Renewable Energy Act 2013

REPUBLIC OF THE GAMBIA

Ministry of Energy

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ARRANGEMENT OF SECTIONS

Section

1. Short title

2. Definitions

3. Responsibilities under this Act

4. Targets

5. Establishment of the Renewable Energy Fund

6. Sources of money for the Fund

7. Management of the Fund

8. Tax Exemption

9. Accounts and audit

10. Annual report

11. Support for on Grid Renewable Electricity (Feed in Tariff)

12. Support for on Grid Renewable Electricity not qualifying for Feed in Tariff

13. Support for off Grid Renewable Electricity

14. General Incentives

15. Biomass strategy

16. Streamlined Permitting

17. Quality of installation

18. Reporting under the Act

19. Regulations

20. Miscellaneous

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A BILL ENTITLED

AN ACT to establish legal, economic and institutional basis to

promote the use of renewable energy resources and for connected

matters.

[ ]

ENACTED by the President and the National Assembly.

1. Short title

This Act may be cited as the Renewable Energy Act, 2013.

2. Definitions

(1) In this Act, unless the context otherwise requires-

“aerothermal energy” means energy stored in the form of heat in

the ambient air;

“Authority” means The Public Utilities Regulatory Authority;

“bio fuels” means liquid or gaseous fuel for transport produced from

biomass;

“bio gas” means a fuel gas produced from biomass or from the bio

degradable fraction of waste, that can be purified to natural gas

quality, to be used as bio fuel or wood gas;

"bio mass" means non-fossil, bio degradable organic material

originating from naturally occurring or cultured plants, animals and

micro-organisms, including products from agriculture (including

vegetal and animal substances), forestry and related industries

including fisheries and aquaculture, as well as the biodegradable

fraction of industrial and municipal waste;

“capacity” means the rated power output;

“consumer” means any person or entity receiving electricity from

the distribution or transmission network for his or her or its own

use;

“Electricity Act” means the Electricity Act;

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[cap 32.05]

“Feed In Tariff Rules” means the rules to establish the Feed In

Tariff system and to regulate the method of establishing and

approving the Feed In Tariffs;

“generation licence” has the meaning given to it in the Electricity

Act;

“geothermal energy” means energy stored in the form of heat

beneath the surface of solid earth;

“grid” means a number of transmission and distribution systems

linked together, as provided for under the Electricity Act;

"hybrid systems" means any power or energy generation facility

which makes use of more than one fuel source with a minimum of

ten percent of the annual energy output provided by renewable

energy sources, including but not limited to integrated combined

solar and wind systems, combined biomass and fossil fuel

systems, combined hydro and fossil fuel systems, integrated solar

and biomass systems, integrated wind and fossil fuel systems;

“hydrothermal” means energy stored in the form of heat in surface

water;

"hydropower" means water-based energy systems;

“Minister” means the Minister responsible for Energy and “Ministry”

shall be construed accordingly;

"off-grid" means not connected to the grid;

“registry” means a registry established by the Ministry to monitor

renewable energy facilities;

"renewable energy resources" means energy from non-fossil

sources such as wind, solar, hydropower, biogas, biomass, landfill

gas, sewage treatment plant gas, geothermal, aero thermal,

hydrothermal and ocean;

“Responsible Network Utility” means the holder of a distribution or

transmission licence (as applicable) granted by the Authority under

the Electricity Act at the receiving point at which electric energy is

delivered directly from a generating facility;

"solar resources" means the energy derived from solar radiation

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which can be converted into useful thermal or electrical energy;

and

"wind resources" means energy derived from wind, converted into

useful electrical or mechanical energy.

(2) A word or phrase not specifically defined in this Act, but defined

in the Electricity Act shall have the meaning assigned to it in that

Act.

