1. PRIMARY ENERGY EFFICIENCY LAW

On 23 June 2011, Law No. 04/L-016 on Energy Efficiency ("Law on Energy Efficiency") entered into force.

The Law on Energy Efficiency regulates energy efficiency issues, the preparation and approval of energy efficiency plans and reporting thereof, determines the roles, duties and responsibilities of the institutions and addresses the obligations deriving from the Energy Community Treaty regarding energy efficiency.

Law No. 05/L-081 on Energy ("Law on Energy" approved on 28 July 2016) is partially in compliance with Directive No. 2009/28/EC concerning the promotion of use of energy from renewable energy sources. Among others, the Law on Energy provides that its goals are to promote a more efficient use of energy and to increase renewable energy sources and cogeneration.

Law No. 05/L-084 on the Energy Regulator ("Law on the Energy Regulator" approved on 29 July 2016), is partially in compliance with Directive No. 2009/28/EC concerning promotion of use of energy from renewable energy sources.

Law No. 05/L-052 on Thermal Energy ("Law on Thermal Energy" approved on 15 January 2016), is also partially in compliance with Directive No. 2009/28/EC concerning promotion of use of energy from renewable energy sources.

Law No. 05/L-101 on Energy Performance of Buildings ("Law on Energy Performance of Buildings" published on 22 December 2016) is partially in compliance with Directive No. 2010/31/EU on the Energy Performance of Buildings and Directive No. 2012/27/EU of the European Parliament and of the Council onEnergy Efficiency. The purpose of the Law on Energy Performance of Buildings is to promote improvements to the energy performance of buildings, taking into consideration outdoor climatic and local conditions, as well as indoor climate requirements as well as cost-effectiveness.

Comparison

Most of the laws and other secondary legislation in the field of energy efficiency which have been passed in Kosovo are partially in compliance with Directives and other comparable EU legislation. The EU Directives regarding energy efficiency are binding upon the Republic of Kosovo as party to the Energy Community Treaty. In addition to laws and other secondary legislation, loans were taken by the Government of Kosovo and other awareness campaigns were organised.

2. SPECIFIC PROVISIONS OF THE LAW

The Law on Energy Efficiency established energy efficiency targets and plans, energy management, energy auditing, and also outlined the role and scope of State institutions and various other organisations dealing with energy efficiency.

The Law on Energy Efficiency obliges the competent ministry to draft and submit for approval to the Government of Kosovo: (i) a plan for energy efficiency in compliance with Directive No. 2006/32/EC, reviewed within a three (3) year period; (ii) a report on its implementation to the Government of Kosovo every three (3) years; and (iii) to develop an Energy Efficiency National Action Plan, in line with Directive No. 2006/32/EC.

In addition to the above, the Law on Energy Efficiency obliges the competent ministry to establish the Kosovo Energy Efficiency Agency ("KEEA"). The KEEA is responsible for: (i) proposing to the Minister the policies to promote energy efficiency; (ii) developing and maintaining the database on energy efficiency; (iii) developing the system of monitoring implementation of the National Energy Efficiency Plan and achievement of the indicative targets for energy saving, (iv) preparing the Progress Report on the Implementation of the National Energy Efficiency Plan; (v) guiding and supporting municipalities for preparation of the municipal energy efficiency plans and their progress reports; and (vi) promoting energy efficiency through public awareness campaigns, etc.

The Law on Energy Efficiency states that the Kosovo Energy Efficiency Plan is an obligatory document for implementation, which is prepared by KEEA, in compliance with requests of Directive No. 2006/32/EC and of the Energy Community Secretariat.

The Law on Energy Efficiency obliges the Municipal Energy Offices to develop the Municipal Energy Efficiency Plan, in line with the instructions of the KEEA.

The Ministry shall present to the Government for approval the necessary legal acts to implement the provisions of the EU Directives regarding energy efficiency, which are binding upon the Republic of Kosovo as a party to the Energy Community Treaty.

The Ministry of Environment and Spatial Planning – taking into consideration the obligation to transpose Directive No. 2010/31/EU – in Law No. 04/L-110 on Construction ("Law on Construction") has set requirements for the application of energy efficiency measures on buildings.

Comparison

The Law on Energy Efficiency set the basic rules and procedures in the field of energy efficiency. Establishing the KEEA was an important step toward engaging in energy efficiency measures at the municipal level. Most of the measures foreseen by laws and secondary legislation are addressed to the public sector. Such intention was provided in the Administrative Instruction No. 14/2012 on the Promotion of Energy End-Use Efficiency and Energy Services, which states that the public sector shall serve as a model for encouraging the efficient use of energy.

3. OBLIGATIONS

Most of the laws in the field of energy and energy efficiency are partially in compliance with the respective EU legislation.

After the Law on Energy Efficiency was approved, various secondary legislation and strategies were issued by the Government.

