Incentives and benefits

What subsidies are applicable to the generation and sale of renewable energy?

This information has not been made public.

Last modified 9 Feb 2021

Under the Commonwealth’s RET, the generation and sale of renewable energy will be subsidised by an annual amount of $2.8 billion up to the year 2030. Subsidies comprise attractive feed-in tariffs as well as other incentive mechanisms.

Last modified 16 Dec 2020

In 2015, the SEA announced a scheme to gradually increase electricity tariffs to meet the cost of power generation of 29 fils/kWh. The new tariffs became effective starting March 2016 for residential, commercial, and industrial consumers. Bahraini nationals holding an EWA single account are exempt from the tariff increases and continue to pay electricity tariffs of 3 fils/kWh. [1]

[1] No. (5).

Last modified 16 Dec 2020

General: In Belgium, the most important subsidy mechanism is a green certificate scheme. This includes a guaranteed minimum price mechanism, where electricity network operators are required to purchase the green certificates at a guaranteed minimum price, subject to generation type and location of the asset. It should be observed that there are four parallel schemes of RSE support in Belgium. This results from the division of competences when it comes to renewable energy.

Belgium's political system is a federal system comprising a federal government level, as well as three regions (Flanders, Wallonia and the Brussels-Capital Region, with mostly economical competences) and three communities (the Flemish Community, the Wallonia-Brussels Community (formerly the French-speaking community) and the German-speaking community, with cultural and language linked competencies such as education). The competence to regulate renewable energy belongs to the regions (i.e. Flanders, Wallonia and Brussels Capital), rather than the federal government. In relation to renewable energy, the federal government is (only) competent to regulate the major infrastructures for energy storage, the transmission of electricity through grids with a voltage higher than 70 kV, the transmission network tariffs, the commodity tariffs for off-takers and the production of energy in Belgium's territorial waters and its exclusive economic zone in the North Sea.

Federal level: On the federal level, a green certificates scheme applies in order to support offshore wind energy installations. In respect of this sector, it should be noted that the Federal Parliament adopted a new Act establishing a tender procedure for new concessions for offshore wind farms, whose operators will then be eligible for support. To date, the key modalities for this tender have not yet been elaborated in Royal and Ministerial Decrees.

In addition, companies can reduce their taxable profits with an increased investment deduction for energy saving and energy recovery investments.

Flemish Region: A green certificates scheme applies in order to support renewable energy installations in the Flemish Region. Regularly – including recently for projects receiving permits from 2020 onwards, the subsidy levels and periods are adjusted downwards for new projects.

The green certificates scheme does not apply to all renewable energy technologies, however. Certain types of renewable energy will (depending on their capacity) not be eligible for the green certificates scheme but will receive subsidies depending on the type and capacity of the renewable energy installation. These subsidies are distributed by means of "calls for proposals". This is, for example, the case for photovoltaic installations with a capacity between 40 kW and 2 MW, and for wind turbines on land with a capacity between 10 kW and 300 kW.

Brussels Capital Region: A green certificates scheme applies in order to support renewable energy installations in the Brussels Capital Region. The Coalition Agreement for the new Brussels Region government states that by 2024 (i.e. the end of the current legislature), the green certificates scheme and the percentage of certificates allocated will be readjusted, taking into account the reduction of the cost of renewable energy systems. In addition, supplementary subsidies are offered to companies willing to invest in "green" projects, subject to the applicant meeting certain requirements.

Walloon Region: A green certificates scheme applies in order to support renewable energy installations in the Walloon Region. In addition, a wide range of support, including energy bonuses, investment aid for cogeneration plants or processing plants, tax deductions for investments, is offered.

Last modified 25 Feb 2021

None as yet.

Last modified 9 Feb 2021

Brazilian energy matrix is composed mostly by large hydro plants (currently, such source corresponds to more than 60% of the energy mix). In view of that and aiming at increasing the part of the alternative sources in the mix, projects based on small hydro, solar, wind, biomass and qualified cogeneration sources have a subsidy in the form of a discount in the transmission and distribution tariffs. Current legislation provides that projects based on such sources which power injected into the systems is greater than 30,000 kW and less than 300,000 kW are entitled to a discount of at least 50% on such tariffs. Please note that these subsidies are currently under review since many consider that their goal to increase the development and use of renewable sources in the country has already been attained.

