Passporting Procedure is set to replace the existing rules, dating from 2015, currently providing a very swift screening process for EU operators who intend to passport their energy or gas supply and trading licenses in Romania (EU Licensees). In a bid to strengthen monitoring powers, the ANRE proposes notable changes to the existing license passporting regime. These involve enhanced scrutiny both from a financial and regulatory compliance perspective while also enhancing ANRE’s monitoring and sanctioning powers over EU Licensees.

The New Passporting Procedure was published for consultations in February 2024. Interested parties could contribute observations until March 22, 2024.

Enhanced Scrutiny of Prior Regulatory Compliance and Trading Behavior

Departing from the current relaxed rules, the New Passporting Procedure renders the passporting conditional on the good financial standing of the applicants, explicitly excluding those undergoing bankruptcy proceedings.

Crucially, applicants must have clean regulatory compliance records, namely (i) no cancellation of licenses by energy regulators or other competent authorities in any EU country in the last five years, and (ii) no cancellation by the ANRE of passport for participation to Romanian energy or gas markets, for reasons attributable to the applicant, in the last five years.

Moreover, applicants’ controlling shareholders and directors or BoD members must also have clean operational records. Namely, they must not have held similar positions in licensed entities having defaulted on their payment obligations arising from trades on the energy or gas markets in Romania.

Financial Guarantees and Local Treasury Accounts in Domestic Currency

To strengthen market security and ensure compliance with the tax payment obligations arising from trades made on the Romanian markets, EU Licensees must (i) open separate accounts in domestic currency with the state’s treasury in Romania, and (ii) (in the case of non-residents) provide a EUR 1 million financial guarantee (in the form of a bank letter of guarantee or cash collateral) to guarantee the payment of windfall taxes on trades due under the temporary mechanism enacted in Romania in 2022 to combat the sharp increase in energy prices.

EU Licensees who have already passported their licenses under the existing rules must also ensure compliance with the above rules within three months from the entry into force of the New Passporting Procedure. If not, they risk the suspension or even cancellation of their rights to participate in the Romanian energy markets.

Additional Requirements for EU Licensees Holding Digital Licenses

The ANRE also recognizes digital licenses issued by other EU countries. However, where applicants submit such digital licenses or where the passported activities may be performed in their EU country of origin without a license, they will be subject to additional requirements. In these situations, applicants must submit to the ANRE formal letters from the competent authorities to (i) confirm the regulatory framework of the country of origin, and (ii) provide a history of the trading operations performed by the applicant on the relevant markets of the country of origin and of the sanctions applied to them, if any.

Reduced Initial Validity for Passported Licenses

Departing from the existing regime, where the passporting of EU licenses is automatically granted for the duration of the license issued in their EU country of origin, under the new passporting rules, the ANRE’s confirmatory decisions will have an initial validity period of one year, which may be renewed for successive periods of up to five years (not exceeding the validity of the passported license).

Detailed Dedicated Provisions for Suspension and Withdrawal of Passports

Unlike the existing rules, which contain a casual mention of the ANRE’s rights to suspend or cancel the rights of EU Licensees to trade on the Romanian markets, the New Passporting Procedure contains detailed provisions regarding the ANRE’s prerogatives to suspend or cancel the respective rights. Among these are an indication of various cases where the suspension or cancellation operates automatically. These include repeated defaults on payment obligations regarding mandatory purchase quotas of green certificates or unilateral termination by the EU Licensees of their energy supply agreements with end customers.

By Monica Cojocaru, Partner, Vlad Cordea, Managing Attorney at Law, and Cristina Olariu, Attorney at Law, Schoenherr Romania

This article was originally published in Issue 11.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

On December 29, 2023, Law no.429/2023 on amendments of the Law on natural gas no.108/2018 entered into force. The amendment contains some provisions regarding the creation and maintenance of natural gas stocks. Thus, the government will undertake the necessary measures to ensure the use, until November 1 of each year, of the natural gas storage capacity in the storage facilities of other countries that are part of the Energy Community and of the member states of the European Union.

The storage capacity must correspond to a level of at least 15% of the five-year average annual consumption of natural gas by final consumers in the Republic of Moldova that are connected to the natural gas networks of licensed system operators.

The government is to identify a natural gas supplier or trader who has experience in conducting transactions and storing natural gas, and impose the obligation to store a certain amount of natural gas in underground storage facilities in other countries that are part of the Energy Community or from member states of the European Union. The amount of natural gas to be stored will be established by the government.

