Construction of Plants and Electricity/Heat Generation from Hydrogeothermal Resources in the Republic of Serbia - Exploitation of a Hydrogeothermal Resource

After conducting geological explorations and establishing the potential of a certain area, or of a concrete site for exploitation of a hydrogeothermal resource, exploitation shall take place in compliance with the regulations governing exploitation of mineral raw materials. Exploitation of mineral raw materials – ground waters from which geothermal energy is obtained in the Republic of Serbia is regulated under the the Law in Mining, technical and other regulations. It is necessary to point to the fact that the Ministry of Mining and Energy is in charge of issuing approvals and permits within the procedure for exploitation of mineral raw materials. Approvals for exploitation shall be issued by the Ministry of Mining and Energy and, for the territory of the Autonomous Province, by the competent secretariat. (*70)

Exploitation of geothermal energy implies carrying out of the work on preparation and opening of a deposit, carrying out of other mining works under ground and on its surface. Exploitation of mineral raw materials also implies carrying out of the work on preparation of mineral raw materials. The the Law in Mining stipulates that exploitation of geothermal energy may be done by any economic operator that meets the following requirements: that it is registered to engage in such an activity and that it has the license to carry out mining works (or a contract with a licensed contractor) and the license for the supervision over mining works.

It also stipulates that the economic operator, which exploits geothermal energy, shall pay the fee for the utilization of mineral raw materials. This fee for the utilization of ground waters from which geothermal energy is obtained shall amount to 1% of the revenue. The revenue is the amount, which the economic operator shall realize from the utilized or sold mineral raw materials, determined on the basis of revenues realized from the sale of unprocessed mineral raw material or revenues realized from the sale of technologically processed mineral raw material. The Rulebook on Method of Payment of Fee for Exploitation of Mineral Raw Materials and the Decree on Amount of Fee for Exploitation of Mineral Raw Materials shall apply. (*71)

Geothermal energy shall be exploited on the basis of: 1) The approval for exploitation, 2) The approval to carry out mining works, 3) The Operating Permit for mining facilities.

Approval for Exploitation of Mineral Raw Materials

The approval for exploitation of mineral raw materials shall be issued on the basis of the application of a legal entity registered for exploitation of mineral raw materials and which has the license for carrying out mining works and for exercising supervision over mining works. Such an approval shall be issued further to the application of the entity dealing with exploration of a mineral raw material, or of the holder of the Decision on Ascertained and Certified Reserves of Ground Waters (*72), in the area in which the same resource shall be exploited.

The applicant applying for exploitation shall meet the prescribed requirements: to be registered and to possess the above licenses (or to have a contract with licensed entities), to have the right to use or to have the ownership right over the land in which the exploitation will be carried out, to have an adequate mining design and to have the decisions of the competent municipal authorities related to the use of geothermal energy and environmental protection.

The following shall be submitted with the application for the approval for exploitation: 1) The layout map in the scale 1:25000 or in an adequate scale with the plotted borders of the exploitation field, public traffic areas, and other structures located in that field and indication of the type of mineral raw material, which is intended to be exploited, the municipality in whose territory the exploitation field is located, and the date of commencement of exploitation works; 2) The decision on established and certified reserves of ground waters (the certificate of balance reserves of mineral raw materials), which has been issued within a period of maximum two years and which shall be issued on the basis of completed explorations in compliance with the prevailing regulations on classification and categorization of reserves of mineral raw materials; 3) The feasibility study for exploitation of deposits of mineral raw materials including the presentation of the conditions and method of exploitation, preparation of mineral raw materials, sale of mineral raw materials, measures of protection and rehabilitation of the environment and the impact on the community, the required financial resources that will be employed, and the number of employees; 4) The decision of the authority in charge of town planning affairs concerning the harmonization of the exploitation of mineral raw materials with the relevant spatial or urban development plans; 5) The decision of the Ministry of Agriculture, Forestry and Water Management, when the exploitation on agricultural land is planned; 6) The approval from the Ministry of Environment and Spatial Planning; 7) The Water Requirements, the Water Approval, and the Water Permit (*73); 8) The evidence of the ownership right or of the right to use, or of servitude and right-of-way over the land, which is defined for the exploitation, except in case of exploitation of mineral raw materials by public companies, affiliated companies founded by public companies, companies having majority state-owned capital founded by the Republic of Serbia, and other companies assigned to engage in an activity of public interest.

