Donor: USAID Better energy
Partners: Ministry of Mining and Energy
Beneficiaries: Citizens, Economy
Implementation period: january 2023. – June 2023.
In recent years, the need to establish sustainable development has significantly prompted the state to embark on an energy transition and promote the renewable energy sector. The state has clearly demonstrated its commitment to shifting towards green energy sources by enacting the Renewable Energy Sources Act in 2021, amending the Energy Act, and issuing a series of subordinate acts, thus creating conditions for energy production for own needs, introducing the new concept of the "Prosumer."
A prosumer is considered the ultimate consumer of electrical energy who has the right to build a production facility and generate electrical energy for their own needs, store it, and sell excess electrical energy, i.e., deliver it to the transmission, distribution, or closed distribution system.
The idea that prosumers actively participate in the electricity market by autonomously making decisions based on production, consumption, and stored electrical energy contributes to savings for the entire society. This is because greater use of renewable energy sources contributes to environmental preservation, reduces losses in the grid, and makes a significant contribution to the country's energy security and system stability.
Many businesses increasingly seek to reduce their impact on the total amount of greenhouse gas emissions contributing to the greenhouse effect by transitioning to using electrical energy from renewable sources for their operations. One way to achieve this is through corporate power purchase agreements.
As the concept of the customer-producer-prosumer is new in our legal system, many questions arise. Some of these questions have been raised by the practices of those who have sought to become prosumers in the electricity market, as identified by the analysis conducted by the USAID Better Energy program. This analysis highlighted challenges related to technical issues regarding the practical application of this concept, as well as the method of system access calculation and the actual cost of energy.
NALED, as a member of working groups responsible for developing regulatory frameworks in the field of renewable energy sources, has received a letter of support from the Ministry of Mining and Energy to conduct an analytical process to review the tax treatment of prosumers and define recommendations for improving the financial and legal framework.
Objectives and results
In terms of improving the position of customer-producers, it is necessary to conduct an analysis to identify shortcomings in the regulations that need to be addressed. This analysis will provide insights into the conditions under which energy exchange will occur between prosumers and suppliers, aiming to eliminate double payments such as access fees to the system for small consumers transitioning to prosumers. Additionally, the analysis will focus on eliminating unnecessary bureaucratic and legal procedures to encourage interested citizens and businesses to generate more of their own energy, particularly through the installation of solar panels.
Based on the recommendations from the analysis, meetings will be organized with relevant ministries and institutions to advocate for amendments and additions to existing subordinate acts aimed at improving the position of prosumers. These efforts will also aim to encourage individuals, businesses, and residential communities to utilize this form of green energy in line with the recommendations from the analysis.
Overall objective: Increase the total number of registered prosumers by the end of 2023.