3. Responsibilities under this Act

(1) The Ministry shall have the following functions under this Act-

(a) recommend national targets for the use of renewable

energy resources, as set out under section 4;

(b) in collaboration with the Ministry responsible for Finance,

determine the equipment that is eligible for tax exemption

under section 14;

(c) carry out an impact assessment of the use of biomass for

energy purposes, as detailed under section 15;

(d) work with other relevant Ministries and authorities to

prepare and co-ordinate the permitting process for

facilities using renewable energy resources within the

meaning of this Act, and summarise such information for

potential developers, as detailed under section 16;

(e) work with other Ministries, universities and other training

providers to promote the implementation of educational

programmes within the renewable energy sector;

(f) encourage the development of technical and standard

requirements and certification of renewable energy

installations for Renewable Energy Systems, to ensure

the quality of these systems especially in small scale

installations, whether residential or commercial;

(g) establish and manage a registry to monitor renewable

energy facilities; and

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(h) undertake such reporting duties as are required by this

Act.

(2) The Authority shall have the following functions under this Act-

(a) the management of the Renewable Energy Fund

established under section 5;

(b) formulating the Feed In Tariff Rules as provided for under

section 11;

(c) acting as arbitrator on matters provided for under this Act

between the Responsible Network Utility and persons who

are already generating or plan to generate electricity from

renewable energy resources;

(d) maintain a register of appropriately qualified installers of

systems using renewable energy resources;

(e) require importers of systems using renewable energy

resources to provide details of compliance with

internationally recognised performance and safety

standards; and

(f) undertake such reporting duties as are required by this

Act, in particular section 18.

(3) The Responsible Network Utility shall have the following

functions under this Act-

(a) determining the safety and technical capability of the grid

to connect electricity generated from renewable energy

resources, and whether any required grid development is

excessive; and

(b) undertake such reporting duties as are required by this

Act, in particular section 18.

4. Targets

(1) The Ministry shall recommend middle and long-term national

targets for the use of renewable energy resources in electricity

generation, which may include targets related to geographic

location and diversity.

(2) The Ministry shall report annually to the Cabinet on progress

towards these targets, including a review of the performance of the

incentives provided under this Act.

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5. Establishment of the Renewable Energy Fund

(1) There is established by this Act, the Renewable Energy Fund.

(2) Moneys from the Fund shall be used for -

(a) the promotion, development, sustainable management and

utilisation of renewable energy sources;

(b) the provision of financial incentives, feed-in-tariffs, capital

subsidies, production based subsidies and equity

participation for –

(i) grid interactive renewable electricity,

(ii) mini-grid and off-grid renewable power systems for

remote areas and islands,

(iii) renewable energy projects for non-electricity

purposes, and

(iv) any other renewable energy activity that the Ministry

may determine;

(c) the promotion of renewable energy projects especially

community based projects;

(d) the promotion of renewable energy for industrial use;

(e) scientific, technological and innovative research into

renewable energy;

(f) the production or fabrication of equipment for the

development and utilization of renewable energy in the

country;

(g) programmes to adopt international best practices and

innovative approaches to the development and utilisation of

renewable energy sources;

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(h) the development of infrastructure for renewable energy; and

(i) capacity building for renewable energy development.

(3) For the purposes of this section, „equity participation‟ means the

participation in the ownership of an organisation or venture

through an investment for renewable energy.

6. Sources of money for the Fund

The moneys in the Fund shall be derived from –

(a) moneys appropriated by the National Assembly;

(b) registration fees of individuals and organisations involved in

renewable energy for commercial gains;

(c) donations, grants and gifts received for renewable energy

activities;

(d) moneys generated by the Authority from the provision of

services for renewable energy activities;

(e) moneys generated by the Authority from the licences issued

to Independent Power Producer`s utilising renewable

energy resources for electricity generation, including solar

energy;

(f) any levy that may be introduced by the Government; and

(g) moneys from any other source approved by the Minister

responsible for Finance.

7. Management of the Fund

(1) The Authority is responsible for the management of the Fund

and to that end shall –

(a) pursue policies to achieve the object of the Fund;

(b) collect or arrange to be collected, moneys lawfully due

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to the Fund, through procedures determined by the

Minister;

(c) keep moneys of the Fund in bank accounts separate

from other funds of the Authority;

(d) ensure accountability of the Fund by defining

appropriate procedures for the utilisation of the Fund;

(e) prepare and publish the criteria for the disbursement of

moneys from the Fund with the approval of the

Minister;

(f) disburse moneys from the Fund;

(g) receive and examine reports from designated persons

or institutions in respect of financial assistance granted

to those persons or institutions; and

(h) perform any other function assigned to it under this Act

or incidental to the achievement of the object of the

Fund.