The Approval for Exploitation shall specify the type of mineral raw material which is to be exploited, the capacity of production, the space in which the exploitation shall take place (borders of the exploitation field), the deadline within which the preliminaries must be completed and within which the approval for mining works must be obtained (which may not be less than six months, nor exceed two years), the period of validity of the right to exploitation, the protective area around the exploitation field required for the purpose of possible extension of the reserves of mineral raw materials. The approval for exploitation may cease to be valid or may be revoked in compliance with the the Law in Mining. (*74)

It is interesting that the holder of the approval for exploitation may also exploit other mineral raw material in the exploitation field, provided he/she has the approval. There may be two holders of the approval for exploitation of different mineral raw materials in one exploitation field, or on a part of the exploitation field, provided that the exploitation of the already previously approved mineral raw material is thus not disrupted.

Exploitation of mineral raw materials shall take place on an exploitation field. An exploitation field shall cover an exploration area, which contains the certified balance reserves of mineral raw materials, as well as the space envisaged for slag dumps and for construction of facilities for processing, maintenance, water intake, and other facilities, and it shall be delimited by adequate lines on the surface or by natural boundaries and shall stretch indefinitely into the depth of the Earth.

An exploitation field of hydrogeothermal energy (of geothermal waters) shall be defined by preparing the study of reserves. The exploitation field shall be defined by contour lines in a geological map. (*75)

Water Requirements, Water Approval, and Water Permit (*76)

The Water Requirements, the Water Approval, and the Water Permit are collectively called the water documents. The Law on Waters differentiates between the general and special uses of waters. The use of waters for the requirements of exploitation of geothermal energy would fall in the category of special use of waters, when we talk about a facility using a sewer for disposal of the exploited hydrogeothermal resource or otherwise disposing of water from the used hydrogeothermal resource. (*77) The right to special use of waters shall be acquired by the Water Permit and, if special use of waters is based on the ground of a concession, in compliance with the agreement regulating the concession as well.

The Law on Waters has also introduced special rules related to the carrying out of works and designing and construction of structures (mining facilities, building structures) (*78). Carrying out of works and designing and construction of structures shall be done: 1) So as to enable discharge of the water back into the watercourse after using the energy; 2) So as not to reduce the existing volume and not to prevent use of water for supply to the population and other users; 3) So as not to degrade the level of protection against harmful impact of waters; 4) So as not to aggravate the conditions of sanitary protection; 5) So as to ensure their multipurpose use. This Law defines the following water documents: 1) the Water Requirements, 2) the Water Approval, 3) the Water Permit, 4) the water order. The water documents in each specific case shall be issued by the Ministry of Agriculture, Forestry and Water Management, by the competent authority of the Autonomous Province, or of the City of Belgrade (*79), depending on the place in which the structure will be located. (*80) The deadline for issuing the above documents shall be two months from the date of filing the application.

An appeal may be lodged against the decision handed down in the procedure of issuing the Water Approval or the Water Permit, handed down by the competent authority of the Autonomous Province, or of the City of Belgrade, to the minister within 15 days. When a decision, in the procedure of issuing the water documents, is handed down by the Ministry, it shall be final and an administrative suit may be instituted against it. Prior to issuing the Water Requirements (which are an element of the Location Permit, and are necessary for preparation of the design documentation – the main design), it is necessary to obtain the Opinion of the Republic organization in charge of hydro meteorological affairs (the Republic Hydro meteorological Service - RHMS) and the Opinion of the public water-management enterprise (Public Water-management Enterprise Srbijavode – for the territory of the Republic of Serbia except for the Autonomous Province of Vojvodina, i.e. of the Public Water-management Enterprise Vode Vojvodine – for the territory of the Autonomous Province of Vojvodina).