Last modified 16 Dec 2020

One of those advantages provided to NCRE projects is the exemption from paying tolls for using the main electrical transmission system. NCRE plants that generate less than 9MW are completely exempt, and NCRE plants that generate more than 9MW but less than 20MW are partially exempt.

Last modified 16 Dec 2020

No subsidies are applicable to the generation and sale of renewable energy. 

Law 1715 of 2014 covers the support schemes for renewable energy projects which include the following tax benefits:

  • income deduction for a period ≤ 15 years on 50% of the investment made;
  • VAT exclusion;
  • exemption from payment of customs tariff duties; and
  • accelerated depreciation of assets.

It also allows the release of surplus energy into the network for all self-generators. 

Finally, the General Regime of the Tax Statute includes the following tax benefits:

  • discount for investments in control, conservation and improvement of the environment;
  • VAT exclusion on imports of environmental control systems, monitoring systems and environmental programs;
  • income exemption from the sale of energy generated from renewable energy projects; and
  • VAT exclusion on the sale of electricity and provision of public energy service.

Last modified 16 Dec 2020

Until 2020, it was possible to use a subsidy from the Renewable Energy Support Programme. This programme focused on energy efficiency, energy development infrastructure and renewable energy sources, promoting introduction of new technologies in the field of energy management and secondary raw materials.

A subsidy programme called Renewable Energy Sources is available from 2022. Through this programme, Czech companies can receive subsidies to build renewable energy sources. Subsidies can be obtained for wind or small hydropower plants, projects related to the use of biomass energy. The aim of the programme is to support the production and distribution of energy from renewable sources. Support will be given to installations with the highest efficiency and without a negative impact on the electricity grid.

Last modified 26 Jul 2021

Not applicable.

Last modified 18 Feb 2021

A new subsidy scheme, the "premium scheme", was recently introduced in Finland. The scheme is based on technology neutral tendering. In the process, the projects based on renewable energy which offer the greatest annual output with lowest premiums are approved into the scheme. The total output volume of the scheme is limited to 1.4 TWh under a tender process, which was executed through an auction process finalized in March 2019. Currently there is no information available on future auction processes in Finland.

Last modified 16 Dec 2020

The main subsidy or financial support for generating and selling electricity from renewable energy sources is by way of the payment of a "market premium" and, in exceptional cases, by way of a fixed feed-in tariff. In cases where an installation operator does not claim any financial support, there is the opportunity to obtain guarantees of origin (Herkunftsnachweise – GoO).

Last modified 16 Dec 2020

The New RES Decree aims to support, for the three-year period 2019-2021, the production of electricity through plants powered by renewable sources.

The sources contemplated by the New RES Decree are: onshore wind, hydroelectric, plants fuelled by landfill and gas residues from purification processes, and photovoltaic (except for plants located in agricultural lands).

On the other hand, the following sources are excluded: offshore wind, biogas plants, geothermic, biomass and bio liquid plants, oceanic and thermodynamic solar plants. These exclusions are justified by the need to provide for different and separate incentive schemes for those sources that still maintain profiles of innovation and low diffusion, while maintaining higher costs.

Even the New RES Decree, although it provides for registers and auctions until 2021, introduces a safeguard principle represented by the indicative overall annual maximum cost for incentives of 5.8 billion Euro. This is the same threshold set by the 2016 Decree, which will continue to apply to plants registered in a useful position in the rankings formed as a result of the relative auction and register procedures.

Solar energy will compete, both for the auctions and the registers, with the wind power plants. The base tariffs are EUR 105.00 for solar and EUR 150.00 for wind (for plants from 1 to 100 kW), EUR 90.00 (for plants from 100 kW to 1 MW) and EUR 70.00 (above 1 MW). The New RES Decree, unlike the 2016 Decree, eliminates direct access to the incentives for small power plants.