(2) The administration expenses of the Fund related to the

management of the Fund shall be charged on the Fund.

8. Tax exemption

The Fund is exempt from the payment of tax.

9. Accounts and audit

(1) The Authority shall within three months before the end of each

financial year, prepare and submit to the Minister for approval,

estimates of the income and expenditure of the Fund for the

succeeding financial year.

(2) The Authority shall keep proper records and books of accounts

of the income and expenditure of the Fund for each financial year.

(3) The Authority shall within two months of the end of each

financial year, submit the statement of accounts of the Fund to the

Auditor General for auditing.

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10. Annual report

(1) The Authority shall not later than three months after the end of

each financial year, submit to the Minister an annual report on the

activities of the Fund during the preceding year.

(2) The report under subsection (1) shall include-

(a) audited Financial Statements;

(b) information with regard to the operation and performance

of the Fund; and

(c) such other information as the Minister may require.

(3) The Minister shall, not later than three months after the end of

the financial year cause the report to be laid before the National

Assembly.

11. Support for on-grid renewable electricity (Feed in Tariff)

(1) To accelerate the development of renewable energy resources,

a tariff system (the “Feed In Tariff”) for electricity produced from

eligible renewable energy resources, including such portion of

electricity from hybrid systems that is directly attributable to eligible

renewable energy resources, shall be introduced.

(2) Eligibility for the Feed in Tariff shall be defined in the Feed In

Tariff Rules.

(3) The Authority shall formulate, with the approval of the Minister,

Feed In Tariff Rules within six months of this Act coming into force,

which shall conform to the following-

(a) the Responsible Network Utility shall pay the Feed In

Tariff only on the basis of electricity from renewable

energy resources delivered into the Grid;

(b) the rules defining eligibility for the tariff;

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(c) electricity generated outside of The Gambia shall not be

eligible;

(d) hybrid systems shall receive the Feed In Tariff only for

that portion of the electricity from renewable energy

resources delivered into the Grid;

(e) only biomass deemed sustainable by the Biomass

strategy, to be adopted by the Government as specified

under section 15, shall be eligible;

(f) a duration for power purchase agreements (“Feed In

Tariff Power Purchase Duration”) and standard contract

terms established under the Feed In Tariff Rules;

(g) the principles and methodology for determining the Feed

In Tariff level and how often the Feed in Tariff will be

revised;

(h) the Feed In Tariff payment during the Feed In Tariff

power purchase duration shall be adjusted based on a

reasonable and fair indexation formula set by the

Authority;

(i) priority connection to the grid for any electricity producer

that is eligible under the Feed In Tariff Rules; and

(j) the priority purchase and transmission of, and payment

for, such electricity that is eligible under the Feed In Tariff

Rules.

(4) The Authority in consultation with the Responsible Network

Utility, shall determine -

(a) a maximum national capacity limit of electricity production

that is eligible under the Feed In Tariff Rules and this level

shall be published by the Authority in the Feed In Tariff

Rules; and

(b) the fixed tariff to be paid for electricity produced from each

type of renewable energy and the mandated number of

years for the application of these rates, which shall not be

less than fifteen years.

(5) The maximum capacity limit may be reviewed and revised by

the Authority, based on evidence of the impact on the safety and

reliability of the electricity system or the financial impact that it may

be having in the power sector in accordance with the provisions set

out in the Feed In Tariff Rules.

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(6) Retrospective changes shall not be made during the Feed In

Tariff Power Purchase Duration.

(7) Financial Institutions may offer preferential loans with financial

interest subsidy, capital subsidies or other complementary

mechanisms to renewable energy projects, without affecting their

eligibility for Feed In Tariffs.