The Opinion of the Republic Hydro meteorological Service shall be obtained on the basis of the submitted Application. The following shall be submitted with the application (*81): 1) The topographic map of the area (1:25000) with indicated layouts of the structures, 2) The technical description, and 3) In case of unstudied catchment areas (which is most often the case with the catchment areas of power plants), the hydrological study (usually made based on meteorological data as well as on the hydrological data from the adjacent catchment areas). The recommendation is that, at the locations of future water intakes, already from the very first visit to the location, one must start measuring the flows.

The opinion of the public water-management enterprise shall be obtained after submitting the Application for the opinion. The following shall be submitted with the application (*82): 1) A copy of the plan with plotted facilities, 2) The excerpt from a planning document – the information on the location, 3) Technical description of the solution (if available, the general design may be submitted).

After obtaining the Opinion of the RHMS and the Opinion of the public water-management enterprise, the Application for the Water Requirements shall be submitted. The Water Requirements are issued by the same authority which issues all the water documents. (*83) (*84)

The following shall be submitted with the Application for the Water Requirements: basic data on the location, use, and size of the structure and, as required, preliminary studies, and the general design (conceptual design), which provide a more detailed insight in the impact of the structure on the water regime. For issuing the Water Requirements, the opinion of the public water-management enterprise shall be mandatory. In addition to the above specified, the following shall be submitted with the Application for the Water Requirements: 1) A copy of the plan (including the plotted position of the structure), which shall be issued by the competent Real Estate Cadastre; 2) The registered land certificate (for the cadastral lot on which the structure is constructed), which shall be issued by the competent Municipal Court, or by another competent authority; 3) Certificate of resolved property-rights relations: evidence of the ownership – use of the land by the investor, approval of the public water-management enterprise if the construction of a structure of public interest on the water land is in question; 4) The plan of use of the areas, which shall be issued by the competent municipal town planning department. (*85) (*86)

The Water Approval shall specify that the technical documentation – the main design has been prepared in compliance with the Water Requirements. The documentation for issuing the Water Approval is specifically the technical documentation (*87), which must contain: 1) The technical report; 2) Computations: hydrological, hydraulic, of stability, level of pollution, etc.; 3) Graphical exhibits: layout plans, plans, and cross-sections with the necessary elements for establishing the impact of the water regime on the structure and vice versa; 4) Presentation of the natural water regime; 5) Presentation of the projected water regime; impact of the structure on the natural and the projected water regimes; 6) The impact of the natural and projected water regimes on the structure. The approvals of the Ministry of Health and of the Ministry of Environment and Spatial Planning shall also be submitted along with the above application.

The following shall be submitted with the application for the Water Approval on the main design: 1) The Decision Issuing the Water Requirements; 2) The main design (with the attached relevant licenses in compliance with the regulations); 3) The report on the review of the design (with the attached relevant licenses in compliance with the regulations); 4) Other documents, which are required in the Decision Issuing the Water Requirements. (*88)

In case carrying out of the works or construction of a facility is not started within two years from issuing the Water Approval, the Water Approval shall cease to be valid. As required, prior to the issuing of the Water Requirements and the Water Approval, for the use of the water land, use of water facilities, and providing other services (in accordance with the Decision for the current year), the Investor shall conclude the relevant agreement with the public water-management enterprise or with the Ministry of Agriculture, Forestry and Water Management – the Republic Water Directorate.