The Government of Kosovo signed two important loan agreements with the International Development Association (World Bank) and KFW (Kreditanstalt für Wiederaufbau), Frankfurt am Main. Both of these above-mentioned agreements were ratified in the Assembly of the Republic of Kosovo and are transposed in the following laws:

-Law No. 05/L-011 on Ratification of Financing Agreement between the Republic of Kosovo and the International Development Association Regarding the Project on Energy Efficiency and Renewable Energy; and

-Law No. 05/L-107 on Ratification of The Loan Agreement Between KFW (Kreditanstalt für Wiederaufbau), Frankfurt am Main and the Government of the Republic of Kosovo for the Programme "Energy Efficiency Measures in Public Buildings at Municipal Level in Kosovo".

In addition to the above, the Government of Kosovo (respectively, the Ministry of Economic Development) approved on 31 January 2013 Administrative Instruction No. 01/2013 on Renewable Energy Targets ("Administrative Instruction on Renewable Energy Targets"). Article 3 of the Administrative Instruction on Renewable Energy Targets provides that the mandatory target for renewable energy by 2020 is twenty five percent (25%) of the final gross energy consumption, as defined in Article 4 of the Decision of the Ministerial Council of the Energy Community No. D/2012/04/MC/ - EnC.

Furthermore, the Government of Kosovo approved Administrative Instruction No. 09/2012 on the Labelling of Energy Related Products ("Administrative Instruction on the Labelling of Energy Related Products") which regulates the labelling of energy related products, and defines the shape and content of labels, roles and entities responsible for labelling and control, and other features of such products, with the aim of informing consumers on the energy consumption and other relevant energy efficiency features of these products.

Moreover, pursuant to the mandatory target mentioned above, the Energy Regulatory Office, ("ERO"), issued the Rule on Support Scheme (on Support of Generation of Electricity from Renewable Energy Sources) ("Rule on Support Scheme"). The Rule on Support Scheme aims at supporting the generation of electricity from renewable energy sources, in order to meet the established Indicative Targets of Renewable Energy Sources.

The Draft Energy Strategy of the Republic of Kosovo 2016-2025 ("Draft Strategy", approved by the Ministry of Economic Development on July 2016), states that its objective No. 5 is the improvement of energy efficiency and energy renewable sources pursuant to the Treaty Establishing the Energy Community and pursuant to the Stabilisation and Association Agreement. The Draft Strategy states that Kosovo, as contractual party of the Energy Community, has undertaken the obligation to implement new policies of the EU that derive from European Directive No. 2012/27/EC on Energy Efficiency. Moreover, the Draft Strategy states that one of its objectives is to promote renewable energy sources over the next ten (10) years by building the needed legal infrastructure in order to achieve the obligatory target of having twenty five percent (25%) of gross final consumption of energy produced by renewable energy sources by 2020.

Comparison

Although, it is not clear whether Kosovo has chosen to pursue the alternatives offered in favour of energy audits and accountability, based on the administrative instructions and other supporting schemes mentioned above, it can be concluded that Kosovo has chosen to pursue such alternatives. In addition, such conclusion can be inferred based upon the type of audits foreseen in the Administrative Instruction on Energy Audits.

4. MANDATORY AUDIT OF LARGE INDUSTRY

The Government of Kosovo, (based on Article 12 of the Law on Energy Efficiency) approved the Administrative Instruction No. 01/2012 on Energy Audits, ("Administrative Instruction on Energy Audits"). The purpose of the Administrative Instruction on Energy Audits is to institutionalise energy audits in an effort to improve energy efficiency in the Republic of Kosovo and to determine the categories of consumes that shall be subject to auditing.

The Administrative Instruction on Energy Audits defines three types of audits: (i) simple audits; (ii) standard audits; and (iii) comprehensive audits. Annex I of the Administrative Instruction on Energy Audits explains thoroughly the procedures that should be followed for each of the above-mentioned types of audits.

The Administrative Instruction on Energy Audits provides as follows:

-a simple energy audit is obligatory to be done at least once every ten (10) years for all energy consumers that are partially or entirely funded by the budget of Kosovo, if the surface of their facilities exceeds 1,000 m² and/or the overall consumption of various energy sources is up to 20 toe (tonne of oil equivalent);

-a standard energy audit is obligatory to be done at least once every eight (8) years for all energy consumers that are partially or entirely funded by the budget of Kosovo and the overall annual consumption of various energy sources is between 20 to 50 toe; and

-a comprehensive energy audit is obligatory to be done at least once every five (5) years for all energy consumers that are partially or entirely funded by the budget of Kosovo and the overall consumption of various energy sources exceeds 50 toe.

The Administrative Instruction on Energy Audits provides that the competent ministry shall periodically inform the end-energy consumers that are subject to energy audits. Costs for any type of energy audit shall be borne by the audited consumer(s).

Furthermore, Annex II of the Administrative Instruction on Energy Audits provides the conditions and procedures in order to file the application for becoming a registered auditor. Such application should be filed at the Energy Auditor Certifying Commission. The registry of the registered energy auditors will be kept by the competent ministry.

Comparison

Similar to the EU Directive, the Administrative Instruction on Energy Audits provides that the costs for any type of energy audit shall be borne by the audited consumer(s). However, the Administrative Instruction on Energy Audits provides that only energy consumers that are fully or partially funded by the budget of Kosovo are subject to energy audits. It should be noted that energy audits, (like other energy efficiency measures) are addressed toward the public sector, (i.e. energy consumers that are fully or partially funded by the budget of Kosovo). The types of energy audits are based on the amount of consumed energy.