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12. Support for on-grid renewable electricity not qualifying for

Feed in Tariff

The tariff paid for electricity generated from renewable energy

resources that do not qualify for the Feed In Tariff regime shall be

governed as follows-

(a) provided the Responsible Network Utility ensures the

safety and technical capability of the grid to integrate the

project, the electricity produced may be purchased at a

negotiated rate which shall not be higher than the

alternative cost of electricity generation;

(b) the Authority shall be responsible for assessing the

alternative cost of electricity generation referred to in

paragraph (a);

(c) required grid connection will be carried out with the

division of costs normally applied for new grid

developments, as approved by the Authority, unless the

required grid development is considered excessive in the

reasonable judgement of the Responsible Network

Utility;

(d) in the event that the required grid development is

considered excessive in the reasonable judgement of the

Responsible Network Utility, the developer of a potential

electricity generation project using renewable energy

resources may carry out these justified grid development

activities at their own expense; and

(e) the Authority shall act as arbitrator in the event of a

disagreement between the Responsible Network Utility

and the developer of a potential electricity generation

project using renewable energy resources.

13. Support for off-grid renewable electricity

(1) Electricity generation from renewable energy resources or

hybrid systems in off-grid areas which build the required facilities to

connect end consumers (“Private Wire Network”) are allowed to

charge electricity tariffs to end consumers up to the current national

retail tariff rates (“Approved Electricity Tariffs”), as determined by

the Authority, provided the capacity of generating facility on such

private wire networks system is no greater than two hundred

kilowatts.

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(2) Private Wire Networks with a capacity of generation from

renewable energy resources or hybrid systems greater than two

hundred kilowatts or wishing to charge tariffs greater than the

approved electricity tariff may also be permitted, but shall justify

any tariff to the Authority following the normal procedures under the

Electricity Act.

14. General incentives

(1) The operators of facilities using renewable energy resources,

including hybrid systems in proportion to and to the extent of the

renewable energy component, for both power and non-power

applications, as duly certified by the Ministry, shall be entitled to the

following incentives-

(a) duly registered projects producing electricity from

renewable energy resources within the meaning of this

Act shall be exempted from import tax;

(b) all renewable energy equipment that fulfil the eligibility

criteria shall be exempted from import duty;

(c) duly registered projects producing electricity from

renewable energy resources within the meaning of this

Act shall be exempted from corporate tax for a period of

fifteen years from commissioning subject to performance

assessment every five years;

(d) duly registered projects producing electricity from

renewable energy resources within the meaning of this

Act shall be exempted from value added and any retail

tax for a period of fifteen years from commissioning; and

(e) all proceeds from the sale of carbon emission credits

shall be exempt from sales taxes.

(2) The fiscal incentives shall apply from the coming into force of

this Act.

(3) Grid connection and administrative expenses reasonably

incurred by the Responsible Network Utility for the purchase of

renewable power and other reasonable expenses may be included

with other reasonable costs and recovered through the regulated

selling price.

(4) Qualified and registered generating facilities based on

intermittent renewable energy resources, including but not limited

to solar and wind, shall enjoy the benefit of priority dispatch

whenever it is technically possible.

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15. Biomass strategy

(1) Within one year of this Act coming into force, the Ministry shall

carry out an impact assessment of the use of biomass for electricity

and other energy purposes (heating, cooling and transport fuel).

(2) The assessment shall include, but not be limited to-

(a) the potential impacts of growing energy crops specifically

for electricity generation, heat or transport fuels, or for

export (competition with food crops for the use of land,

potential increase in food prices, etc.);

(b) the most appropriate use for waste biomass, considering

cooking fuel and electricity generation applications;

(c) forestry impacts of using different biomass energy

sources;

(d) agricultural impacts of using different biomass energy

sources;

(e) the feasibility of using different biomass energy sources;

and

(f) potential economic impacts.

(3) Until such impact assessment is complete, biomass energy

sources beyond one megawatt total capacity shall not benefit from

the Feed In Tariff or any other incentive.

(4) Following completion of the impact assessment, the

Government shall prepare and adopt a strategy for the sustainable

use of biomass energy sources (“Biomass Strategy”).

16. Streamlined permitting

(1) The Government shall simplify as far as reasonably possible,

the permitting process for facilities using renewable energy

resources to facilitate timely development of these facilities.

(2) The Ministry shall work with other relevant ministries and

authorities to coordinate and simplify the permitting process,

including where applicable on environmental impact, generation,

distribution, land use, water use and construction.