Biogas plants can have access to the incentive regime of the Ministerial Decree 23 June 2016 provided that: (i) they have a power up to 300 kW; (ii) they are managed by farmers or by agricultural companies; (iii) the biogas is produced from by-products for at least the 80%; (iv) the thermal energy produced is used for self-consumption. Plants with a power up 100 kW can have a direct access to the incentive regime, whereas plants with a power up to 300 kW shall undergo a competitive procedure and be enrolled in specific registers that will be opened from 10 April 2019 to 9 June 2019.

Last modified 16 Dec 2020

While many subsidies have been the subject of recent potential revision, there are currently still various tax incentives for involvement in renewable energy, including:

  • VAT exemption on specialized equipment for the development and generation of solar and wind energy, including deep cycle batteries which use or store solar power;
  • VAT exemption on inputs or raw materials supplied to solar equipment manufacturers for the manufacture of solar equipment or deep cycle-sealed batteries which exclusively use or store solar power;
  • exemption from tax on interests to be paid on loan from foreign sources for investing in the energy sector - pursuant to Legal Notice 91 of 2015;
  • exemption from tax on payments made to a non-resident for services rendered under a power purchase agreement - pursuant to Legal Notice 165 of 2015; and
  • exemption from payment of stamp duty on instruments executed in respect of loans from foreign sources received by investors in the energy sector.

Last modified 18 Feb 2021

There are no subsidies in Mexico for renewable generation or sale of electricity. As mentioned above, there are some advantages given to Self-Supply projects in the transmission of electricity from renewable sources.

Last modified 16 Dec 2020

No subsidies are applicable.

Last modified 10 Feb 2021

The subsidies applicable to the generation and sale of renewable energy are as follows:

  • financing through public funds and low-interest loans or government loan guarantees;
  • tax incentives intended to promote the domestic production of equipment under a special investment regime, e.g., an industrial free zone;
  • direct subsidies (e.g., discounts) to new and renewable energy equipment users on purchasing such equipment.

Last modified 1 Feb 2021

The SDE+ (Stimulation of Sustainable Energy Production) is an operating feed-in tariff subsidy. This subsidy compensates the difference between the cost price of generation of sustainable energy, and the market price of the electricity. This subsidy has been very popular and is being used to bridge the gap between the cost price of ‘grey electricity’ and ‘green electricity’.

In the summer of 2020, the SDE+ was replaced by the SDE++. This new subsidy system calculates the subsidy allocated on the basis is reduced emissions as opposed to generated kWh electricity.

The Energy Investment Tax reduction (EIA) allows companies to deduct 55% of the investment cost from the fiscal profits. This to support the investment in renewable energy, or broader, energy efficient technologies.

Last modified 16 Dec 2020

No text yet.

Last modified 16 Dec 2020

The RER premium is a subsidy created by Legislative Decree No. 1002 that is given within the framework of public tenders carried out by OSINGERMIN to contract energy from RER generators. 

There is a guaranteed income in energy tenders. It does not include the delivery of (i) energy committed to third parties and (ii) energy that can be purchased in the SEIN itself.

Formula:

Income from Energy Sales + Additional Price Paid to Winning Bidders (“Premium”) = Guaranteed Income.

Last modified 16 Dec 2020

The Department of Minerals and Energy ("DoME") established the Renewable Energy Finance and Subsidy Office, whose mandate includes:

  • the management of renewable energy subsidies; and
  • offering advice to developers and other stakeholders on renewable energy finance and subsidies. This includes information on the size of awards, eligibility, procedural requirements, and opportunities for accessing finance from other sources.

The subsidy is milestone driven, and the milestones are set out in a subsidy agreement to be entered into been the DoME and the recipient of the subsidy (the key milestones being financial close, construction and commissioning etc). The subsidy takes the form of a grant and is "once-off" in that it is a single disbursement linked to a construction milestone, and is provided on the basis that if any subsequent milestones are not met, the DoME may request that the grant be paid back.

We have not been involved in any projects which, to our knowledge, have benefited from the subsidy.

Last modified 16 Dec 2020

As a preliminary remark, please note that the current (electricity production) remuneration scheme does not provide for any feed-in tariff system.

Since 2014, the main strategy in order to support the production and consumption of renewable energy in Spain consists in the public auction of a certain level of installed power with the right to an specific remuneration scheme (régimen retributivo específico, Royal Decree 413/2014). This scheme implies that the relevant facilities will receive the market price plus an additional remuneration which is aimed to guarantee a "reasonable return" on the investment. Royal Decree-Law 17/2019 sets forth this profitability currently at 7,398% for the 2020-2030 regulatory period.

