Use of a Feed-In Premium for Photovoltaic Electricity

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The Government of North Macedonia announced an open call for awarding a contract for the use of a feed-in premium for electricity produced in photovoltaic power plants (“PVPPs”) on state land in North Macedonia, with total installed capacity of 35 MW. Two locations are envisaged for construction of the PVPPs – Azambegovo (Sveti Nikole) and Manastirec (Makedonski Brod). Bidders can submit a bid for three PVPPs, at most, for the location of Azambegovo, as well as one PVPP on the location of Manastirec. The installed capacity of the PPVPs on the mentioned locations can be 10 MW, 5 MW, 2 MW and 1 MW depending on the parcel. The term of the contract for the use of a feed-in premium will be 15 years.

The state has already negotiated with the Distribution System Operator regarding the price for the connections to the network. Also, it will facilitate all administrative procedures for investors, including procedures for the conversion and urbanization of the construction land. Investors will have to prepare a basic project and an environmental report, secure a bank guarantee for the quality performance of the contract of EUR 75,000 for 1 MW, as well as procure the necessary equipment.

The procedure will be public and transparent, conducted through an electronic auction in accordance with the Law on Public Procurement. The main criteria for selection will be the requested feed-in premium from bidders. A feed-in premium is a form of financial support that is granted to a preferential generator of electricity from renewable sources on top of the market price for their electricity production. A construction license will be granted to those who offer a lower fixed feed-in premium, i.e. to those who request a lower subsidy from the state. The maximum required feed-in premium can be EUR 15 per MWh of electricity produced, while the minimum EUR 0.01 per MWh. The call will be open until 10 am on 21 August 2019, so that all interested investors will have enough time to prepare and submit their bids.

This project enables a practical way to use natural resources and generate solar electricity, thus enabling private investors to realize serious and big projects in the developing energy sector of North Macedonia. The Deputy Prime Minister in charge of Economic Affairs announced that new calls, like this one, will follow – such as the construction of photovoltaic power plants with an installed power of 27 MW on private land.

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.

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