EXPRESS #4 - October 9, 2018
The Italian government has said it will soon be issuing a decree in support of solar PV and other renewable energies.
It has also proposed changes favourable for PV linked to projects for asbestos removal. Alberto Pinori, president of Italy’s renewable energy association, Anie Rinnovabili, has praised the government’s new attitude and its agencies, notes PV magazine.
Italy will spend up to €900 million by 2020 for the development of new renewable energy installations. These will include 6 GW of new capacity, mostly solar, with the aim of adding 10 TWh per year of renewable electricity to the grid.
The new Spanish government is also aiming to boost renewable energy, for one thing by suspending the notorious 7% solar tax which owners of solar panels have to pay. According to Spanish energy experts, the average family home with three solar panels fitted to their home pay around €70 each month to remain connected to the grid whether or not they use the electricity it generates.
Spain’s new Minister of Ecological Transition, Teresa Ribera, has announced that the tax will be scrapped as the government seeks to reduce Spain’s spiralling energy costs for households – Spain, in the second half of 2017, had the fifth highest electricity prices in the entire European Union.
Spain’s new commitment to renewable sources is supported by a recent €450m finance package issued by the European Investment Bank, which will fund Spanish solar and onshore wind projects. This new capacity will also substitute for almost 5GW of Spain’s coal-fired capacities, which are set to be closed that year.
In Serbia, the independent grievance body of the European Bank for Reconstruction and Development (EBRD) has started investigating a €200 million ‘restructuring loan’ granted in 2015 to Elektroprivreda Srbije (EPS), the largest energy company in Serbia, following a complaint by CEE Bankwatch Network and Serbian environmental group CEKOR, according to a press release from CEE Bankwatch.
According to the NGOs’ complaint, “although the investment is on corporate level (…) the project has caused harm (…) due to freeing up resources to allow the company to implement its long-term capital expenditure programme which includes lignite mine expansion and the construction of several coal plants.”
Back in 2015, the EBRD granted this loan to EPS after massive rainfall flooded EPS coal mines and damaged the company’s infrastructure. Nominally, the EBRD loan was meant to help the company get over the floods, but an EBRD board document said the money was meant to ensure the company can implement its long-term capital expenditure programme – and that means more coal, says CEE Bankwatch.
According to the press release, “the 2015 loan is one in a series of several loans the EBRD has given to EPS since 2001, despite the company clearly pursuing a strategy to expand coal-based electricity production and numerous allegations of corruption and legal violations tarring its reputation.”
According to the 2016 Energy Strategy of Serbia, in addition to prolonging the life of existing coal plants, EPS is planning several new lignite power plants: Kostolac B3, Nikola Tesla B3, Kolubara B and Stavalj. While it is unlikely that all of these will go ahead, EPS clearly prioritises Kostolac B3 in the implementation programme for the energy strategy and has not publicly announced any cancellations of the other plants, notes Bankwatch.
Bankwatch charges that “EPS is also expanding the Drmno lignite mine’s production capacity from 9 to 12 million tonnes per year, and it is doing so without an environmental and social impact assessment, in breach of EBRD policy, as well as Serbian and EU legislation. In September, Bankwatch and CEKOR also submitted a complaint to the Energy Community about mine expansion works going ahead without the necessary precautions.”
“The EBRD’s 2015 loan for EPS should have prepared a coal-heavy company for the realities of adhering to stricter EU legislation. Instead, it appears to have freed up resources so that the company can extract and burn even more coal,” says Ioana Ciuta, energy campaigner at Bankwatch.
The EBRD’s Project Complaint Mechanism has now declared the NGOs’ complaint eligible and published its assessment report, which raises a series of questions about the Environmental and Social Policy of the bank when it comes to corporate level finance. According to Bankwatch, “the assessors’ willingness to examine a ‘restructuring loan’ is a step in the right direction since such loans can serve as a facade for indirectly financing problematic projects.”
The EBRD will organise a public consultation in Belgrade on October 19, in the context of its Energy Sector Strategy revision, where it is expected that lending to coal dependent companies, such as EPS, and decarbonisation of the energy sector will be among the topics for discussion.
A new report published by Bankwatch shows “how EPS and other companies in Poland, the Czech Republic and Bulgaria have been receiving generous financial support from European development banks despite their continued reliance on fossil fuels. In light of the revision of the EBRD’s Energy Strategy, the report makes the case for conditioning further financing to such companies on decarbonisation plans in line with the Paris climate agreement.”