The holder of the storage obligation will purchase the natural gas through a competitive procurement procedure or in compliance with the rules used on the natural gas markets. At the decision of the government, the storage obligation can be replaced in whole or in part by means of an effort-sharing mechanism with one or more countries that are part of the Energy Community or with EU member states that have natural gas storage facilities.

The project also regulates the certification procedure of the storage facility operator. The document also contains provisions regarding the monitoring of compliance with the certification requirements of the National Agency for Energy Regulation. The obligation of transmission system operators to ensure permanent two-way physical capacity at all cross-border interconnections with neighboring countries will be established to ensure the security of the natural gas supply.

Also, the new amendments impose on all suppliers or potential suppliers seeking to obtain a gas supply license the obligation to hold MDL 1 million (approximately EUR 50,000) free cash on their accounts. At the same time, the conditions under which final consumers can continue to benefit from the regulated prices for the supply of natural gas will be established if they decide to change their supplier. The draft law developed by the Ministry of Energy contains rules for harmonizing the national legislation in the field with the legislation of the European Union, resulting from the commitments assumed within the Association Agreement and the Energy Community Treaty.

Finally, the amendments try to exclude the legislative vacuum regarding the express basis for license withdrawal in case of non-compliance by license holders in the natural gas sector with the legal requirements regarding the separation, independence, and/or certification of the transmission system operator. In 2016, by Law no. 108/2016 regarding natural gas, Directive 2009/73/EC of the European Parliament and of the Council of July 13, 2009, regarding common rules for the internal market in the natural gas sector was transposed into national legislation through the implementation of the Energy Package III, which represents a sine qua non in the European Union integration process, in addition to the 2010 Energy Community Accession Treaty and the Treaty signed for the European Union Accession Agreement. One of the basic commitments undertaken by the Republic of Moldova in relation to the European Union in the energy sector is to ensure the separation and independence of natural gas transport system operators from vertically integrated enterprises that carry out the activity of production, distribution, storage, trading, or supply of natural gas, as well as toward any company that controls the companies carrying out these activities. The determination of whether all the requirements regarding the separation and independence of the transmission system operator are met is made through the certification procedure by the national regulatory authority and is subject to approval at the EU level by the Secretariat of the Energy Community. This exercise is a basic precondition for the creation and operation of a competitive energy market and ensuring the non-discriminatory access of all system users to the natural gas transport infrastructure.

By Sorin Dolea, Managing Partner, Dolea & Co

This article was originally published in Issue 11.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

In mid-2023, the Bulgarian Parliament finally formed a steady Government. The Parliament also introduced predictability in the regulatory environment for renewables along with several legislative developments.

Energy Market at a Glance

The Bulgarian energy market is undergoing significant changes to decrease its CO2 emission by 55% until 2030 (compared to 1990) and reach net-zero by 2050.

At the end of 2023, the Parliament adopted the country’s road map for decarbonization. The main milestones envisage (i) the phase-out of 1,600 megawatts of its thermal power plants until 2026; (ii) new nuclear and RES capacities of 14,000 megawatts, offshore wind capacities of 2,500 megawatts, and 2,000 megawatts storage capacities until 2040; and (iii) the refurbishment of the Chaira Pumped Storage Hydropower Plant with a power production capacity of 864 megawatts and pumping capacity of 788 megawatts, which is a key asset in the energy balancing market.

Renewable Energy

The Bulgarian renewable energy market continues its quick development and attracts major investors in utility-scale projects. Currently, over 2,800 megawatts of solar and over 700 megawatts of wind are operational.

For now, Bulgarian legislation does not provide for a tender or other competitive procedures for securing grid connections for new RES projects. Grid connection contracts are provided on a first-come-first-served basis to greenfield projects. By the end of 2023, the Bulgarian Transmission System Operator confirmed that it had received applications for the construction of RES projects with a total installed capacity of over 45,000 megawatts. Nevertheless, in October 2023, the Parliament introduced amendments to the legislation, requiring developers to pay a deposit in the amount of EUR 25,000 per MW installed capacity to secure their grid connection, thus urging the developers to implement their projects and terminate speculative applications.