As mentioned above in 6 and 7. Royal Decree-Law 23/2020 has added a new provision related to the remuneration of renewable energy production facilities. According to this provision, it is established that in order to promote predictability and stability in income and financing of new electricity production facilities from renewable energy sources, the Government will develop a new remuneration framework for the generation of electricity from such sources, based on the long-term recognition of a fixed price for energy, through competitive procedures (i.e. public auctions). This regulatory development is in draft form and has not yet been approved.

Additionally, the Administration may grant subsidies for the construction of energy generation infrastructures, at the central, regional and local level, and that certain tax advantages can be obtained for such constructions.

Finally, in addition to pure financial incentives, other policies that promote the development of renewable energies in Spain are the following:

  • priority of access to the grid – renewable energy generators have priority over other operators to access and connect to transmission and distribution networks; and
  • priority of dispatch of electricity generated in the wholesale market – under equal market conditions renewable energy generators have priority over other conventional generators to deliver their electricity in the wholesale market.

Last modified 16 Dec 2020

The Government through various agencies (county administrative boards, the Energy Agency, the National Agricultural Agency) operate several different schemes for the construction of photovoltaic installations, electricity storage and wind power. The regulatory environment and the amounts available under these schemes change rapidly.

Last modified 16 Dec 2020

VAT Exempt status:

  • 1 (sc) the supply of deep cycle batteries, composite lanterns, and raw materials for the manufacture of deep cycle batteries and composite lanterns,
  • (t) the supply of photosensitive semiconductor devices, including photovoltaic devices, whether or not assembled in modules or made into panels; light emitting diodes; solar water heaters, solar refrigerators and solar cookers.
  • (dda) the supply of any goods and services to the contractors and subcontractors of  hydro-electric power, solar power, geothermal power or biogas and wind energy projects 
  • Zero-Rated Supplies

Last modified 9 Feb 2021

Net metering is the policy tool most often adopted by governments in the region as a means to encourage self-generation.

Last modified 21 Jan 2021

The primary subsidy for generators with capacity above 5 MW is the Renewable Obligation, however, this was closed to new participants on 31 March 2017 applies. To continue the support of low-carbon electricity generation, the Government introduced contracts for difference (CfDs) for eligible generators, with the fixed "strike" price being set by auction. The successful bidder enters into a contract with the Low Carbon Contracts Company (LCCC) for a 15 year period.

Last modified 16 Dec 2020

See discussion above regarding federal tax credits. In addition, some states also have tax credits or other incentives available to support the generation or consumption of renewable power or the development and use of related technologies like energy storage.

Last modified 24 Mar 2021

Angola

Angola

To what extent are corporate PPAs presently deployed and what sort of structure do they take?

Corporate PPAs remain uncommon in Angola. 

Article 48 of the Electricity General Law provides that outside the scope of the public electric system, the conditions of sale of electric energy will be established by the parties.

Article 15 of the Executive Decree No. 122/19 of May 24 (electric energy sales tariffs) provides special arrangements for the sale of electricity by means of special or bilateral contracts between producers and distributors and those with final customers, under the terms set out in the Tariff Regulations (Presidential Decree No. 4/11 of January 6) shall be authorized by an order of the Minister of Energy and Waters, after hearing the regulatory authority.

All the contracts with National Transportation Network ("RNT" as a sole buyer must comply with certain requirements specified in Article 11 of the Presidential Decree No. 4/11 of January 6 as amended by Article 11 of the Presidential Decree 178/20 of June 25, in order to their prices are allocated to tariffs.

Do the country's regulators allow corporate owners to purchase (1) directly from a facility, or (2) from a choice of suppliers?

In accordance with Article 11 of the General Electricity Law, the use of the facilities and networks that incorporate the Public Electricity System is allowed under the conditions provided for in the aforementioned regulation or agreed between the interested parties and their holders, as long as the supervisory body approves it after prior validation by the regulatory authority.

Hence, corporate owners are allowed to purchase directly from a facility or a choice of suppliers, as long as it has been approved by the supervisory body and has effectively gone through a prior validation from the regulatory authority.