Once the facility has been constructed, and prior to obtaining the operating license (*89), one has to submit the application for the Water Permit to the Ministry of Agriculture, Forestry and Water Management, to the competent authority of the Autonomous Province, or of the City of Belgrade. The Water Permit is required for the exploitation and use of waters and natural and artificial watercourses, lakes, ground waters, for discharge of waters and other substances into natural and artificial watercourses, lakes, ground waters, and public sewers, as well as in case of increase of the capacity of the already existing structure – for the increase of the quantity of in-taken and discharged waters, changed nature and quality of discharged waters. This permit shall be issued for a period of maximum 15 years so that, minimum two months prior to its expiry, its validity should be extended.

If there is a decision on the Water Permit, the right acquired on the basis of the Water Permit may not be assigned to a third party without the consent of the issuing party and this right shall terminate: upon expiry of the validity thereof, by waiver of the right, and by failure to exercise the right without justified reasons for over 2 years. The following shall be submitted with the application for the Water Permit: 1) The Water Approval; 2) The evidence of fulfillment of the requirements from the Water Approval; 3) The (technical) documentation based on which the structure has been constructed, including all the modifications and additions made in the course of construction; 4) The report of the commission on the completed technical inspection of the constructed structure or plant; 5) The opinion of the public water-management enterprise concerning the fulfillment of the requirements from the Water Approval, the impact of the structure on the water regime, the impact of the water regime on the structure, and the requirements for issuing the Water Permit. (*90)

Approval for Carrying out Mining Works

The approval for carrying out mining works shall be the precondition for carrying out of the works on a mining project. The approval shall be issued by the competent authority (*91), after having previously obtained the approval of the Ministry of Environment and Spatial Planning and the Ministry of Agriculture, Forestry and Water Management evidencing that the above works do not disrupt the environment and the water regime.

The following shall be submitted with the application for the approval for carrying out mining works: 1) The mining design including the report on the completed review; (*92) 2) The certificate of certified balance reserves; 3) The evidence of the ownership right or the right of use in the space in which the above-ground system for exploitation of geothermal energy is going to be constructed; 4) The approval of the authority in charge of environmental protection affairs; 5) The Water Approval. (*93)

Carrying out of mining works according to a simplified mining design, or drilling of hydrogeothermal boreholes, may be commenced based on the report, which shall be submitted to the Ministry 15 days prior to the commencement of carrying out the works at the latest. Prior to the commencement of the works, the contractor shall report to the mining inspector, for the purpose of exercising supervision.

Mining Facilities

The the Law in Mining stipulates the notions of the mining works and the mining facilities. According to the the Law in Mining, mining works are the works on: making boreholes, works in boreholes, works on an exploitation field for the purpose of exploitation, works carried out for the purpose of exploration of mineral raw materials. Mining facilities imply facilities and plants within the complement of mines, which are directly related to: 1) The technological process of exploration, exploitation, and preparation of mineral raw materials and disposal of dirt, slag, ash, and mineral raw materials on dumpsites for homogenization; 2) Machines and equipment intended for all the stages of technological processes of underground and open cast exploitation; 3) Facilities, plants, and equipment for protection of mines from ground waters; 4) Facilities, plants, and equipment on oil and gas fields, which are directly related to the technological process of exploration, exploitation, and transportation of crude oil, gas, and ground waters on an exploitation field; 5) Facilities for underground storage of natural gas and crude oil on an exploitation field; 6) Electrical installations of mines; 7) Warehouse of explosives and blasting agents on an exploitation field; 8) Piping systems on exploitation fields and boreholes; 9) Facilities for separation of gravel, sand, and stone. Mining facilities are directly related to the technological processes of exploration, exploitation, and transportation of ground waters on an exploitation field.