The upward trend continues in 2024 as the largest photovoltaic project in Bulgaria (the 229-megawatt St. George power plant) has received an energy generation license. As of 2025, it will produce 13% of the country’s installed solar capacity. And a new major strategic investor entered the Bulgarian market in 2024, acquiring three photovoltaic projects with a total installed capacity of over 80 MW.

It is highly expected that the Government will start the long-awaited grant scheme in accordance with the National Recovery and Resilience Plan for supporting new RES capacity and storage of electricity. The scheme shall enhance RES production with storage capacity and envisages investment support only for the storage facilities component of projects.

Additionally, at the end of 2023, the EU Commission approved the Bulgarian Just Transition Budget in the amount of EUR 1.2 billion supporting the coal power plant’s phase-out and enhancement of renewable energy in the regions affected by the CO2 emissions reduction.

Offshore wind appeared on the Parliament members’ agenda in 2024, as an offshore renewable energy draft act was adopted at first voting. The act shall regulate how Bulgaria’s offshore wind potential will be exploited and how major investors will be courted. It is expected that in the upcoming months, the draft will pass into law.

Nuclear Power

At the end of 2023 the Parliament adopted a decision assigning the Minister of Energy to initiate a procedure for the construction of two new AP 1,000 Westinghouse nuclear reactors at the sittings number 7 and 8 of the single operating nuclear power plant Kozloduy NPP. As per the draft timeline, the two new nuclear reactors shall be put into operation at the end of 2034.

At the beginning of 2024, the special purpose company Kozloduy NPP – New Builds EAD initiated the procedure for proposal of interest in the construction and announced that five companies declared their interest in the construction. The proposals are currently being reviewed by the Ministry of Energy.

Furthermore, in January 2024, the Nuclear Regulatory Agency issued a license to Kozloduy NPP AD for the storage of Westinghouse nuclear fuel. However, the Nuclear Regulatory Agency is expected to license the use of the Westinghouse nuclear fuel itself for Unit 5 of Kozloduy NPP only in spring 2024.

Natural Gas

At the end of 2023, Bulgaria and Serbia put into operation the Interconnector Bulgaria – Serbia with a capacity of 1.8 billion cubic meters per annum. It aims to enhance the gas supplies to Bulgaria from Western Europe.

In addition, in early 2024, the Bulgarian gas transmission operator Bulgartransgaz signed an interconnection agreement with BOTAS A.S which allows for 4.2 billion cubic meters of natural gas per annum to enter Bulgaria from Turkiye.

Leading upstream companies such as OMV Petrom remain committed to Bulgaria and continue the oil and natural gas exploration in the Black Sea.

By Kostadin Sirleshtov, Managing Partner, Borislava Piperkova, Counsel, and Dian Boev, Associate, CMS Bulgaria

This article was originally published in Issue 11.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

As the year 2024 unfolds, Greece stands as a shining beacon of opportunity in the energy sector, particularly in the realm of renewable energy. The Greek energy market has undergone a profound transformation in recent years, embracing a diverse and sustainable energy mix that positions the country as an attractive investment destination.

The Greek energy landscape has pivoted, with a strong emphasis on harnessing renewable sources to meet the nation’s energy needs. Fueled by a steadfast commitment to environmental sustainability, Greece is leading the charge in a renewable energy revolution, with solar energy, wind power (soon to include offshore wind farms), hydropower, and biomass at the forefront of this transformative journey.

In 2022, Greece surpassed expectations with 43% of its energy derived from renewable sources, surpassing the European average of 41%, as per data released by Eurostat. A historic milestone was achieved in October 2022, when Greece powered the entire country solely with renewable energy for an unprecedented five hours. Building on this momentum, the Institute of Energy for South East Europe announced a further 7% increase in total renewable energy participation in 2023 compared to 2022. In July 2023, the nation recorded an impressive 87 consecutive hours without utilizing lignite, showcasing the prowess of renewable energy sources, which accounted for up to 84% of total energy consumption during this period.

The trajectory of the green energy sector is poised for even greater acceleration in the next five years, with total investments in Greece for this decade expected to surpass an impressive EUR 20 billion. To facilitate this monumental shift, Greece has implemented a supportive regulatory framework aimed at encouraging renewable energy investments. Key legislative initiatives include the updated Law for Fast Track Licensing of Strategic Investments (Law 4608/2019), which expedited the implementation of major renewable energy source (RES) parks throughout the country.