(3) The Ministry shall issue clear guidelines for the processing of

applications for the development of projects using renewable

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energy resources, which shall include the following-

(a) requiring the relevant agency to respond within ten

business days acknowledging receipt of any permit

application and informing the applicant of any missing

information required to assess their application;

(b) an application process that reflects the scale and

potential impact of the development (simpler processes

for those developments that may have lower impacts);

(c) establishing a timeline for the processing of each

application;

(d) specific deadlines for decisions and actions on permit

applications;

(e) complete permit applications for developments using

renewable energy sources shall be assessed and

responded to within sixty days after submission, unless

otherwise agreed with the applicant;

(f) if any agency fails to comply with any deadline with

respect to a permit application, they shall notify the

applicant every ten days with specific information

regarding the reasons for the delay and an estimate of

the time the permit decision will be made; and

(g) establish a deadline by which the applicants must use

the permit or forfeit their right to it.

(4) The Ministry shall compile details of all relevant permit

application processes and summarise them for potential

developers, including making the information and relevant

application forms available on their website.

(5) For avoidance of doubt, application fees, timelines for

construction, penalties, and other provisions set out in regulation

shall remain unchanged.

17. Quality of installation

(1) Installers of systems using renewable energy resources,

including electricity generation and thermal energy systems shall

be appropriately trained to install the equipment that they offer, with

appropriate certification where relevant.

(2) Installers of systems using renewable energy resources shall

provide a quality guarantee for the proper installation according to

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best practice.

(3) The minimum obligatory duration of such guarantee shall be six

months or such other period set by announcement by the Authority.

18. Reporting under the Act

(1) The Authority shall, within two weeks after the end of each

quarter, publish on an appropriate website, a report setting out the

following-

(a) the number of applications for the connection of

renewable energy generating facilities to a Relevant

Network Utility received by the Relevant Network Utility

during the period as well as the capacity involved;

(b) the number of renewable energy generating facilities

connected to a Relevant Network Utility by the Relevant

Network Utility during the period; and

(c) the total number of renewable energy generating

facilities connected to a Relevant Network Utility‟s

network and their capacity, and comparing this to the

maximum overall national capacity of electricity

production that is eligible under the Feed In Tariff Rules.

(2) The Responsible Network Utility shall make available to the

Authority without delay-

(a) the information the Authority requires to prepare the

report mentioned in sub-section (1); and

(b) the data the Authority requires to record tariff payments

and recovery mechanisms of the Feed In Tariff regime.

(3) Developers of systems using renewable energy resources

shall-

(a) register facilities with the Ministry for inclusion in the

Registry;

(b) inform the Responsible Network Utility of the location and

installed capacity of the installation as well as of the

quantity of electricity expected to be fed into the grid

(where applicable); and

(c) by 31 January of each year, provide the Responsible

Network Utility with the data required for the final

accounts of the previous year.

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(4) Responsible Network Utilities shall determine the quantities of

electricity and tariff payments based on actual measurements.

(5) The Authority shall publish in an anonymised form on a shared

website, the quantities of electricity purchased at the Feed In Tariff

and the surcharge if any, on the consumers.

(6) The Authority may disclose the surcharge to final consumers.

(7) This surcharge shall be laid out in a manner which is

understandable to consumers without the need for further

information.

19. Regulations

The Minister may make regulations for the implementation of this

Act.

20. Miscellaneous

(1) The Ministry shall be the lead agency mandated to implement

the provisions of this Act, and shall work closely with the Authority

on such aspects that pertain to electricity generation.

(2) All prior rules and guidelines issued by the Authority not

consistent with this Act are hereby repealed or modified

accordingly.

OBJECTS AND REASONS

The objectives of this Act are to-

(a) promote the use of renewable energy resources,

including hybrid systems, to achieve greater energy self-

reliance and thereby reduce the exposure to fossil fuel

price fluctuations, reduce harmful emissions, and

promote economic growth and protection of the

environment in The Gambia;

(b) increase the development of renewable energy by

development of national and local capabilities and

providing both fiscal and non-fiscal incentives;

(c) enhance the use of renewable energy resources;

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(d) establish the roles of each relevant institution; and

(e) contribute to observe the regional decisions adopted in

Accra regarding the ECOWAS Regional Renewable

Energy Policy.

……………………………………

TENENG MBA JAITEH

MINISTER OF ENERGY