Other than the generator and the off-taker, are any third parties commonly party to the PPA structure (e.g. a utility or other market agent)?

In addition to the electrical energy provided by the Company ENDE E.P (National Electricity Distribution Company) that comes from hydraulic dams and private generators, so far, there are no other third parties as a common party to the cPPA structure.

Is a generator permitted to sell electricity directly to an end user? If so, do they require a licence or other form of authorization?

As previously stated, Article 48 of the Electricity General Law provides that outside the scope of the public electric system, the conditions of sale of electric energy will be established by the parties.

Last modified 9 Feb 2021

Angola

Angola

What are some of the technical, political, financial or regulatory challenges to corporations adopting green energy in the short/medium term in your country and how have these challenges been overcome (or how can they be overcome)?

More incentives and benefits need to be created for companies that want to implement green energy systems. Facilitating the process of importing and accessing currencies to pay for equipment to implement the projects related to renewable energy is necessary. Governments should create incentives for companies that are implemented across the country, thereby creating employment and facilitating greater acceptance of new technologies in rural areas.

Last modified 9 Feb 2021

Angola

Angola

Are there any anticipated regulatory changes which will alter the regulatory landscape for corporate green energy and corporate PPAs?

International development partners are providing technical support to the Angolan government to establish a regulatory framework which includes negotiating power purchase agreements with independent power producers (IPPs) and design of a feed-in-tariff scheme for renewables.

Last modified 9 Feb 2021

Angola

Angola

What is the corporate appetite for green energy, including any political or financial incentives available to corporates to adopt green energy?

Even though national and international companies have been showing interest to develop green energy structures in Angola, this is still something that has to be well studied and thought through it. However, there are already small dimensions of solar energy structures being developed, for example, but only for particular purposes.

What are the key local advantages of the corporate PPA model which can benefit our clients?

The key local advantage of the corporate PPA model in Angola is energy security and easier access to financing having the corporate PPA as collateral.

What subsidies are applicable to the generation and sale of renewable energy?

This information has not been made public.

Does your country implement a national support scheme with tradable green certificates (such as guarantees of origins)?

Not yet, as green energy has not yet been implemented.

Last modified 9 Feb 2021

Angola

Angola

To the extent corporate PPAs are deployed, how are prices, terms and risks affected?

Do prices tend to be floating or fixed?

According to Article 26 of the Presidential Decree 178/20 of June 25, the tariff structure is applied by the RNT concessionaire and by the distribution companies to users connected to their networks. Along these lines, this same diploma, on its article 27, establishes that the tariff structure reflects the costs to which users give rise, according to the characteristics of consumption and the level of tension to which they are connected, regardless of their social or legal character and the final destination give to the energy consumed. 

Hence, the prices are fixed considering the elements above mentioned.

What term is typically agreed for the PPAs?

There is not a fixed-term for cPPAs it all depends on the activity to be exercised. However, it is important to mention that the tariff regime is, in general terms, in force in a four-year tariff regime. Alongside with that, the tariff period is defined by a specific diploma by the Sector Regulatory Entity, which must be multiannual, as established on Article 28-A of the Presidential Decree 178/20 of June 25.

Are the PPAs take-or-pay or limited volume?

Not applicable.

Are there any other typical risks?

Not applicable.

To the extent corporate PPAs are deployed, in whose favour will the risks typically be balanced?

Volume risk

The risk is born by those who not comply with rule applicable to the specific situation.

Change in law

Usually, when changing legislation, users and distributors are given a period to prepare and adapt to this mentioned change of legislation. Hence, when there is a change in law non complied with, the risk is born by those who have not complied with the rule in place.

Increase / reduction of benefits

Again, similar to the change in law, the risk is born by those who not comply with rule applicable to the specific situation.

Market liberalization (if applicable)

Not applicable.

Credit risk

The risk is born by those who not comply with rule applicable to the specific situation.

Imbalance power risk

The risk is born by those who not comply with rule applicable to the specific situation.

Production profile risk

The risk is born by those who not comply with rule applicable to the specific situation.

Last modified 9 Feb 2021

Angola

Angola

Does your country operate a balancing responsibility scheme?