Further, Climate Law (Law 4936/2022) has set ambitious targets for the de-carbonization of the Greek economy, aiming to reduce greenhouse gas emissions by 55% by 2030 and 80% by 2040, ultimately achieving climate neutrality by 2050. Complementing these efforts, Law 4964/2022 was passed to simplify procedures and accelerate the development of RES projects in response to the urgent need to address climate change.

Also, aligned with the National Energy and Climate Plan (NECP), which envisions a significant increase in installed RES capacity by 2030, Greece has increased its target for RES to 28 gigawatts, up from the previous aim of 19 gigawatts. The ongoing de-lignification of certain areas, coupled with the country’s geographical location and favorable weather conditions (over 250 days of sunshine per year, high wind potential, etc.), has spurred the development of numerous large-scale RES projects across Greece.

Additionally, long-term Power Purchase Agreements (PPAs) add an attractive dimension to investing in renewable energy in Greece. The NECP aims for a 55% drop in CO2 emissions and 45% of total energy consumption from RES by 2030, with long-term PPAs being instrumental in achieving these ambitious goals.

Over the past decade, major photovoltaic parks have been established in various regions, including the North East (combining four parks of 1.2 gigawatts), central Greece (700 megawatts), western Macedonia (205 megawatts), northern Greece (362 megawatts), and a cluster of 13 parks (197 megawatts). The EuboeaIsland hosts one of Greece’s largest wind farm complexes boasting a total capacity of 154 megawatts, while a hybrid cluster project on Crete integrates hydroelectric and wind power to generate 227 megawatts.

The funding for these energy projects primarily comes from a combination of local investors and major international players, many of which have shares listed on stock exchanges worldwide. The National Recovery and Resilience Facility Greece 2.0 (RRF), adopted in 2021, has played a pivotal role in financing investments in the green energy sector. Offering long-term loans with remarkably low interest rates, covering up to 50% of the investment cost, the RRF has ushered in a new era of sustainable financing.

All projects eligible for RRF funding fall into this transformative pillar. Already, the RRF has provided funding for PPAs with a capacity of approximately 200 megawatts whereas, when combined with investors’ and banks’ contributions, the total investment may reach approximately EUR 12.7 billion.

In conclusion, Greece’s renewable energy renaissance is not just a testament to its commitment to environmental sustainability but also a lucrative investment horizon for those looking to participate in the global shift toward cleaner and greener energy sources. With a supportive regulatory framework, ambitious targets, and substantial financial backing, Greece stands as a prime destination for investors seeking both environmental impact and financial returns in the burgeoning renewable energy sector.

By Dimitris Emvalomenos, Lawyer, Mediator, Deputy Managing Partner, Bahas, Gramatidis & Partners

This article was originally published in Issue 11.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

As always in Slovakia, political changes are accompanied by personnel changes. Thus, having a new government and new deputies to the parliament has initiated the change of the key personnel, including the head of the Regulatory Office for Network Industries (URSO) and of the Slovak electricity transmission system, Plc. (SEPS).

New people also bring new ideas, and the URSO put up on its website a comprehensive package of legislation for public consultation. It seems that the general direction of the electricity and gas markets regulations, quality standards, and further legal acts are under review. As a result of this suggested package, operators of biogas installations will have direct access to the gas network.

Further, the Ministry of Economy put forward a law proposal for the extension of the competencies of the URSO. It is to take over competencies from the Trade Inspection regarding consumer protection and vulnerable customers.

Regarding the electricity market, the URSO aims to change the balancing groups, the responsibility for deviations, the entry of new participants like active customers, the energy community, independent and integrated aggregators, the provision of flexibility, the operation of electricity storage facilities and other related areas, rules on cross border exchange and the procedures and arrangements for the storage of data, and the form and content of the data to be stored.

With respect to the gas market, the new drafts include new details of contractual relations in the framework of access to the transported network and the transport of gas, the conditions for the protection of vulnerable gas customers, the structure of information on the quantity of gas secured for the supply of gas to final gas customers, the contractual details of gas supply contracts and the provision of metered and evaluated consumption data at the customer’s point of use, depending on the type of metering at the customer’s point of use and the metering structure, as well as the storage of consumption data by network operators.

