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Renewables potential grows in CEE, legal framework lags

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While across the globe governments show a willingness to embrace renewable sources of power and their implementation has been growing, the sector still lags behind in the Central Eastern European region due to the lack of an appropriate legal framework, according to a white paper released jointly by KPMGʼs Energy & Utilities Advisory practice in Budapest, and the local office of leading independent international law firm Kinstellar.

Entitled “Electricity Storage Insight – Delving into the key issues,” the KPMG-Kinstellar white paper aims to provide a comprehensive overview of the multitude of electrical energy storage technologies and information on their stages of development, lists the challenges and opportunities of using electrical energy storage across the value chain, and delves into the legal aspects of EES projects, among other matters. 

“Wind and solar PV had record increases in installed capacity for the second consecutive year, accounting for about 77% of new generation,” the report says in reference to global tendencies. Solutions and appropriate measures are needed, it explains, to balance the supply and demand of energy.

In the context of newly-emerging electricity systems, EES is crucial for their overall proper functioning, especially considering that they have practically been reinvented in light of the inclusion of renewable sources of power, which can be sporadic when the wind is not blowing or the sun is not shining, KPMG partner Csaba Kovács, one of the initiators of the study, points out. Generation support, grid support and consumer support are three aspects addressed by electrical energy storage, the professional adds.

“There is a need for a balance of supply and demand, which is partially mitigated through the use of energy storage,” he says, adding that EES technologies help to provide a reliable and stable operation of transmission and distribution (T&D) systems, can meet frequency control requirements and can provide “black start” capacity in case of total or partial shutdown of a transmission system.

Meanwhile, technological innovation of a smaller scale has also generated benefits for electrical energy storage. “Because of the increased usage of battery technologies in consumer appliances, electricity storage technology is reaping huge improvements, as both types of storage are similar, just different in scale,” according to Kovács.

CEE needs appropriate legal framework to prosper 

As those innovations continue, Kristóf Ferenczi, partner and firm-wide head of the energy practice at Kinstellar points out that CEE countries are very well positioned and could actually blaze a trail for the further development of such EES technologies, but the region needs to take the lead in adapting its legislative frameworks.

“A European framework in this regard is lacking, so the first step would be making sure that any future legislation will comply with overarching European sector regulation,” Ferenczi explains. “Once that is done, a country or countries within CEE could attract huge investments into electrical energy storage in our region. According to the conclusions we have drawn in our white paper, this approach could reap huge benefits in both technological development and investments.”

Kovács admits that tackling such difficulties will be tough, especially without creating market distortions. Part of the dilemma, according to the expert, is that CEE countries need to define exactly what the role of EES in their systems should be. Ferenczi emphasizes that it will be challenging, “especially, considering that currently there is no official definition of EES in EU energy legislation. [...] But the lack of EU level harmonization also provides an opportunity for member states, including the CEE countries, to create a national regulatory framework which complies with the applicable EU regulations, but at the same time facilitates storage project development.”

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