Not applicable.

If your country operates a balancing responsibility scheme, who is the balancing authority and do the generator and offtaker typically undertake balancing themselves?

Not applicable. 

Last modified 9 Feb 2021

Angola

Angola

What significant transactions/deals have taken place in the last 12-18 months?

Laúca Hydroelectric Power Plant

According to the Government, Laúca Hydroelectric Power Plant (“AH Laúca”) is the largest work in the country today. The Project was commissioned by the Angolan Executive, represented by the Ministry of Energy and Water, and is carried out by ODEBRECHT. COBA and LA MAYER carry out the supervision of the implementation of the project. When AH Laúca is 100% operational, it will produce more than twice as much energy as the other two dams already operating on the Kwanza River. This energy potential will serve 8 million people. AH Laúca will produce 8,643 GWh (gigawatts) of electricity, representing an installed capacity of 2,070 MW (megawatts).

The realization of the project demands great infrastructure support. Because of this, AH Laúca is today a city that is composed by: Leisure area; Sports area; Accommodations; Kitchen and Cafeterias and Medical Center.

AH Laúca is a pole of job and income generation. The project is also committed to providing opportunities for national talent. Today, the enterprise has 8,458 Members. Of these, 8,035 are national, which represents 95% of the entire productive force involved in the execution of the work. The remaining 423 are expatriates, a number that represents 5% of total members.

Through the Acreditar Program, the project offers basic and specific training to AH Laúca Members and also to the residents of the communities surrounding the construction site.

AH Laúca is 86% ahead of Civil Works, 72% ahead of Electromechanical Assembly and 14% in the Energy Transport System. Always overcoming challenges and fulfilling all the goals set with safety, quality and productivity.

2nd Hydroelectric Power Plant of Cambambe and Dam Alignment

With the conclusion of the Cambambe 2nd Power Station and the Dam Raising, it was possible to obtain an additional power of 780MW. This power is helping to reduce the energy supply deficit in the Provinces of Luanda, Kwanza Sul, Malanje, Uige, Kwanza Norte and Bengo.

It will also allow the interconnection of the North-Central Systems with the Benguela Province link, thus reducing production costs and the consumption of diesel for energy production.

More than 10,000 construction posts have been created as part of the temporary work in the rehabilitation, modernization and extension of the hydroelectric complex. The construction owner was GAMEK (Gabinete de Aproveitamento do Médio Kwanza) and the contractor was ODEBRECTH.

Solar village program

The main objective of the Solar Village Programme is electrification, through the installation of autonomous solar photovoltaic systems (isolated) in infrastructures Social, including: Schools; Medical Posts; Police Posts; Administrative Buildings; and, Social Jangos, including Public Lighting Posts.

In the 1st phase of the Programme, awarded to the company Elektra Electricidade e Águas, Lda, 11 localities were selected from 4 Provinces in the country: Bié, Kuando Kubango, Malange and Moxico. This phase has been completed since 2011, with a total of 156,660 Wp of 42 systems and 70 public lighting posts implemented.

In some cases, a system provides electricity to more than one infrastructure. So far, 50 infrastructures have benefited from the electricity supply, namely: 15 schools, 18 medical posts, 1 maternity ward, 1 police station, 1 police station, 9 administrative residences, 1 nurse's residence, 3 administrations.

In the 2nd phase of the Solar Village Programme, four companies were selected for the installation of a total of 75 systems and 160 streetlights.

As part of the 3rd phase of the Solar Village Programme, the project has already started after the Auto de Consignation signed with the Company LTP Energias S.A. The project will benefit the provinces of Kwanza Sul, Cuando Cubango and Lunda Sul, whose aim is to supply electricity to the communities with Solar Photovoltaic Systems of Auto-consumption Kits and Public Photovoltaic Lighting.

It is part of the energy and water sector action plan 2018-2002, to continue the Solar Village Programme and to ensure adequate maintenance of its infrastructure and test a new concept of a 100% solar mini network, based on batteries, to electrify the most isolated municipality headquarters, avoiding fuel logistics.

What transactions/deals are anticipated to come to market in the next 12-18 months?

See Past transactions

Last modified 9 Feb 2021