Operating Permit for Mining Facilities

The Operating Permit for mining facilities is an administrative decision, which shall be issued by the Ministry of Mining and Energy and which shall approve the use of a mining facility or a part thereof. The Operating Permit shall be issued if it is established that a mining facility or a part thereof has been constructed in compliance with the mining design based on which the approval for carrying out mining works has been issued and in accordance with technical regulations and standards and that the requirements have been met with respect to the measures of safety and health at work, protection of waters, fire protection, protection of the environment, and other prescribed requirements for the construction and utilization of such type of facilities. Fulfillment of the specified requirements shall be verified by the technical inspection of the facility, which shall be carried out by the persons, who have the necessary licenses in the area of mining.

Mining Right Licenses

Mining right licenses shall be the licenses for designing and carrying out of mining works and review/inspection of mining designs and facilities. Such licenses shall be issued by the Mining Agency. (*94) The Mining Agency shall issue: the license for carrying out of mining works and for exercising supervision over mining works, the license for design of mining designs, and the license for the review of mining designs and technical inspection of facilities.

The mining right licenses shall be administrative decisions establishing fulfillment of the requirements for engaging in certain activities necessary for carrying out of mining works and for inspection of mining facilities.

Details of Relevant Legislation

(*70) The Secretariat for Energy and Mineral Raw Materials of the AP of Vojvodina shall issue the approval for exploitation in the territory of the AP of Vojvodina.

(*71) Such a provision on setting the fee for the use of ground waters from which geothermal energy is obtained on the basis of revenues of the economic operator engaged in the exploitation, indicates that such fee shall not be paid in case the same economic operator does not exploit it with the aim to realize revenues, but for its own requirements.

(*72) The decision on established and verified ground water reserves (the Certificate of Balance Reserves of Mineral Raw Materials) shall be issued in accordance with the regulations on geological explorations.

(*73) Articles 117, 119, and 122 of the Law on Waters.

(*74) Article 20 and Article 20a of the the Law in Mining.

(*75) Article 56 of the the Law in Mining.

(*76) Issuing of the water requirements, the water approval, and water permit is regulated by the Law on Waters. It is necessary to point to the fact that, in case of construction of a facility in which the activity of heat or electricity generation will rake place, the water documents for exploitation of hydrogeothermal energy shall cover the entirety of the undertaking. In such a case, the same documents shall also be submitted when submitting the application for the Construction Permit for the specified facility. This Law does not differentiate between a small power plant and a power plant of a capacity of over 10 MW. The water permit shall also define the method of discharging waste waters.

(*77) Note: In case the users of geothermal waters, after having utilized them, choose the option to discharge such utilized waters into rivers, e.g. the Tisa, the Danube or into canals, in order to discharge the utilized waters, the users shall have temporary permits, obtained from the competent water-management organizations. The requirement for obtaining a permit for discharge of geothermal water into watercourses is that the discharged water does not aggravate the quality of water in the watercourse. If such requirements can be met, the water permit shall define the requirements for discharge of waters.

(*78) The Law on Planning and Construction prescribes that, for the procedure of preparation of the technical documentation for construction of new and reconstruction of the existing facilities and for carrying out of other works that may have impact on the changes in the water regime, the investor shall obtain the water requirements (specifying technical and other requirements, which must be fulfilled). It also prescribes that, for the requirements of preparation of the technical documentation, it is necessary to obtain the water approval which shall establish whether the technical documentation for facilities and works has been prepared in compliance with the water requirements. The water permit, which shall be obtained once the facility has been constructed (the operating permit may not be issued without the obtained water permit), shall establish the method of and requirements for the use and exploitation of waters and discharge of waters. The text below shall describe in detail the procedures for issuing the above documents.

(*79) The competent authority of the City of Belgrade is the Water Administration.

(*80) Depending on the type of the facility or works for which the application for the water documents is submitted, the competent authority may also be the competent authority of a local self-government unit (depending on the facility or works for which the water documents are applied for). Types of facilities/works and the competence of the authorities for issuing the water documents are stipulated in Articles 117 and 118 of the Law on Waters.

(*81) There is nothing prescribed as to what should be submitted with the application for the Opinion from RHMS – what has been specified herein is a general assessment of the author in line with the discussions in the specified organization.