As to energy resilience, the Ministry of Economy has extended the eligible period for electricity and gas price compensations. In addition to 2023, it will also be possible to apply for compensation for the period up to June 30, 2024. Applications can be submitted until June 15, 2024. The compensation amounts to 80% of the difference between the price actually paid for gas and electricity and the set maximum limits of EUR 99 per megawatt-hour (gas) and EUR 199 per megawatt-hour (electricity), respectively. This is the net price of the commodity excluding distribution and network charges.

The maximum amount of the subsidy per month for an economic unit is EUR 200,000. At the same time, the maximum cumulative amount of aid for all subsidies granted under Section 2.1 of the Temporary Crisis Framework per undertaking has been increased to EUR 2.25 million. If the amount requested exceeds EUR 100,000, the applicant must be entered in the Register of Public Sector Partners.

As part of the implementation of the Renewable Energy Directive (RED III), on September 4, 2023, a memorandum of cooperation was signed between the Ministry of Economy of the Slovak Republic and the Nuclear Energy Company of Slovakia, a. s. (JESS). The aim of the memorandum is to cooperate on the development of methods for the development of wind energy and the identification and preparation of pilot areas suitable for its development (so-called “go-to” areas), in which JESS plays a decisive role.

The role of JESS shall be the development of methodologies for wind energy development that, inter alia, define the precise procedure and conditions for the selection of suitable sites for wind energy development and ensure the preparation and establishment of pilot areas for wind energy development, including the selection of sites for the construction of two wind farms (each with a capacity of up to 50 turbines).

The Ministry of Environment presented a draft for a comprehensive novelization of the EIA Act. As the ministry explains, “the aim of the draft law is to eliminate the problems of the administrative process arising from practice, to adapt the processes to the new legislation in the field of construction and spatial planning, to shorten the procedures and ensure greater professionalism of the state administration, as well as to adjust the process in the light of the warnings of the European Commission. Last but not least, the draft law implements principles arising from international conventions and European regulations.” Among other things, the draft contains simplified rules for wind turbines and different energy sources.

By Bernhard Hager, Managing Partner, Eversheds Sutherland

This article was originally published in Issue 11.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Poland stands out as an EU member state with extremely high reliance on power generated from coal and lignite. In 2023, 63% of its electricity was produced from these resources. Still, this marks the lowest-ever share of coal and lignite-fired electricity in Poland’s annual production thanks to the rapid growth of wind and solar plants.

The new governmental plans target 60% of electricity to come from renewable energy sources by 2030. A significant portion of this electricity will be delivered by 5.9 gigawatts of offshore wind power projects that are currently gearing to commence construction. Onshore wind project prospects are still limited by the rule introduced by the 2016 Wind Farm Investment Act. According to it, no residential building can be located closer to a wind turbine than a distance equal to 10 times the height of the wind turbine, including the rotor – thus earning the act the name of the “10H Act.” The 10H Act left only 2% of Poland’s territory available for development of wind farms. An amendment to the 10H Act passed in the summer of 2023 kept the 10H rule in principle but granted local authorities the right to agree to wind farms built not less than 700 meters from residential buildings under certain conditions. The changes should allow for an additional 4 gigawatts of new onshore wind energy capacity. However, the relatively long period when the 10H rule was fully in force has effectively frozen the development of onshore wind farms. The new government announced the change of the 700-meter distance to 500 meters as its priority, which was strongly advocated by the wind power community. The recent plan includes replacing the 10H Act with an entirely new law regulating the distance of windmills from residential buildings, allowing for an additional 4 gigawatts of onshore wind farms.

The investor with rights to the project site needs to sign an interconnection agreement with the electricity system operator – a crucial step that has become a major bottleneck for renewable projects. Alarmingly, in 2023, over 90% of applications from investors seeking an interconnection agreement for new renewable energy projects were rejected by system operators. System operators need to find ways of bolstering their spending on grid improvement, but the challenge lies in securing additional funding without relying on regulated electricity distribution tariffs. Should a significant increase in distribution tariffs prove impossible, alternative avenues should be explored.

The most frequently used option to overcome a refusal to connect to the grid is the investor offering the system operator to cover the costs of grid improvement. This solution has been chosen by some investors in the most attractive locations, but the investor is fully dependent on the decision of the system operator. Under the Energy Law, system operators have no legal obligation to engage in discussions about such an agreement if they once refused to connect the project to the grid.