5. STRATEGIES

The Government of Kosovo undertook several actions since the Law on Energy Efficiency entered into force. Respectively, the KEEA was established, which published on its web site numerous public awareness campaigns and strategies regarding energy efficiency.

With respect to the Public Sector Energy Efficiency, the two loan agreements entered into and mentioned in Section 4 were very important steps in relation thereto.

On 22 January 2016, the Government of Kosovo signed a loan agreement with KfW for the Programme "Energy Efficiency Measures in Public Buildings at Municipal Level in Kosovo". This loan agreement is in the amount of EUR 7.5 million and four of the largest municipalities in Kosovo will benefit therefrom.

Also, on 15 January 2015, the Government of Kosovo signed a loan agreement with the International Development Association Regarding the Project on Energy Efficiency and Renewable Energy.

Supervision, monitoring, verification and evaluation of measures of energy efficiency in schools and

hospitals in Kosovo is another project in the amount of EUR 15.6 million, financed by the European Commission.

Energy efficiency in the private sector is supported by the European Bank for Reconstruction and Development. This is a EUR 12 million project and first contracts have already been signed with TEB Bank and Kreditimi Rural i Kosovës.

With respect to secondary legislation, the Government of Kosovo approved Administrative Instruction No.

14/2012 on the Promotion of Energy End-Use Efficiency and Energy Services, ("Administrative Instruction on the Promotion of Energy End-Use Efficiency and Energy Services"), which states that the public sector shall serve as a model for encouraging efficient use of energy.

Furthermore, the following strategies and plans were approved by the Government of Kosovo:

-Energy Strategy of the Republic of Kosovo 2009-2018, approved by the Ministry of Economic Development in 2009;

-Draft Energy Strategy of the Republic of Kosovo 2016-2025, published by the Ministry of Economic Development in July 2016;

-The First Medium-Term Action Plan of the Kosovo for Energy Efficiency, approved by the Ministry of Economic Development in September 2011;

-The Second National Action Plan of Kosovo for Energy Efficiency, approved by the Ministry of Economic Development in June 2013;

-National Action Plan for Resources Renewable Energy 2011-2020, approved by the Ministry of Economic Development in 2013; and

-Decision of the Government of Kosovo No. 05/23 on approving the Concept Document for Energy Performance in Buildings, dated 15 April 2015.

Comparison

Kosovo has approved legislation and other measures in numerous sectors. However, most of the adopted legislation and strategies are addressed toward the public sector. In addition, loans and other projects that were taken by the Government of Kosovo are also addressed to the public sector. This is in line with the purpose stated in the Administrative Instruction on the Promotion of Energy End-Use Efficiency and Energy Services, based upon which the public sector should serve as a model for encouraging the efficient use of energy.

6. TARGETS

The Ministry of Economic Development approved the Administrative Instruction on Renewable Energy Targets on 31 January 2013. Article 3 of this Administrative Instruction provides a mandatory target for renewable energy of twenty five percent (25%) of the final gross energy consumption by 2020, as also specified in Article 4 of the Decision of the ministerial Council of the Energy Community No. D/2012/04/MC/-EnC.

In addition to the above, on 31 December 2013 the Ministry of Economic Development issued Administrative Instruction No. 02/2013 on Use and Support of Energy Generation from Renewable Sources, ("Administrative Instruction on Use and Support of Energy Generation from Renewable Sources"). The Administrative Instruction on Use and Support of Energy Generation from Renewable Sources regulates the support of utilisation of renewable energy sources for energy generation purposes, the categorisation of capacities by type of renewable energy source, and support schemes for energy generated from renewable energy sources, statistical transfers and joint processes.

The Rule on the Support Scheme defines the criteria and procedure for application and admission to the Support Scheme in order to support the generation of electricity from renewable energy sources.

In the Strategy approved by the Government of Kosovo, the energy sector is one of the priorities. The

Draft Strategy provides for four measures to improve the energy sector – two of which include the reduction of energy consumption through efficiency measures and rational use of renewable energy resources.

Comparison

Laws that were approved in Kosovo in the field of energy efficiency are partially in compliance with the respective EU directives. According to the Draft Strategy, Kosovo’s Action Plan for Energy Efficiency 2010- 2018 foresees an energy saving target up to nine percent (9%) (around 92 ktoe) until 2018. In addition to that, the National Action Plan for Energy Renewable Sources 2011-2020 provides that Kosovo aims to achieve a twenty nine point four seven percent (29.47%) ratio of participation of renewable energy in gross final energy consumption by 2020. Furthermore, the National Action Plan for Energy Renewable Sources 2011-2020 also provides for sector-based targets with regard to energy from renewable sources as follows: twenty five point six four percent (25.64%) of gross final consumption of electricity, ten percent (10%) of gross final consumption in the area of transportation and forty five point six five percent (45.65%) of gross final consumption in the sector of heating and cooling.

CONTACT

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Pallaska&Associates L.L.C.,

Pristina, Kosovo

www.pallaska-associates.org