(*82) There is nothing prescribed as to what should be submitted with the application for the Opinion from public water-management enterprises – what has been specified is a general assessment of the author in line with the discussions in the specified organizations.

(*83) The decision on issuing the water requirements shall be issued by the Ministry of Agriculture, Forestry and Water Management, by the competent authority of the Autonomous Province or of the City of Belgrade, depending on the place at which the facility is going to be located or the work will be carried out.

(*84) Exceptionally, subject to Article 118 of the Law on Waters, the authority in charge of issuing of the water requirements may request from the applicant to obtain the opinion of the Ministry of Environment and Spatial Planning and/or of a specialized scientific institution (establishments, institutes, etc.). For the structures and works in a territory of a spa resort, the applicant shall obtain the opinion of the ministry in charge of the affairs of tourism. There is no specifically prescribed procedure for obtaining the above opinions.

(*85) To assist an applicant, the list of all the required documentation for obtaining the water documents can be found on the Web site of the Ministry of Agriculture, Forestry and Water Management: www.minpolj.gov.rs Link: Arhiva – Vodoprivreda - Vodna akta - Obrazac zahteva VS (Archive - Water Management – Water Documents - Application Form VU). In compliance with the Law on General Administrative Procedure, the authority may request from the Investor to complete the documentation.

(*86) The obtained Decision Issuing the Water Requirements shall also be one of the elements of the location permit. After obtaining the location permit, one may proceed with the preparation of the design documentation – the preliminary and the main design of a power plant. In order to proceed with the following phase – obtaining the Construction Permit, it is necessary, inter alia, to obtain the Water Approval on the main design.

(*87) The technical documentation in this procedure has the contents of the main design.

(*88) Exceptionally, in case some other documents are also required, which depends on the specific features of the facility, after submitting the application, the Investor shall be subsequently notified to complete the documentation if required.

(*89) The operating permit shall be issued both for mining facilities and for buildings of (energy) facilities. See more about the operating permit for mining facilities in Chapter 2.2.4 hereof. More about the operating permit for buildings of (energy) facilities in Chapter 3.2.2.9 hereof.

(*90) To assist an applicant, the list of all the required documentation for obtaining the water documents can be found at the Web site of the Ministry of Agriculture, Forestry and Water Management: www.minpolj.gov.rs, Link: Arhiva –Vodoprivreda -Vodna akta - obrazac zahteva VD (Archive - Water Management – Water Documents - Application Form VD).

(*91) The authority in charge of issuing the approval for carrying out mining works is the Ministry of Mining and Energy and, for the works in the territory of the Autonomous Province – the competent secretariat.

(*92) For this design it has to be established as to whether the preparation of the Impact Assessment Study will be necessary. More about this procedure in Chapter 3.2.2.5 hereof.

(*93) More about this in Chapter 2.2.1.1 hereof. For issuing the water approval, it is necessary to previously obtain the water requirements. In this case, the Ministry of Agriculture, Forestry and Water Management shall be in charge of issuing the water requirements and the water approval and, if the facility is in the territory of the Autonomous Province, the competent authority of the Autonomous Province shall be in charge thereof and, if the facility is in the territory of the City of Belgrade – it shall be the competent authority of the City of Belgrade.

(*94) By the date of submitting this text, the Mining Agency had not as yet been founded. By the time the Mining Agency starts operating, licenses shall be issued by the Ministry of Mining and Energy.

Note: This text is taken from the document-guide for investors "Construction of Plants and Heat/Electricity Generation from Hydrogeothermal Resources in the Republic of Serbia", of which authors are Dr. Branislava Lepotic Kovacevic, PhD Law, Stanislan Milosavljevic, BSc M. Eng, and Bojan Lazarevic, BSc El. Eng.

The project was implemented under the patronage of USAID, GTZ / GIZ Serbia and the Ministry of Energy in 2010.