Changes to the Polish Energy Law in 2023 allowed for the installation of capacities higher than the interconnection capacity. Cable pooling provisions were also added to the Energy Law that allow now for two or more renewable electricity generation projects to share the same interconnection facility and its capacity. Only the first out of two or more projects sharing the interconnection capacity can obtain and keep state aid. This solution is particularly attractive for operating wind projects where additional PV generation capacities can be built. These can be controlled by the same or a different investor.

The last strategy for new projects lies in repowering. The oldest operating wind farms were commissioned over 12-14 years ago at sites with the best wind conditions available. Since state aid schemes are now limited to 15 years, investors have already received returns on their initial investments. They can now consider replacing old turbines with newer, more efficient models of much higher capacity. This prospect, combined with the legal provision allowing for higher capacity than the interconnection capacity through cable pooling, presents a lucrative business opportunity. Currently, the main obstacle to repowering is the necessity to renew all permits for projects, which is usually a time-consuming process. Fortunately, the government is expected to change the law shortly to align with the European Wind Charter and the RED III Directive, under which permitting procedures for renewable projects must be shortened to 12 months. Considering these developments, the oldest wind farms in the market could soon become attractive assets to buy.

By Igor Muszynski, Partner, Wolf Theiss

This article was originally published in Issue 11.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

On February 14, 2024, the Hungarian Energy and Public Utility Regulatory Authority (MEKH) approved the Network Development Plan 2023 submitted as a result of the coordinated work of the Hungarian TSO (transmission system operator – MAVIR Zrt.) and distribution network operators.

It is Directive 2019/944/EU of the European Parliament and of the Council (Directive) which requires that the development of a distribution system be based on a transparent network development plan that the distribution system operator must publish at least every two years and submit to the regulatory authority. The network development plan must provide transparency on the medium- and long-term flexibility services needed, and set out the planned investments for the next five to ten years, with particular emphasis on the main distribution infrastructure which is required in order to connect new generation capacity and new loads, including recharging points for electric vehicles. The network development plan must also include the use of demand response, energy efficiency, energy storage facilities, or other resources that the distribution system operator is to use as an alternative to system expansion.

Based on Directive and Act LXXXI of 2007 on electrical energy, the Network Development Plan is an annual network development plan for the national electricity system for networks of 132 kilovolts and above. It includes baseline data for network development, electricity system characteristics, development policies, and strategies with a specific focus on the elements of the transmission network to be built or upgraded in the next 15 years, the developments already approved, and the investments to be made in the distribution network over the next 10 years.

Before approving the Network Development Plan, the MEKH holds a public consultation at the end of the year, where system users are also able to comment on the document. This year, during the preparation of the Network Development Plan, the methodology of the investment generation studies was changed, and in line with the publication procedure for network connection capacities, new principles were applied to the timing of the finalization.

The recently adopted methodology of the Network Development Plan and the application of the corresponding practices meet the requirements of the directive.

Among other interesting planned investments, the Network Development Plan 2023 focuses on the reinforcement of international interconnections of the domestic electricity network with Slovakia, Serbia, and Romania. These projects are to be completed by 2030, and the document also points out that, due to the increased demand for large consumers and renewable power plants compared to previous years, network license holders are required to make significant investments to ensure that demand can be met on the network and to maintain security of supply levels. Note that the new Network Development Plan also contributes to the smoothness of future electricity trade with Ukraine and Austria as well.

The main investments linked to the transmission network are also of crucial importance in the Network Development Plan in the sense that the electricity generated from renewable energy sources (e.g., solar power plants) at a given point in the day exceeds the electricity used at that moment. It follows that the resulting surplus needs to be exported, which requires an adequate transmission network.

Further development of the transmission system is also required and has been listed in the Network Development Plan for future renewable energy and nuclear projects that can increase Hungary’s energy independence and reduce CO2 emissions.

The continuous capacity increases in the electricity system are not only in the interest of generators but also of large consumers. In Hungary, a great number of projects are in the pipeline that will face high energy demand in the future. Examples include the cathode factory in Acs, as well as battery factories in Debrecen and God. The batteries and components produced there are intended to provide sufficient storage capacity in the future for solar power plants and electric vehicles.

Overall, the Network Development Plan is not only a document that shows and locates developments but also gives a picture of the role of renewable energy production and the investments mentioned above in support of the goals toward energy independence, and helps investors to invest in larger projects in Hungary.

By Orsolya Kovacs, Executive Partner, and Daniel Nyulasi, Junior Associate, Nagy es Trocsanyi

This article was originally published in Issue 11.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.