On 14 May 2025, the Parliament of the Republic of North Macedonia adopted the new Energy Law, modelled on European Union (EU) acquis and aligning the country’s energy policies with the EU’s Clean Energy Package.
It is expected that the novelties which the new Energy Law provides will significantly accelerate the energy transition in the country and accelerate the energy and streamline the development of energy capacities. Most importantly for investors, the new legislation introduces changes to the procedure for obtaining an authorisation for the construction of an energy facility (“Energy Facility Authorisation”), requirements for guarantees from investors and novelties regarding energy storage development.
Annual Plan
To develop an energy project, the project must first be included in the annual plan for construction of energy facilities (“Annual Plan”). At the end of each year, the Government adopts the Annual Plan, which is prepared by the Ministry of Energy, Mining, and Natural Resources (“Ministry of Energy”). The Annual outlines energy projects planned for implementation over the next two years, with particular focus on the first year.
Interested investors are obliged to submit their initiatives for the inclusion of their energy project in the next Annual Plan by 1 June. As an exception, initiatives for inclusion submitted by 1 October each year may also be considered in case the proposed project envisages the use of technologies for which the targets in the Energy Development Strategy and the Integrated National Energy and Climate Plan (NECP) have not been met. The initiatives for inclusion are accepted on a “first-come, first-served” basis.
New Procedure for Energy Facility Authorisation
The Ministry of Energy issues an Energy Facility Authorisation for the following types of energy facilities:
- power plants with an installed capacity of 1 MW or more;
- high-efficiency cogeneration plants;
- synthetic fuels production plants;
- plants for hydrogen production; and
- electricity storage facilities.
Unlike in the previous law, where Energy Facility Authorisations were issued for power plants with a capacity of 10 MW or above, the new Energy Law provides that an Energy Facility Authorisation is required for smaller facilities, of at least 1 MW, as well.
An additional novelty is that applications for Energy Facility Authorisation shall now be submitted only once the construction permit has been obtained. The construction permit becomes final and binding only once the Energy Facility Authorisation is issued.
The new Energy Law regulates that the validity period of the issued Energy Facility Authorisation cannot exceed 15 years.
Investors must provide Guarantees
Interested investors applying for an Energy Facility Authorisation are obliged to provide a guarantee in the form of a bank guarantee or deposit facility within 15 days of the submission of the application. The guarantee must be expressed in EUR and in the amount of EUR 25,000 per MW of capacity of the planned energy facility.
The Ministry may activate the guarantee in case the investor does not:
- commence construction within 2 years as of the date the construction permit became final and binding;
- finishes construction within the deadline determined in the Energy Facility Authorisation; and
- extend the validity of the guarantee 60 days prior to the expiry of the guarantee period.
Energy Storage
Under the new Energy Law, energy storage may be performed:
- as a standalone energy activity;
- by an electricity producer as an integral part of the power plant;
- as a fully integrated grid component to the transmission or distribution system.
The new Energy Law puts emphasis on the promotion of the implementation of energy storage and obliges power plants using variable renewable energy sources to install electricity storage within the power plant with an installed capacity equal to 20% of the installed capacity of the power plant expressed in MW.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
